Abstract
This paper develops and expands upon an important connection between foreign parent firm strategies, the manner in which they control their international joint ventures (IJVs), and the performance of those IJVs. Parent firms’ strategies refer to strategic motives, importance, focus, and competitiveness. Foreign parent firm control is conceptualized across three dimensions including the control mechanism, the control focus, and the extent of control. Our empirical evidence is based on the survey data collected from Finnish firms that established IJVs with local firms in the 1990s. The empirical evidence show different strategies used in IJVs by foreign parent firms required different control structures in IJVs. In addition, the firms that adapted control structure in their IJVs according to their strategies were more satisfied with their IJV performance than those who did not. As such, the paper takes a step further from just being concerned about parent firms’ strategies and moves our thinking toward understanding how to realize such strategies through proper control.
Highlights
In the present study, an international joint ventures (IJVs) is regarded as a separate entity formed by a multinational company (MNC) or multinational companies and a local firm or local firms either through greenfield investment or partial acquisitions
This paper develops and expands upon an important connection between foreign parent firm strategies, the manner in which they control their international joint ventures (IJVs), and the performance of those IJVs
To be able to capture the dynamic nature of IJV and conduct IJV control research thoroughly, this study adopts the multidimensional approach of control advocated by Geringer and Hebert’s (1989)
Summary
Management control means the process by which an organization influences its members and units to work in ways that meet the organizational objectives (Glaister & Buckley, 1998). The main purpose of control is to attain predictability and critical information on IJV operation through some regulatory means (Makhija & Ganesh, 1997), and to safeguard the parent firm’s interests. The control of IJVs is defined as the influence of the foreign parent firms on the operations of the IJVs (Ding, 1997). To be able to capture the dynamic nature of IJV and conduct IJV control research thoroughly, this study adopts the multidimensional approach of control (mechanism, focus, and extent) advocated by Geringer and Hebert’s (1989).
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
