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Joint Venturing, Contracting
& Business Law BMCP 905


Mar 30, April 1, 2, 2006
Calgary




                           Chris Hylton
                           chris@hylton.ca
                           Tel 403 264-5288

                                              1
Friday   Part I: Where does law come from
         Part II: Contracts
         Part III: Joint Ventures
Saturday
         Part III: Joint Ventures - continued
         Part IV: Employment Law
         Part V: Courts and Civil Procedures
         Part VI: Sole Proprietorships, Corporations,
                   Partnerships
Sunday   Part VII: The Tort of Negligence
  am     Part VIII: Privacy Law
         Part VIII: The Charter & Human Rights
                    Legislation in Canada
  pm     Exam
                                                        2
Your agenda – what do you want?

 ________________________
 ________________________
 ________________________
 ________________________
 ________________________



                                  3
Evaluation

  Final exam                               100%
  Sunday 1 pm




Exam is open book. You may bring in your textbook, class
notes, and lecture notes.


                                                           4
A little about me:
First of all, call me Chris
  BA & MA from Queens and Laval University
  Worked for the feds, consulting firms
  Has own firm since 1991
  Specialize in employee benefits and Human resources
   consulting
  Certified Trainer with NAIT
  Sports: skiing, swimming, squash
  Have worked with aboriginal groups for 5 years




                                                         5
Why study Joint Ventures
and Law?
   (beside this being a required course
   for most of you)
What is Law?

   Anyone have any idea?
What is Law?
 Law as Rules
 Law as Morals
 Characteristics of “good” law:
   –   Generality
   –   Lack of retroactivity
   –   Clarity
   –   Non-contradictory
   –   Constancy and consistency between official actions
       and existing law




                                                            8
The Role of Law
   The law fulfils several functions in
   society, including:

 Protect persons and property
 Provide government with powers to act in the
  interest of the public; and
 Provide a framework that gives us broader
  freedom of choice



                                                 9
The Law in Perspective
 Law provides rules of conduct that are
  enforceable by government, individuals,
  and companies
 Law binds everyone: you can’t opt out of the
  legal system
 The law protects people and their property
 The law allows government to act on behalf
  of society
 From a commercial perspective, the law
  provides a framework for economic freedom

                                                 10
The Law and Economic Freedom
Framework for freedom of choice
  – Businesses rely on law to enforce the
    business arrangement
  – Law provides predictability and reliability
  – Regulating commerce is a balancing act
  – Under-regulated jurisdictions create
    uncertainty
  – Others believe that excessive regulation
    leads to restriction on economic freedom


                                                  11
Business and the Law
Law is pervasive in the business environment.
    - Employment contracts
    - Liability of Directors and Officers
    - Slip and fall of customers on business property
    - Leasing of buildings and equipment
    - Misrepresentation by sales people
    - Transferring shares and shareholder rights
    - Contracts between suppliers, distributors and
       customers



                                                        12
Case: Dudley & Stephens
 3 men and a boy are shipwrecked
 Men are all married with young families
 Food & water ran out, several days passed
 2 of the men killed the boy, and all three fed until
  they were rescued
 The 2 men charged with murder
What would you argue?
 … if you were the prosecutor
 … if you were the accused?

                                                    13
The Civil & Common Law Systems
The legal systems of the Western world can be
    divided into two groups: countries with a
    civil law system and countries with a
    common law system.
 The civil law system originated in continental
  Europe, and has its roots in Roman law, and the
  common law system operated in feudal England.
 Other parts of the world inherited these systems
  of law during the process of colonization.



                                                     14
I.   Where Does Law Come from?
     P3
I Where Does Law Come from? P 3
Four Sources of law:
 Statutes
 Subordinate legislation
 Law made by Judges – Case law
  – Common law




                                  16
Legislation or Statutes pg 3
 Legislation is a general term referring to statutes (or
  statute law), regulations, by-laws
 Statute laws are created by Parliament or legislature (also
  called “Acts”)
   – introduced as “bill”
   – majority support through series of “readings”
   – Potential for public consultation
   – Additional step of Senate for federal legislation
   – finalized by “royal assent”
 subordinate legislation: regulations, bylaws
   – created under Parliament’s or legislature’s authority
   – example of municipality: province creates municipality,
     province gives municipality power to pass by-laws


                                                               17
Subordinate Law pg 3
 Statute creates administrative body
 Administrative body may create procedural
  rules
 Administrative body makes decisions,
  sometimes even giving reasons
 Examples: Workers Compensation tribunals,
  Labour Relations boards, Employment Stds
  Regulations, OH&S


                                              18
Case Laws - The Doctrine of
Precedent pg 4
  One of the most important differences
  between the civil and common law systems is
  the emphasis that is placed on precedent.
 In the common law system, judges have an
  obligation to treat similar or like cases alike.
  This practice is referred to as the doctrine of
  precedent, or stare decisis
 In civil law systems, however, little emphasis
  is placed on precedent


                                                     19
The Constitution

The Constitution is the highest source of
  law in Canada.

  – Any law inconsistent with Constitution: no
    force or effect, see also s. 52 “supremacy
    clause”

EXCEPT: see Limitations on Charter
  rights, discussed below.
                                                 20
Division of Powers pg 5
Canada is a federal country with 2 constitutionally
  entrenched levels of government:
 federal government
   – represents entire country
   – Parliament, or House of Commons (elected)
   – Senate (appointed)
 provincial (territorial) government
   – Legislature represents province (or territory)



                                                      21
Division of Powers pg 5
The Constitution creates division of
 powers     between the levels of government
  – topics divided into federal or provincial authority
     • federal: crime, bankruptcy, copyright, etc (s. 91)
     • provincial: property, civil rights, etc (s. 92)
  – federal government holds residual power
     • topics not otherwise allocated (eg
       telecommunication)
ultra vires legislation
  – created outside scope of government’s authority
     • no force or effect (s. 52)

                                                            22
Constitution Act 1867

s. 91 – Federal Powers     s. 92 – Provincial Powers
 Interprovincial/          Hospitals
   international trade &    Property and civil rights
   commerce                 Administration of justice
 Postal service            Local matters (e.g.
 Aboriginal affairs          highways)
 Currency                  Incorporation of
 National defense            provincial companies
 Criminal law
 Residual powers
 Navigation & shipping


                                                         23
5-1




II Contracts pg 31
Contract Law

A contract is a voluntary exchange of
 promises, creating obligations which, if
 defaulted on, can be enforced and remedied
 by the courts.
Primary concern of the courts is to enforce the
 reasonable expectations of the parties
Courts reluctant to interfere, not concerned
 about fairness of the deal

                                              25
Ingredients of a Contract pg 31
 To be enforceable in court an agreement
 must meet the following qualifications.
  1. Consensus           4. Legality
  2. Consideration       5. Intention
  3. Capacity            6. In writing
                          (sometimes)




                                           26
Consensus p 32
A meeting of the minds of contracting parties
  –   share an understanding of the bargain struck
  –   be willing to commit themselves to terms
  –   terms must be unambiguous
  –   failure to read a contract is no excuse
Comprised of Offer and Acceptance




                                                     27
Offer p 32
  Offer must contain:
   – terms of the contract

   – a communication of willingness
     to be bound
   – terms of offer must be clear

   – terms can be implied




                                      28
Invitation to Treat p 32
An invitation to the general public to engage
  in the bargaining process
  –   advertisements or sales promotions are not
      binding offers
  –   articles displayed for sale are not
      offers but merely invitations for
      customers to offer to pay
      the price of the item



                                                   29
Communication of an Offer
An offer must be communicated
Disclaimers of responsibility must be posted
 in plain sight or printed on back of tickets
Only the person or group to whom offer is
 made can accept it




                                                30
End of an Offer
Offer ends at a specified time or
after a reasonable time if not specified
At the death or insanity of offeror
When it is revoked before acceptance and the
 revocation is communicated to offeree
When offer is rejected or counteroffer is put
 forward


                                                 31
Acceptance p 33

Must be unconditional
  –   must not specify any new terms
  –   court will interpret any ambiguities in the offer
      to give effect to the intentions of the parties
  –   will not overcome the defect of an incomplete
      or defective offer



                                                          32
Communication of Acceptance 33
Usually by communication to the offeror
  –   effective at time acceptance is communicated
Sometimes by conduct
By performance of the act stipulated in offer
Silence is not acceptance unless part of on-
 going business relationship
Note negative-option schemes, cable cos


                                                     33
Post Box Rule pg 33


When acceptance is mailed, it is effective
 when and where it is posted
Rule applies only when response by mail is
 appropriate
New methods of communication
 makes the expansion of the post
 box rule unnecessary

                                              34
Consideration p 34
Each party must give consideration
Does not have to be fair
Must be legal
Not gratuitous
Past consideration is no consideration




                                          35
Capacity pg 34




                 36
Illegal Contracts pg 35




                          37
Restrictive Covenant p 35, 36
Non compete clause against sellor of business
  – Must be reasonable in time and geography
Employment contract
  – Same issues for new hires




                                               38
Some contracts not enforceable by the
courts unless in writing p 36
Land deals
  – Sale, easements, and right of ways
Leases for more than 3 years
Contract that cannot be performed in one year
Guarantee’s against another’s debt
Marriage promises
Promise of executor to pay debts of estate


                                              39
Factors affecting contracts pg 37 - 40




                                         40
Ending contract pg 40




                        41
Remedies pg 42, 43




                     42
Case Study – Leander and Jason
Leander (L) owns greenhouses
Jason (J) is a retail florist
J contracts with L for 3000 plants @ $10
Delivery to take place between Dec.10-20
On Dec. 9, L informs J that she will not
 deliver the plants
What are J’s options?


                                            43
Jason’s Position
Contract
  – Offer
  – Acceptance
  – Consideration
Breach
Remedy




                    44
Leander’s Position
No contract as performance not until Dec. 10-
 20
No breach
J can still go elsewhere and get plants




                                             45
The Result
J has a much better case
There was a contract
Remedy
  – Mitigation
  – Assessment of damages
  – Costs




                            46
III JOINT VENTURES:
GROWING THE FUTURE



  The growth in aboriginal Ec Dev
  strategies is a key driver for joint
  ventures
Planning for success
 Phase I - Ideas   Phase II - Options




                                        48
Next Steps,

Planning      Signing   Announcing




                                     49
Steering
                 Committee



Resources   Markets               Community
                       Business
                       Strategy




                                              50
Ownership Options
                                                     Merger Acquisition
    100%
Community
 Ownership
                                         Joint Ventures & Alliances


                               Lease
                                               Partnerships & Franchises
                               Equipment
             Management
             Contracts

                     Service
                     Contracts
       0%
Community        5        10        15        20       25       30+        Months
 Ownership


                                                                               51
Commitment Options
Type of relationship Example         Scale of Commitment
no relationship                      No commitment
One-off deal         delivery of one
                       service

Alliance               buying consortia /
                        national brand

Partnership            various partnerships / franchises

JV                     timber or O&G
                         operation
Merger / Acquisition                        High commitment
                                                              52
Motivation for developing a
      joint venture pg 3
•Business expansion
•New products
•New markets
•Need for more resources
•Technical expertise
•Greater distribution channels

                                 53
The following areas need to be considered
 when forming a joint venture:

Capital
Branding
Expertise
Resources
Cultural
Legal
National/local government support

                                            54
Types of JV’s pg 4
Start small
New company
Legal advice needed (Vancouver FN and
 casino)




                                         55
Why JV? Pg 5
Greater success
Complementary practices




                           56
Important Factors
Success in a joint venture depends on the choice
  of JV partner. Successful choice depends on:

 The partners sharing similar objectives
 The partners’ commitment to making the JV
  work
 A reward from the relationship, and
 An equal share in the risks and rewards



                                                   57
If there is a fit with your organization and
   prospective partner:
 Financial
 Joint development of business plan
 Legally, and from a
 Governance / regulatory perspective
If you have researched potential partner track
   record in:
 Maintaining relationships
 Resources to commit to the venture, and
 History of long-term commitment
…then the building blocks for an alliance are in
   place                                           58
Benefits
There must be real benefits for both partners. If the
  partnership is
successfully established, it will provide:
 Shared financial commitment
 Shared risk
 Growth
 Mutual learning & professional development
 Increased research capacity
 Widening markets / programs / opportunities

                                                        59
Question for Discussion
Your leadership wants you to come up with
 three possible partners for a JV in your
 community
With a partner, come up with three possible
 JV partners and explain your choices




                                               60
HUMAN RESOURCE
STRATEGY pg 5, 6, 7
The HRM functions of a JV are more
 complex because managers (and
 sometimes workers) come from two or
 more firms or from two or more cultures



                                           61
HR ISSUES
HR planning, skills needed
Parent involvement
Staffing the alliance management and
 technical personnel
Staffing the alliance workforce
Assigning managers strategic or operations
 tasks


                                              62
HR issues, continued
Performance assessment
Loyalty
Career development
Cultural differences, need to create hybrid
 culture, overcoming cross cultural issues
Training
Compensation plan tied to success of JV


                                               63
What can go wrong? Pg 9
Most common reasons for JV failure:
Cultural Differences – 49%
Poor or unclear leadership – 49%
Poor integration process – 46%




                                       64
Why? Pg 9
Objectives are not clear
Community buy in not there
Imbalance in levels of expertise, investments
 or assets of partners
Different cultures and management style
 results in poor integration and co-operation



                                                 65
Assess your readiness for JV pg 11
    SWOT analysis
    Gap analysis
    Look at existing successful
      businesses

    Direction of growth
    Method of growth
                                     66
Choosing the right JV Partner pg 12
Existing customers and suppliers
Other success stories from other
  communities




                                      67
SELECTING A PARTNER:
THE MOST IMPORTANT
CHOICE?
Seek
  – strategic complementarity
  – skill complementarity
  – compatible management styles




                                   68
ISSUES TO CONSIDER IN
 CHOOSING A PARTNER
The level of mutual dependency
The "anchor" partner
The "elephant and the ant" complex
Operating policy differences
Difficulties of cross-cultural communication




                                                69
Plan your JV relationship pg 14
What do you want out of relationship?
Access to larger resources




                                         70
Decide Link in
                             Value Chain



                              Select a
          Begin Over          Potential
                              Partner




                   No        Acceptable?


                                  Yes
                                                           Build Trust
 Choose an         Negotiate an          Build the
                                                              and
Alliance Type      Agreement            Organization
                                                          Commitment




                              Assess
                            Performance




    Terminate
                               Meets                   Continue or
        or
      Revise
                       No     Strategic       Yes        Increase
                             Objectives?               Involvement
  Implementation

                                                                         71
Creating a JV, pg 15
Written agreement
Shopping list
trust




                       72
NEGOTIATING THE
AGREEMENT
Joint venture contracts: legal documents that
 bind partners together
The formal agreement is not as important as
 the ability of managers to get along




                                                 73
ISSUES IN ALLIANCE
AGREEMENTS
under which law does the agreement operate
how will profits be divided
do you need a prenuptial agreement
what are the equity contributions of each
  partner?



                                              74
DECISION MAKING CONTROL

Majority ownership does not necessarily =
 control
Operational decisions
Strategic decisions




                                             75
DOMINANT PARENT
One parent controls strategic and
 operational decision making
  – dominant parent often has majority
    ownership
  – dominant parent treats the JV as wholly
    owned subsidiary




                                              76
SHARED MANAGEMENT
Both parents contribute approximately the
 same number of managers to the board of
 directors, the top management team, and
 functional area management




                                             77
SPLIT CONTROL
Partners usually share strategic decision
  making and split functional decision making




                                                78
INDEPENDENT
MANAGEMENT

JV managers act like managers from a
 separate company
  – JVs often recruit managers from outside the
    parent companies




                                                  79
ROTATING MANAGEMENT
Key positions rotate among partners
  – popular in developing countries
     • trains management talent and transfers expertise




                                                          80
CHOOSING AN ALLIANCE
MANAGEMENT STRUCTURE
If one parent has dominant equity position
  – dominant management structure more likely




                                                81
Choosing an alliance
management structure,
continued
Equal ownership
  – shared, split, or rotating management
    structure preferred
Similar technologies or know-how
  – shared management structure preferred



                                            82
COMMITMENT AND
  TRUST

Without trust and commitment the alliance
 will fail entirely or never reach its potential




                                                   83
COMMITMENT
Taking care of each other and putting forth
  extra effort to make the venture work
  – attitudinal commitment
  – calculative commitment




                                               84
WHY ARE TRUST AND
COMMITMENT IMPORTANT?
Required for JV participants to contribute
 knowledge and quality inputs
Weakness of formal contracts
  – can never identify all the issues




                                              85
KEY FACTORS TO BUILD &
SUSTAIN TRUST &
COMMITMENT
Pick your partner carefully
Know each side’s strategic goals
Seek win-win situations
Go slowly



                                    86
Key factors to build and sustain trust
and commitment, continued
Invest in cross-cultural training
Invest in direct communication
Find the “right” levels of communication




                                            87
TRUST & COMMITMENT
   High
Commitment         Vulnerabilities
  Trust




                                             Benefits
    &




                                 Trade Off
                                   Point




    Low

             Low      Vulnerabilities &       High
                          Benefits
                                                        88
Making it work. Pg 16, 17
Look for quick success first
Communications
Share info openly
Look for win wins




                                89
Critical Success Factors
Assuming that financial, legal, and regulatory
  elements are stable, the two critical factors
  are:

 Communication
 Shared goals and vision




                                                  90
Communication and
         shared vision
High levels of internal commitment
  communicated clearly and consistently,
  including:
 Involvement of senior management
 Involvement of departments and staff
 Creation and propagation of protocols
  and responsibilities




                                           91
Ending a JV pg 17, 18
Not designed to last forever
Contract wording
Buy out




                                92
IF THE ALLIANCE DOES
NOT WORK
Negotiate an end or improve
 implementation
Know when to quit/invest more
Avoid “escalation of commitment”
“prenuptial agreements” assist with
 termination of agreement
Death not always failure
Was not designed to last for ever
 anyway 5 – 10 years                   93
One example pg 18, 19, 20
Discuss and comment on what you would do
 differently




                                            94
Joint Ventures – Conflicting
Values
 “Developing businesses for our community will
  create jobs and bring wealth to our people”
            Economic Development Director
 “The real issue is the protection of our
  traditions and values, not jobs”
                          Museum Director

1. Do you agree or disagree with each of the
   statements above?
2. Discuss with colleagues and come to a
   conclusion

                                                  95
Building on economic
   opportunities       Forestry
                                                         (e.g., BC Economic
                         Mining                          Renewal, Sask
                                                         Forestry Accord)
                         (e.g., Diavik)


Oil & Gas                                                                     Tourism
(e.g., Athabasca Oil                                                          (e.g., the North)
Sands/Fort McKay)




                                                                                                  Fisheries


  Agriculture
  (e.g., Blood and
  Peigan irrigation)
                       Hydro              Commercial/
                       (e.g., Gull                                                         Gas
                       Rapids)            Industrial Parks                                 (e.g., Sable Island)
                                          (e.g., Chippewas of                                                     97
                                          Sarnia, Kamloops)
INAC’s Key Investments in
 Economic Development

• Capacity Development
• Regional Economic Opportunities
• Business/Market Development
• Innovative Access to Capital

                                    98
Regional Economic Opportunities
Regional Partnerships Fund Assists First Nation and Inuit
  communities to participate in the planning and
  implementation of large-scale resource development
  projects involving the private sector, federal and
  provincial/territorial governments and other
  stakeholders
Resource Access Negotiation Program Helps individual First
  Nation and Inuit communities negotiate bilateral benefit
  agreements with governments or the private sector
  relating to resource development

Resource Partnerships Program Assists First Nation and
  Inuit communities to participate in the planning and
  implementation of large scale resource development
  projects involving the private sector, federal and
  provincial/territorial governments and other
  stakeholders                                               99
Business / Market Development
Opportunity Fund/Resource Acquisition
 Initiative
  • Helps First Nation and Inuit Community Economic
    Development Officers (CEDOs) attract joint venture
    partners or secure conventional debt financing, and
    helps communities to obtain natural resource permits
    and licences

Major Business Projects Program
  • Provides financial assistance for start-up and
    expansion of major First Nation and Inuit businesses
                                                       100
Innovative Access to Capital

Aboriginal Contract Guarantee
  • Assists Aboriginal businesses overcome lack
    of access to bid and performance bonds

  Note – some of these programs may have been
   discontinued or replaced, check with your
   local office.


                                                  101
Federal Support for Ab Forestry
 Natural Resources Canada (NRCan)
  – First Nation Forestry Program (joint with INAC)
  – Sustainable Communities Initiative
  – Model Forest Program
 Indian and Northern Affairs Canada (INAC)
  –   Resource Access Negotiations Program
  –   Resource Partnerships Program
  –   Resource Acquisition Initiative
  –   Regional Partnership Fund
 Human Resources Development Canada (HRDC)
  – Aboriginal Human Resources Development Strategy
  – Youth Employment Strategy
 Aboriginal Business Canada (ABC)
  – ABC business program                              102
NR Canada Initiatives
 First Nation Forestry Program
  – To improve economic conditions in status Indian
    communities with full consideration of the principles
    of sustainable forest management
  – Capacity building and economic development projects
  – A partnership program between INAC, NRCan, and
    First Nations
  – 1148 projects; $83 million invested ( 96/97 – 01/02)
  – Over 65,000 person weeks of work
  – 4,800 First Nations with forestry job experience
  – 106 forest management plans
  – 90 feasibility studies and 114 business plans
  – http://fnfp.gc.ca
                                                            103
Forestry Mess ups in
Clayoquot Sound
Clayoquot Sound: A Mythic
 Battle
Conflict began in mid 1980’s
Key stakeholders
  – Coalition of environmental groups
  – MacMillan Bloedel Forest Company
  – First Nations leaders (Nuu-Chah-Nulth)
Government in passive role though
 responsible for Crown Lands
No one “in charge”

                                             105
What happened?
Conflict (1985-1995)
  – protests, blockades and market campaign
Exploration (1994-1998)
  – community-based dialogue and learning
  – development of new model of forestry
Collaboration (1999- ?)
  – MOU re joint venture forest company
  – collaboration on the Central and North Coast

                                                   106
Barriers to Building Social Capital
hostility/years of conflict
gender/ethnicity/life experience differences
lack of common vision/goal
no language for sustainable forestry




                                           107
Lessons Learned
Relationships evolved between individuals
 and organizations
Relationships fostered greater
 interdependence and trust
Solutions emerged that weren’t anticipated
Relationship-building competence a key




                                              108
Strategies
Start small           Keep the door open
Manage                Embrace diversity
 expectations          Focus on shared
Seek quick             visions
 successes and build   Earn trust
 on them
Make linkages


                                          109
MISSISSIPPI BAND OF
CHOCTAW INDIANS
Economic Overview




                      110
Economic Conditions 1950s

•86% below $2,000 per year
•Only 7% finished High School
•BIA “in charge”




                                111
History

•1969 Choctaw Development Enterprise
(construction co)
•1969 American Greeting Visit
•1971 1st Industrial Park
•1975 - 1977 Chief Martin wrote 500 letters
•1977 Packard Electric
•1981 American Greetings
•1985 Choctaw Electronics Enterprise


                                              112
History

•1986 Choctaw Manufacturing Enterprise
•1989 Choctaw Shopping Center Enterprise
•1991 First American Printing & Direct Mail
•1995 First American Plastic Molding Enterprise




                                                  113
Industrial Development Results

•Diversified Economy into 5 counties
•Customers: McDonald’s, Ford, Chrysler, Xerox, AT&T,
Navistar, Boeing, Peavey, Caterpillar, etc.
•Industries: Automotive Assembly, Commercial Printing,
Plastic Molding, Retail, Service, Construction, Medical,
etc.
•Business Types: Wholly-owned Tribal Enterprise, Joint
Ventures, Leasehold Interest
•Overall: A positive reputation within business and
political realms
                                                           114
Tourism & Gaming

•1988 Indian Gaming Regulatory Act passed by Congress
•1993 Signed the Tribal/State Compact
•1994 Opened the Silver Star Hotel & Casino
•1997 Dancing Rabbit Golf Club -- The Azaleas
•1999 Dancing Rabbit #2 -- The Oaks
•2000 Pearl River Resort Master Plan
•2002 Golden Moon Hotel & Casino
•2002 Geyser Falls Water Park
•2003 Hard Rock Beach Club and Clearwater Key
                                                        115
Economic Impact Study 2001

Impact from Recurring Operations
      Jobs Created               14,817
      Payroll Created            $356.8 million
      MS Tax Revenues            $18.7 million
Construction Impacts
      Current Expenditures       $485.9 million
      Jobs Created               8,686
      Payroll Created            $236.7 million
      Mississippi Tax Revenues   $19.7 million
                                                  116
Emerging Trends



•400 Tribal Members in College


•50% of the Tribe’s population is <21 years old


•Emerging Middle Class




                                                  117
What the Tribe is
 Seeking
1. Add new customers to existing companies
   •Electronic assembly, printing, plastic molding, etc.
   •Exclusive Manufacturing Arrangements
2. Leasehold Tenants
   •Manufacturing Facilities
   •Choctaw Town Center
   •Pearl River Resort
3. Joint Ventures with Existing Companies
4. Creation of New Tribal Enterprises or Joint Ventures
                                                           118
What the Tribe is
 Not Seeking

•Vertical Integration Opportunities
•Angel Investment Opportunities
•Purchase of Existing Companies/Facilities outside
“normal” boundaries
•Tax-Oriented Projects
•Environmentally-Sensitive Projects
•Grant-Dependent Projects
Source: “MISSISSIPPI BAND OF CHOCTAW INDIANS
Economic Overview” BREI ANNUAL CONFERENCE Proceedings, HALIFAX, NOVA
SCOTIA, MAY 20, 2004
                                                                       119
Most Alliances Fail
Researchers              Year   Failure Rate

McKinsey & Company       1993      33%

The Darden School
                         1996      60%
(Prof. Robert Spekman)

KPMG                     1996      70%

PricewaterhouseCoopers   1998      50%

Anderson Consulting      1999      61%


The Lared Company        2000      60%

                                               120
30 – 70% of alliances do not succeed for a number of reasons



 Unclear strategies                                  Changing factors (internal and external)

 Strategy failure                                    Different partner goals

                                                      Uncertainty
 Dysfunctional governance
                                                      Valuation difficulty
 Culture clashes
                                                      Difficulty in unwinding
 Loss of proprietary assets
                                                      Asymmetric dependence

 Lack of relationship focus                          Distrust
    Source: Jill Foote, CFA, Ph.D.
    Jones Graduate School of Management, Rice University
                                                                                            121
Our offer to you
Please call if you have any HR, or workplace
 issue that you are overwhelmed with
We can help you


We also are pleased to do Free Workshops for
  your organization (some limits apply) Let us
  know what your needs are and we will make it
  happen!
                                                 122
CG Hylton - Services
 HR Consulting                  Benefits, Pensions,
 Job Descriptions               EAP
 Salary Grids                   Strategic Planning
 Wellness at Work               Drug and Alcohol
                                  programs
 Staff Morale
                                 Dept re-orgs
 Training and
  Workshops                      Leadership
                                  compensation
                  Tel 403 264 5288
                  chris@hylton.ca
                                                   123

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Business Law 1

  • 1. Joint Venturing, Contracting & Business Law BMCP 905 Mar 30, April 1, 2, 2006 Calgary Chris Hylton chris@hylton.ca Tel 403 264-5288 1
  • 2. Friday Part I: Where does law come from Part II: Contracts Part III: Joint Ventures Saturday Part III: Joint Ventures - continued Part IV: Employment Law Part V: Courts and Civil Procedures Part VI: Sole Proprietorships, Corporations, Partnerships Sunday Part VII: The Tort of Negligence am Part VIII: Privacy Law Part VIII: The Charter & Human Rights Legislation in Canada pm Exam 2
  • 3. Your agenda – what do you want? ________________________ ________________________ ________________________ ________________________ ________________________ 3
  • 4. Evaluation  Final exam 100%  Sunday 1 pm Exam is open book. You may bring in your textbook, class notes, and lecture notes. 4
  • 5. A little about me: First of all, call me Chris  BA & MA from Queens and Laval University  Worked for the feds, consulting firms  Has own firm since 1991  Specialize in employee benefits and Human resources consulting  Certified Trainer with NAIT  Sports: skiing, swimming, squash  Have worked with aboriginal groups for 5 years 5
  • 6. Why study Joint Ventures and Law? (beside this being a required course for most of you)
  • 7. What is Law? Anyone have any idea?
  • 8. What is Law?  Law as Rules  Law as Morals  Characteristics of “good” law: – Generality – Lack of retroactivity – Clarity – Non-contradictory – Constancy and consistency between official actions and existing law 8
  • 9. The Role of Law The law fulfils several functions in society, including:  Protect persons and property  Provide government with powers to act in the interest of the public; and  Provide a framework that gives us broader freedom of choice 9
  • 10. The Law in Perspective  Law provides rules of conduct that are enforceable by government, individuals, and companies  Law binds everyone: you can’t opt out of the legal system  The law protects people and their property  The law allows government to act on behalf of society  From a commercial perspective, the law provides a framework for economic freedom 10
  • 11. The Law and Economic Freedom Framework for freedom of choice – Businesses rely on law to enforce the business arrangement – Law provides predictability and reliability – Regulating commerce is a balancing act – Under-regulated jurisdictions create uncertainty – Others believe that excessive regulation leads to restriction on economic freedom 11
  • 12. Business and the Law Law is pervasive in the business environment. - Employment contracts - Liability of Directors and Officers - Slip and fall of customers on business property - Leasing of buildings and equipment - Misrepresentation by sales people - Transferring shares and shareholder rights - Contracts between suppliers, distributors and customers 12
  • 13. Case: Dudley & Stephens  3 men and a boy are shipwrecked  Men are all married with young families  Food & water ran out, several days passed  2 of the men killed the boy, and all three fed until they were rescued  The 2 men charged with murder What would you argue? … if you were the prosecutor … if you were the accused? 13
  • 14. The Civil & Common Law Systems The legal systems of the Western world can be divided into two groups: countries with a civil law system and countries with a common law system.  The civil law system originated in continental Europe, and has its roots in Roman law, and the common law system operated in feudal England.  Other parts of the world inherited these systems of law during the process of colonization. 14
  • 15. I. Where Does Law Come from? P3
  • 16. I Where Does Law Come from? P 3 Four Sources of law:  Statutes  Subordinate legislation  Law made by Judges – Case law – Common law 16
  • 17. Legislation or Statutes pg 3  Legislation is a general term referring to statutes (or statute law), regulations, by-laws  Statute laws are created by Parliament or legislature (also called “Acts”) – introduced as “bill” – majority support through series of “readings” – Potential for public consultation – Additional step of Senate for federal legislation – finalized by “royal assent”  subordinate legislation: regulations, bylaws – created under Parliament’s or legislature’s authority – example of municipality: province creates municipality, province gives municipality power to pass by-laws 17
  • 18. Subordinate Law pg 3  Statute creates administrative body  Administrative body may create procedural rules  Administrative body makes decisions, sometimes even giving reasons  Examples: Workers Compensation tribunals, Labour Relations boards, Employment Stds Regulations, OH&S 18
  • 19. Case Laws - The Doctrine of Precedent pg 4 One of the most important differences between the civil and common law systems is the emphasis that is placed on precedent.  In the common law system, judges have an obligation to treat similar or like cases alike. This practice is referred to as the doctrine of precedent, or stare decisis  In civil law systems, however, little emphasis is placed on precedent 19
  • 20. The Constitution The Constitution is the highest source of law in Canada. – Any law inconsistent with Constitution: no force or effect, see also s. 52 “supremacy clause” EXCEPT: see Limitations on Charter rights, discussed below. 20
  • 21. Division of Powers pg 5 Canada is a federal country with 2 constitutionally entrenched levels of government:  federal government – represents entire country – Parliament, or House of Commons (elected) – Senate (appointed)  provincial (territorial) government – Legislature represents province (or territory) 21
  • 22. Division of Powers pg 5 The Constitution creates division of powers between the levels of government – topics divided into federal or provincial authority • federal: crime, bankruptcy, copyright, etc (s. 91) • provincial: property, civil rights, etc (s. 92) – federal government holds residual power • topics not otherwise allocated (eg telecommunication) ultra vires legislation – created outside scope of government’s authority • no force or effect (s. 52) 22
  • 23. Constitution Act 1867 s. 91 – Federal Powers s. 92 – Provincial Powers  Interprovincial/  Hospitals international trade &  Property and civil rights commerce  Administration of justice  Postal service  Local matters (e.g.  Aboriginal affairs highways)  Currency  Incorporation of  National defense provincial companies  Criminal law  Residual powers  Navigation & shipping 23
  • 25. Contract Law A contract is a voluntary exchange of promises, creating obligations which, if defaulted on, can be enforced and remedied by the courts. Primary concern of the courts is to enforce the reasonable expectations of the parties Courts reluctant to interfere, not concerned about fairness of the deal 25
  • 26. Ingredients of a Contract pg 31 To be enforceable in court an agreement must meet the following qualifications.  1. Consensus  4. Legality  2. Consideration  5. Intention  3. Capacity  6. In writing (sometimes) 26
  • 27. Consensus p 32 A meeting of the minds of contracting parties – share an understanding of the bargain struck – be willing to commit themselves to terms – terms must be unambiguous – failure to read a contract is no excuse Comprised of Offer and Acceptance 27
  • 28. Offer p 32  Offer must contain: – terms of the contract – a communication of willingness to be bound – terms of offer must be clear – terms can be implied 28
  • 29. Invitation to Treat p 32 An invitation to the general public to engage in the bargaining process – advertisements or sales promotions are not binding offers – articles displayed for sale are not offers but merely invitations for customers to offer to pay the price of the item 29
  • 30. Communication of an Offer An offer must be communicated Disclaimers of responsibility must be posted in plain sight or printed on back of tickets Only the person or group to whom offer is made can accept it 30
  • 31. End of an Offer Offer ends at a specified time or after a reasonable time if not specified At the death or insanity of offeror When it is revoked before acceptance and the revocation is communicated to offeree When offer is rejected or counteroffer is put forward 31
  • 32. Acceptance p 33 Must be unconditional – must not specify any new terms – court will interpret any ambiguities in the offer to give effect to the intentions of the parties – will not overcome the defect of an incomplete or defective offer 32
  • 33. Communication of Acceptance 33 Usually by communication to the offeror – effective at time acceptance is communicated Sometimes by conduct By performance of the act stipulated in offer Silence is not acceptance unless part of on- going business relationship Note negative-option schemes, cable cos 33
  • 34. Post Box Rule pg 33 When acceptance is mailed, it is effective when and where it is posted Rule applies only when response by mail is appropriate New methods of communication makes the expansion of the post box rule unnecessary 34
  • 35. Consideration p 34 Each party must give consideration Does not have to be fair Must be legal Not gratuitous Past consideration is no consideration 35
  • 38. Restrictive Covenant p 35, 36 Non compete clause against sellor of business – Must be reasonable in time and geography Employment contract – Same issues for new hires 38
  • 39. Some contracts not enforceable by the courts unless in writing p 36 Land deals – Sale, easements, and right of ways Leases for more than 3 years Contract that cannot be performed in one year Guarantee’s against another’s debt Marriage promises Promise of executor to pay debts of estate 39
  • 43. Case Study – Leander and Jason Leander (L) owns greenhouses Jason (J) is a retail florist J contracts with L for 3000 plants @ $10 Delivery to take place between Dec.10-20 On Dec. 9, L informs J that she will not deliver the plants What are J’s options? 43
  • 44. Jason’s Position Contract – Offer – Acceptance – Consideration Breach Remedy 44
  • 45. Leander’s Position No contract as performance not until Dec. 10- 20 No breach J can still go elsewhere and get plants 45
  • 46. The Result J has a much better case There was a contract Remedy – Mitigation – Assessment of damages – Costs 46
  • 47. III JOINT VENTURES: GROWING THE FUTURE The growth in aboriginal Ec Dev strategies is a key driver for joint ventures
  • 48. Planning for success Phase I - Ideas Phase II - Options 48
  • 49. Next Steps, Planning Signing Announcing 49
  • 50. Steering Committee Resources Markets Community Business Strategy 50
  • 51. Ownership Options Merger Acquisition 100% Community Ownership Joint Ventures & Alliances Lease Partnerships & Franchises Equipment Management Contracts Service Contracts 0% Community 5 10 15 20 25 30+ Months Ownership 51
  • 52. Commitment Options Type of relationship Example Scale of Commitment no relationship No commitment One-off deal delivery of one service Alliance buying consortia / national brand Partnership various partnerships / franchises JV timber or O&G operation Merger / Acquisition High commitment 52
  • 53. Motivation for developing a joint venture pg 3 •Business expansion •New products •New markets •Need for more resources •Technical expertise •Greater distribution channels 53
  • 54. The following areas need to be considered when forming a joint venture: Capital Branding Expertise Resources Cultural Legal National/local government support 54
  • 55. Types of JV’s pg 4 Start small New company Legal advice needed (Vancouver FN and casino) 55
  • 56. Why JV? Pg 5 Greater success Complementary practices 56
  • 57. Important Factors Success in a joint venture depends on the choice of JV partner. Successful choice depends on:  The partners sharing similar objectives  The partners’ commitment to making the JV work  A reward from the relationship, and  An equal share in the risks and rewards 57
  • 58. If there is a fit with your organization and prospective partner:  Financial  Joint development of business plan  Legally, and from a  Governance / regulatory perspective If you have researched potential partner track record in:  Maintaining relationships  Resources to commit to the venture, and  History of long-term commitment …then the building blocks for an alliance are in place 58
  • 59. Benefits There must be real benefits for both partners. If the partnership is successfully established, it will provide:  Shared financial commitment  Shared risk  Growth  Mutual learning & professional development  Increased research capacity  Widening markets / programs / opportunities 59
  • 60. Question for Discussion Your leadership wants you to come up with three possible partners for a JV in your community With a partner, come up with three possible JV partners and explain your choices 60
  • 61. HUMAN RESOURCE STRATEGY pg 5, 6, 7 The HRM functions of a JV are more complex because managers (and sometimes workers) come from two or more firms or from two or more cultures 61
  • 62. HR ISSUES HR planning, skills needed Parent involvement Staffing the alliance management and technical personnel Staffing the alliance workforce Assigning managers strategic or operations tasks 62
  • 63. HR issues, continued Performance assessment Loyalty Career development Cultural differences, need to create hybrid culture, overcoming cross cultural issues Training Compensation plan tied to success of JV 63
  • 64. What can go wrong? Pg 9 Most common reasons for JV failure: Cultural Differences – 49% Poor or unclear leadership – 49% Poor integration process – 46% 64
  • 65. Why? Pg 9 Objectives are not clear Community buy in not there Imbalance in levels of expertise, investments or assets of partners Different cultures and management style results in poor integration and co-operation 65
  • 66. Assess your readiness for JV pg 11 SWOT analysis Gap analysis Look at existing successful businesses Direction of growth Method of growth 66
  • 67. Choosing the right JV Partner pg 12 Existing customers and suppliers Other success stories from other communities 67
  • 68. SELECTING A PARTNER: THE MOST IMPORTANT CHOICE? Seek – strategic complementarity – skill complementarity – compatible management styles 68
  • 69. ISSUES TO CONSIDER IN CHOOSING A PARTNER The level of mutual dependency The "anchor" partner The "elephant and the ant" complex Operating policy differences Difficulties of cross-cultural communication 69
  • 70. Plan your JV relationship pg 14 What do you want out of relationship? Access to larger resources 70
  • 71. Decide Link in Value Chain Select a Begin Over Potential Partner No Acceptable? Yes Build Trust Choose an Negotiate an Build the and Alliance Type Agreement Organization Commitment Assess Performance Terminate Meets Continue or or Revise No Strategic Yes Increase Objectives? Involvement Implementation 71
  • 72. Creating a JV, pg 15 Written agreement Shopping list trust 72
  • 73. NEGOTIATING THE AGREEMENT Joint venture contracts: legal documents that bind partners together The formal agreement is not as important as the ability of managers to get along 73
  • 74. ISSUES IN ALLIANCE AGREEMENTS under which law does the agreement operate how will profits be divided do you need a prenuptial agreement what are the equity contributions of each partner? 74
  • 75. DECISION MAKING CONTROL Majority ownership does not necessarily = control Operational decisions Strategic decisions 75
  • 76. DOMINANT PARENT One parent controls strategic and operational decision making – dominant parent often has majority ownership – dominant parent treats the JV as wholly owned subsidiary 76
  • 77. SHARED MANAGEMENT Both parents contribute approximately the same number of managers to the board of directors, the top management team, and functional area management 77
  • 78. SPLIT CONTROL Partners usually share strategic decision making and split functional decision making 78
  • 79. INDEPENDENT MANAGEMENT JV managers act like managers from a separate company – JVs often recruit managers from outside the parent companies 79
  • 80. ROTATING MANAGEMENT Key positions rotate among partners – popular in developing countries • trains management talent and transfers expertise 80
  • 81. CHOOSING AN ALLIANCE MANAGEMENT STRUCTURE If one parent has dominant equity position – dominant management structure more likely 81
  • 82. Choosing an alliance management structure, continued Equal ownership – shared, split, or rotating management structure preferred Similar technologies or know-how – shared management structure preferred 82
  • 83. COMMITMENT AND TRUST Without trust and commitment the alliance will fail entirely or never reach its potential 83
  • 84. COMMITMENT Taking care of each other and putting forth extra effort to make the venture work – attitudinal commitment – calculative commitment 84
  • 85. WHY ARE TRUST AND COMMITMENT IMPORTANT? Required for JV participants to contribute knowledge and quality inputs Weakness of formal contracts – can never identify all the issues 85
  • 86. KEY FACTORS TO BUILD & SUSTAIN TRUST & COMMITMENT Pick your partner carefully Know each side’s strategic goals Seek win-win situations Go slowly 86
  • 87. Key factors to build and sustain trust and commitment, continued Invest in cross-cultural training Invest in direct communication Find the “right” levels of communication 87
  • 88. TRUST & COMMITMENT High Commitment Vulnerabilities Trust Benefits & Trade Off Point Low Low Vulnerabilities & High Benefits 88
  • 89. Making it work. Pg 16, 17 Look for quick success first Communications Share info openly Look for win wins 89
  • 90. Critical Success Factors Assuming that financial, legal, and regulatory elements are stable, the two critical factors are:  Communication  Shared goals and vision 90
  • 91. Communication and shared vision High levels of internal commitment communicated clearly and consistently, including:  Involvement of senior management  Involvement of departments and staff  Creation and propagation of protocols and responsibilities 91
  • 92. Ending a JV pg 17, 18 Not designed to last forever Contract wording Buy out 92
  • 93. IF THE ALLIANCE DOES NOT WORK Negotiate an end or improve implementation Know when to quit/invest more Avoid “escalation of commitment” “prenuptial agreements” assist with termination of agreement Death not always failure Was not designed to last for ever anyway 5 – 10 years 93
  • 94. One example pg 18, 19, 20 Discuss and comment on what you would do differently 94
  • 95. Joint Ventures – Conflicting Values  “Developing businesses for our community will create jobs and bring wealth to our people” Economic Development Director  “The real issue is the protection of our traditions and values, not jobs” Museum Director 1. Do you agree or disagree with each of the statements above? 2. Discuss with colleagues and come to a conclusion 95
  • 96.
  • 97. Building on economic opportunities Forestry (e.g., BC Economic Mining Renewal, Sask Forestry Accord) (e.g., Diavik) Oil & Gas Tourism (e.g., Athabasca Oil (e.g., the North) Sands/Fort McKay) Fisheries Agriculture (e.g., Blood and Peigan irrigation) Hydro Commercial/ (e.g., Gull Gas Rapids) Industrial Parks (e.g., Sable Island) (e.g., Chippewas of 97 Sarnia, Kamloops)
  • 98. INAC’s Key Investments in Economic Development • Capacity Development • Regional Economic Opportunities • Business/Market Development • Innovative Access to Capital 98
  • 99. Regional Economic Opportunities Regional Partnerships Fund Assists First Nation and Inuit communities to participate in the planning and implementation of large-scale resource development projects involving the private sector, federal and provincial/territorial governments and other stakeholders Resource Access Negotiation Program Helps individual First Nation and Inuit communities negotiate bilateral benefit agreements with governments or the private sector relating to resource development Resource Partnerships Program Assists First Nation and Inuit communities to participate in the planning and implementation of large scale resource development projects involving the private sector, federal and provincial/territorial governments and other stakeholders 99
  • 100. Business / Market Development Opportunity Fund/Resource Acquisition Initiative • Helps First Nation and Inuit Community Economic Development Officers (CEDOs) attract joint venture partners or secure conventional debt financing, and helps communities to obtain natural resource permits and licences Major Business Projects Program • Provides financial assistance for start-up and expansion of major First Nation and Inuit businesses 100
  • 101. Innovative Access to Capital Aboriginal Contract Guarantee • Assists Aboriginal businesses overcome lack of access to bid and performance bonds Note – some of these programs may have been discontinued or replaced, check with your local office. 101
  • 102. Federal Support for Ab Forestry  Natural Resources Canada (NRCan) – First Nation Forestry Program (joint with INAC) – Sustainable Communities Initiative – Model Forest Program  Indian and Northern Affairs Canada (INAC) – Resource Access Negotiations Program – Resource Partnerships Program – Resource Acquisition Initiative – Regional Partnership Fund  Human Resources Development Canada (HRDC) – Aboriginal Human Resources Development Strategy – Youth Employment Strategy  Aboriginal Business Canada (ABC) – ABC business program 102
  • 103. NR Canada Initiatives  First Nation Forestry Program – To improve economic conditions in status Indian communities with full consideration of the principles of sustainable forest management – Capacity building and economic development projects – A partnership program between INAC, NRCan, and First Nations – 1148 projects; $83 million invested ( 96/97 – 01/02) – Over 65,000 person weeks of work – 4,800 First Nations with forestry job experience – 106 forest management plans – 90 feasibility studies and 114 business plans – http://fnfp.gc.ca 103
  • 104. Forestry Mess ups in Clayoquot Sound
  • 105. Clayoquot Sound: A Mythic Battle Conflict began in mid 1980’s Key stakeholders – Coalition of environmental groups – MacMillan Bloedel Forest Company – First Nations leaders (Nuu-Chah-Nulth) Government in passive role though responsible for Crown Lands No one “in charge” 105
  • 106. What happened? Conflict (1985-1995) – protests, blockades and market campaign Exploration (1994-1998) – community-based dialogue and learning – development of new model of forestry Collaboration (1999- ?) – MOU re joint venture forest company – collaboration on the Central and North Coast 106
  • 107. Barriers to Building Social Capital hostility/years of conflict gender/ethnicity/life experience differences lack of common vision/goal no language for sustainable forestry 107
  • 108. Lessons Learned Relationships evolved between individuals and organizations Relationships fostered greater interdependence and trust Solutions emerged that weren’t anticipated Relationship-building competence a key 108
  • 109. Strategies Start small Keep the door open Manage Embrace diversity expectations Focus on shared Seek quick visions successes and build Earn trust on them Make linkages 109
  • 110. MISSISSIPPI BAND OF CHOCTAW INDIANS Economic Overview 110
  • 111. Economic Conditions 1950s •86% below $2,000 per year •Only 7% finished High School •BIA “in charge” 111
  • 112. History •1969 Choctaw Development Enterprise (construction co) •1969 American Greeting Visit •1971 1st Industrial Park •1975 - 1977 Chief Martin wrote 500 letters •1977 Packard Electric •1981 American Greetings •1985 Choctaw Electronics Enterprise 112
  • 113. History •1986 Choctaw Manufacturing Enterprise •1989 Choctaw Shopping Center Enterprise •1991 First American Printing & Direct Mail •1995 First American Plastic Molding Enterprise 113
  • 114. Industrial Development Results •Diversified Economy into 5 counties •Customers: McDonald’s, Ford, Chrysler, Xerox, AT&T, Navistar, Boeing, Peavey, Caterpillar, etc. •Industries: Automotive Assembly, Commercial Printing, Plastic Molding, Retail, Service, Construction, Medical, etc. •Business Types: Wholly-owned Tribal Enterprise, Joint Ventures, Leasehold Interest •Overall: A positive reputation within business and political realms 114
  • 115. Tourism & Gaming •1988 Indian Gaming Regulatory Act passed by Congress •1993 Signed the Tribal/State Compact •1994 Opened the Silver Star Hotel & Casino •1997 Dancing Rabbit Golf Club -- The Azaleas •1999 Dancing Rabbit #2 -- The Oaks •2000 Pearl River Resort Master Plan •2002 Golden Moon Hotel & Casino •2002 Geyser Falls Water Park •2003 Hard Rock Beach Club and Clearwater Key 115
  • 116. Economic Impact Study 2001 Impact from Recurring Operations Jobs Created 14,817 Payroll Created $356.8 million MS Tax Revenues $18.7 million Construction Impacts Current Expenditures $485.9 million Jobs Created 8,686 Payroll Created $236.7 million Mississippi Tax Revenues $19.7 million 116
  • 117. Emerging Trends •400 Tribal Members in College •50% of the Tribe’s population is <21 years old •Emerging Middle Class 117
  • 118. What the Tribe is Seeking 1. Add new customers to existing companies •Electronic assembly, printing, plastic molding, etc. •Exclusive Manufacturing Arrangements 2. Leasehold Tenants •Manufacturing Facilities •Choctaw Town Center •Pearl River Resort 3. Joint Ventures with Existing Companies 4. Creation of New Tribal Enterprises or Joint Ventures 118
  • 119. What the Tribe is Not Seeking •Vertical Integration Opportunities •Angel Investment Opportunities •Purchase of Existing Companies/Facilities outside “normal” boundaries •Tax-Oriented Projects •Environmentally-Sensitive Projects •Grant-Dependent Projects Source: “MISSISSIPPI BAND OF CHOCTAW INDIANS Economic Overview” BREI ANNUAL CONFERENCE Proceedings, HALIFAX, NOVA SCOTIA, MAY 20, 2004 119
  • 120. Most Alliances Fail Researchers Year Failure Rate McKinsey & Company 1993 33% The Darden School 1996 60% (Prof. Robert Spekman) KPMG 1996 70% PricewaterhouseCoopers 1998 50% Anderson Consulting 1999 61% The Lared Company 2000 60% 120
  • 121. 30 – 70% of alliances do not succeed for a number of reasons  Unclear strategies  Changing factors (internal and external)  Strategy failure  Different partner goals  Uncertainty  Dysfunctional governance  Valuation difficulty  Culture clashes  Difficulty in unwinding  Loss of proprietary assets  Asymmetric dependence  Lack of relationship focus  Distrust Source: Jill Foote, CFA, Ph.D. Jones Graduate School of Management, Rice University 121
  • 122. Our offer to you Please call if you have any HR, or workplace issue that you are overwhelmed with We can help you We also are pleased to do Free Workshops for your organization (some limits apply) Let us know what your needs are and we will make it happen! 122
  • 123. CG Hylton - Services  HR Consulting  Benefits, Pensions,  Job Descriptions EAP  Salary Grids  Strategic Planning  Wellness at Work  Drug and Alcohol programs  Staff Morale  Dept re-orgs  Training and Workshops  Leadership compensation Tel 403 264 5288 chris@hylton.ca 123