When a foreign company initiates a joint venture with a localcompany as a way of adapting to risk, the foreign company isfollowing a strategy of?
Expert Answer
Here the foreign company isemploying the strategy of equity sharing. In this the equity or theownership of the joint venture is shared by both the foreigncompany and the local company as local company also invests itsmoney into the joint venture. As the local company’s money is alsoat stake, it makes its best effort to ensure that the joint venturesucceeds by bringing in its expertise in the local ways of workingthus mitigating the risk.