Behavioral characteristics of international joint venture performance

Abstract

The arrangement of international joint ventures (IJVs) between firms is becoming an increasingly prevalent way for firms to acquire and maintain competitive advantage across the nations. While existing research on IJVs focuses primarily on the ex ante structuring of inter-organizational relationships, this study departs from that by taking a behavioral approach to understanding the ex post maintenance of cross border partnerships. This study employed the cross sectional design which was the most predominant design in the social sciences. A questionnaire survey has been responded by using 88 executives in Thai-Japanese JV, 33 executives in Thai-American JV and 32 executives in Thai-European JV. Data Analysis comprised of reliability test, factor analysis, correlation analysis, multivariate analysis of variance (MANOVA), multivariate and univariate multiple regression analysis. A theoretical framework is developed by hypothesizing that compatibility characteristics, cooperation attributes, communication behaviors, and conflict resolution styles are related to joint venture (JV) performance satisfaction. The perceptions of Thai-Japanese JV, Thai-American JV and Thai-European JV executives of the importance of these behavioral characteristics were measured. Differences in perceptions were found. The hypotheses concerning the relationship between compatibility characteristics, cooperation attributes, communication behaviors, conflict resolution styles and IJV performance satisfaction are then empirically tested. The findings indicate that the primary behavioral characteristics of IJV performance satisfaction are: compatibility characteristics of objectives congruence and mutual trust; cooperation attributes of coordination, commitment, and interdependence; communication behaviors of quality, participation and information sharing; and the conflict resolution styles of collaborating and compromising. The results provide support for objectives congruence, mutualtrust and interdependence, and partial support for coordination, commitment, communication quality, participation, information sharing and collaborating and compromising conflict resolution. Results also offer insight into how to better manage these relationships to ensure success. Additional findings are the four motives for IJV formation. Strategic behavior, organizational knowledge and learning, resource dependence and transaction cost are the most respectively mentioned motives. Differences in importance of motives were found among Thai-Japanese JV, Thai-American JV and Thai-European JV executives.