Partners must fit: Lessons from an Indian-Norwegian venture.

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A Norwegian telecom corporation wants to sell a joint venture which it set up with an Indian partner. In a contribution to “Harvard Business Review” Laurence Capron and Will Mitchell describe the end of what was only a temporarily happy marriage.
Telenor, a major Norwegian telecommunication company looked for a partner in India some years ago to set up operations there and found Unitech. It seemed to be a fairly happy partnership starting because Telenor needed a local partner to meet the legal requirements in India. On the other side, Unitech needed a partner with competence in the telecom business because its main business had been property development when in 2008 it won a bid for telecommunications spectrum licenses. The joint venture started well with 35 million subscribers and a staff of 15,000 in India. However, from early on there had been differences on central strategic questions ranging from investment strategies to pricing details. Telenor holds a two thirds majority stake in the joint venture and had to provide the technological and business knowhow. The struggle between the partners is now being fought in public after a former Indian chairman of the joint venture was arrested over corruption charges. Also, board appointments were disputed and, last but not least, no agreement could be reached about the current material and strategic worth of the partnership.
The separation quarrels are now filling the press. Most likely, both partners discovered too late that they had not much in common beyond the basic deal which was licenses and legal cover from Unitech in exchange for expertise in the field and business knowhow from Telenor. This demonstrates that an agreement on some basics is not necessarily enough to make cross-cultural joint ventures successful in the long term.