Conflict Management in German-Russian Joint Ventures

Research Paper (undergraduate) from the year 2008 in the subject Politics - Region: Russia, grade: 1,4, University of Cooperative Education Mannheim, course: International Seminar, language: English, abstract: The German-Russian foreign trade has been doubled since the year 2000 to 50 billion Euros. According to the Ost-Ausschuss of the German Economy (Deutsche Wirtschaft) this positive trend will continue during the next years. German companies are planning investments accounting to 1.4 billion Euros in the Russian market and as well Russian firms are going to invest in Germany. Russia is not only the biggest country in the world but also richest in commodities. Furthermore, it is also one of the fastest growing economies in the world with a geographical closeness to Germany. This should be reason enough for the German companies to invest in the Russian market and reversely. Next to exporting and licensing the entity form of joint ventures represents a good strategy for entering the foreign market. The hosting partner will deliver the knowledge and technology and the home partner will offer experience in the market, meaning awareness of cultural differences, political regulations and potential conflicts. Nevertheless, joint ventures are also starting points for conflicts that may endanger the success of the business. This paper deals with the conflict management of joint ventures that have been coordinated by German and Russian firms. At first the terms conflict management and joint venture will be defined followed by an introduction to the two countries Germany and Russia. At the second stage different starting points for conflicts will be determined. Examples of these are the differences in culture, the restrictions and regulations for entering the Russian market and opinions of experts on joint ventures with Russia. Due to the lacking of direct information on conflict management of actual joint ventures, two successful joint ventures will be presented. Occurred and potential conflicts will be determined. With help of these conclusions will be drawn upon the management of conflicts which most often leads to success in business. To complete the paper lessons learnt for more Russian joint ventures will be pointed out.