Joint Venture Relationships Research Articles

What affects parent companies’ innovation more in joint venture relationships?

Forming joint ventures with potential partners in acquiring the needed resources and technology provides benefits and creates competitive advantage and innovation for multinational enterprises. While cooperative partners can provide JVs with various resources and technologies, allocation of the position of organizational resources remains unclear and needs to be further addressed. The main purpose of the current paper is to emphasize organizational slack resources (e.g., available slack and potential slack) to illuminate the settings that facilitate the effects of investment attractiveness and employee involvement on JV innovation performance. To demonstrate the real industry of JVs and examine the research purpose, we used various databases, including the National Bureau of Economic Research U.S. patent data file, Harvard DVN patent database, Compustat database and SDC global joint ventures databank to examine the hypotheses. The results show the positive and significant direct effects of investment attractiveness and employee involvement on JV innovation performance. Additionally, the findings demonstrated that the above direct effects are more pronounced when there is higher available slack and potential slack. The current study contributes by offering new viewpoints on JV, offering new understandings of organizational slack and developing an uncharted bridge between the types of slack and JV innovation studies.

MNEs and the Duality of Institutions: Regulative Pressures, Social Responsibility Pressures and FDI

Given the constant changes taking place in the international business (IB) landscape, a firm’s institutional environment is recognized as a key source of uncertainty. Addressing calls to explore how multinational enterprises (MNEs) strategize to manage complex institutional pressures, this paper examines the effects of institutional duality on entry mode choices. We explore how key institutions – both at home and abroad - affect MNEs’ foreign direct investment (FDI) decisions. In practice, country of origin still matters as MNEs seek to manage the pressures exerted by their host institutional environments, whilst also strategizing to maintain home market institutional legitimacy. Further, we propose and show that regulative and normative institutional pressures affect the choice of FDI mode differently. Using a sample of 44,881 FDI events between 2013 and 2019, we show that higher degrees of FDI such as wholly owned subsidiaries, tend to be used by MNEs when the distance between normative institutions, i.e., home and host CSR norms and practices, is high. Whilst regulative distance is managed through setting up joint venture relationships, wholly owned subsidiaries are chosen to control whether, and to what extent, MNEs adapt to different, host market CSR standards and practices.

Improving the Joint Venture Relationship and Working Culture in the Nigeria Oil & Gas Industry

The focus of this research is to investigate the working culture and the relationship between joint venture (JV) partners in the Nigerian oil industry and its impact on JV project performance. The major international oil companies (IOC) having JV with the Nigeria National Petroleum Company (NNPC) in Nigeria are ExxonMobil, Royal Dutch Shell, Total, Chevron, and ENI. An organizational working culture can be said to be the organization’s belief system, thought processes, the attitude of the employees, their ideologies, and the organizational principles of doing things. The research methodology used is a qualitative questionnaire based on a systematic random sampling of targeted participants both in and out of the Nigerian oil and gas industry. The research analyzes the root cause of the inefficiency experienced in the Nigerian oil industry, which is responsible for JV project delays, recent divestment by the IOCs, frequent community-related work stoppages at JV project sites, sabotage of oil pipelines, and the un-restfulness in the Niger Delta area. The research work is intended to inform the need for cultural change in JV operations in Nigeria oil and gas industry by providing information on the existing JV working culture, partners relationship under the current joint operating agreement (JOA) vis a vis best global practices and to make recommendations to the Nigerian populace especially the new board of director that will be appointed early 2022 following the new petroleum industrial bill (PIB) that has just been signed into law. This article is to provide information for the required restructuring and define the effective and efficient relationships and working culture under a new JOA. The result obtained established the fact that the existing working culture and relationship between the JV partners in the Nigerian oil and gas industry are not only unsustainable but unfit to deliver individual or joint venture interest. The JV operations must be incorporated as a legal entity having its own organization, dedicated management, and a workforce that will develop a positive working culture focused on achieving the JV goals and objectives.

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.

Flexibility in Modification and Termination of Cross-Border Joint Ventures

The paradigms of transaction cost and social exchange are instrumental in developing joint venture research as well as its impact on flexibility of partners. However, extant research is scant regarding the type of flexibility that partners in joint venture are most impacted. In this study, we analyze the flexibility determinants in a sample of Indian cross-border joint ventures with G8 nations’ partner firms. The factors in the study as determinants of flexibility—termination flexibility and modification flexibility—are resource heterogeneity, trust, prior joint venture relationship, foreign equity, cultural distance, asymmetry in motives and foreign equity. We adopt a structural equation modeling approach for the study.

Governance of a public sector joint venture: the control challenges of dominated owners

ABSTRACTLocal governments increasingly choose to provide a wide range of services through cooperation with other local governments. Providing complex services through intergovernmental units creates collaboration risks and collective action dilemmas that need to be mitigated. Based on a longitudinal case study, an investigation is made into the dynamic processes in the governance of a public sector joint venture (JV) and the control challenges of dominated owners. The findings illustrate that the approach to mitigating collective action dilemmas is far less rational than that prescribed by the normative literature, resulting in control challenges at later stages in the relationship. Limitations in the assessment of collaboration risks are explained by drawing on resource dependence theory (RDT) arguments. Dynamic processes in the JV relationship create the need to adjust the governance system. However, adaptability is constrained by power asymmetry and control complexity.

Managing Conflicts in Joint Venture Projects

A joint venture (JV) involves two or more businesses pooling their resources and expertise to achieve a particular goal, where the risks and rewards are shared. JV has become popular because of their importance as a strategic alternative in global competition. The number of JV has increased over the past two decades due to intensified technology, competitive challenges and market globalisation but it is important to understand what causes some JV to fail and others to succeed. Conflict is the main reason that causes some JV to fail. It may create problems in future planning and have negative effects on the financial performance of the firm that would affect JV survival. Hence, the study concentrates on the JV relationship between partners in the Malaysian construction industry in order to identify the effective ways in managing conflicts. A total of 100 questionnaires were distributed to the selected respondents and the finding shows that all of the respondents experienced conflict in the JV and the conflict management team seems to be inexistent to manage the conflict. Some recommendations in managing conflict are dictated by discussing the problem such as open talk, self-patience, endurance and being decisive as well as educating all the staffs in handling conflict.

The Fiduciary Duties of Joint Venture Parties When Do They Arise and What Do They Comprise?

Joint Ventures are often used by parties in commercial enterprises where parties seek to achieve a common goal. One issue which is increasingly contentious is the extent to which, if any, joint venture parties owe each other fiduciary obligations. This paper refutes, as a dangerous heresy, the idea that joint venture relationships are discrete legal relationships that are inherently fiduciary in nature. The majority of self-styled "joint ventures" are, invariably, nothing more in legal terms than contracts. Ifparties are going to be bound by fiduciary duties, over and above the contractual duties they owe each other, this will only be so by virtue of the particular arrangement they have entered into which, on a thorough examination of the facts, is found to require each party to give unstinting loyalty to the other. Recent Australian case law bears this out.

Formal and Real Authority in Interorganizational Networks: The Case of Joint Ventures

We apply a recent and more fine grained concept of authority to interorganizational networks and provide the first empirical evidence on how formal and real authority are allocated in joint ventures. Specifically, we show that intangibility of knowledge and uncertainty impact the allocation of authority in joint ventures via formal and real authority. Moreover, we provide evidence that formal authority and real authority function as complements in joint venture relationships. Copyright © 2012 John Wiley & Sons, Ltd.

Dialectical tensions and path dependence in international joint venture evolution and termination

This paper identifies how dialectical tensions influence the conflicts in and unplanned terminations of international joint venture (IJV) relationships. The findings from case studies of two Finnish-Chinese JVs show how initial tensions and institutional imprints set the IJV processes in motion; how critical junctures influence perception of the IJV relationship and its evolution; and how a lack of efficient communication, interlinks between dialectical tensions, and insufficient movement of trust between cultural, organizational, and individual levels in the relationship lock in action patterns of confrontation which lead to the termination of the IJV. In essence, this study contributes to international business research by explaining the path-dependent nature of dialectical tensions in the evolution and survival of cross-cultural JVs.

The Fiduciary Duties of Joint Venture Parties – When do They Arise and What Do They Comprise?

Joint Ventures are often used by parties in commercial enterprises where parties seek to achieve a common goal. One issue which is increasingly contentious is the extent to which, if any, joint venture parties owe each other fiduciary obligations. This paper refutes, as a dangerous heresy, the idea that joint venture relationships are discrete legal relationships that are inherently fiduciary in nature. The majority of self-styled "joint ventures" are, invariably, nothing more in legal terms than contracts. If parties are going to be bound by fiduciary duties, over and above the contractual duties they owe each other, this will only be so by virtue of the particular arrangement they have entered into which, on a thorough examination of the facts, is found to require each party to give unstinting loyalty to the other. Recent Australian case law bears this out.

파트너십 관계-개방형 혁신 프로세스 프레임워크에 대한 탐색적 연구

Open innovation is a phenomenon that has been widely accepted by both practice and theory over the last few years. On the contrary, partner relationships have attracted little attention while the open innovation could not be emerged without the link to partners. This paper identifies and evaluates a framework for the partner relationships and open innovation processes. Based on the literatures regarding open innovation and partner relationships, we propose the framework of matrix type. We present results based on 352 open innovation cases reported during 2002-2009, and each case is classified into 5 different categories of the framework. JV-C(Joint Venture relationship & Coupled process) archetype has dominated the cases with 178 cases(50.6%) where JV-O(Joint Venture relationship & Outside-In process) follows JV-C with 124 cases(35.2%). No significant change has been found in the number of cases after 2003 when open innovation firstly suggested. However, the number sharply increases in 2009 by boom in JV-C and JV-O. These results show the importance of partner relationships and preference toward Joint Venture relationship in open innovation, while the conventional approaches has just focused on value-chain partnership. We find remarkable collaboration cases contributed by universities and government invested research centers, so the role of non-profit R&D organizations has also been discussed.

Joint Venture Breakup and the Exploration-Exploitation Trade-off

This paper explores the effect of a potential joint-venture breakup on the level of technology transfer in a set-up with exploration-exploitation trade-offs in the presence of time compression costs. We consider a joint-venture relationship between a technologically advanced multinational firm and a local firm operating in a developing economy where the ability to enforce contracts is weak, and the local firm can quit without penalties. The multinational firm has to consider the advantages and disadvantages of an intensive transfer of technology versus an extensive one. In response to the breakup incentives, the multinational firm reduces the intensity (lowering the pace) and opts for a more extensive transfer mode (longer duration of transfer), compared to the first best. The scheme is supported by a flow of side payments to encourage the local firm to stay longer. We show that a fall in time compression costs may increase or decrease the intensity of technology transfer, both in the first-best and in the second-best scenarios, depending on the nature of the saving in time-compression costs.

Continuity and change in alliances, joint ventures, and mergers and acquisitions: a matter of cooperation or domination?

This paper discusses the dynamics of alliances, joint ventures, and mergers and acquisitions. Where many scientists solely focus on mergers, or joint ventures, or alliances, this article enhances an integral approach to the dynamics among the different types of partnerships, and how these can evolve. The impact of changes in motives and bargaining power for collaborative enterprises are illustrated with the help of two case studies regarding entrepreneurial organisations, in order to ensure a thorough understanding of the 'how and why' concerning the dynamics of collaborative enterprises. One case describes the development from an alliance situation into an acquisition. The other case reviews the dynamics in a joint venture relationship.

Gabapentin Extended-Release ??? Depomed

Depomed is developing an extended-release (ER) oral formulation of gabapentin, a GABA receptor agonist commonly used for the treatment of epilepsy and seizures, neuropathic pain and hot flushes. Gabapentin ER is based on the company's proprietary AcuForm drug delivery technology, which is part of the Gastric Retention (GR) family of technologies; this offers improved drug absorption and bioavailability compared with the existing immediate-release formulation of gabapentin (Neurontin), making gabapentin ER suitable for twice-daily dosing. The product is in clinical development for the treatment of postherpetic neuralgia and diabetic neuropathies in the US. Additionally, Depomed has commenced a phase II trial of gabapentin ER in postmenopausal patients with hot flushes. Depomed's AcuForm platform is based on polymer technology that provides targeted drug delivery for a variety of compounds. Following ingestion, AcuForm tablets swell and are retained for 6-8 hours in the stomach, enabling controlled and prolonged release of gabapentin to the upper intestinal tract; this extends the time of drug delivery to the small intestine for complete and safe elimination via the lower intestinal track. Gabapentin ER is available for licensing. Depomed acquired exclusive development and commercialisation rights to gabapentin ER in September 2003 via its subsidiary, Depomed Development Ltd (DDL). Depomed is not required to pay upfront license fees, but will make royalty and milestone payments to DDL upon successful commercialisation of gabapentin ER. Gabapentin ER was originally developed by DDL, a joint venture between Depomed and Elan established in January 2000 to design products using the GR family of technologies. However, in efforts to restructure joint venture relationships, Elan withdrew from operational involvement of DDL in September 2003, and Depomed has gained full ownership of DDL. Depomed sublicensed exclusive rights to a US patent (held by the University of Rochester) covering the use of gabapentin in the treatment of hot flushes from PharmaNova in October 2006. Under the agreement, Depomed paid PharmaNova an upfront fee of US dollars 500 000. PharmaNova is also entitled to milestone payments and royalties on sales of gabapentin ER in this indication only. Depomed has reported significant safety and efficacy benefits from gabapentin ER in its phase II trial. This study was initiated in February 2005 following positive results from a phase I trial in which gabapentin ER demonstrated a pharmacokinetic profile suitable for twice-daily dosing. In two pharmacokinetic studies, gabapentin ER achieved improved bioavailability at higher doses. This result supports Depomed's development of a once- or twice-daily product with potentially fewer adverse events. The basic US patents relating to gabapentin expired in 2000. Depomed holds exclusive rights to a US patent (No. 6 310 098) held by the University of Rochester covering the use of gabapentin to treat hot flushes.Additionally, Depomed was issued a US patent (No. 6 723 340) in May 2004 that covers proprietary polymer combinations (as used in AcuForm tablets) to create improved formulations of existing drugs.

Hospital-Physician Joint Venture Relationships: A Useful Tool to Improve Hospital Services

Hospital-Physician Joint Venture Relationships: A Useful Tool to Improve Hospital Services

Management control patterns in joint venture relationships: A model and an exploratory study

Joint ventures provide advantages to parent companies, for instance by gaining quick access to new resources. However, their shared ownership gives rise to complexities involving control issues. We propose an integrated model of joint venture control, which adds relational issues to the TCE framework. By combining transaction and relational characteristics, we argue that three different management control patterns can be distinguished: a content-based control pattern, a consultation-based control pattern, and a context-based control pattern. We empirically examine these three patterns by conducting two exploratory case studies.

How much does ownership really matter? Equity and trust relations in joint venture relationships

In this paper, I reaffirm the role of trust in interfirm relations and make an appeal for more cross-disciplinary work to further our insights into the functioning of important phenomena of interest such as international joint ventures. I also pose a couple of fundamental questions: (1) Is ownership over-rated? That is, should we and our scholarship be so consumed with issues of ownership? (2) Is trust under-rated? In what way might we and our scholarship change if we assumed trust rather than opportunism? In what way might it change firms' attitudes and behavior towards their partnership relations?

Relational Capital and Performance of International Joint Ventures in Vietnam

Relational capital (RC), which is defined as mutual trust, respect, understanding, and close friendship between individuals in a business partnership, is one of the foremost important elements of the international joint venture (IJV) relationship. However, only relatively few researchers have hitherto attempted to measure this concept or its antecedents and consequences on joint ventures (JVs). This article examines the links between RC and relational factors, such as inter-partner flexibility, cultural sensitivity, goal clarity, information exchange and conflict management, and how RC contributes to performance of the IJVs in Vietnam. Based on an extensive questionnaire survey, the study found significant relationships between these relational factors and RC and between RC and performance of the IJVs. The findings suggest that investment in RC between partners is critical for the success of the IJV. In this regard, this research highlights the mediating roles of inter-partner flexibility, goal clarity, and conflict management.

Impact of Perceived National Corruption on the Returns to US Multinationals in Transactions with Foreign Governments

In this exploratory study, we investigate the influence and effects of foreign government corruption on the market value and accounting outcomes of US multinational corporations. We use hierarchical cluster analysis on Transparency International Corruption scores to identify high and low corruption in both developed and developing countries. We argue that corruption obscures the true value of assets, makes valuation difficult, and reduces the potential gains of an acquisition. We find that firms acquiring assets from governments in high corruption environments tend to be larger in size and more intangible asset‐oriented than those expanding into low corruption environments. We find that the market responds much more favorably to expansions into low corruption environments than high corruption environments for both acquisitions and joint ventures. We find little evidence that long run accounting performance is adversely affected by government‐multinational relationships in high corruption environments. However, long run market value outcomes are negative for all firms entering into relationships with foreign governments, and are especially negative for joint venture relationships in developing high corruption environments. Finally, we find that systematic risk increases substantially for firms entering high corruption environments through trust‐based modes of expansions.