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Difference Between Joint Venture and Collaboration

June 21, 2011 Posted by Olivia

Joint Venture vs Collaboration

Collaboration is a concept that is responsible for coming together of people to work towards a shared goal or objective. It is an idea that has led to creation of international bodies where member countries cooperate with each other to achieve the objectives for which the body is set up. Writers collaborate to finalize the script of a movie, two persons collaborate to start a new business, institutes collaborate to help in spread of education and research, and countries collaborate for specific issues to arrive at a solution or to lead to better, friendly relations. Joint venture is a special type of collaboration and there are many who cannot differentiate between the two. This article will highlight the differences between the two concepts – Joint Venture and Collaboration.

Collaboration

Collaboration is best exemplified in the area of trade where two countries benefit by collaborating with each other as their citizens get products that are not naturally produced in their countries. Collaboration started as soon as people started to communicate with each other through words or written language. However, collaboration is not limited to material exchange. There are countries lacking technologies and services in certain areas and these countries benefit a lot when they decide to collaborate with countries possessing them.

Joint Venture

A joint venture is a particular example of collaboration that is formed especially for the purpose of business. A joint venture is described as an agreement between two or more parties who cone together, sharing their resources (assets) and expertise to establish a business entity and share the profits. Control of the enterprise is also joint and no single party controls the JV. When a JV is not for a specific project and is for normal business on a continuous basis, it can be considered as a type of partnership. JV is not a type of entity and it can take shape of a corporation, partnership, a limited liability enterprise, and so on. A joint venture can be formed between local as well as international parties. Joint venture allows a foreign party to get entry into another country’s markets easily at the same time allowing it to use the resources of the local partner.

Difference Between Joint Venture and Collaboration

• Collaboration is a generic term that describes coming together of two or more entities for mutual benefit

• Joint Venture is a specific entity that describes the purpose for which two or more parties come together for business

• JV allows a party to gain easy entry into another country and also to use resources of the local partner in the venture.

• JV is characterized by joint control and no single party has outright control over the business entity.

Related posts:

Difference Between Joint Venture and Partnership Difference Between Joint Venture and Strategic Alliance Difference Between Subsidiary and Joint Venture Difference Between Subsidiary and Division Difference Between Joint Venture and Licensing

Filed Under: Organization Structure Tagged With: collaborating, Collaboration, Joint venture, JV

About the Author: Olivia

Olivia is a Graduate in Electronic Engineering with HR, Training & Development background and has over 15 years of field experience.

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