IDEAS home Printed from https://ideas.repec.org/a/spr/manint/v54y2014i5d10.1007_s11575-014-0217-4.html
   My bibliography  Save this article

Revisiting the Trustworthiness–Performance–Governance Nexus in International Joint Ventures

Author

Listed:
  • Linda H. Y. Hsieh

    (University of Birmingham)

  • Suzana B. Rodrigues

    (Erasmus University
    Queen’s University Belfast
    FUMEC University)

Abstract

This paper contributes to the research on international joint ventures (IJV) in the following ways: (1) by identifying different patterns of governance that partners in the post-formation period exercise and examining how contrasting patterns relate to variations in perceived partner’s trustworthiness, as well as to IJV performance; (2) by empirically testing the extent to which partners emphasize or even renegotiate and change different elements of governance; and (3) by complementing existing studies that have examined only unidirectional links among trustworthiness, performance and governance by considering possible simultaneous relationships that may exist among these variables. The findings from a survey and follow-up interviews with international joint ventures located in Taiwan reveal that levels of partners’ trustworthiness and performance satisfaction each, by itself, may lead to the deployment of different governance measures. However, it is the combinations of extreme (high or low) variants on both partners’ trustworthiness and performance satisfaction that seem to generate clearer patterns of governance. Low satisfaction and partners’ trustworthiness seem to encourage intensification of control or the deployment of more aggressive governance measures. In contrast, high performance satisfaction and partners’ trustworthiness may foster a combination of soft and routine forms of control.

Suggested Citation

  • Linda H. Y. Hsieh & Suzana B. Rodrigues, 2014. "Revisiting the Trustworthiness–Performance–Governance Nexus in International Joint Ventures," Management International Review, Springer, vol. 54(5), pages 675-705, October.
    • Handle: RePEc:spr:manint:v:54:y:2014:i:5:d:10.1007_s11575-014-0217-4
    DOI: 10.1007/s11575-014-0217-4
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11575-014-0217-4
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s11575-014-0217-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Preet S Aulakh & Masaaki Kotabe & Arvind Sahay, 1996. "Trust and Performance in Cross-Border Marketing Partnerships: A Behavioral Approach," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 27(5), pages 1005-1032, December.
    2. Boersma, Margreet F. & Buckley, Peter J. & Ghauri, Pervez N., 2003. "Trust in international joint venture relationships," Journal of Business Research, Elsevier, vol. 56(12), pages 1031-1042, December.
    3. Hans Mjoen & Stephen Tallman, 1997. "Control and Performance in International Joint Ventures," Organization Science, INFORMS, vol. 8(3), pages 257-274, June.
    4. Kevin Zheng Zhou & Dean Xu, 2012. "How foreign firms curtail local supplier opportunism in China: Detailed contracts, centralized control, and relational governance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 43(7), pages 677-692, September.
    5. Ajai S. Gaur & Debmalya Mukherjee & Sanjaya S. Gaur & Florian Schmid, 2011. "Environmental and Firm Level Influences on Inter‐Organizational Trust and SME Performance," Journal of Management Studies, Wiley Blackwell, vol. 48(8), pages 1752-1781, December.
    6. Steven C Currall & Andrew C Inkpen, 2002. "A Multilevel Approach to Trust in Joint Ventures," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 33(3), pages 479-495, September.
    7. Charles Dhanaraj & Paul W. Beamish, 2004. "Effect of equity ownership on the survival of international joint ventures," Strategic Management Journal, Wiley Blackwell, vol. 25(3), pages 295-305, March.
    8. Bo Bernhard Nielsen, 2011. "Trust in strategic alliances: Toward a co-evolutionary research model," Journal of Trust Research, Taylor & Francis Journals, vol. 1(2), pages 159-176, June.
    9. Jean‐Paul Roy, 2012. "IJV Partner Trustworthy Behaviour: The Role of Host Country Governance and Partner Selection Criteria," Journal of Management Studies, Wiley Blackwell, vol. 49(2), pages 332-355, March.
    10. Siegwart Lindenberg, 2000. "It Takes Both Trust and Lack of Mistrust: The Workings of Cooperation and Relational Signaling in Contractual Relationships," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 4(1), pages 11-33, March.
    11. Andrew C. Inkpen & Steven C. Currall, 2004. "The Coevolution of Trust, Control, and Learning in Joint Ventures," Organization Science, INFORMS, vol. 15(5), pages 586-599, October.
    12. Hsieh, Linda H.Y. & Rodrigues, Suzana B. & Child, John, 2010. "Risk perception and post-formation governance in international joint ventures in Taiwan: The perspective of the foreign partner," Journal of International Management, Elsevier, vol. 16(3), pages 288-303, September.
    13. William G. Ouchi, 1979. "A Conceptual Framework for the Design of Organizational Control Mechanisms," Management Science, INFORMS, vol. 25(9), pages 833-848, September.
    14. Preet S Aulakh & Masaaki Kotabe & Arvind Sahay, 1996. "Trust and Performance in Cross-Border Marketing Partnerships: A Behavioral Approach," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 27(4), pages 1005-1032, December.
    15. Chung, Chris Changwha & Beamish, Paul W., 2012. "Multi-party international joint ventures: Multiple post-formation change processes," Journal of World Business, Elsevier, vol. 47(4), pages 648-663.
    16. Groot, Tom L. C. M. & Merchant, Kenneth A., 2000. "Control of international joint ventures," Accounting, Organizations and Society, Elsevier, vol. 25(6), pages 579-607, August.
    17. Jeffrey H. Dyer & Wujin Chu, 2003. "The Role of Trustworthiness in Reducing Transaction Costs and Improving Performance: Empirical Evidence from the United States, Japan, and Korea," Organization Science, INFORMS, vol. 14(1), pages 57-68, February.
    18. Child, John & Yan, Yanni, 1999. "Investment and control in international joint ventures: the case of China," Journal of World Business, Elsevier, vol. 34(1), pages 3-15, April.
    19. Alexander T Mohr & Jonas Puck, 2013. "Revisiting the Trust-performance Link in Strategic Alliances," Management International Review, Springer, vol. 53(2), pages 269-289, April.
    20. Håvard Ness, 2009. "Governance, Negotiations, and Alliance Dynamics: Explaining the Evolution of Relational Practice," Journal of Management Studies, Wiley Blackwell, vol. 46(3), pages 451-480, May.
    21. Yadong Luo & Oded Shenkar & Mee-Kau Nyaw, 2001. "A Dual Parent Perspective on Control and Performance in International Joint Ventures: Lessons From a Developing Economy," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(1), pages 41-58, March.
    22. Chang-Bum Choi & Paul W Beamish, 2004. "Split management control and international joint venture performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(3), pages 201-215, May.
    23. Akbar Zaheer & Bill McEvily & Vincenzo Perrone, 1998. "Does Trust Matter? Exploring the Effects of Interorganizational and Interpersonal Trust on Performance," Organization Science, INFORMS, vol. 9(2), pages 141-159, April.
    24. Fey, Carl F. & Beamish, Paul W., 2000. "Joint venture conflict: the case of Russian international joint ventures," International Business Review, Elsevier, vol. 9(2), pages 139-162, April.
    25. Bill McEvily & Vincenzo Perrone & Akbar Zaheer, 2003. "Trust as an Organizing Principle," Organization Science, INFORMS, vol. 14(1), pages 91-103, February.
    26. Inkpen, Andrew C. & Currall, Steven C., 1998. "The nature, antecedents, and consequences of joint venture trust," Journal of International Management, Elsevier, vol. 4(1), pages 1-20, July.
    27. Costa e Silva, Susana & Bradley, Frank & Sousa, Carlos M.P., 2012. "Empirical test of the trust–performance link in an international alliances context," International Business Review, Elsevier, vol. 21(2), pages 293-306.
    28. Keith D. Brouthers & Gary J. Bamossy, 2006. "Post‐Formation Processes in Eastern and Western European Joint Ventures," Journal of Management Studies, Wiley Blackwell, vol. 43(2), pages 203-229, March.
    29. Holger Patzelt & Dean A. Shepherd, 2008. "The Decision to Persist with Underperforming Alliances: The Role of Trust and Control," Journal of Management Studies, Wiley Blackwell, vol. 45(7), pages 1217-1243, November.
    30. Kwon, Yung-Chul, 2008. "Antecedents and consequences of international joint venture partnerships: A social exchange perspective," International Business Review, Elsevier, vol. 17(5), pages 559-573, October.
    31. Martyna Janowicz‐Panjaitan & Rekha Krishnan, 2009. "Measures for Dealing with Competence and Integrity Violations of Interorganizational Trust at the Corporate and Operating Levels of Organizational Hierarchy," Journal of Management Studies, Wiley Blackwell, vol. 46(2), pages 245-268, March.
    32. Gerald E. Fryxell & Robert S. Dooley & Maria Vryza, 2002. "After The Ink Dries: The Interaction Of Trust And Control In Us‐Based International Joint Ventures," Journal of Management Studies, Wiley Blackwell, vol. 39(6), pages 865-886, September.
    33. 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.
    34. Akbar Zaheer & N. Venkatraman, 1995. "Relational governance as an interorganizational strategy: An empirical test of the role of trust in economic exchange," Strategic Management Journal, Wiley Blackwell, vol. 16(5), pages 373-392.
    35. Matthew J. Robson & Constantine S. Katsikeas & Daniel C. Bello, 2008. "Drivers and Performance Outcomes of Trust in International Strategic Alliances: The Role of Organizational Complexity," Organization Science, INFORMS, vol. 19(4), pages 647-665, August.
    36. Michael Nippa & Schon Beechler & Andreas Klossek, 2007. "Success Factors for Managing International Joint Ventures: A Review and an Integrative Framework," Management and Organization Review, The International Association for Chinese Management Research, vol. 3(2), pages 277-310, July.
    37. John Child & Yanni Yan, 2003. "Predicting the Performance of International Joint Ventures: An Investigation in China," Journal of Management Studies, Wiley Blackwell, vol. 40(2), pages 283-320, March.
    38. Aimin Yan & Barbara Gray, 2001. "Antecedents and Effects of Parent Control in International Joint Ventures," Journal of Management Studies, Wiley Blackwell, vol. 38(3), pages 393-416, May.
    39. Shige Makino & Christine M. Chan & Takehiko Isobe & Paul W. Beamish, 2007. "Intended and unintended termination of international joint ventures," Strategic Management Journal, Wiley Blackwell, vol. 28(11), pages 1113-1132, November.
    40. J Michael Geringer, 1991. "Strategic Determinants of Partner Selection Criteria in International Joint Ventures," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 22(1), pages 41-62, March.
    41. Chris Changwha Chung & Paul W. Beamish, 2010. "The Trap of Continual Ownership Change in International Equity Joint Ventures," Organization Science, INFORMS, vol. 21(5), pages 995-1015, October.
    42. Nippa, Michael & Beechler, Schon & Klossek, Andreas, 2007. "Success Factors for Managing International Joint Ventures: A Review and an Integrative Framework," Management and Organization Review, Cambridge University Press, vol. 3(2), pages 277-310, July.
    43. Leila Hurmerinta-Peltomäki & Niina Nummela, 2006. "Mixed methods in international business research: A value-added perspective," Management International Review, Springer, vol. 46(4), pages 439-459, August.
    44. Peter J. Lane & Jane E. Salk & Marjorie A. Lyles, 2001. "Absorptive capacity, learning, and performance in international joint ventures," Strategic Management Journal, Wiley Blackwell, vol. 22(12), pages 1139-1161, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tengjian Zou & Gokhan Ertug & Ilya R. P. Cuypers & Donald L. Ferrin, 2023. "Trust across borders: a review of the research on interorganizational trust in international business," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(8), pages 1379-1401, October.
    2. Sufyan QUDAH & Alexandru CAPATINA & Mihaela CAPATINA, 2023. "Jordan Companies’ Trustworthiness through Foreign Business Partners’ Lens," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 2, pages 41-46.
    3. Tao Bai & Jialin Du & Angelo M. Solarino, 2018. "Performance of foreign subsidiaries “in” and “from” Asia: A review, synthesis and research agenda," Asia Pacific Journal of Management, Springer, vol. 35(3), pages 607-638, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michael Nippa & Jeffrey J Reuer, 2019. "On the future of international joint venture research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(4), pages 555-597, June.
    2. Isidor, Rodrigo & Schwens, Christian & Hornung, Frank & Kabst, Ruediger, 2015. "The impact of structural and attitudinal antecedents on the instability of international joint ventures: The mediating role of asymmetrical changes in commitment," International Business Review, Elsevier, vol. 24(2), pages 298-310.
    3. Ng, Paul Wai-Kit & Lau, Chung-Ming & Nyaw, Mee-Kau, 2007. "The effect of trust on international joint venture performance in China," Journal of International Management, Elsevier, vol. 13(4), pages 430-448, December.
    4. Khalid, Saba & Ali, Tahir, 2017. "An integrated perspective of social exchange theory and transaction cost approach on the antecedents of trust in international joint ventures," International Business Review, Elsevier, vol. 26(3), pages 491-501.
    5. Marius G. Gehrisch & Stefan Süß, 2023. "Organizational behavior in international strategic alliances and the relation to performance – a literature review and avenues for future research," Management Review Quarterly, Springer, vol. 73(3), pages 1045-1107, September.
    6. Matthew J. Robson & Constantine S. Katsikeas & Daniel C. Bello, 2008. "Drivers and Performance Outcomes of Trust in International Strategic Alliances: The Role of Organizational Complexity," Organization Science, INFORMS, vol. 19(4), pages 647-665, August.
    7. Owens, Martin & Ramsey, Elaine & Loane, Sharon, 2018. "Resolving post-formation challenges in shared IJVs: The impact of shared IJV structure on inter-partner relationships," International Business Review, Elsevier, vol. 27(3), pages 584-593.
    8. Alexander T Mohr & Jonas Puck, 2013. "Revisiting the Trust-performance Link in Strategic Alliances," Management International Review, Springer, vol. 53(2), pages 269-289, April.
    9. Ali, Tahir & Khalid, Saba & Shahzad, Khuram & Larimo, Jorma, 2021. "Managing international joint ventures to improve performance: The role of structural and social mechanisms," International Business Review, Elsevier, vol. 30(3).
    10. Kwok, Francis & Sharma, Piyush & Gaur, Sanjaya Singh & Ueno, Akiko, 2019. "Interactive effects of information exchange, relationship capital and environmental uncertainty on international joint venture (IJV) performance: An emerging markets perspective," International Business Review, Elsevier, vol. 28(5), pages 1-1.
    11. Nguyen, Huu Le & Larimo, Jorma & Wang, Yi, 2019. "Control, innovation and international joint venture performance: The moderating role of internal and external environments," International Business Review, Elsevier, vol. 28(6), pages 1-1.
    12. Costa e Silva, Susana & Bradley, Frank & Sousa, Carlos M.P., 2012. "Empirical test of the trust–performance link in an international alliances context," International Business Review, Elsevier, vol. 21(2), pages 293-306.
    13. Jin, Jason Lu & Wang, Liwen, 2021. "Resource complementarity, partner differences, and international joint venture performance," Journal of Business Research, Elsevier, vol. 130(C), pages 232-246.
    14. Hsieh, Linda H.Y. & Rodrigues, Suzana B. & Child, John, 2010. "Risk perception and post-formation governance in international joint ventures in Taiwan: The perspective of the foreign partner," Journal of International Management, Elsevier, vol. 16(3), pages 288-303, September.
    15. Le Nguyen, Huu & Larimo, Jorma & Ali, Tahir, 2016. "How do ownership control position and national culture influence conflict resolution strategies in international joint ventures?," International Business Review, Elsevier, vol. 25(2), pages 559-568.
    16. Kolloge, Konstantin, 2009. "Die Messung des Kooperationserfolges in der empirischen Forschung: Ergebnisse einer Literaturstudie," Arbeitspapiere 76, University of Münster, Institute for Cooperatives.
    17. Lui, Steven S. & Ngo, Hang-yue & Hon, Alice H.Y., 2006. "Coercive strategy in interfirm cooperation: Mediating roles of interpersonal and interorganizational trust," Journal of Business Research, Elsevier, vol. 59(4), pages 466-474, April.
    18. Maximilian Holtgrave & Mert Onay, 2017. "Success through Trust, Control, and Learning? Contrasting the Drivers of SME Performance between Different Modes of Foreign Market Entry," Administrative Sciences, MDPI, vol. 7(2), pages 1-24, May.
    19. Tengjian Zou & Gokhan Ertug & Ilya R. P. Cuypers & Donald L. Ferrin, 2023. "Trust across borders: a review of the research on interorganizational trust in international business," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(8), pages 1379-1401, October.
    20. Martyna Janowicz‐Panjaitan & Rekha Krishnan, 2009. "Measures for Dealing with Competence and Integrity Violations of Interorganizational Trust at the Corporate and Operating Levels of Organizational Hierarchy," Journal of Management Studies, Wiley Blackwell, vol. 46(2), pages 245-268, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:manint:v:54:y:2014:i:5:d:10.1007_s11575-014-0217-4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.