Managerial accounting - Essay Example

ad mainly formed strategic partnerships with major players in the Chinese dairy, beverage and food industries gaining rights to major Chinese dairy and beverage brands. China was an important market for Group Danone owing to which the company along with Peregrine formed a Singapore registered company to invest in Joint Venture keeping 51% shares while Wahaha and employees had 49% of the shares. However the main motive of the Joint Venture is mentioned below: Yanni Yan (2000) mentions that control is a multidimensional factor which plays an important role in the capacity of a firm to achieve its goals which refers to the process by which one person or group influences to varying degrees, the behavior of another through the use of power and authority.

However the main purpose of control and influence in joint ventures is to ensure that the benefits are realized and objectives are achieved. Further it is mentioned by Aimin Yan and Yadong Luo (2001) that the extent of control refers to the degree to which each party in the venture exercises its control in the management of the joint venture. Schaan (Aimin Yan and Yodan Luo, 2001) during his study identified wide range of control mechanisms available to parent firms including the ventures board of directors, formal agreements, appointments of key personnel, planning process, and reporting relationships.

It is also further stated that variety of informal mechanisms are also effective for exercising parent control through setting up integrative structures between the venture and the parent, running training programs for personnel’s and inviting managers to attend the corporate business meetings. It is pertinent to mention that according to a study, higher performance occurred when the multinational parents assumed a more relaxed attitude toward control otherwise in case of tight control by foreign partner; the ventures performance is likely to be suffering (Aimin Yan and Yodan Luo, 2001).

However in case of Wahaha and