International Joint Ventures Management Research Articles

Implementing global corporate social responsibility locally: the example of multinational enterprises and international joint ventures in Myanmar

ABSTRACT Corporate social responsibility (CSR) has become an ever more important and increasingly high profile, visible and commented on part of business operations. This is especially so for multinational enterprises (MNEs) seeking practice adherence to global CSR policy when operating international joint ventures (IJVs). In this context we look at the example of land grabbing, a pervasive commercial norm across parts of Asia. It is essential to understand both the sources and mechanics of this practice as well as its costs. To date, however, knowledge remains limited to depictions of ‘exploitative’ Western MNEs, with little accounting for the key moderating influence of local stakeholders. The role and practices of local partners in IJVs has been largely ignored. Addressing this we extend our knowledge of MNE engagement through understanding the domestic partner’s land grabbing practices in an in-depth study of IJVs in Myanmar. Juxtaposing this data with our own experiential data from across emerging South East Asia, we develop a typology of land grabbing engagement comprising ‘obliviousness’, ‘passive collusion’, ‘blind-eye facilitation’ and ‘on-brand’ engagement. Implications for how we understand the management of MNE ‘foreignness’ at the intersection of CSR implementation, IJV management and corporate reputation protection in emerging Asia Pacific countries, are then presented.

Understanding the Paradox in the Results of National Cultural Distance Impact on International Joint Venture Performance: A Narrative Review of Prior Literature

The literature on international joint ventures (IJVs) continues to grow owing to their crucial importance in global market competition. National cultural distance (NCD) between partner firms is conventionally considered one of the main contributors to unsatisfactory IJV performance, leading to its dissolution. Nevertheless, there is no consensus on the extent of the impact of NCD on IJV performance, nor on whether this impact is predominantly positive or negative. Therefore, we conducted a narrative review to shed light on prior research (including the earliest works) to explore and clarify the causes of these apparent inconsistencies in the research’s results. Theoretically, the current research offers guidance for future study on the topic. Researchers should introduce moderator and mediator variables in pursuit of a more nuanced understanding such as mutual trust between partners. Practically, this paper will help IJV managers mitigate the negative effects of NCD and improve overall venture performance by selecting culturally intelligent managers, providing cross-cultural training for IJV staff, and implementing cooperative conflict resolution. Like any study, this paper has some limitations that should be examined by future researchers.

IJV partner relations in emerging markets: the importance of Greek partner's prior IJV experience

PurposeThe purpose of this study is to examine the effect of the Greek partners' prior international joint venture (IJV) experience on partner compatibility, knowledge transfer (KT) and trust in their IJVs.Design/methodology/approachThe authors conducted a primary research study and collected a total of 50 useable questionnaires from Greek firms with IJV participation.FindingsThe findings show a positive effect of the Greek partner's prior experience in IJV establishment and management on partner compatibility and on successful KT to the IJV.Practical implicationsThe results are significant for executives of firms who seek to expand to international markets through IJV formation and for practitioners involved in IJVs, regarding prior IJV experience, partner compatibility and KT to their IJVs.Originality/valueThis study uses a sample of Greek firms with IJV participation to examine the effect of their prior IJV experience on IJV partner relations in the region of South East (SE) Europe. Additionally, it enhances the understanding of the effect of prior experience in the IJV establishment and management in emerging markets and sheds light to the antecedents of partner compatibility, which have been neglected by researchers.

International Joint Venture in Thailand

This research investigates the effects of cultural characteristics, awareness of international joint ventures (IJVs) importance, commitment, and team commonality on team and IJV performances. This study employs a database of IJV firms from the Thailand Board of Investment and an original survey conducted of IJV top managers via a mailed questionnaire. Data was analyzed using ordinary least square regression. The results indicate the cultural characteristics of IJV managers have no significant effect on the awareness of IJV importance while individualism and power distance show significant effects on commitment. Also, uncertainty avoidance and power distance exhibit a significant positive impact on team performance. Subsequently, IJV importance awareness mediates between commitment and cultural characteristics to some degree, while individualism and power distance significantly alter commitment. In addition, uncertainty avoidance and power distance exhibit a significant positive impact on team performance, while team commonality reveals no moderating effect.

International Joint Venture in Thailand

This research investigates the effects of cultural characteristics, awareness of international joint venture (IJV) importance, commitment, and team commonality on team and IJV performances. This study employs a database of IJV firms from the Thailand Board of Investment and an original survey conducted of IJV top managers via a mailed questionnaire. Data was analyzed using ordinary least square regression. The results indicate that the cultural characteristics of IJV managers have no significant effect on the awareness of IJV importance while individualism and power distance show significant effects on commitment. Also, uncertainty avoidance and power distance exhibit a significant positive impact on team performance. Subsequently, IJV importance awareness mediates between commitment and cultural characteristics to some degree, while individualism and power distance significantly alter commitment. In addition, uncertainty avoidance and power distance exhibit a significant positive impact on team performance, while team commonality reveals no moderating effect.

Management control structures and performance implications in international construction joint ventures: critical survey and conceptual framework

PurposeManagement control is needed in international joint ventures (IJVs) for successful management and performance. While IJV management control and performance concept has been widely explored, in the construction sector, the core understanding of the design of the two concepts is still lacking. This has resulted in the neglect of important questions and directions for research and practice improvement. This study aims to conduct a critical survey of prior studies addressing the conceptualization of management control and performance in IJVs and to propose a framework for studying the performance implications of management control in international construction joint ventures (ICJVs).Design/methodology/approachUsing Scopus database and search terms, a systematic desktop search was conducted to retrieve empirically related peer-reviewed papers for this study.FindingsDrawing on the transaction cost, institutional and relational logic, the first inclusive hypothetical model for studying the relationship between different dimensions of management control mechanism and multiple performance criteria in ICJVs is presented. The model proposes a measurement method for both the management control and performance and explains how they can be established in ICJVs.Practical implicationsThe proposed framework provides a methodology to understand the dynamics of management control and performance implications in ICJV. Specifically, uncovering the critical paths will assist ICJV frontliners to approach management control in a more holistic and systematic way to promote achievement of ICJV goals.Originality/valueThe study gives a firm ground to the construction industry, which is accurate and educational for related fields concentrating on several other forms of cooperative relationships.

Unravelling the role of guanxi in the formation and management of international joint ventures – a systematic review of the literature

PurposeThe formation of international joint ventures (IJVs) is one of the prevalent approaches for Western companies to conduct business in China. Yet, doing business in China is difficult for many firms, partially because of the institutional voids that are created by weak formal institutions. The paper aims to focus on the role of guanxi (an informal institution and a company capability that fills such institutional void) in the formation and management of IJVs.Design/methodology/approachA systematic literature review on the role of guanxi in IJV formation and management is conducted based on papers published in top international business journals between 2005 and 2020 – in total, 47 papers are included in the review.FindingsThe findings of the study are presented in four themes, namely, the role of guanxi as social capital in IJV formation, the role of trust in guanxi-based IJVs, the role of control mechanisms in balancing high reliance on trust in guanxi-based IJVs and the role of guanxi in managing inconsistencies in the regulatory environment. The analysis also reveals that guanxi has a positive effect on the development of IJVs if control between the parent firms is well balanced; otherwise, guanxi can trigger opportunism and leads to failures.Practical implicationsThe study unravels how guanxi leads to successful outcomes in IJV formation and management, which assist managers who operate IJVs with their decision-making.Originality/valueTo the best of the authors’ knowledge, no previous paper has critically analysed the literature on IJVs using a guanxi perspective at micro (personal), meso (business) and (macro) governmental levels. This approach allows for providing more nuanced view of the role of guanxi in the formation and management of IJVs and aligns more closely with managerial decision-making.

Managing international joint ventures to improve performance: The role of structural and social mechanisms

Poor performance has been a major concern in research on international joint ventures (IJVs). This study integrates the IJV management mechanisms from transaction cost theory (TCT) and social exchange theory (SET) in order to gain insights into management mechanisms that improve IJV performance. The framework consists of three structural (i.e., symmetric dependence, symmetric equity share and resource complementarity) and three social (i.e., trust, communication and cultural adaptation) IJV management mechanisms, which are considered as potential determinants of IJV performance. Based on the analysis of data collected from 89 IJVs established by Nordic firms in Asia, Europe and the USA, results indicate that TCT-based symmetric dependence and resource complementarity on the one hand and SET-based trust, communication and cultural adaptation on another significantly improve IJV performance. However, impact of symmetric equity share on IJV performance remains negative and non-significant, explaining that IJV partners may consider it rather a safeguard to their own stake and interests in IJVs. In addition, SET-based IJV management mechanisms are found to be more effective than the TCT-based IJV mechanisms in improving IJV performance.

Perspectives on Networking in the Management of International Joint Ventures

Perspectives on Networking in the Management of International Joint Ventures

Race to learn: knowledge characteristics and resource structure

PurposeThis paper aims to study the impact of the interactive effect of knowledge characteristics – tacitness, specificity and availability – and resource structure – complementarily and asymmetric – on learning race behavior among international joint venture (IJV) partners in China.Design/methodology/approachPreliminary in-depth interviews with three IJV managers were conducted to develop and evaluate the tentatively developed questionnaire. The finalized survey questionnaire was distributed to middle and top-level managers of IJVs, resulting in a total of 124 usable surveys. The psychometric properties of data were evaluated using Cronbach’s alpha and confirmatory factor analysis and hypotheses were tested using a generalized linear model.FindingsThe results show that partners in IJV have low tendencies to acquire tacit and specific knowledge, but, when the resource is complementary, it stimulates the learning race. Also, when resources are asymmetric, IJV partners engage in the learning race more aggressively, particularly for highly specific knowledge. The situation reverses for highly available knowledge.Originality/valueThe findings provide important insights for both researchers and managers on knowledge characteristics and resource structure influencing learning race behavior. This insight allows firms to leverage features of knowledge and resource conditions to prevent or facilitate the learning race for either common or private interests.

How Do International Joint Ventures Build Legitimacy Effectively in Emerging Economies? CSR, Political Ties, or Both?

Legitimacy has been identified as an important factor influencing the survival of international joint ventures (IJVs). Yet empirical studies exploring IJV strategies for gaining post-formation legitimacy are scarce. This study examines how IJVs accumulate legitimacy after their formation in China. We identify two non-market strategies, namely corporate social responsibility (CSR) and political ties, and compare their effects on gaining two types of legitimacy: political legitimacy and market legitimacy. Data obtained from senior and middle IJV managers in China lends empirical support for the direct effects of CSR and political ties on IJV legitimacy-building. Surprisingly, we find that CSR has a stronger effect on gaining both political and market legitimacy than political ties. Furthermore, both political and market legitimacy contribute to IJVs’ performance.

Interactive effects of information exchange, relationship capital and environmental uncertainty on international joint venture (IJV) performance: An emerging markets perspective

Prior research on the role of international joint ventures (IJV) in the emerging markets generally ignores the impact of information exchange on IJV performance as well as the mediating role of relationship capital (a key measure of competitive dynamics and co-evolution) and the moderating impact of environmental uncertainty in this process. This paper addresses these important research gaps by exploring the direct effect of information exchange on IJV performance as well as indirect (mediated) effect through mutual trust and reciprocal commitment, two key components of relationship capital. In addition, this paper investigates the role of environmental uncertainty as a moderator of these mediating effects. Results from a study of 205 contractual IJVs in China, a highly competitive and dynamic emerging market, show that foreign and local partners collaborate and co-evolve through regular information exchange that helps them build relationship capital with each other in the form of mutual trust and reciprocal commitment, which in turn leads to better IJV performance. In addition, environmental uncertainty negatively moderates (weakens) the positive effects of information exchange on mutual trust and reciprocal commitment but not their impact on IJV performance. The authors discuss the implications of these findings for future research on the role of relationship capital in the successful formation and management of IJVs in the emerging markets.

Collectivist values for constructive conflict management in international joint venture effectiveness

PurposeThis study aims to identify mechanisms to manage conflicts that occur when organizations with different cultures, habits and experiences try to coordinate effectively in international joint ventures (IJV). This study proposes that partners can promote their joint venture performance to the extent that they rely on cooperative rather than competitive conflict management. This study further hypothesizes that adopting collectivist values strengthens relationships and thereby provides a foundation for cooperative conflict management.Design/methodology/approachThe authors collected data for this study in Shanghai, which is currently the most attractive province in China for FDI (FDI Intelligence, 2014). In all, 75 pairs of foreign and Chinese managers at middle and senior levels, knowledgeable about the joint venture relationships, completed their respective questionnaires.FindingsResults of the structural equation analyses support the hypotheses that collectivist values support cooperative conflict management that in turn facilitates joint venture learning and performance. In contrast, individualistic values promoted competitive conflict management which in turn frustrated IJV performance.Practical implicationsResults suggest that IJV managers can strengthen their venture by developing collective values and training such cooperative conflict management skills as self-expression and demonstrating understanding of opposing views.Originality/valueThis study directly documents that while conflicts may interfere they can also stimulate discussions and decisions that promote coordination and performance of IJVs. This study contributes to conflict management research that has largely focused on investigating the consequences of approaches by examining conditions that promote constructive conflict management approaches.

Relationships between work values, communication satisfaction, and employee job performance

Purpose – The purpose of this paper is to examine the relationships between work values (cognitive, instrumental, social, and prestige), communication satisfaction (informational and relational), and employee job performance (task and contextual) in the context of international joint ventures (IJVs) in Iran. Design/methodology/approach – Validated measurement items for study variables were adopted from previous studies. Data were collected through surveys using a random sample of employees and their direct supervisors from the two largest IJVs in Iran’s automobile industry. Findings – According to the results, cognitive, instrumental, and prestige work values had significant effects on informational communication satisfaction. All dimensions of work values (cognitive, instrumental, social, and prestige) were significantly related to relational communication satisfaction. Both dimensions of communication satisfaction (informational and relational) were significantly related to both dimensions of employee job performance (contextual and task). Research limitations/implications – Data were collected from two IJVs in Iran, which may limit the generalization of results to non-IJVs in Iran. The results have important implications for IJV managers by providing valuable insights into adopting various effective tools in the workplace. Originality/value – Previous studies have generally considered work values as a two-dimensional construct. This study extends the literature by conceptualizing work values based on four dimensions (cognitive, instrumental, social, and prestige). No study has taken into consideration social and prestige values in an Asian context. In addition, few studies have investigated the relationships between work values and communication satisfaction.

How long will the marriage of Sino-Foreign JVs in China last? A theoretical and empirical investigation

This paper studies the factors affecting the longevity of international joint ventures (IJVs) in China and investigates the strategic interactions of the players in an IJV (foreign parent, local parent and IJV management) by adopting game theory and using empirical analysis based on national perceptions of time horizons. The theoretical part shows equilibria for the games played by the parents. The empirical evidence, based on a sample of Chinese-US and EU IJVs, as well as Chinese-Japanese and South Korean IJVs, is consistent with the propositions derived from our theoretical models. Our empirical findings show that the longevity of an IJV is affected by senior management control. Access to local knowledge is also a crucial factor affecting longevity. Furthermore, the degree of long-term orientation (LTO) of the parents influences the longevity of Sino-Foreign IJVs. The contributions made by both foreign and local parent firms are also found to influence the longevity.

Microfoundations for learning within international joint ventures

IJV research highlights the importance of learning in international joint ventures (IJVs) but has not indicated how to achieve it. We combine organizational learning and internationalization process research within a microfoundations framework to understand learning in IJVs. We study a Samsung–Tesco IJV that successfully learned retail practice from one partner and applied it in a South Korean context known by the other. The managers used many learning processes, not just experiential learning emphasized in international business research, and used many more knowledge sources than assumed in prior research, including the IJV partners’ other subsidiaries. To build absorptive capacity, IJVs need appropriate microfoundations at individual, process and structural levels, and coherent interlinkages between them, especially by having IJV managers’ with extensive experience and orientation to learn who are given structural and process autonomy to invest in learning.

Differences in Partners’ Perception and the Performance of German-Chinese Joint Ventures

This study discusses the role of differences in individuals’ perception for research in international management in general, and then explores the extent to which partner firm representatives of German-Chinese Joint Ventures (GCJVs) differ in their perception of various characteristics of their co-operation. In a second step the article suggests how differences in partners’ perceptions of key variables in the management of International Joint Ventures (IJVs) are associated with the perceived performance of such ventures. Using empirical data gathered from 38 General Managers and senior managers representing both sides of 19 GCJVs in the People’s Republic of China (PRC), asymmetries in partners’ perceptions and their association with the perceived performance of the IJV are explored empirically. The results show interesting differences in perception between the German and Chinese partners, and some significant relationships between the differences in perceptions and IJV performance. The key results of the paper are that (1) there are considerable differences in the perceptions of managers representing the different sides of a JV, and (2) that these differences are related to differences in the perception of IJV performance. The paper contributes to research and practice by identifying and providing first empirical data on the magnitude of perceptual differences in IJVs and their potential relevance for the performance of IJVs.

The antecedents and outcome of control in IJVs: A control gap framework

Plenty of researchers have explored the relationship between parent firm control and international joint venture (IJV) performance. However, the conclusions of these researchers are inconsistent. Some studies suggest that total control from foreign parent firms produces better outcomes, while other studies consider that shared control or split control structures result in higher IJV performance. All of these studies argue that a parent firm’s control over an IJV would influence the performance of the IJV. This paper contributes to these debates by exploring the control gap, that is, the difference between desired control and exercised control of a parent firm. Evidence from 80 IJVs in Taiwan indicates that control gaps in the areas of manufacturing, financial, and human resource management have negative impacts on IJV performance. Empirical results also show that the level of a parent firm’s resource contribution to an IJV positively influences the parent firm’s desired control. The extent of a parent firm’s learning intent in marketing and R&D management is also positively linked with the degree of control desired by the parent firm. These findings provide important implications for the study of control structure in IJV management.

Korean international joint ventures: how the exchange climate affects tacit knowledge transfer from foreign parents

PurposeThe purpose of this paper is to develop and test a theoretical model to examine how exchange climate attributes and contextual factors between two parent firms in an international joint venture (IJV) affect tacit knowledge transfer. The authors investigate how this tacit knowledge, which comprises international marketing expertise, knowledge about foreign cultures and tastes and managerial practices, impacts IJV performance.Design/methodology/approachBased on data from a survey of IJV managers in 326 Korean firms from a variety of industries, structural equation modeling (AMOS 18.0) is used to test the authors’ hypotheses.FindingsThe findings show that conflict resolution and cooperation positively affect tacit knowledge transfer, but communication does not. It was found that the difference in the relative levels of economic development in the environments of partners significantly influences tacit knowledge acquisition, but cultural distance does not. Tacit knowledge acquisition positively influences IJV performance.Originality/valueThe paper fills a gap in the literature by articulating the relationships between exchange climate attributes and tacit knowledge acquisition. Exchange climate, characterized by behavioral processes that directly impact knowledge transfer, constitutes an important missing link in prior research about tacit knowledge transfer. The paper contributes to a better understanding of the dynamic relationships among relational capital, exchange climate and tacit knowledge transfers. The model the authors develop and test has important implications for the design of organizational processes that facilitate tacit knowledge transfer.

IJV Partner Trustworthy Behaviour: The Role of Host Country Governance and Partner Selection Criteria

abstractThis study provides new insight into the interplay between partner‐ and institution‐level bases of trustworthy behaviour in international joint ventures (IJVs). The results of the study, based on survey and archival data collected on 144 IJVs across six Asian countries, revealed that host country governance quality directly and positively influences IJV partner trustworthy behaviour. It was also found that weak host country governance undermined the effectiveness of certain partner selection criteria in serving as a tool for establishing an IJV with a trustworthy partner. Furthermore, through distinguishing between two dimensions of trustworthiness (benevolence and competence), it was demonstrated that partner benevolence is facilitated by relationship‐oriented criteria, whereas partner competence is facilitated by task‐oriented criteria. The implications of these results for the establishment and management of IJVs are discussed.