Governing joint ventures: tension among principals’ dominant logic on human motivation and behavior

Abstract

We examine a neglected area in the joint venture literature—how parents’ dominant logic on human intent influences the JV control-performance relationship. Considering two well-developed theoretical perspectives, we suggest that when the decision-making team responsible for negotiating, formulating, and executing the JV agreement is driven by dominant agency logic they rely on a control structure that emphasizes formal mechanisms. In contrast, a parent driven by dominant stewardship logic emphasizes social mechanisms. We also explore the impact of dominant logic on JV performance to propose that effective and efficient goal attainment is higher for JVs governed by parents that share dominant stewardship logic than it is for those that share dominant agency logic. When logics conflict, issues of power arise such that the parents’ relationship and JV goal-related performance ranges from moderate to poor when power is asymmetrical and is consistently poor when parents of equal status battle to get their preferred and incompatible controls fully implemented.