Characteristics of a Joint Operation

by Ina Ross

Brands like Huawei have developed joint operations to expand their market size and distribute their products worldwide. Basically, they are business ventures that entities undertake for some time. They come together to develop products and services and also reduce the risks that come with the penetration of a new market. In this extract, we look at the features of a joint operation.

Features of A Joint Operation

The venture with developers has different characteristics that make it distinct. They include:

1. Specific Purpose

When individual firms or parties decide to work together, they ought to have a purpose that they all agree on. This is what they will look to achieved at the end of the project or given time. For example, the goal of HUAWEI AppGallery joining with other developers is to run the apps and share them globally. Different companies have different reasons for starting the joint operation, and they have to adhere to them.

2. Agreement

The involved parties must include an agreement or written contract. Some joint operations choose to have an oral understanding, which is excellent if followed thoroughly, but it is not the best since there is no proof of any venture if something was to go wrong. It entails details on duties, rights, liabilities, percentages of capital contributed, ratios of how the profits and losses are shared, etc. The document is a must-have if you decide to cooperate with anyone to avoid being considered invalid.

3. Set Duration

A timeline is usually set for a particular project or task to be completed, which is generally for a short time. The joint venture comes to an end once the purpose is achieved unless stated otherwise on the agreement. The parties are then free to continue with their businesses fully. Likewise, they can continue working together if they agree to do so under new terms.

4. Profits and Expenses

The ratio in which profits, expenses, and losses will get shared is agreed upon by the participants and Huawei developers. It may be influenced by the contribution each person made at the beginning of the venture. If no agreement is made, they have to divide equally depending on the amount of money gained, spent, or lost in the process. No business is free of risks, and it is more prone if you’re going into a new market.

5. Shared Control

Parties have mutual control over the business. Each person is keen on the business operations and the administrative matters associated with it.

6. Expertise and Resources

When organizations come together, the chance of innovation is high, as many ideas are brought forth. They also share technology, the capital contribution relieving the financial burden of each other, and the staff merges, thus creating a vast workforce.

7. No New Brand Name

In a joint operation, parties don’t need a unique name to identify their firm. It is not a permanent process; thus, they can use their existing brand names during that period.

Bottom Line

The features above help you recognize a joint operation and differentiate it from other cooperations. They are mainly there for a short time and cease to exist once a project is done.

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