Abstract
In recent years, there were some foreign investors who were forced to exit from successful joint venture FDI. Family Mart Japan was forced to exit from CVSJVFDI in Korea and Vietnam. PepsiCo was forced to exit from JVFDI, Sermsuk. Danone was forced to exit from JVFDI Wahaha. This essay tries to explain such exits of foreign investors from JVFDI with Institutional theory of Selznick and Berger and Luckmann, and shows possible solutions to prevent foreign investors from exiting JVFDI. Selznick says in his Institutional theory, that institution may have a social value under interactions with its environment, and the social value may be changed from its original purpose of the institution. Such social value can be coordinated and controlled by a top leader of the institution. If a top management of a JVFDI is dispatched from its local partner, he or she may justify exit of foreign partner with its social value. But the proposed social value is sometimes introduced with profit making purpose of its local investor from JVFDI not with profit making purpose of the JVFDI itself and does not match with its real environment. Berger and Luckmann show Institutionalization can be processed under interactions of the institution from externalization, objectivation and internalization. If a top management of a JVFDI proceeds in externalization and objectivation of certain social value of the JVFDI, the foreign investor of the JVFDI may prevent its internalization with appealing counter social value toward multiple stakeholders of the JVFDI including local government and employees. This strategy can be supported with several cases including above mentioned exit cases, JVFDI of TOTO, Thailand, PT NNT Indonesia and Marubeni initiated industrial estate JVFDI in Philippines. This analysis can be useful in equity localization request and can be supported with stakeholder capitalism of JVFDI.
