This case follows the evolution of the relationship between Whirlpool Corporation and Tatramat, a Slovak manufacturer of washing machines. (See “Whirlpool Corporation: Entering Slovakia”, IMD-3-0796, for a description of events prior to Fall 1991.) In Spring 1992, the two companies began to implement an agreement to start a joint venture, but soon thereafter the country was split in two – with the new company located in Slovakia, the poorer of the two economies. By the end of 1993 the output of the JV was significantly below the original expectations and the company was operating at a significant loss. The management of Whirlpool was faced with a choice: increase the equity investment in the JV as anticipated in the original business plan, wait a little longer before making a decision, or cut its loses and withdraw.
