Bringing corporate governance to international joint ventures

Abstract

Large gaps appear to exist between the evolving corporate governance practices of organizations and those of international joint ventures (IJVs

Interorganizational governance and global strategy

“…E-mail: ruth-agu@illinois.edu It is important to remember that governance structures and governance processes are the two sides of the same coin, that is, they are highly intertwined (Chandler, 1962), such that they must be aligned to maintain some Pareto equilibrium and reach efficiencies. The articles by Contractor et al (2011) and Reuer et al (2011) are complementary in that they not only fall in the realm of global strategy and interorganizational networks, but they also emphasize different parts of the governance structure and governance process mirrored relationships. These two articles are concerned with unpacking the interorganizational tie in a semiglobalized world, whether it is at the alliance interaction level (relational governance) or at the interfirm governance level (principal-principal problem).…”

“…Reuer et al (2011) focus on equity international joint ventures (IJVs). One of the common denominators of these two articles is that they are concerned with increasing our understanding of interorganizational governance in the context of cross-national ventures.…”

Governance of Hybrid Organizations

“…Research needs to examine the interplay of boards and board-like structures and other governance instruments. alliance governance research is called for to better understand how hybrid organizations employ boards and other supporting governance mechanisms (Reuer et al, 2011). We explain each generation of alliance research in more detail below.…”

“…Given that detailed information on joint ventures' governance characteristics in secondary data sources is largely unavailable, opportunities exist to enrich the theory of boards of directors in joint ventures, but primary data collection efforts will be required. The use of broad indicators will no longer suffice as the alliance governance literature develops as these indicators can be associated with many other factors, such as partners' incentives, bargaining power, decision rights, contracts, managerial commitments, and so forth (e.g., Mjoen and Tallman, 1997;Dhanaraj and Beamish, 2004;Choi and Beamish, 2004;Barden et al, 2005;Zhang et al, 2007;Beamish and Lupton, 2009;Reuer et al, 2011). By neglecting the board of directors, JV research can even impede theory development and testing since these boards are featured in alliance contracts, provide opportunities for private ordering, and are structures that can shape cooperative norms and processes between firms (Reuer et al, 2011).…”

“…More specifically, the formation of joint ventures over acquisitions can avoid a terminal sale in the presence of information asymmetries, enabling a firm the possibility of obtaining first-hand experience with the target's resources and capabilities, which a board can facilitate. Others argue that boards can curb moral hazard by partners and risks such as knowledge misappropriation (Inkpen and Curall, 2004;Oxley and Sampson, 2004;Reuer et al, 2011).…”