EXPRESS: Is Ambidextrous Innovation Strategy Beneficial to International Joint Venture Performance? Evidence from China

While the strategic marketing literature promotes ambidexterity as a critical innovation strategy that can enhance firm performance, its value in the international marketing context remains under-explored. Combining the ambidexterity and international marketing literatures, this study investigates how ambidexterity affects performance of the international joint ventures (IJVs) and how parent control asymmetry and cultural distance moderate the effects. Using polynomial analysis, this study simultaneously considers both the balance and intensity elements of ambidexterity and examines their effects on IJV performance in China. The authors argue that ambidexterity balance has a U-shaped effect on IJV performance, whereas ambidexterity intensity exerts an inverted U-shaped effect; such effects are further moderated by the unique features of IJVs—parent control asymmetry and cultural distance. With a dataset that combines survey and archival data on IJVs in China, the authors find strong empirical evidence for the hypotheses. These findings offer important advances to innovation research on IJVs.

Collectivist values for constructive conflict management in international joint venture effectiveness

Purpose This study aims to identify mechanisms to manage conflicts that occur when organizations with different cultures, habits and experiences try to coordinate effectively in international joint ventures (IJV). This study proposes that partners can promote their joint venture performance to the extent that they rely on cooperative rather than competitive conflict management. This study further hypothesizes that adopting collectivist values strengthens relationships and thereby provides a foundation for cooperative conflict management. Design/methodology/approach The authors collected data for this study in Shanghai, which is currently the most attractive province in China for FDI (FDI Intelligence, 2014). In all, 75 pairs of foreign and Chinese managers at middle and senior levels, knowledgeable about the joint venture relationships, completed their respective questionnaires. Findings Results of the structural equation analyses support the hypotheses that collectivist values support cooperative conflict management that in turn facilitates joint venture learning and performance. In contrast, individualistic values promoted competitive conflict management which in turn frustrated IJV performance. Practical implications Results suggest that IJV managers can strengthen their venture by developing collective values and training such cooperative conflict management skills as self-expression and demonstrating understanding of opposing views. Originality/value This study directly documents that while conflicts may interfere they can also stimulate discussions and decisions that promote coordination and performance of IJVs. This study contributes to conflict management research that has largely focused on investigating the consequences of approaches by examining conditions that promote constructive conflict management approaches.

Trust-performance relationship in international joint ventures: the moderating roles of structural mechanisms

Purpose This study aims to investigate the relationship between trust and performance in international joint ventures (IJVs) with the moderating effects of the structural mechanisms from transaction cost approach. Design/methodology/approach Using web-survey, data are collected from 89 IJVs of Northern European firms in Asia, Europe and America. Empirical data are analyzed with structural equation modeling and estimates moderating effects of symmetric dependence, symmetric equity share and resource complementarity. Findings The findings offer some interesting insights for transaction cost and the social exchange theory. This study demonstrates that a symmetric equity share between IJV partners does not moderate the trust–performance relationship, while a symmetric dependence and resource complementarity between partners effect positively. Therefore, trust takes on greater importance in enhancing IJV performance under symmetric dependence and resource complementarity and symmetric equity share between IJV partners deprecates the importance of equity distribution. Practical implications A symmetric dependence prevents the deceit from either partner in trusting relationships. Further, a trustful relationship enhances IJV performance regardless of the equity share in IJVs. IJVs with asymmetric equity share can also be successful, provided that IJV partners develop inter-partner trust. Originality/value The extant research has not examined how the trust–performance relationship is contingent on structural mechanisms of IJVs that transaction cost economics deem necessary to prevent opportunistic behavior. Three structural mechanisms of symmetric dependence, symmetric equity share and resource complementarity moderate the trust–performance relationship in IJVs.

International joint venture strategies and performance in the Baltic States

Purpose – The purpose of this paper is to analyse investment strategies and performance of Finnish firms in their international joint ventures (IJVs) established in Baltic States. Design/methodology/approach – The paper analyse performance of IJVs in Baltic States based on the IJV theory, international business literature, and foreign direct investments in Central and Eastern Europe (CEE) literature. The analysed factors include firm, investment, and inter-partner relationship-specific factors. To examine the propositions the paper used ten IJVs established by Finnish firms in various Baltic States between the period 1991 and 2005. Findings – The results show that the level of uncertainties in the countries and the differences between partners are not related to firms’ commitments and the entry mode choice. Several Finnish firms preferred cost leadership to compete with other firms in the local markets. In most cases there was a positive relationship between the level of partners’ equity share, commitment to the IJV, and the level of trust between partners. The results indicated differences in the IJV performance depending on parent firms’ objectives, their competitive strategies, mode of entry, age of IJVs, control strategies, level of trust, and commitment between partners, as well as depending on the performance measures used. Practical implications – This study suggests four observations that managers may need to take into consideration to improve IJV performance in the Baltic States. First, cost leadership strategy help to increase IJV performance in terms of sales. Second, social control mechanisms and narrow control leaded to better performance than formal and wide control. Third, minority ownership by Finnish firms in IJVs leaded to better performance based on sales, productivity and total performance whereas majority ownership had leaded to better performance in terms of total costs. Finally, the results confirmed that commitment to the IJV operation and trust on the other partner are very essential factors to IJV performance. Originality/value – The study is the first one to analyse in more detail based on several cases the IJV strategies and performance of Finnish firms in the Baltic States. The analysed factors include several such factors which have not been analysed related to IJV operations in Baltic States (some also limitedly in the CEE context).

THE CONSEQUENCE OF PARTNER RELATIONSHIP QUALITY TO PREDICT THE SUCCESSFUL PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES (SMES) INTERNATIONAL JOINT VENTURES (IJVS) IN THAILAND INDUSTRIAL SECTORS

Purpose:This study highlighted the importance of partner relationship quality captured by bonding, empathy, reciprocity and trust in SME IJV firms. Despite, there has been no systematic analysis has found in the literature regarding partnership quality in terms of relationship marketing (RM) and its effect on IJV business performance across several Thailand’s industrial sectors.. Methodology/Sampling: By systematic random sampling, 835 questionnaires were distributed and 341 (42%) usable cases were returned for the final analysis. The study examines the direct and indirect effect of partner relationship quality and its consequence on SME IJV in Thailand across several industrial sectors. Findings: The results of the study confirmed the significant important of partner relationship quality represented by bonding, empathy, reciprocity and trust have fully mediated the relationship between MO and SME IJV performance. Practical Implications: Based on this finding, partner relationship quality is implicit to be important predictors to determine the success of SME IJV in Thailand.