This case details the negotiations for a joint venture between Nora Holdings Sdn Bhd in Malaysia and Sakari Oy based in Finland. Nora is known in Malaysia as the leading telecom company and Sakari is known in Finland as a leading manufacturer of switching systems and cell phone sets. The venture would allow the new company to manufacture and commission digital switching exchanges in order to meet the needs of the telecom companies in Malaysia and other countries around it. Telekom Malaysia Bhd (TMB) wanted the countries aging telecom system to be upgraded and needed it to migrate from a primarily analogue system to a digital system. Since they lacked the resources to do it by themselves they extended a substantial contract to other telekom companies to bid on the project. This is how Nora started to negotiate with Sakari so they could together build a venture that would be able to take on this task.
Joint ventures are set up in many countries to facilitate business and have an edge on competition. Nora did not have the resources to go into the project on its own and needed the expertise and technology of other companies in order to compete in the marketplace. For this reason, as with most joint ventures, Nora started its negotiations with Sakari, because they had the technology needed for the project. This would be beneficial to both companies, because Sakari would be able to enter a foreign market that would be, in part, run by a local company that understands the underlying culture and way to do business in a foreign environment. For Nora, they would be getting the support and backing, both in technology and expert workers etc… from a multinational company. This would ensure that Nora and Sakari’s joint venture would be able to enable Nora to not only secure the contract for Malaysia but they could further explore the markets of other neighboring countries.