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Split management control and international joint venture performance

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  • Chang-Bum Choi

    (Bryan School of Business and Economics, The University of North Carolina at Greensboro, USA)

  • Paul W Beamish

    (Asian Management Institute, Richard Ivey School of Business, The University of Western Ontario, Canada)

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    Abstract

    A framework is presented to characterize four different ways in which management control is partitioned between a multinational enterprise (MNE) and local partners within international joint ventures (JVs): split control management, shared management, MNE-partner-dominant management, and local-partner-dominant management. The framework was tested using a sample of international JVs in Korea. We found that JVs following the split control management performed better than any other approach. No performance differences were found among the remaining three types of management control. This suggests that MNEs and local partners should split control: that is, choose the activities to control so that those chosen activities can be matched with their respective firm-specific advantages. Journal of International Business Studies (2004) 35, 201–215. doi:10.1057/palgrave.jibs.8400078

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    Bibliographic Info

    Article provided by Palgrave Macmillan in its journal Journal of International Business Studies.

    Volume (Year): 35 (2004)
    Issue (Month): 3 (May)
    Pages: 201-215

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    Handle: RePEc:pal:jintbs:v:35:y:2004:i:3:p:201-215

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    Cited by:
    1. Byung Park, 2010. "What matters to managerial knowledge acquisition in international joint ventures? High knowledge acquirers versus low knowledge acquirers," Asia Pacific Journal of Management, Springer, vol. 27(1), pages 55-79, March.
    2. Luo, Yadong, 2009. "Are we on the same page?: Justice agreement in international joint ventures," Journal of World Business, Elsevier, vol. 44(4), pages 383-396, October.
    3. J. Windsperger, 2009. "Allocation of decision rights in joint ventures," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 30(8), pages 491-501.
    4. Acquaah, Moses, 2009. "International joint venture partner origin, strategic choice, and performance: A comparative analysis in an emerging economy in Africa," Journal of International Management, Elsevier, vol. 15(1), pages 46-60, March.
    5. Chang-Bum Choi & Paul Beamish, 2013. "Resource complementarity and international joint venture performance in Korea," Asia Pacific Journal of Management, Springer, vol. 30(2), pages 561-576, June.
    6. Kolloge, Konstantin, 2009. "Die Messung des Kooperationserfolges in der empirischen Forschung: Ergebnisse einer Literaturstudie," Arbeitspapiere 76, Westfälsche Wilhelms-Universität Münster (WWU), Institut für Genossenschaftswesen.
    7. Muthusamy, Senthil Kumar & White, Margaret A., 2006. "Does power sharing matter? The role of power and influence in alliance performance," Journal of Business Research, Elsevier, vol. 59(7), pages 811-819, July.
    8. Van Assche, Ari & Schwartz, Galina A., 2013. "Contracting institutions and ownership structure in international joint ventures," Journal of Development Economics, Elsevier, vol. 103(C), pages 124-132.
    9. Park, Byung Il, 2011. "Knowledge transfer capacity of multinational enterprises and technology acquisition in international joint ventures," International Business Review, Elsevier, vol. 20(1), pages 75-87, February.
    10. Lin, Xiaohua & Wang, Cheng Lu, 2008. "Enforcement and performance: The role of ownership, legalism and trust in international joint ventures," Journal of World Business, Elsevier, vol. 43(3), pages 340-351, July.
    11. Williams, Christopher & Lee, Soo Hee, 2009. "Resource allocations, knowledge network characteristics and entrepreneurial orientation of multinational corporations," Research Policy, Elsevier, vol. 38(8), pages 1376-1387, October.
    12. Banerjee, Shantanu & Mukherjee, Arijit, 2010. "Joint venture instability in developing countries under entry," International Review of Economics & Finance, Elsevier, vol. 19(4), pages 603-614, October.
    13. Park, Byung Il & Choi, Jiyul, 2014. "Control mechanisms of MNEs and absorption of foreign technology in cross-border acquisitions," International Business Review, Elsevier, vol. 23(1), pages 130-144.
    14. Ming-Chang Huang & Ya-Ping Chiu, 2014. "The antecedents and outcome of control in IJVs: A control gap framework," Asia Pacific Journal of Management, Springer, vol. 31(1), pages 245-269, March.
    15. Jell-Ojobor, Maria & Windsperger, Josef, 2014. "The Choice of Governance Modes of International Franchise Firms — Development of an Integrative Model," Journal of International Management, Elsevier, vol. 20(2), pages 153-187.
    16. Schotter, Andreas & Beamish, Paul W., 2011. "Performance effects of MNC headquarters-subsidiary conflict and the role of boundary spanners: The case of headquarter initiative rejection," Journal of International Management, Elsevier, vol. 17(3), pages 243-259, September.
    17. Ari Van Assche & Galina A. Schwartz, 2013. "Contracting Institutions and Ownership Structure in International Joint Ventures," CIRANO Working Papers 2013s-04, CIRANO.
    18. Kobernyuk, Elena & Stiles, David & Ellson, Tony, 2014. "International joint ventures in Russia: Cultures' influences on alliance success," Journal of Business Research, Elsevier, vol. 67(4), pages 471-477.
    19. Li, Dan & Miller, Stewart R. & Eden, Lorraine & Hitt, Michael A., 2012. "The Impact of Rule of Law on Market Value Creation for Local Alliance Partners in BRIC Countries," Journal of International Management, Elsevier, vol. 18(4), pages 305-321.

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