International Joint Ventures Management Research Articles

Perceived fairness, decision control, and commitment in international joint venture management teams

AbstractPrevious research examining the effectiveness of international joint ventures (IJVs) has focused on differences in the backgrounds and bargaining power of IJV parent firms, while little attention has been given to the IJV itself. This study takes a different perspective by examining the relationship between IJV parent firms and the IJV. Specifically, we examine how IJV and parent involvement in strategic decision‐making influences the IJV management team's commitment to the IJV and to the parent firms. We hypothesize that the IJV management team tends to be more committed to the IJV than to the parent firms, and that there is a strong positive relationship between procedural justice, strategic decision control, and organizational commitment. A field study involving 51 IJVs supported our hypotheses. We discuss the implications of organizational commitment and procedural justice for managing IJVs. Copyright © 2002 John Wiley & Sons, Ltd.

Investors' resource commitments and information reporting systems: control in international joint ventures

This paper examines the effects of resource commitments on information reporting in international joint ventures (IJVs). Resources provided by a parent company to an IJV are expected to impact on the intensity and focus of information reported to it from that IJV. Findings from 20 Sino–British joint ventures confirm that a parent's resource commitment to the IJV, and the control this affords affects the information it receives from the IJV compared to that received by the other parent. They illustrate how the structuring of information feedback is a purposive control mechanism. The experience of the British parent companies suggests that an effective structure for feedback of IJV information requires integration between the provision of technology and occupancy of relevant IJV management positions.

International Joint Ventures: Partnering Skills and Cross-Cultural Issues

Cooperative activity has become an important element of strategic behaviour and, with increasing globalisation, many alliances are being formed across national boundaries, with the attendant challenges of surmounting linguistic and other cultural barriers. This article provides new perspectives on the partnering skills needed for success in such international joint ventures (IJVs). Based on the analysis of 60 personal interviews from a sample of 20 Anglo-European JVs, four categories of skills are analysed: inter-partner skills, managing the IJV managers, the “upward management” skills of IJV managers managing the ‘parent’ partners, and those of managing the IJV itself. The article presents a matrix to examine the four categories of skill in the context in which each are used. Serving both as an analytical device and a diagnostic tool, this matrix offers results that have important implications for the management of IJVs with regard to the selection and training of managers and the inculcation of the skills required for each level of operation.

Compositional gaps and downward spirals in international joint venture management groups

We argue that compositional gaps in international joint venture (IJV) management groups, along parent company lines, will accentuate distinct managerial coalitions. Such gaps can occur on dimensions of observable demography, less apparent demography, or psychological characteristics. While compositional gaps in IJV management groups can provide the basis for healthy substantive conflict, such gaps - particularly if they are large - also tend to induce relationship conflict and heighten substantive conflict beyond its beneficial range. This can set off a downward spiral of relationship conflict, substantive conflict, and behavioral disintegration in the group. These harmful group processes further interact reciprocally with any tensions that might exist between the IJV parents, engendering a second downward spiral. Our model has implications for the performance of international joint ventures, and it serves as a foundation for designing interventions to avoid the downward spirals we portray.

Compositional gaps and downward spirals in international joint venture management groups

AbstractWe argue that compositional gaps in international joint venture (IJV) management groups, along parent company lines, will accentuate distinct managerial coalitions. Such gaps can occur on dimensions of observable demography, less apparent demography, or psychological characteristics. While compositional gaps in IJV management groups can provide the basis for healthy substantive conflict, such gaps—particularly if they are large—also tend to induce relationship conflict and heighten substantive conflict beyond its beneficial range. This can set off a downward spiral of relationship conflict, substantive conflict, and behavioral disintegration in the group. These harmful group processes further interact reciprocally with any tensions that might exist between the IJV parents, engendering a second downward spiral. Our model has implications for the performance of international joint ventures, and it serves as a foundation for designing interventions to avoid the downward spirals we portray. Copyright © 2001 John Wiley & Sons, Ltd.

Drivers and outcomes of parent company intervention in IJV management: a cross-cultural comparison

This study focused on an important issue in international joint venture (IJV) management — the motivations for and outcomes of parent company intervention into the affairs of the IJV, specifically in the form of control processes. The paper reports on IJVs between Japanese companies and firms from other Asian and Western national cultures. The study considered two forms of parental control: direct, where the parent overtly dictates and meddles in IJV operations and decision-making, and indirect, which involves a more consultative relationship between the parent and IJV. Motivations for control included IJV experience, strategic importance, product similarity, and resource dependence. As an outcome of parent control of the IJV, the study looked at conflict between partners and conflict between the IJV's managers and their parent company. Results suggested significant variance in control by national culture for the effects on control of IJV experience, strategic importance, product similarity, and resource dependence. The effects of control on conflict also varied by national culture.

MULTIPLE COMMITMENTS AND CONFLICTING LOYALTIES IN INTERNATIONAL JOINT VENTURE MANAGEMENT TEAMS

International joint ventures (IJV) management teams exhibit organizational commitment to multiple organizations: to the IJV, to the domestic parent, and to the foreign parent. Conflicting loyalties occur when there is an unbalanced commitment to these entities. An empirical study found that almost one third of the IJV managers sampled perceived conflicting loyalties in the IJV management team. The negative consequences of conflicting loyalties are discussed, and suggestions are offered for mitigating their effects.

Longevity and Cultural Differences of International Joint Ventures: Toward Time-Based Cultural Management

This article explores the relationships among time, organizational, and national cultural distance in an international joint venture setting. More particularly, the extent to which the longevity of an international joint venture affects the intensity of its cultural differences, is investigated in a sample of 51 international joint ventures set up in Hungary. It addresses certain mechanisms available to an international joint venture's managers and to its partners to deal with cross-cultural issues. The results suggest that the temporal dimension is a cultural moderator of prime importance, but to be totally effective, it must be combined with a willful strategy of cultural integration.

Research on Joint Ventures in China

Previous published studies on international joint ventures (JVs) in China are reviewed and assessed by summarizing important research patterns. A model of management of international JVs in China is developed which emphasizes the central theme of cross-cultural management. Dimensions in research on international JVs China and directions for future research are also discussed.

Strategic management of international joint ventures

Today, international joint ventures (IJVs) are widely acknowledged as a viable strategic option. Unfortunately, IJVs have an estimated 60 per cent rate of failure. Shaker Zahra and Galal Elhagrasey suggest that executives can reduce this high failure rate by determining the need for the venture; by carefully selecting compatible IJV partners; by patiently and thoroughly negotiating the purpose, form, scope, duration, and administrative structure of the venture; and by managing problems as they occur during the course of the IJV project. This article provides a step-by-step model of these issues, highlighting potential problems executives may face and how they can address them.

Self‐Efficacy, Outcome Expectancy and Performance of International Joint Venture General Managers

AbstractDespite the increasing frequency and strategic importance of international joint ventures (IJVs), the issues of effective IJV management and the role and required skills of the IJV general manager (IJVGM) have received minimal attention. Thus, it is essential to identify factors which contribute to IJVGM effectiveness. Using data on a sample of 39 IJVs, this study examined the empirical relationship of self‐efficacy and out come expectancy with IJVGM performance. Hypotheses that both self‐efficacy and outcome expectancy are significantly related to both IJVGM and IJV performance were supported. Theoretical, practical, and methodological implications are discussed.RésuméMalgré l'importance stratégique et le nombre croissant de “joint‐ventures” internationaux (IJV), la gestion de ces organisations ainsi que le rôle et les compétences des directeurs généraux de IJV (IJVGM) ont jusqu‘à maintenant été peu étudiées. Dès lors, il apparaît important d'examiner les facteurs contribuant à la bonne performance des IJVGM. à partir d'un échantillon de 39 IJV, cette recherche s'intéresse à la relation liant l'efficacité personnelle, les attentes vis‐à‐vis les résultats et la performance des IJVGM. Les résultats démontrent que l'efficacité personnelle et les attentes vis‐à‐vis les résultats sont effectivement des facteurs de la performance des IJVGM et des IJV. Les auteurs terminent en discutant des implications théoriques, pratiques et méthodologiques de ces résultats.