Managing an International partnership US-T and ITA-Truck

Introduction
US-Truck and ITA-Truck are two family owned small enterprises oriented to develop their current activities through the assessment of the possibilities offered in the global context. Although these similarities, alongside other common feature they have several differences that may undermine the definition of the partnership they have started to evaluate.

History of ITA-truck
Family owned business founded by Alpha family in the year 1977. The production and supply operates in the home country. Main product of production is to produce Dump trucks. The company strength employee of the company is 30. The company invest heavy amount on R&D. In 2009 the companys estimated turnover was 10 million Euros. ITA-trucks has been appreciated in the home country, the firm also conducted few activities abroad. The companys export is between 5%-10% due to international activities of the industrial sector.

History of US-T
Family owned business founded by Jeff Smith Sr. in the year 1986. The company distributes, Install and repairs lubrication equipment as well as designing and building customized lubrication trucks which supply in the home country with 15 states. The head quarter is located in concord, North Carolina. The company strength employee of the company is 28. In 2007 the companys estimated turnover was 8 million Euros. US-T has been appreciated in the home country.

Governance of Transaction
ITA-TRUCK AND US-T INTERNATIONAL PARTNERSHIP Goods-US-T and ITA-Trucks product will results in good fit for the markets and industries due to long term relationship. Service- Resulted in better service. Knowledge- technical know-how will be shared among the two companies which will result in reducing the cost.

Complexity

1) Uncertainty of first order and second order: There is an uncertainty of production of the goods in the first and second batch. 2) Investing systems boundaries and potentials for surprises: The companies should be ready to take surprises as in the any future risks.

3) Need for stakeholder involvement for collecting and interpreting: Stake holder plays an important role as any gain/loss will affect the stakeholders. 4) Different frames: Both company has different frames of rules and regulation

5) Different concepts about route of risk handling: Both companies have different concepts of handling of risks which might results in conflicts between two companies.

HIERARCHY

As the two companies will have similar type of hierarchy 1) CEO 2) STAKE HOLDER 3) BOARD OF DIRECTORS 4) PRESIDENT 5) MANAGERS

TYPE OF OWNERSHIP
KEY POINTS GOVERNANCE STRATEGY POSITIONING EXPORTS BARRIERS SOLUTIONS WANTS

ITA-TRUCK
FAMILY OWNERSHIP R&D INVESTMENT LEADING FIRM STANDARDIZATION FEW (5 TO 10%) SHIPPING COSTS OUTSOURCE PRODUCTION ESTABLISH PARTNERSHIP PARTNERSHIP

US-T
FAMILY OWNERSHIP DIVERSIFICATION AND GEOGRAPHICAL ETENSION DESIGNED-TO-FIT MULTIPLE MARKETS NO OPPORTUNITIES EXPAND LOCALLY INSOURCING

PROPOSITION FOR ROLE DISTRIBUTION

ITA-TRUCK
DESIGN US TRUCK CHASSIS
DESIGN KNOWHOW TRANSFE R

US-T IDENTIFY DISTRIBUTOR FOR SALES DECIDE WHICH ITATRUCK TO SELL MARKET ANALYSI S

ADAPT US-T SUPPLY CHAIN

PROVIDE MANUFACTURING KNOWHOW Administrativ e ADMINISTRATIVE WORK

DETERMINE SPECIFICATION (CHASSIS)

PRICING

MANUFACTURING AND ASSEMBLING

DISTRIBUTING

Production & distribution

COMPLIANCE
1) DIFFERENT WAYS TO CONDUCT BUSINESS There are many way to conduct business as there is no single method. The two companies have different strategic. 2) CULTURAL DIFFERENCES Here the cultural difference can be a problem as one company is American and other is European. 3) ASSISTANCE FROM A THIRD NEUTRAL PARTY Third party can play a major role in the deals and might take major benefits. 4) ADAPT TO LOCAL MARKETS Adapting to the local market might take some times due to cultural differences. Risks Takeover: One major risk associate with the partnership is that takeover as in future one company might take over the other company. Profit distribution: There can be a quarrel between the two companies over the profit distribution so before entering into the partnership clear rules offers and rules should be laid down. Different strategies: Having different can results in breakup of the partnership, so the companies should follows common policies. Cultural Differences: As the two companies are from two different continents so the culture will be different, these cultural differences might cause problem in the companies. Conclusion Both the companies should be careful with its corporate governance and it must establish a well-defined partnership. The companies should be able to avoid the transactional relationship. As there is no doubt the international partnership will boost companies image and profit but both the companies should be ready to

take surprise risk also. The companies cost will reduce and will help to improve their goods, service and knowledge.