Final answer:
The concept described is known as a joint venture, where organizations pool resources and share risks and rewards in starting a new venture abroad. This strategic alliance often involves complementary skills and joint decision-making. It is a common practice in the context of globalization for companies to collaborate in this manner.
Step-by-step explanation:
When managers pool or share their organization's resources and know-how with those of a foreign company, and the two organizations share the rewards or risks of starting a new venture in a foreign country, this is typically referred to as a joint venture.
In a joint venture, partners may bring complementary skills to assist in the management of the business, and they jointly make business decisions.
This approach allows companies to transfer ownership or use rights to locals, bring outside investment to local businesses, potentially increase employment in the service industry, and involve formal encoding of local monitoring and managing resource extraction.
Payment may be received for successfully maintaining local resources. In the broader context of globalization, this kind of collaboration can be part of a strategy to leverage an international division of labor and to manage the cost-savings associated with offshoring or outsourcing.
Another form of business organization related to this is a general partnership, which involves two or more people sharing the responsibility and profits in running a business. Unlike a joint venture, a general partnership usually does not specifically focus on a single project or venture.
As business entities look to grow, they may also consider mergers or becoming multinationals to introduce opportunities in foreign nations, although this is distinct from forming a joint venture.
While a joint venture focuses on a collaborative effort for a specific venture, alternatives such as merged currency or portfolio investment involve different aspects of international business strategies and should not be confused with joint ventures.
Merged currency relates to the use of another nation's currency, and portfolio investment is an investment in another country that is purely financial and does not involve any management responsibility.