Things to look out for in joint operations

by Edward Pond

Developer operations allow companies such as Huawei to develop high-quality products faster compared to traditional software. The products make it easier for them to form joint operations with other organizations, as better communication and collaboration is enhanced. In this extract, we discuss the disadvantages of joint operations.

1. Things to look out for in Joint Operations

These business ventures can pose significant risks that are liability related and also lead to conflicts between the parties.

2. Different Management Styles

Two unrelated companies decide to work together, and each has different work ethics, culture, and ways of running the company. This may result in conflict among workers or misunderstanding each other. Mismanagement is bound to happen as there are many opinions as to how the company should be run. A written agreement is essential so that the business partners can have clearly defined roles.

3. Liability

No liability protection is given to the parties involved for the debts that might be incurred or obligations. If the company’s assets cannot clear the debt, the partners are at risk of having their belongings taken away. A business creditor can go after a party’s house, car or money

4. Limited Duration

The joint operation comes to an end immediately, the purpose for its formation is fulfilled or when death occurs. This disadvantages the other partner who wants to continue with the operation. Since it is temporary, commitment issues might develop among the members, and they choose to leave. It becomes challenging to work with such people since you can’t accomplish the goals that led to its development.

5. Restricted Flexibility

It is ok to be part of a joint venture and still run your business on the side. These two businesses require your attention; thus, one may suffer in the process. In most cases, you are needed to focus more on the partnership than your company. You may find yourself putting more resources or finances on the venture and neglecting the business, making you lose customers. A balance must be struck to keep both afloat.

6. Difficult to Exit

You might notice that the collaboration is not beneficial to you in the early stages, and you want to leave. Maybe the other party is not cooperating or giving their share of resources, or you don’t like the other party’s leadership. Having put your stake in it, selling it at a discounted price may be hard such that you are forced to stay in it.

7. Imbalance in Levels of Expertise

Companies don’t contribute the same amount of money; hence the number of assets or investments varies. In most cases, the profits and losses are divided according to your share; thus, there is no equality.

8. Planning and Research

Before starting, one has to plan and conduct research on the market, and its quite a long process. One must have all the legal documents, and it requires a lot of money, making it difficult for some people to afford it.

Bottom Line

Note, although joint operations have drawbacks, there’s always a positive side that outweighs it. This means that these drawbacks should not keep you from partaking in joint operations because the benefits are numerous. They succeed only when a common goal is established.

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