Ericsson Hewlett-Packard Telecommunications (A): Joint venture formation

This is an introductory note for the Ericsson Hewlett-Packard joint venture role play series. It provides all the participants with the necessary background information. The series consists of four A-cases (IMD-3-1091 – 1094), four B-cases (IMD-3-1095 – 1098), and a concluding C-case (IMD-3-1099).The four A-cases each portray a negotiating manager. In the preparation leading to the agreement, the two managers from HP and the two from Ericsson have to prepare their negotiating position in order to finalize the deal, which would involve the development of a new telecom management platform targeted at telecom operators. Once the deal is finalized, the four B-cases show the difficulties with which each of the managers from the A-case is faced shortly after the joint venture agreement has been reached. A lack of goal clarity, clashing cultures and internal conflicts are some of the issues that the joint venture and its management have to deal with. The question is how much involvement is needed by the board and to what degree the joint venture manager and his team should resolve the issues personally. The C-case describes how the joint venture manager addressed some of these issues and how a changing ownership structure poses an entirely new set of challenges that he has to deal with.