An Analysis of Strategic Determinants,Learning and Decision‐Making in Sino‐British Joint Ventures

This paper examines how partners’ strategic objectives, inputs and competencies affect the learning they achieve in joint ventures and their ability to influence decision‐making in such ventures. Quantitative and qualitative research in 20 Sino‐British joint ventures permits an investigation of these factors for both British and Chinese joint venture partners. Findings indicate that the transfer by British partners of technology and managerial expertise to joint ventures enhances their ability to achieve their strategic objectives by influencing decisions in such ventures. The learning achieved by British partners depends on their commitment of strategic inputs to joint ventures and is therefore associated with their influence. The case of Chinese partners is different, because they look to learn from the knowledge and resource inputs provided by the British partners. They therefore rely more on legal ownership rights to retain an influence over joint venture decision‐making. The achievement of Chinese partners’ strategic objectives depends more critically on the quality of the partnership itself.     

Risk perception and post-formation governance in international joint ventures in Taiwan: The perspective of the foreign partner

This paper draws on a risk analysis framework in order to develop a systematic understanding of the risks perceived by partners, and to investigate the implications of risk perception for the configuration of control, in the post-formation governance of international joint ventures. The key variables in this framework consist of six situational factors which are considered as potential antecedents of perceived risk: conflict, opportunism, cultural difference, dependence, partner fit, and ownership share; partner's perception of risk; and post-formation governance as a set of outcome variables. The framework is tested using a sample of international joint ventures located in Taiwan. The findings show that conflicts between partners, opportunistic behavior by the local partner, cultural differences, and perceived partner misfit are related to foreign partners' risk perceptions. This study suggests that when foreign partners face likely performance and partnership risks after an IJV is established, they tend to resort to tighter post-formation governance measures in order to increase or maintain their confidence in their joint ventures.     

Task-related and Partner-related Selection Criteria in UK International Joint Ventures

This paper identifies partner selection criteria in a sample of UK international joint ventures with Western European, US and Japanese partners. Rankings of selection criteria are derived for the sample using a typology that distinguishes between task-related and partner-related selection criteria. The most important task-related criteria are found to be access to knowledge of local market, access to distribution channels, access to links with major buyers and access to knowledge of local culture. The most important partner-related selection criteria are trust between the top management teams, relatedness of partner's business and reputation. A parsimonious set of selection criteria for the sample is provided by means of factor analysis. Hypotheses are tested on the relationship between the relative importance of selection criteria and a number of characteristics of the sample—partner nationality, industry of the joint ventures, joint-venture purpose, geographical location of the venture, initial approach for joint-venture formation and relative partner size. The greatest variation in the relative importance of selection criteria occurs with the geographic location of the joint venture.     

Equity alliances,stages of product development,and alliance instability

The purpose of this research is to analyze the stability of strategic alliances initiated at different stages of the new product development process and to determine the appropriateness of different governance structures (e.g., joint ventures, minority equity alliances, non-equity alliances). Specifically, we argue that the minority equity form of alliance is an inherently unstable structure for product development partnerships. Key findings of this study are: (a) minority equity alliances are more likely to be terminated within 5 years than joint ventures and non-equity alliances, (b) alliances are more likely to be terminated if they are initiated in the early and late stages of product development and less likely to be terminated if they are initiated in the mid-stages of product development, and (c) alliances are more likely to become acquisitions if they are initiated in the mid-stages of product development and less likely to become acquisitions if they are initiated in the early and late stages of product development.     

Knowledge Accession and Knowledge Acquisition in Strategic Alliances: The Impact of Supplementary and Complementary Dimensions

This paper advances the concepts of knowledge accession and knowledge acquisition in strategic alliances by identifying supplementary and complementary dimensions to these knowledge transfer modes. Complementary knowledge transfer reflects the similarity of knowledge that the partners have and is conducted in pursuit of higher efficiency and productivity to enhance partner firms' existing competitiveness. Supplementary knowledge transfer occurs when partners each possess distinctive core competences and the information that is acquired or accessed increases the business scope of partners. As knowledge accession entails knowledge amalgamation that does not involve organizational learning, costs associated with the transfer process are lower and trust is easier to establish than in the case of knowledge acquisition. The paper reviews the implications of these transfer modes on trust building in alliances and their costs implications and presents a number of propositions for further exploration.     

Cooperation and Knowledge Transfer within Buyer–Supplier Relationships: The Moderating Properties of Trust,Relationship Duration and Supplier Performance*

This paper examines the effect of relational factors on knowledge transfer within strategic buyer–supplier exchange. Prior research examining inter‐firm knowledge transfer has focused almost exclusively on horizontal forms of governance such as strategic alliances and joint ventures, whilst research on vertical forms, such as buyer–supplier relationships, is limited. We test the effect of four important relational properties: cooperation, trust, relationship duration and supplier performance. Quantitative data, gathered from 104 UK manufacturing firms in eight industry sectors, are used to analyse the hypothesized relationships through a moderated hierarchical regression model. Our study provides support for the importance of considering relational factors in the transfer of knowledge at the inter‐organizational level. In particular, the results indicate that knowledge transfer is positively influenced by the extent of cooperation, but that this relationship is moderated by the level of trust and the performance of the supplier firm. Managerial implications for these findings and future directions for research are then offered.     

Is experience valuable in international strategic alliances?

This study investigates whether firms benefit from prior alliance experiences as they undertake international strategic alliances. Different from previous studies that mostly focus on equity joint ventures, this study investigates non-equity alliances. This specific investigation is essential, because the complexity and uncertainty associated with such alliances potentially magnify the benefits of experiential learning. With a sample of 629 international, non-equity alliances formed by US firms, our results confirm the contribution of ISA experience in general, as well as that of experience specific to partner's country of origin and alliance activity type. The results also reveal a contingent benefit of ISA experiences, where experience of technological cooperation and experience with alliance partners from emerging countries both add more to firm value. We derive consistent evidence, as performance is assessed either by the market's perception of ISA value creation, or by the post announcement operating earnings in practice.     

The Role of Trust and Contractual Safeguards on Cooperation in Non-equity Alliances

Because partners may behave opportunistically in alliances, contractual safeguards or trust between partners are necessary for successful outcomes. However, it remains controversial whether safeguards and trust substitute or complement each other. Drawing on transaction cost theory, this study conceptualizes both contractual safeguards and trust as important control mechanisms in non-equity alliances, and develops a model that relates contractual safeguards and trust to cooperative outcomes. We test our hypotheses with data collected from 233 architect-contractor partnerships in Hong Kong. The results show that the relationship between contractual safeguards and cooperative outcomes depends on both the level and type of trust.     

Competition,formal governance and trust in alliances: An experimental study

We study the role of alliance governance in the behavior of partners in alliances with different degrees of competition. Using data from a lab experiment on 1,009 alliances and 31,662 partners' choices, we explore whether and how alliances succeed in different competitive scenarios, contingent on the use of formal governance mechanisms (termination clauses) and the number of partners in the alliance. We find that trust, an informal governance mechanism, emerges as a complement to formal governance in order to establish success in our experimental alliances, especially when competition is high. In particular, we document the significance of “trust-building” in initial stages and “trust repair” in later stages of our experimental alliances.     

How Japanese partners help US manufacturers to raise productivity

Cross-border alliances are useful strategies for technological innovation and as a basis for the adaptation of foreign technologies. This study provides evidence that through strategic alliances US automotive firms are effectively adopting manufacturing technologies from Japan, and are adapting them to the US industrial context.

The results show that US firms without foreign affiliations use fewer modern manufacturing technologies than US firms with Japanese strategic alliance partners. Furthermore, US firms with Japanese strategic alliance partners believe that manufacturing cycle times for product introduction are more efficient that US firms without foreign affiliations.     

联盟关系协同的股权规制机制研究

联盟关系协同是在一定的规制机制下的联盟系统自组织过程。股权式联盟可被视为一种规制机制,它借助于关系性资产的投入所形成的双边依赖关系在促进联盟成员激励相容、信息对称和利益分享方面发挥协同作用。本文分析了股权规制机制的协同机理,通过对等和非对等关系性资产投入下联盟成员纳什议价过程及结果的比较分析,确定了股权规制机制的协同效应,并结合最优股权结构的决策分析揭示出,对等分享股权有利于实现联盟关系的协同。     

All You Need Is Trust? An Examination of Inter‐organizational Supply Chain Projects

This study examines the antecedents of supply chain project success. We first propose and test a model that describes the role of relationship‐level factors (trust and asymmetric dependence) and project‐level factors (between‐firm communication and within‐firm commitment) in determining supply chain project success. We find that project‐level factors completely mediate the effect of trust on project success. We conclude that trust, despite being a stronger predictor compared to asymmetric dependence, is necessary but not sufficient for supply chain project success. We then proceed to further explore the role of these factors by introducing a categorical scheme that differentiates supply chain projects based on the decision rights configuration of each project. This categorization enables us to explore how relationship‐level and project‐level factors can have different impact on performance based on the characteristics of a supply chain project. The findings offer insights into how to effectively manage supply chain projects and inter‐firm alliances.     

International alliance formation and stock market responses:: Industry globalization as an environmental contingency

This study examines the effects of the degree of industry globalization on international alliance formation in terms of the type of alliance chosen by partner firms and stock market responses to the chosen type of alliance. Using a sample of 244 international alliances formed between U.S. and non-U.S. firms for the 1992–97 period, we find that nonjoint venture (joint venture) alliances take place relatively more frequently in global (multidomestic) industries than in multidomestic (global) industries. We also find that in global industries, abnormal returns to nonjoint venture partners are relatively greater than those to joint venture partners, whereas in multidomestic industries, abnormal returns to nonjoint venture partners are relatively smaller, though insignificant, than those to joint venture partners. Our findings suggest that the degree of industry globalization plays an important role in explaining which type of international alliance is likely to be chosen by partner firms when entering an alliance and how stock markets tend to respond to the chosen type of alliance.     

Negotiating control and achieving performance in international joint ventures: A conceptual model

Adapting well-established organization theories to international joint ventures (IJVs), this paper develops an overarching theoretical model of the determinants and effects of parent control of IJVs from an interpartner bargaining power perspective. Drawing upon power dependence, transaction costs, and agency theories, we argue that the relative bargaining power between IJV partners serves as the key determinant of control structure, and that control exerts a direct effect on the venture's performance. In addition, government influence and interpartner working relationship are critical factors that complicate the linkage between control and performance but may help to explain past conflicting results. Propositions regarding these relationships are formed for future empirical test, and implications and directions for future research are provided.     

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.     

Minimum cost network design in strategic alliances

Strategic alliances are established between firms to improve their competitiveness in markets and generally appear in the form of joint ventures. Such collaborative efforts require centralized planning, and the survival of the alliance largely depends on the success of joint planning processes. In this regard, we investigate the opportunities that centralized collaboration can offer to firms when designing their service networks. Apart from the classical fixed and variable costs associated with the network design, we also consider transaction costs induced by the formation of the alliance, which can broadly be defined as cost components related to the coordination and monitoring of the people, efforts and resources. We concentrate on bilateral alliances and develop alternative models for solving their associated network design problem. We also adopt a state-of-the-art heuristic to solve large-scale instances. Our findings confirm that accounting for the transaction cost in network design is vital for the alliance. These transaction costs can be high enough to even render the collaboration unattractive. Hence, careful data collection and model treatment are required before deciding whether to form an alliance.     

Value Chain Orchestration in Action and the Case of the Global Agrochemical Industry

This article examines the concept of virtual value chain orchestration, an emergent phenomenon of strategizing and organizing. Virtual value chain orchestration is defined as way of creating and capturing value by structuring, coordinating, and integrating the activities of previously separate markets, and by relating these activities effectively to in-house operations with the aim of developing a network of activities that create fundamentally new markets. The research is based on an in-depth analysis of the agrochemical and biotech industry and is illustrated by two case studies. Consideration is given to steps needed for orchestrating a successful virtual value chain, including the conditions which might indicate when strategic alliances, rather than joint ventures or acquisitions are used for capturing the value created. Based on the preliminary results of the case studies, the article concludes that the orchestration of an extended network of diverse partner companies leads to superior financial results.     

UK International Joint Ventures: An Analysis of Patterns of Activity and Distribution

To date no study has presented data which systematically considers the detailed activity of UK firms in joint venture formation over a significant period of time. This paper attempts to rectify this position by providing key statistics on the formation of joint ventures between UK firms and partner firms in Western Europe, the USA and Japan over the 1980s. The study examines several dimensions of activity: Trends in UK joint ventures over time, geographic distribution, industry characteristics, joint venture purpose, number of partners, contractual form and the equity share of UK partners.     

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.Based on the responses of senior executives of IJVs and their parent companies in China, it is confirmed that trust influences IJV performance. The moderating effects of trust on the relationships between IJV performance and local reliance and the experience of executives were confirmed for the senior executive sample, but the moderating effect of cultural distance was not consistent between the firm-level and country-level measures. There was no significant result regarding these moderating relationships for the parent sample, except local reliance.     

Leadership, decision-making and cultural context: Event management within chinese joint ventures

Two studies are presented of the ways in which middle-level leaders within enterprises in mainland China handle work events. A sample of Chinese managers reported much stronger reliance on widespread beliefs as a source of guidance than had been found in other nations in earlier studies. This effect was stronger in state enterprises than in joint ventures. In the second study, management of nine work events by Chinese leaders in joint venture hotels was investigated. Events were more frequently problematic when working with Western or Japanese partners than with ethnic Chinese. Respondents' reports of how they handled work events did not vary in relation to the overseas partner with whom they worked. However they did show awareness that agreement about how best to handle events does vary in relation to who is one's partner. The results are discussed in terms of the skills required of leaders working across cultural boundaries.