Strategic Motives and Partner Selection Criteria in International Joint Ventures in Turkey

Abstract

This paper provides an analysis of two important aspects of international joint venture (IJV) activity between Western MNEs and local partner firms in Turkey. First, the strategic motives for IJV formation are investigated from the comparative perspective of Western firms and local partners. As hypothesised a number of significant differences are found in the relative importance of strategic motives between foreign partner firms and Turkish partner firms. Second, the paper considers criteria used by Western firms and Turkish firms when selecting IJV partners. As hypothesised a number of significant differences are found in the relative importance of selection criteria between foreign partner firms and Turkish partner firms. Third, the paper considers the relationship between selection criteria and strategic motives by examining a multiple regression model using the factors of selection criteria and the factors of strategic motives as dependent and independent variables respectively. There is some support for the hypothesis that the relative importance of the selection criteria varies with the strategic motives of the IJV.     

Institutional dimensions and conflict resolution strategy in international joint ventures: An empirical examination

This study examines the impact of the host‐country institutional structures on the choice of conflict resolution strategy in the international joint venture (IJV). Using the survey method and relying on multiple regression, we demonstrate that there is a statistically significant relationship between institutional pillars and the choice of conflict resolution strategy in the international joint venture in the context of Ghana. In particular, we demonstrate that legalistic and forcing conflict resolution strategies are influenced by the regulative institutional pillar, while compromising and problem‐solving conflict resolution strategies are impacted by normative and cognitive institutional pillars. The multigrouping analysis results show that the views and the choice of foreign partners on conflict resolution strategy differ from that of the local partners to the IJV. This study fills the gap by empirically testing the conflict resolution strategies of firms in relation to the role of regulative, normative, and cognitive institutional pillars of the host country.     

New directions for international retail joint venture research

Abstract

This paper contends that a range of questions arising from the geographical and organizational dynamics of international retail joint ventures have been bypassed by studies in the international retail field. It argues that, despite its importance as a corporate growth strategy, comparatively less is known about the way in which retailers have employed joint ventures in international markets. Based on a review of the literature and illustrated with examples of international retail joint venturing activity, this paper reveals several gaps in our understanding of the internationalization process of retail firms. Suggestions for further research are made throughout the paper on the basis of gaps in the retailer internationalization literature.     

The Internationalisation of Small to Medium-Sized Retail Companies: Towards A Conceptual Framework

The internationalisation of large multinational retailers is well documented and much research attention has been given to their processes, motives and strategies for expansion. However, a successful international retailer does not necessarily have to be a large retailer. Dynamic smallerretailers with strong concepts, formats and products have shown themselves capable of rapid international growth. To date there has been a distinct lack of research on the internationalisation of small to medium-sized companies (SMEs) operating in the retail sector. Any discussion of SME internationalisationwithin the retail industry should recognise that research on large multinational corporations is not directly transferable to small and medium-sized firms who by their very nature and characteristics embrace a very different set of opportunities in the international market. To address thisgap in research, this paper draws upon broader established international SME and entrepreneurship literatures to provide a framework for examining some of the key aspects of the internationalisation of retail SMEs.     

Organising new business in a turbulent context: Opportunity discovery and effectuation for IJV development in transition markets

Research on entrepreneurship has suggested entrepreneurial phenomena to take place in a wide variety of contexts that deal with new venture emergence. Opportunity discovery and effectuation are seen as the essence of entrepreneurship. The present study examines entrepreneurial behaviour in the organising of an international joint venture (IJV) in Polish transition markets. The paper aims to answer the following question: How is an international joint venture organised in turbulent context through opportunity-discovery and effectuation behaviours? Based on theoretical analysis and a longitudinal case study, we illustrate the organising of an international joint venture in transition markets through specific behaviours of opportunity discovery and effectuation. We show especially the relationship-based nature of all the behaviours. The study advances international entrepreneurship research by emphasising the intertwinedness of the entrepreneurial behaviours with the drastic developments in the transition markets and the evolution of the IJV partnership.     

Virtue in small business in small places: Organisational factors associated with employee dishonest behaviour in the retail sector

The organisational factors associated with employee dishonest behaviour are understudied because dishonesty is sensitive topic and organisations are not willing to reveal misbehaviour to the wider public. This paper addresses this research gap by providing an empirical study on reporting of dishonest behaviour of retail employees in Estonia and Latvia. The aim of the paper is to find out how organisational factors affect the reporting of dishonest behaviour in retail sector. Local vs international retailers and rural vs capital city stores characterise organisational factors and these are analysed in different hypothetical scenarios: low wage, perceived injustice and boredom. The sample consists of 781 retail employees from six retail organisations. The study employed a survey with manipulated questionnaires. Some of the main findings are the following: employees in international retail chains and in stores located in capital cities deem dishonesty more prevalent compared to domestically owned shops and stores situated outside metropoles. However, employees outside capital cities were more sensitive to the motives, especially perceived injustice. Implications for retailers are discussed at the end of the paper.     

International versus domestic entrepreneurship: New venture strategic behavior and industry structure

International entrepreneurship is defined in this study as the development of international new ventures or start-ups that, from their inception, engage in international business, thus viewing their operating domain as international from the initial stages of the firm's operation.One hundred and eighty-eight new venture firms in the computer and communications equipment manufacturing industries are classified according to the percentage of their sales in the international market. Ventures with no sales derived from international activities are considered “domestic” new ventures, and ventures with sales from international activities comprising greater than 5% of total sales are considered “international” new ventures.The strategy and industry structure profiles of international new ventures are significantly different from domestic new ventures. The internationals pursue much broader market-based strategies, seeking a strategy of broad market coverage through developing and controlling numerous distribution channels, serving numerous customers in diverse market segments, and developing high market or product visibility. The internationals also emphasize a more aggressive entry strategy, building on outside financial and production resources to enter numerous geographical markets on a large scale. Securing patent technology is also an important component of their strategy. This suggests that the internationals compete by entering the industry on a large scale, seeking to penetrate multiple markets, with the recognition that external resources are necessary to support such an entry.Whereas both the domestics and the internationals characterize domestic competition as being relatively intense, the international new ventures compete in industries with higher levels of international competition. It is not clear from this research whether the new venture selects an industry with a high degree of international competition and therefore responds with an international orientation or, because the new venture has an international orientation, it perceives or recognizes a higher degree of international competition. Another industry structure difference is the internationals' perceived higher degree of restrictiveness due to government regulation. It is unclear whether this restrictiveness motivates new ventures to seek less-regulated international environments or if it indicates that when competing internationally, the new venture is confronted with increased regulatory requirements.Domestic new ventures are distinguished by their emphasis on a production expansion strategy and customer specialization strategy. The production specialization strategy consists of focusing on limited geographical markets, maintaining excess capacity, and pursuing forward integration. The customer specialization strategy incorporates the production of a specialty product that is purchased infrequently. Thus, for both of the domestic strategies, a consistent “closeness” between the producer and consumer is implied. This may be an important basis underlining the new venture's decision to compete in an exclusive domestic context.This study offers initial support for the notion of international entrepreneurship by its findings that there are significant differences between new venture firms competing domestically and new ventures choosing to also enter international markets.     

Do Strategic Motives Affect Ownership Mode of Foreign Direct Investments (FDIs) in Emerging African Markets? Evidence from Ghana

The objective of this study is to examine the influence of ownership, location, and internalization‐specific factors, as well as strategic motives on ownership choice of foreign subsidiaries in Ghana. The authors use a quantitative methodology in order to statistically explore the relationships between dependent and independent variables by using the logistic regression model. The analysis was based on 115 manufacturing investments made by multinational corporations (MNCs) from different countries in 1994–2013. The results indicate that contractual risk leads to the choice of whollymowned subsidiary while cultural distance and country risk lead to the choice of the joint venture. In the case of the motives, efficiency‐seeking and resource‐seeking FDIs lead to the choice of the joint venture. © 2016 Wiley Periodicals, Inc.     

Understanding IJV performance in a learning and conflict mediated context

Determinants of international joint venture (IJV) performance are examined within the context of cross-border learning. Using a structural equation model, we test the multifaceted interactions among strategic goal congruency, national culture differences, learning and conflict. Cross-border learning is recognized as a kernel variable which is influenced by matching strategic motives, national culture differences, and conflicting relations, and which affects the performance of IJVs. In particular, we hypothesize that interpartner goal congruency and national culture differences have an indirect effect on IJV performance through cross-border learning and conflict; previous studies established their direct relationship. The test results show that congruent strategic motives and cultural similarity had a positive effect on cross-border learning, which was reinforced by learning capacity, and which in turn led to better performance. Conflicting relations between partners and heterogeneous cultural backgrounds were shown to discourage cross-border learning.     

Consumers’ perception of store image of joint venture shopping centres: first-tier versus second-tier cities in China

Studies on consumer behaviour and the modelling of attributes representing store image of shopping centres in the context of a developed country have been the focus of many researchers. In contrast, although China has the largest consumer market in the world, the consumer behaviour and consumption psychology of this enormous market remain relatively unknown due to a previously “close-door” policy as well as a high degree of government intervention within the retail sector. This paper discusses the unique nature and development of the retail industry in China, and formulates a model to represent the store image of joint venture shopping centres, which are the only approved form of direct foreign investment into China's retail sector. Research on store image of shopping centres in the west as well as in China has been applied in the formulation of the model, which consists of 21 attributes. The relative importance of these 21 shopping centre image attributes is subsequently analysed between consumers in a first-tier and a second-tier city in China. By being the first of its kind to reflect on China's retail market and its joint venture shopping centres, and to compare the consumer behaviour within different levels of cities in China, this paper provides both researchers and retailers with a better insight and understanding into the psychology of Chinese consumers, and the retailing business in China.     

论我国商业银行零售银行业务的发展策略

零售银行业务是目前商业银行的主要业务之一,对于商业银行的发展至关重要。我国的零售银行业务还处在起步阶段,如何加快其发展,是商业银行面临的迫切问题。本文针对我国商业银行零售银行业务的现状,从业务领域、客户管理、组织结构、网上银行、风险管理、人才培养等方面提出了具体的发展策略。     

Partner identification and selection of joint ventures in international retailing

Identifying and selecting the ‘right partner’ is one of the key topics in the international retailing literature. Yet, current research provides little knowledge of how international retailers find and select joint venture (JV) partners in foreign markets. We investigate seven cases of British retail multinationals to address this research gap. We find that some retailers initiate formalised partner searches. In other cases, however, JVs arise opportunistically, involving no planned partner identification and selection. Retailer selection criteria revolve significantly around local relationships and market knowledge, specifically concerning local real estate. At the same time, some retailers understand that to leverage these local resources, the relationship and strategic fit with partners are critical.     

Technology transfer and spillovers in international joint ventures

It is often argued that multinationals are reluctant to transfer technology due to the fear of spillovers. We show that this need not be the case if host country policies like taxation are taken into account. Furthermore, we examine the incentives the multinational and the host country have to engage in an international joint venture. We show why a multinational may agree to enter a joint venture even though this gives rise to spillovers. Surprisingly, we find that a joint venture is sometimes not in the interest of a host country, despite the prospect of spillovers.     

Traces of foreign retailers – local knowledge-spillovers and strategy adaption within retail internationalization

ABSTRACT

Since the 1990s certain retail companies have evolved into some of the largest and most dispersed transnational corporations worldwide. However, within the ‘new era of retail distribution’ retailers are increasingly divesting from foreign markets. This study addresses these recent and under-explored dynamics by revealing the traces transnational retail corporations leave after divesting from a country. It explores the aspect of learning of host market retailers from entering transnational corporations (TNCs) and examines how foreign knowledge is adjusted in the business strategies of these local actors. It takes a fresh empirical slant using qualitative interviews with host market retail managers including former TNCs’ subsidiaries operating under domestic ownership. The emerging economy of Turkey serves as an empirical example. The paper finds that foreign retailers transfer firm-specific resources to the local retail through (1) demonstration and imitation, (2) vertical linkages with suppliers, (3) joint ventures and acquisitions, and (4) labor turnover of TNC trained staff. Certain successful local companies adjust the foreign knowledge based on their local knowledge and strengths, their high level of flexibility and deep territorial embeddedness, and create ‘hybrid’ business strategies. These findings suggest that dynamic capabilities are crucial to successful retailing in an international competitive environment. TNC managers should work with local staff in partnerships of equals and managers of locally operating companies should incorporate new knowledge by hiring TNC trained staff.     

Motives behind retailers’ post-entry expansion - Evidence from the Chinese luxury fashion market

This study aims to examine the motives behind retailers’ post-entry expansion in foreign markets. Through case studies of eleven participating luxury fashion retailers in China, qualitative data was collected from twenty-two executive interviews. Although their initial market entry was driven by both reactive (push) and proactive (pull) factors, the motives behind their post-entry expansion have become predominantly proactive, especially long-term growth strategies, the ambition to extend their brands and retail formats to more cities, and the experiences gained in entry markets. The desire to optimize the retail store portfolio through multiple channel strategies have slowed down the expansions of physical stores.     

The internationalization of entrepreneurial firms from emerging economies: The roles of institutional transitions and market opportunities

This paper examines the influence of institutional transitions and market opportunities in emerging economies on the internationalization of entrepreneurial firms from these economies. We conceptualize and examine a three-stage model of institutional transition in emerging economies, and their effects on the internationalization strategies of new venture firms. Propositions are developed in examining how the different stages of the institutional transition can influence the strategic choices for the internationalization of new venture firms. In responding to the calls for more research on institutions and international entrepreneurship, this paper is an attempt extending the linkages between the two to the context of emerging economies. The paper also has managerial implications for entrepreneurs and the associated policy implications in international entrepreneurship.     

International joint ventures and the U.S. auto industry

In 1983 General Motors Inc. and Toyota Inc. formed a joint venture, the New United Motor Manufacturing Inc., to assemble autos in the United States. For Toyota, the venture was a first attempt to locate production in America. General Motors viewed the venture as a means of learning how to produce low-cost, high quality, small vehicles. Facing an onslaught of anti-union Japanese firms, the United Auto Workers had to demonstrate that unions would not be an impediment to Japanese production in the United States. By 1986 the venture was termed a success. This paper considers the welfare effects of international joint ventures among competing manufacturers, as applied to the U.S. auto industry.     

Goal achievement and satisfaction of joint venture partners

Joint venturing is recommended to avoid some of the obstacles to successful business venturing, such as capability limitations and organizational resistance. However, the high dissolution rates for joint ventures suggest a need to learn how to utilize this cooperative strategy more effectively. Two frequently reported problem areas in joint venturing are unrealistic corporate expectations and inadequate planning. Thus, this study sought to examine the impact of strategic intent on joint venture success as measured by partner goal achievement and satisfaction.A review of the literature on strategic goals and goal consensus suggested that two variables are likely to affect joint venture performance: the number of partner goals pursued and the overlap in partners' goals. The type of goals pursued may also affect performance; that is, some goals may be more achievable through joint venturing than are other goals.The purpose of this research was two-fold: (1) to empirically explore the relative importance of a variety of partner goals for their joint ventures, and (2) to determine if goal disparity, and the number and type of goals pursued affected joint venture success. This approach draws attention to the expectations of partners rather than to the venture itself, the traditional focus in entrepreneurship.The hypotheses and exploratory propositions were tested using data from U.S. firms involved in manufacturing joint ventures. A categorization of partner goals was developed through factor analysis, in which five categories of goals emerged: knowledge transfer, market power, financial performance, efficiency, and financial structure. Partners were found to have pursued multiple goals simultaneously, with knowledge transfer and market goals being most frequently rated as critically important. These findings suggest the need to expand traditional performance measures to account for the diverse and nonfinancial nature of partner goals.When examined separately, it was found that a large goal set facilitated partner goal achievement and satisfaction, and that an overlap in partners' goals promoted partner satisfaction. The large goal set was argued to be necessary in the volatile environments that are often attractive for joint venturing. A large goal set reflects adaptation to environmental change and facilitates prudent strategy selection by subjecting alternatives to multiple goal hurdles. The overlap in partners' goals reflects a meshing of individual partner goals and helps to minimize conflict, which could stall strategy development and drain resources. However, when an integrated model was developed from multiple regression findings, the overlap in partners' goals became a moderator variable. This model exposed the negative as well as the positive effects of the overlap in partners' goals.Analysis further suggested that the joint venture strategy may be better suited to achieving efficiency goals than financial goals. Possible explanations for the difficulty in achieving financial goals include: insufficient time (or short lifespan of the joint venture), the complex structure inherent in joint ventures, and the possibility of disagreement between the partners about how the financial goals should be achieved. On the other hand, efficiency goals, such as vertical integration and economies of scale, require expansion or extension of operations and thus fit well with the pooling of skills and resources that are characteristic of joint venturing. Further, both partners contribute to and gain from efficiency goals, unlike with market access or knowledge transfer goals where one firm contributes more than it gains or vice versa for that particular goal.Additional analysis revealed that the goal types explained more variance in partner goal achievement and satisfaction than did the size of goal sets or the extent of overlap in partners' goals. Taken in combination, the various aspects of partners' goals explained 26% of the variance in partner goal achievement and 38% of the variance in partner satisfaction. When partner goal achievement was included in the multiple regression model for partner satisfaction, the amount of explained variance increased to 69%. The results suggest that a partner firm may be able to significantly enhance its chances of judging a joint venture to be successful if its goals focus on efficiency rather than revenues and profits, if it has a relatively large goal set, and if it concentrates on achieving the set of stated goals.     

Consumer insights into luxury goods: Why they shop where they do in a jewelry shopping setting

The question that guides this research concerns why consumers prefer to shop where they do for luxury goods. This study applies Tauber's (1972) motives, as representative of Sheth's (1983) nonfunctional shopping motives for luxury goods purchases. The study examines how well Tauber's motives describe consumers’ shopping motivations at each retail outlet in a jewelry shopping setting. These retail outlets consist of store- and non-store formats. The study identifies motives that are considered most important by consumers and that contribute to their shopping preferences. This study also identifies demographic profiles of jewelry shoppers at each retail outlet. Jewelry shoppers are more influenced by functional motives than nonfunctional motives.     

Towards understanding network relationships in online retailing

This paper views e-commerce (B2C) as a retail innovation that evolves along with newly emerging technological system around the Internet. In the case of e-commerce, this system consists of retailers as adopters and co-developers of technological solutions invented/commercialized by specialists. As part of 'new economy' business practices, what is needed for establishing successful e-commerce venture in terms of tangible resources and competences is not necessarily acquired internally but are coordinated via network relationships. The paper proposes to identify different e-commerce strategies, and outlines the kinds of actors involved in the networks that seem to go along with each strategy. While suggesting that different e-commerce strategies correspond to different networking strategies it points at the importance of relational competences in varying online retailing contexts.