The Relationship Between Control and Partner Learning in Learning-Related Joint Ventures

Abstract

The model developed draws on resource-based, information-processing, and organizational learning theories to show how JV control processes affect the dynamics of interpartner learning. According to the model, firms forming learning-related JVs match with partners in line with their differences in capability and other requirements; the result is referred to as the asymmetry-need configuration. A satisfactory post-negotiation match implies a balance in perceived bargaining power, enabling both partners to institute controls appropriate for the specific types of learning undertaken. The model stresses that appropriate controls are essential for learning to take place, yet dissimilar learning needs or learning capabilities of the two partners may nonetheless result in unequal learning rates. Such unequal learning sets into motion a continual reconfiguration of the original relationship between the two partners, including modification of the initial asymmetry-need configuration and perception of bargaining power. The model emphasizes that JVs with learning objectives are inherently and inevitably dynamic because of these internal processes. However, control mechanisms themselves are an important means for diagnosing these processes and realigning the relationship. The formulation of such a process model helps to integrate many aspects of the JV relationship, including initial configuration, partner bargaining power, JV controls, and interpartner learning. In addition, the model captures the evolution of the partner relationship over the life of the JV. The focus on JV control processes in this research complements the insights gained from previous work that has looked at JV learning mainly in relation to the characteristics of the partners.

Survey of Cross-Cultural Technology Transfer Research

“…The higher the incentive-based learning capacity, the higher the degree of knowledge transfer (Makhija & Ganesh, 1997;Parise & Henderson, 2001;Simonin, 2004;Le & Evangelista, 2007).…”

Moderating Effect of MNCs’ Equity Ownership in the Relationship between Degree of Inter-Firm Technology Transfer and Local Firms’ Performance

“…The inter-firm TT and KT literatures have strongly acknowledged that a substantial transfer of technology, regardless whether tacit or explicit technology, will positively 1) lead to a higher potentials of innovation performance/capabilities (Guan et al, 2006;Kotabe et al, 2007), 2) increase technological capabilities (Kumar et al, 1999;Madanmohan et al, 2004), 3) enhance organizations' competitive advantage (Liao and Hu, 2007;Rodriguez and Rodriguez, 2005), 4) enhance organizational learning effectiveness (Inkpen, 2000;Inkpen and Dinur, 1998), 5) improve productivity (Caves, 1974;Liu and Wang, 2003), 6) increase technological development of local industry (Markusen and Venables, 1999), and 7) improve the economic growth of the host country (Blomstrom, 1990). Both knowledge acquisition and knowledge transfer literatures have argued that equity ownership in IJVs, particularly shared management IJVs; where the partners' equity/share is split 50/50 between IJV partners, could significantly influence knowledge acquisition in IJVs when 1) appropriate controls can facilitate the organizational learning process by managing the dynamic internal processes of IJVs such as a balanced bargaining power and different need-configurations of partners (Makhija and Ganesh, 1997), 2) equity ownership enables the JV partners to interact and communicate easily thus creating opportunities to share and easy access to each partner's technologies, knowledge and competencies (Pak and Park, 2004), 3) shared management IJVs provides a strong strategic rationale of transferring and acquiring knowledge and skills of both partners (Salk, 1992), 4) acquiring tacit knowledge from a JV partner is less difficult through shared management as compared to simple contract-based relationship (Mowery et al, 1996), and 5) it determines the degree of resource commitment or equity interests as control is closely associated with the partners' ability to influence systems, methods, and decisions (Anderson and Gatignon, 1986). Nevertheless, few other researchers have also stressed that if no single partner has dominant controls in IJVs, the 50/50 ownership structure could 1) escalate difficulties when cultural differences are present (Killing, 1983), and 2) create parental tensions (Killing, 1983;Salk, 1992).…”

Inter-Firm Technology Transfer and Performance in International Joint Venture Firms

“…The OL literature theoretically deals with organization tacit knowledge from several dimensions for instance: 1) tacit knowledge as an important key in building the organization's competitiveness , 2) organizational learning mainly occurs through transfer of tacit knowledge (Glaister et al 2003), 3) organization capabilities often involve the acquisition of tacit knowledge (Makhija and Ganesh, 1997), 4) learning in JV is concentrated on the acquisition of tacit knowledge such as management skills and marketing know-how knowledge (Lane et al 2001), and 5) knowledge tacitness determines the accessibility of alliance knowledge acquisition by partners (Inkpen, 2000).…”