Control and Performance of International Joint Ventures

Abstract

Abstrct. Controlis a criticalconceptfor successfulmanagement andperformanceof international joint ventures(IJUs).This paper reviewsandsynthesizespriorstudiesaddressingthe conceptualization and operationalizationof controlwithin IJVs,as well as the IJV control-performance relationship.The paperalso presentsa newconceptualization of IJVcontrol,as wellas a conceptual framework for studyingcontrol of IJVs. THEIMPORTANCE OF CONTROL

The characteristics and dynamics of management controls in IJVs: Evidence from a Sino-Japanese case

“…Yan and Gray, 1994;Mjoen and Tallman, 1997), and a shareholder's equity stake in the IJV may not be able to endorse a comparable influence on IJV-related affairs (Nam, 2011). Building on the work of Ouchi (1977), Geringer and Hebert (1989) define control of IJVs as the process by which one entity influences and controls the behaviour and output of another through a wide range of bureaucratic, cultural and informal mechanisms including power and authority. A multi-dimensional perspective on management controls also exists in previous studies (e.g.…”

“…A multi-dimensional perspective on management controls also exists in previous studies (e.g. Geringer and Hebert, 1989;Yan and Gray, 1994;Groot and Merchant, 2000). For a better fit with the focus of the present study on the development process of IJVs at the post-formation stage, we employ Geringer and Hebert's definition of control with a process perspective and examine three primary dimensions, namely, mechanisms, focus, and extent.…”

“…Since the late 1980s, however, there have been calls for an integrative approach, in which the three dimensions are brought together in order to obtain a more thorough understanding of the control phenomenon in IJVs (Geringer and Hebert, 1989;Yan and Gray, 1994). Some recent studies have considered two or three dimensions in their description of the characteristics of controls (e.g.…”

“…They argue that parents can exert each control mechanism tightly or loosely, which captures the characteristics of control mechanisms and extent. Some researchers implicitly integrate the dimensions of control focus and extent, and argue that a parent may exercise dominant control over only a limited range of activities undertaken by an IJV, which raises the prospect of a split control style (Schaan, 1983;Geringer and Hebert, 1989). This split control style captures the characteristics of a tight control with a narrow focus.…”

“…There are calls for the use of a multi-dimensional perspective, to achieve a better understanding of the characteristics of management control in IJVs. Geringer and Hebert (1989) characterise parent controls over IJVs as comprising three primary dimensions, namely, mechanisms, focus, and extent. Mechanisms refer to the means by which control is exercised.…”