International Joint Ventures Performance Research Articles

Understanding IJV performance in a learning and conflict mediated context

Determinants of international joint venture (IJV) performance are examined within the context of cross-border learning. Using a structural equation model, we test the multifaceted interactions among strategic goal congruency, national culture differences, learning and conflict. Cross-border learning is recognized as a kernel variable which is influenced by matching strategic motives, national culture differences, and conflicting relations, and which affects the performance of IJVs. In particular, we hypothesize that interpartner goal congruency and national culture differences have an indirect effect on IJV performance through cross-border learning and conflict; previous studies established their direct relationship. The test results show that congruent strategic motives and cultural similarity had a positive effect on cross-border learning, which was reinforced by learning capacity, and which in turn led to better performance. Conflicting relations between partners and heterogeneous cultural backgrounds were shown to discourage cross-border learning.

Parent Control Dynamics and International Joint Venture Performance

This article examines the relationship between foreign parent control and International Joint Venture (IJV) performance over the lifecycle of the IJV. Following Geringer and Hebert (1989); Glaister, Husan, and Buckley (2005), Nguyen and Larimo (2008), the paper conceptualizes foreign parent control across three dimensions including mechanism, focus, and extent. The empirical evidence is based on an analysis of 49 Finnish IJVs established in the 1990s. The result shows that foreign parent firms who adopted a control dynamic approach will see better IJV performance. Broad, tight, and formal control exercised by foreign parent firms over their IJVs leads to better performance of those IJVs in the formation stage. When the performance of an IJV is viewed negatively, foreign parent firms who exercise more control over IJVs will see better IJV performance in the post-formation stage. In contrast, when IJV performance is positive in the formation stage, foreign parent firms are likely to exercise less control over the IJV in the post-formation stage.

Relational factors in UK‐Chinese international joint ventures

PurposeThis paper sets out to address the influence of relational variables, such as trust and commitment, on international joint venture (IJV) performance, in the empirical context of UK/Chinese joint ventures.Design/methodology/approachThe paper starts with a discussion of the importance of inter‐firm relationships in China and how there currently exists relatively little research in this area. Qualitative research was chosen to create a holistic picture of the possible impact of relational factors on IJV performance.FindingsTrust appears to be the most important of the relational factors on IJV performance, followed by commitment, cooperation and satisfaction. Chinese cultural values, such asguanxi, also need to be taken into account as an important factor of IJV relationships.Research limitations/implicationsWhen researching inter‐firm relationships, ideally data would be gathered from both parties. This was not possible owing to difficulties encountered in gaining access to the Chinese parent organisations. Nevertheless, the findings are of interest to British firms interested in the Chinese market.Practical implicationsJoint ventures in China continue to experience high failure rates. Failure to nurture relationships with joint venture partners is one reason for failure. Despite the limitations noted above, the findings make a useful contribution to the management literature on China.Originality/valueWhereas many researchers have studied financial and non‐financial measures of joint venture performance, little has been written on relational factors and performance.

Foreign Parent Strategies, Control and International Joint Venture Performance

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.

Performance of International Joint Ventures: What Factors Really Make a Difference and How?

This article presents an in-depth review and critique of previous research on international joint venture (IJV) performance over the past 10 years. In doing so, the authors tease out the most important conceptualizations of IJV performance, the dominant drivers of IJV performance, and the key links among all these variables. They propose a comprehensive model that relates drivers to IJV performance measures and also performance measures to each other over time to guide future research.

Antecedents and consequences of marketing dynamic capabilities in international joint ventures

The influence of firms' dynamic capabilities on performance has been well articulated in the strategy literature. Yet conceptualization and operationalization of dynamic capabilities in marketing function have not been attempted, and empirical evidence substantiating the effect of dynamic capabilities is scarce. This research develops a conceptualization of marketing dynamic capabilities (MDCs), investigates their development in international joint ventures (IJVs), and explores their effect on IJVs' performance and competitive advantage. Using a dyadic dataset collected from top managers of IJVs in China, as well as objective performance data collected separately, the study found empirical support for the effect of MDCs on IJVs' competitive advantage and performance. In addition, MDCs are found to be influenced by IJV resource magnitude, resource complementarity, organizational culture, and organizational structure. The theoretical implications of our findings and future research directions are also discussed.

Foreign parent control mechanisms and international joint venture performance

Despite the strategic importance of foreign parent control mechanisms they have received scant attention in the discussion of international joint venture performance. This paper analyses the relationship between control mechanisms and efficiency as a possible proxy for performance measurement and reports two key findings. First, international joint ventures perform better when foreign parents possess majority equity ownership. Second, foreign parents' participation and support based on indirect control promotes performance compared with the case where foreign parents exercise direct and active control over the joint venture.

Impact of formal control mechanisms on the performance of international joint ventures

Joint ventures (JV) are often a key component of the internationalisation strategies of companies. However, such operations are successful less often than expected. Problems rooted in the management accounting systems (MAS) are mentioned as typical failure causes (Watson Wyatt, 2000). This paper contributes to the understanding of JVs control mechanisms, MAS in particular, by considering them as coordination and monitoring mechanisms (Davila and Foster, 2005). The evidence, from 65 surveyed JVs and three JVs studied in detail in the motor/auto parts industry, supports the theory that highly intensive use of control mechanisms reduces uncertainty (Davila, 2000). This study demonstrates that control mechanisms assume either a coordinating role (budgeting, transfer pricing and cost allocation) or a monitoring role (performance measurement and governance mechanism). Successful international JVs predominantly adopt a balanced use of MAS, but giving pre-eminence to the coordination role as a manner to reduce uncertainty in decision making without eroding trust. However, monitoring roles are also needed to avoid opportunistic behaviours.

Foreign parent control mechanisms and international joint venture performance

Foreign parent control mechanisms and international joint venture performance

FDI Ownership Strategy: A Japanese-US MNE Comparison

Much of the extant literature characterizes international joint venture (IJV) as a less stable and less successful form of organization. In this view, the IJV is considered a suboptimal ownership strategy, one where the firm lacks control over its operations, compared to wholly-owned subsidiary (WOS). We tested this widespread view on IJV and WOS by analyzing a large, longitudinal sample of Japanese MNEs, comparing our results to those from US MNEs reported in Desai et al. (2004a) and Gomes-Casseres/Jenkins (2003). Japanese MNEs showed a stronger preference for IJVs over the last two decades as compared to US MNEs. IJV performance exceeded WOS among Japanese firms in most sample years, while WOSs outperformed IJVs among US subsidiaries in all sample years. Clear boundaries exist along the line of country-of-origin, with respect to the generalizability of the extant view toward IJVs.

Partner Characteristics, Trust, and Performance in International Joint Ventures: A Multi-level Approach

Partner Characteristics, Trust, and Performance in International Joint Ventures: A Multi-level Approach

Partner nationality, market-focus and IJV performance: A contingent approach

This study examines how Taiwanese firms engaging in various types of international joint ventures (IJVs) have performed in China, and how different types of market-focus affect IJVs’ performance. Based on the IJV classification scheme suggested by [Makino S., & Beamish P. W. (1998). Performance and survival of joint ventures with non-conventional ownership structures. Journal of International Business Studies, 29(4): 797–818], this study outlines and examines three categories of IJVs, according to partner nationality: Taiwan-Taiwan (T-T) JVs, Taiwan-Local (T-L) (China) JVs, and Taiwan-Foreign (T-F) (third-country) JVs. We propose two hypotheses, with associated sub-hypotheses, to examine the major effects of partner nationality on performance, as well as the moderating effects of local market-focus on the relationship between partner nationality and performance. Through the analysis of 236 Taiwanese JVs in China, we find that (1) T-L JVs perform better than T-T JVs and T-F JVs; (2) T-L JVs focusing on the local market do not perform better than those focusing on foreign markets; and (3) T-F JVs focusing on foreign markets perform better than those focusing on the local market.

Market orientation, learning orientation and organisational performance in international joint ventures

PurposeDespite failure rates of around 30 per cent, international joint ventures (IJVs) continue to grow. It is argued that IJVs provide a platform for organisational learning, which facilitates organisational performance. Intuitively, IJVs that are learning oriented should have a positive impact upon organisational performance. However, it is unclear as to whether a firm in an IJV should focus more on being learning oriented, or market oriented. The paper aims to address this question.Design/methodology/approachA survey of 168 senior managers involved in IJVs in Malaysia. Data were analysed using two‐stage least squares estimators for latent variable models.FindingsResults suggest that for IJVs, a market orientation has a more positive impact on organisational performance than a learning orientation. The non‐linear relationship between market orientation and performance suggest that larger gains in performance are achieved by firms who have low initial levels of market orientation. Thus, in the absence of one or the other, it is preferable for a firm in an IJV to have a strong market orientation.Practical implicationsFor managers of IJVs, the study would suggest that firms should concentrate on improving their organisations' overall level of market orientation if they are to improve the level of business performance.Originality/valueThis paper is the first to examine the relative effects of a market orientation and a learning orientation in the context of IJVs.

Implications of Culture in the Performance of International Construction Joint Ventures

Joint ventures have become popular because of their importance as a strategic alternative in global competition. One of the reasons why international joint ventures (IJVs) are difficult to manage is because the cultural distance between IJV partners has significant impact on alliance performance. Since construction projects are highly sensitive to external risks, the effect of the culture in the location in which the IJV operates is also significant. In this study, the effect of cultural similarity/difference relative to the national and organizational characteristics of partner companies on IJV performance is examined through a questionnaire survey. The impact of the cultural similarity/difference between an IJV partner and the host country is also assessed. The results of the study suggest that differences in organizational culture have a greater impact on IJV performance than differences in national and host country culture. The findings also reveal that similarity between the national cultures of IJV partners has a negative effect on IJV performance. The analysis of the data failed to provide evidence that IJV performance is affected by differences between the culture of the host country and the culture of an IJV partner.

International Joint Venture Performance in South East Asia ‐ by Craig C. Julian

Asian-Pacific Economic LiteratureVolume 22, Issue 1 p. 72-73 International Joint Venture Performance in South East Asia - by Craig C. Julian Güldem Gökçek, Güldem Gökçek New York UniversitySearch for more papers by this author Güldem Gökçek, Güldem Gökçek New York UniversitySearch for more papers by this author First published: 15 April 2008 https://doi.org/10.1111/j.1467-8411.2008.00213_2.xRead the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL No abstract is available for this article. Volume22, Issue1May 2008Pages 72-73 RelatedInformation

Knowledge Acquisition and Performance: The Role of Foreign Parents in Korean IJVs

In this paper, we investigate the influence of the foreign firm, through its interaction with the local partner, on the extent to which international joint ventures (IJVs) acquire knowledge and reach a higher level of performance. Based on the literature, we posit and test the proposition that there is a positive relationship between IJVs’ knowledge acquisition from foreign firms and their performance. To date, very few studies exist on IJVs in Korea, and fewer still examine the relationship between management knowledge acquired from foreign parents and IJVs’ performance. Using a sample of IJVs in Korea, this paper contributes to the literature, firstly by examining and confirming the positive relationship between managerial knowledge acquisition from foreign parents and IJV performance; and secondly, by testing for the extent of foreign firm support, and the relationship between parents with respect to both managerial knowledge acquisition and performance. This study extends knowledge on IJV knowledge acquisition and performance, more specifically in the Korean context.

Effect of Partner Fit in International Construction Joint Ventures

Joint ventures have been an important research topic over the last few decades primarily because of their importance as a strategic alternative in global competition. Due to the inherent complexities of international joint ventures (IJVs), involving a mixture of different managerial systems, attitudes, and business strategies, such entities are very difficult to manage. In this study, the effect of strategic, organizational, and cultural fit between IJV partners and of interpartner relations on IJV performance is examined through a questionnaire survey. IJV performance is measured by means of two constructs: “project performance” and “performance of IJV management.” The results point out the significance of the quality of partner relations for a successful IJV operation. Findings of the study also suggest that the level of organizational fit between the partners has a moderate influence on IJV performance. It was observed that strategic fit between IJV partners affects interpartner relations extensively, which in turn affects IJV performance. IJV partners with compatible technical and managerial skills, financial resources, organizational size, workload, and project experiences are expected to achieve greater IJV success.

Organisational culture, national culture and performance in International Joint Ventures based in Israel

International Joint Ventures (IJV) capitalise on localised skills, knowledge and capabilities. Moreover, the internationalisation of markets offers scope to innovate, develop and market new products benefiting from international collaborations. Nonetheless, some IJV fail and many do not achieve satisfactory performance. One reason proposed is cultural differences, most often the differences in partners' national cultures or differences between corporate. We examine 66 Israeli IJV to establish the impact of national and organisational cultures. We found that neither organisational nor national culture had much impact on performance or the perception of performance. However, trust seems to play an important mediating role.

Evaluation and analysis of IJV marketing performance and its key predictors

The marketing performance of International Joint Ventures (IJVs), particularly those in the South East Asian economies, has not received adequate attention from international business researchers. IJVs have become an important means of market entry for many firms, particularly those seeking entry into Asia. This study identifies the factors influencing the marketing performance of IJVs in Thailand and the relative importance of these factors. The key factors in Thailand were identified as market characteristics, commitment of the partners and the marketing orientation of senior management. Implications for the management of IJVs in the South East Asian countries in general and Thailand in particular are also outlined.

The effect of trust on international joint venture performance in China

The role of trust between the parent companies of international joint ventures (IJVs) is re-examined, and it is suggested that trust between parents is not only a major predictor of the achievement of financial and non-financial goals by IJVs as reported in the literature, but also moderates the relationship between IJV performance and certain contextual factors.