China-United States joint ventures: a typological model of goal congruence and cultural understanding and their importance for effective human resource management

Little has been written about enhancing human resource management effectiveness in joint ventures with China. This study presented a typology of potential relationships between Chinese and American partners in a joint venture based on goal congruence and cultural understanding. Each relationship is described, and implications for the management of human resources are discussed.     

Social capital and human resource management in international joint ventures in Vietnam: a perspective from a transitional economy

This study highlights the importance of social capital in international joint ventures (IJVs), and examines human resource practices as a factor shaping such social capital. Comprehensive measures of social capital are developed and tested, which extend prior work on ‘bonding’ and ‘bridging’ social capital. We also link social capital with its anticipated antecedents and consequences. The study's findings are based on data collected from 164 IJVs located in Vietnam. IJV performance was predicted by training and by the level of trust and cooperation between foreign and local personnel. Training (including acquisition of management skills, technology, and cross-cultural understanding) also was predictive of the measures of social capital. A key practical implication arising from this study is that the return on investment from training of joint venture personnel can stem not only from the transfer of technical and management skills needed for developing competitive advantage, but also from the positive impact on social capital, which further contributes to venture success. The establishment of written objectives and plans for the venture, as well as the IJV's level of control regarding its own HR functions also was found to be related to some components of social capital. The findings of this study reinforce the call to build on the contributions of local personnel in joint ventures, and in Vietnam in particular.     

战略匹配对合资企业绩效的影响研究——基于中美合资企业的实证研究

关于合资企业的研究从不同学者分别论述了合资企业的战略、组织和文化的匹配性对合资企业绩效的影响。本文通过研究合资企业在合资运营之前战略匹配对中外合资企业四类绩效指标的影响研究。研究结果发现,目标一致(战略匹配)对合资企业满意度和总体竞争力有显著影响,而资源互补(战略匹配)对合资企业绩效无显著影响。     

Management of Sino-Sino Joint Ventures

Abstract

Since China's implementation of its open-door policy in 1979, the most effective way to obtain a foothold has proved to be to create joint ventures (JV) with a Chinese business partner. The foreign partner provides the transfer of technology, management skills, financing and access to international markets, whilst the Chinese partner contributes a production base with cheap land and labor, contacts with central and local government officials and access to the domestic Chinese market. The Chinese economy has benefited to a large extent from the creation of joint ventures in the past two decades. Hong Kong firms have used China as a production base for many years, usually with great success and to the mutual benefit of both. However, although Hong Kong firms had considerable experiences in running business and manufacturing operations in China, several have suffered substantially from their investment in joint ventures with Chinese partners. This paper evaluates various issues relating to the performance of equity joint ventures in China. The evaluation is based on a case study of four Sino-Hong Kong joint venture manufacturing firms in the electronics industry, and the findings of this paper indicate that there are number of important factors affecting the stability of joint ventures in China. Foreign investors' experiences in other areas may not be applicable to their investment in China because the operation of a joint venture in China is inevitably faced with a variety of problems that the foreign firms may not have encountered before.     

Corporate entrepreneurship through joint venture

One of the characteristics of the entrepreneurial firm is the active search for opportunities without taking into account the resources available to the firm at a given moment. In such cases, certain types of operation, such as a joint venture, may provide a quick solution to the resource needs of the entrepreneurial firm. Moreover, this form of cooperation offers a suitable context for partners to be able to learn specific knowledge pertaining, for example, to the country of origin of the market they are aiming to enter, or to learning particular activities etc. Bearing these two dimensions in mind, the objective of this paper is to analyze the role of the joint venture as a tool for undertaking different activities associated with Corporate Entrepreneurship, that is to say, strategic renewal, Corporate Venturing and innovation. An empirical study using a sample of 74 joint ventures suggests that this particular mode of cooperation is employed by the entrepreneurial firm to carry out some, though not all, of the activities associated with Corporate Entrepreneurship.     

Public Money and Mickey Mouse: Evaluating performance and accountability in the Hong Kong Disneyland joint venture public–private partnership

Abstract

Joint venture public–private partnerships (PPPs) allow partners to share in the risks and rewards of joint production. But the literature offers little theoretical guidance on assessing performance and accountability in this type of PPP. This article fills this gap by examining joint ventures as PPPs and formulates a comprehensive performance evaluation framework. Its application to the case of Hong Kong’s Disneyland Resort reveals a project that has endured several challenges related to achieving objectives, ensuring cooperation among partners, and upholding principles of democratic accountability. Outcomes from this study offer new insight into an underexplored aspect of PPP research.     

‘Who Knows What?’ in New Venture Teams: Transactive Memory Systems as a Micro‐Foundation of Entrepreneurial Orientation

The increasing importance of entrepreneurial behaviour has led scholars to embrace the idea that an entrepreneurial orientation (EO) is an important predictor of firm performance. While EO occupies a central position in strategic entrepreneurship research, scholars have yet to explore its origins in new ventures. Drawing on the knowledge‐based and cognitive views, we theorize that a new venture team's transactive memory system is a cognitive mechanism that spurs the development of an EO. In a field study of high‐tech new ventures in China, we examined the relationship between venture teams’ transactive memory systems (representing the distribution, integration, and utilization of the teams’ knowledge) and EO and the moderating influence of team‐, firm‐, and environment‐level factors. We found that the transactive memory system of a new venture team enhanced their EO and that this relationship was positively influenced by intra‐team trust, the structural organicity of a venture, and environmental dynamism. Our findings provide novel insights into the micro‐foundations of TMS in developing an EO in new ventures.     

Growth opportunities,corporate governance and the market value of multinational joint ventures

This paper examines whether differences in investment opportunities and corporate ownership structure can explain the disparate findings of other researchers with regard to the market's price reaction to the announcement of international joint ventures. We study a sample of 320 joint ventures announced during the period 1987–92. The sample joint ventures involve at least one US partner and one or more international partners from emerging economies (former communist countries in Eastern Europe and China), as well as industrialized G7 countries. We find that international joint ventures are on average wealth creating when the foreign partner comes from an emerging economy but are wealth neutral when the partner is from an industrialized country. This finding supports the investment opportunity set hypothesis. However, we do not find support for the shareholder-management alignment hypothesis in that higher insider holdings or a greater level of outsiders on the board for the US partner will lead to joint venture investments that are more highly valued by investors, other things remaining the same. © 1998 John Wiley & Sons, Ltd.     

Environmental uncertainty,prospector strategy,and new venture performance: the moderating role of network capabilities

We examine the network capability of new ventures and its relationship to uncertainty management, engagement in the prospector strategy, and performance outcome in a transition economy. Using data from a survey of 302 new ventures based in China, we find that new ventures respond to a high environmental uncertainty by engaging more in prospector strategy, consequently enhancing the ventures’ performance. Moreover, we find that network capabilities significantly moderate these relationships by not only strengthening the relationship between environmental uncertainty and engagement in the prospector strategy (the E–S relationship) but also by enhancing the relationship between engagement in the prospector strategy and new venture performance (the S–P relationship). Our findings extend the environment, strategy, and performance paradigm from large firms to small new ventures, highlighting the importance of network capabilities in a new venture’s engagement in an innovative strategy and of performance outcomes in a transition economy with a generally high level of environmental uncertainty.     

CEO Experiences: Effects on the Choice of FDI Entry Mode*

abstract Drawing on the strategic management and international business literatures, this study examines the relationships between the experiences of newly selected CEOs and their choice of foreign direct investment (FDI) entry modes. Based on a sample
of 380 foreign market entry events involving acquisitions, greenfield investments, and joint ventures, our findings indicate that CEOs with less firm experience preferred acquisitions and greenfield investments to joint ventures and, older CEOs were more likely to opt for joint ventures over greenfield investments. In addition, CEOs with throughput functional experience favoured acquisitions over joint ventures and greenfield investments. Finally, CEO international experience was associated with a greater propensity to choose greenfield investments and acquisitions over joint ventures and also greenfield investments over acquisitions. The implications of the findings from the perspective of theory and managerial practice are discussed, along with possible directions for future research.     

Joint ventures for entry deterrence

The literature of joint ventures has not discussed whether joint ventures may be used to deter entry. This paper then addresses how joint ventures may be used strategically for this purpose. Under the assumptions of linear demand and linear cost, as well as Stackelberg–Cournot interactions between incumbents and their joint venture firms, it is found that the incumbents can deter entry by creating independent joint ventures. Furthermore, it is shown that the optimal number of the joint ventures for the deterrence and the optimal deterrence strategies are functions of the number of potential entrants. Copyright © 1999 John Wiley & Sons, Ltd.     

MANAGING FOR AUTONOMY IN JOINT VENTURES: A LONGITUDINAL STUDY OF UPWARD INFLUENCE*

This article explores the relationships among influence, autonomy and control in a joint venture setting. It addresses the mechanisms available to joint venture (JV) managers to influence and gain compliance from parent firms. Control categories derived primarily from research on unified structures are explored in a new domain, an international joint venture. the beginning of new theory specific to relationships in joint ventures is developed based on causal maps of managerial perceptions. the results suggest that the use of upward influence to gain autonomy in a joint venture is different and more complex than in unified structures or among independent organizations.     

Social networks of female tech-entrepreneurs and new venture performance: the moderating effects of entrepreneurial alertness and gender discrimination

The social networks of entrepreneurs are an important factor affecting new venture performance. Based on the survey data of 316 new ventures in China, this paper explores the relationship between the social networks of female tech-entrepreneurs and new venture performance, and examines the moderating effects of entrepreneurial alertness and gender discrimination on this relationship. Our findings reveal that: (a) the social networks of female tech-entrepreneurs have a positive effect on new venture performance; (b) the entrepreneurial alertness of female tech-entrepreneurs has a positive effect on new venture performance; and (c) gender discrimination against women has a negative effect on new venture performance. Moreover, we found that gender discrimination negatively moderates the relationship between the social networks of female tech-entrepreneurs and new venture performance. We also found that entrepreneurial alertness positively moderates the relationship between the social networks of female tech-entrepreneurs and new venture performance. Our findings provide theoretical and practical implications for female technical individuals in the entrepreneurial practice, and shed light on the study of entrepreneurship theory in other emerging economies.     

Relational trust and new ventures’ performance: the moderating impact of national-level institutional weakness

This study investigates the link between relational trust in exchange partners and new venture performance, and determines whether weakness in national-level formal institutions influences this link. Based on a sample of 203 entrepreneurs and their new ventures from Germany and China, findings reinforce the idea that new venture performance may profit from relational trust in exchange partners. However, interaction analyses also reveal that the performance implications of relational trust are contingent on the institutional context. The contributions and implications of these findings are discussed.     

Looking inside the joint venture to help understand the link between inter-parent cooperation and performance

Cooperation is the Holy Grail for inter-organizational relationships, and significant research effort has been directed towards understanding its antecedents. However, the extant literature on joint ventures indicates that relatively few researchers have attempted to measure either cooperation or its organizational consequences. This paper examines the thesis that the link between inter-parent cooperation and joint venture performance may be mediated by important conditions inside the joint venture. The findings suggest that the nature of relations between the managers transferred into the joint venture from the parents can help explain the link between joint venture performance and inter-parent cooperation. In that regard, this research highlights the mediating roles of interdependence, factionalism, and patterns of influence behaviour. A parsimonious model is offered to help understand joint venture performance.     

Product market objectives and the formation of research joint ventures

In this paper we extend the existing literature on research and development (R&D) investments and research joint ventures (RJVs) in two important ways. First, we analyze and compare the case where firms collude in the product market to the benchmark case of competition in the output market. Second, we allow firms to form coalitions endogenously as a separate stage in the game. We develop profit functions that depend on the partition of firms into joint ventures and the nature of product competition between venture partners. Our results illustrate the restrictive nature of some assumptions made in the literature. Typically multiple RJVs of different sizes form in equilibrium. In general, RJVs should not be promoted if they entail product market collusion. Given the information available to policy‐makers, it is unlikely that an R&D policy more refined than analyzing and allowing RJVs on a case‐by‐case basis is feasible. Copyright © 1999 John Wiley & Sons, Ltd.     

Balancing dual missions for social venture growth: a comparative case study

ABSTRACT

Balancing social and economic missions in the pursuit of growth is one of the greatest challenges faced by social ventures. Although social ventures strive for growth to scale their social impact, pursuing growth often results in mission drift and the sacrifice of social objectives, which in turn eventually undermine the ventures’ raison d’être. In this study, we investigate how and with what outcomes social ventures that pursue growth can manage the balance of social and economic missions. Through a comparative case study of six for-profit social ventures, we find significant differences in how dual missions are selected, connected, and intertwined, leading to varying degrees of mission spillover effects between social and economic missions. Our findings show that two-sided mission spillover effects are a central mechanism in dual mission management, enabling social ventures to pursue balanced growth, avoid mission drift, and achieve social impact. With these findings, this study adds to the emergent literature on social entrepreneurship, dual mission management, and social venture growth.     

A longitudinal study on the relationship between financial bootstrapping and new venture growth

While bootstrap finance is widely used in entrepreneurial ventures, both scholars and practitioners have presented conflicting views on the relation between financial bootstrapping and venture growth. This article empirically investigates the association between bootstrap strategies used at startup and subsequent venture growth. For this purpose, we use a longitudinal database comprising data from both questionnaires and financial accounts of 214 new ventures. Findings demonstrate that the association between financial bootstrapping and venture growth is either nonexistent or positive. More specifically, new ventures that use more owner funds, employ more interim personnel, encourage customers to pay more quickly, and apply for more subsidy programs exhibit higher growth over time. We discuss the managerial and policy implications of these results and suggest avenues for future research.     

Accounting for derivatives: An evaluation of reporting practice by UK banks

In 1995, the Canadian Institute of Chartered Accountants (CICA) changed its Generally Accepted Accounting Principles on accounting for joint ventures from permitting a choice between the equity method (EM) and proportionate consolidation (PC) to requiring only PC. More recently, the International Accounting Standards Board (IASB) has decided to issue a new standard that will eliminate choice between EM and PC and require only EM; but as of October 2010 a new standard was still to be issued. The past Canadian and proposed IASB changes are similar in that choice between the same two reporting methods is removed but differ in the required alternative, PC for Canada and EM for the IASB. In this paper we use a sample of Canadian companies over the period 1985–2003 to study financial reporting for joint ventures. To our knowledge, our Canadian sample is the only one reflecting a reduction of choice in financial reporting methods for joint ventures. Therefore, our results have particular relevance for evaluating the IASB's proposed change. Specifically, we investigate whether firms that use EM between 1985 and 1994 experience a decline in value relevance of key balance sheet amounts such as total assets and liabilities when forced to use PC from 1995 onwards. Since 1995 firms are also required to provide footnote disclosures on their share of joint venture assets and liabilities in addition to revenues, expenses and cash flows. Using these disclosures, we investigate whether disaggregate joint venture assets and liabilities are incrementally and overall value relevant. We find that firms that are forced to switch from EM to PC experience a decline in value relevance of reported assets and liabilities. The firms that use PC for the entire sample period experience no such decline. We also find that joint venture assets and liabilities are incrementally and overall value relevant when disclosures are mandatory from 1995 onwards. Our results show that the removal of choice of financial reporting method does have value-relevance implications, something that is of importance to users. We also find that the requirement of additional disclosure of joint venture assets and liabilities is value relevant, which may offset, to some extent, the costs of the reduction in choice. Our inferences may have implications for a number of jurisdictions across Europe and beyond that are affected by a similar reduction of accounting choice proposed by the IASB.     

SME Foreign Direct Investment: An Examination of the Joint Venture Experiences of German and U.K. Small and Medium Sized Firms in China

Joint Ventures (JVs) have become popular vehicles for foreign market servicing, but few studies have focused on the joint venturing activities of Small and Medium-sized Enterprises (SMEs). This article examines the activities of 9 U.K. and 12 German SME joint ventures in China. Based on a questionnaire survey and in-depth case interviews, it reveals that the JVs, though successful, are not without their problems and the experiences are similar to those of large multi-national enterprises. As the key to success is the choice of the joint venture partner, assistance is required to help SMEs identify and select appropriate partners.