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ARTICLE · 11 AUGUST 2016

Dangerous Alliances: Is Peter Druker right about Joint Ventures?

Corrs Chambers Westgarth
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Peter Druker said that joint ventures are growing in use, are dangerous in nature and are fundamentally misunderstood.

AustraliaCorporate/Commercial Law
Ben Davidson
Ben Davidson
Elena Stojcevski
Elena Stojcevski
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Statistics tell us that more than 25% of project/construction Joint Ventures (JVs) end in internecine dispute. So, was Peter Druker right when he said they are growing in use, dangerous in nature and fundamentally misunderstood?

Joint ventures (JVs), are almost as old as the law itself. The mechanism of sharing profit and risk has been deployed in a range of industries and circumstances throughout history. There is no doubt, however, that its prevalence and sophistication is on the rise.

Peter Druker, one of the founders of modern management, is quoted as saying:

"Businesses once grew by one of two ways; grass roots up, or by acquisition... Today businesses grow through alliances - all kinds of dangerous alliances. Joint ventures and customer partnering which, by the way, very few people understand."1

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