Soviet joint ventures
pearls and perils of Perestroika
The people of the Soviet Union are quickly reforming their society and eager to learn the management skills needed to move to a free-market system. Opportunities abound for Western businesses to enter into joint ventures with the Soviets in such areas as finance, manufacturing, agriculture, and infrastructure. This article provides some background on the current situation, discusses recent trends toward forming consortiums and increasing local control, and lists some of the perils that joint ventures still face, such as political instability, currency exchange and profit repatriation, and effective cost accounting. Among suggestions offered for improving the odds for success are: start small but start now; utilize a third-party arbitrator to ensure that critical issues get addressed, and conduct frequent audits so that solutions can quickly be worked out.