Benefits and problems likely to arise when operating a joint venture partnership There are diverse accounting and business reasons why firms may opt to be involved in a joint venture. Entering into a partnership with a business entity that has flattering capabilities, competencies, and resources like vast and effective distribution channels, financial resources and technology justify the core objectives behind engaging in a joint venture (Alkhafaji, 2003). In the case of IKEA, joint ventures primarily serve the underlying core objectives including the distribution of both risks and rewards with the foreign company in collaboration, distribution of technology, joint efforts towards product and service development, and ensuring that there is compliance with the foreign government set of laws (Briscoe & Schuler, 2004). Benefits of joint venture partnership One of the potential benefits to IKEA for operating a joint partnership is that it serves to integrate the resources of the partnering business entities, which in turn results in production and cost efficiencies. This is to the advantage of IKEA because it will gain access to larger capital and assets and production technology. This means that minimal investment is needed when operating joint venture partnerships because the underlying technology and capital are shared among the partnering companies. Also, operating a joint venture partnership offers IKEA with an opportunity to access new capacity and skills (Dowling & Welch, 2004). The second business advantage associated with operating a joint venture partnership for the case of IKEA is that the firm will be perceived as an insider in the target market of the host country. This comes as a business advantage for the firm when compared to other options of entry such as Foreign Direct Investment. This plays an integral role in overcoming the barriers related to the restrictions on ownership and the cultural variations in the host country. Also, this offers an opportunity through which IKEA can adjust its business-level strategies to meet the demands of the target market (Duane & Hoskisson, 2008). Another business advantage for IKEA when operating a joint venture partnership is that the risks are shared. Also, joint venture partnerships are effective in scenarios whereby the strategic goals of the business partners are converging and their competitive goals are diverging. Currently, IKEA’s business strategy focuses more on expansion to foreign markets; therefore, the partnering company should also be having similar strategic goals. Joint venture partnerships are flexible and only tend to last for a limited duration, implying IKEA can opt to disintegrate its business with the parent company or acquire the business from its partnering companies (Haar & Bardoel, 2008). Problems likely to arise during a joint venture partnership Constraints that are likely to arise when engaged in a joint venture partnership in a host country is due to the lack of support from the head office because shared operations similar to the aspect of joint executive management and property rights usually tend to reduce organizational support and collaboration from the head office. There are also potential causes of mistrust relating to proprietary knowledge and cultural differe