Joint Ventures - Northeast Ike Wire & Cable Co., Ltd. China, As A Minority Stake In The Control Of Management Case Studies

Because of the diversification of beneficial owners in Chinese-foreign joint ventures, through comprehensively making use of different control structures and methods and various factors that influence the control force, all parties to the joint ventures unceasingly contend for the power to control the joint venture enterprises, trying to reach a balance during the maximization of their own benefits in the competition for the control power. Because of various reasons, the Chinese parties are always at a status of minority shareholders and consequently lose the power of share control and organization control according to the game regulations that those who contribute more shall have the decisive power, so their rights and benefits are easy to be damaged. Therefore, in the situation that the Chinese parties are at an inferior position in equity interest, the Chinese parties should stress on the motivation of man's initiative in control strategy, give full scope to the advantage of all essential resources that may influence the control force, make a comprehensive use of various control structures and methods and even resort to law in order to implement negative control of the foreign parties' unilateral control and dynamically and continuously protect the balance of their own rights and benefits in the whole process of the operation of joint venture enterprises.