The C.E.O. of Stability, Inc., a U.S. company, is considering the wisdom of an alliance with a Malaysian company. She is concerned about the fact that the Malaysian company wants to own a large percentage of the venture. The CEO
A) is correct to be concerned because this indicates a lack of trust by the Malaysian company.
B) should be concerned because the Malaysian company will be less inclined to share its expertise with the U.S. firm if it owns a dominant interest in the venture.
C) the CEO should realize that if the Malaysian company owns a large equity stake in the venture it will have more incentive to make the venture a success.
D) the CEO's concern probably arises from unconscious prejudice, and this indicates that she will be unable to form a trusting relationship with her Malaysian counterparts.

Question

Quizplus · Accepted Answer

The CEO should realize that if the Malaysian company owns a large equity stake in the venture it will have more incentive to make the venture a success. This is because the Malaysian company will have a vested interest in ensuring the success of the venture as it stands to gain a significant portion of the profits. This can lead to a more committed and motivated partner, resulting in a stronger alliance.

The CEO of Stability, Inc