The influence of parent control structure on parent conflict in Vietnamese international joint ventures: an organization
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The influence of parent control structure on parent conflict in Vietnamese international joint ventures: an organizational justice-based contingency approach Jeffrey Q Barden1, H Kevin Steensma2 and Marjorie A Lyles3 1 Fuqua School of Business, Duke University, Durham, NC, USA; 2School of Business, University of Washington, Seattle, WA, USA; 3 Kelley School of Business, Indiana University, Indianapolis, IN, USA
Correspondence: JQ Barden, Fuqua School of Business, Duke University, Box 90120, Durham, NC 27708-0120, USA Tel: 19 19 416 9085; E-mail: [email protected]
Abstract There has been significant interest in understanding how the distribution of parental control over international joint ventures (IJV) influences IJV outcomes (e.g., parent conflict, survival, performance). Yet, the accumulation of research on the relationship between control structure and IJV outcomes has been somewhat inconclusive and even contradictory. We contribute to this research stream by developing an organizational justice-based contingency model relating parental control structure to parent conflict. We suggest that the level of conflict between IJV parents will depend on the consistencies between the control structure and parents’ contribution of proprietary resources, and between control structure and the parents’ abilities to effectively monitor operations. Our analysis of Vietnamese joint ventures provides some support for our model, and suggests that the relationship between parent control structure and IJV outcomes is perhaps more complex than previously thought. Journal of International Business Studies (2005) 36, 156–174. doi:10.1057/palgrave.jibs.8400121 Keywords: joint ventures; control; justice
Received: 3 September 2003 Revised: 18 July 2004 Accepted: 20 July 2004 Online publication date: 3 February 2005
Introduction For over 20 years, an ongoing debate has developed in the international joint venture1 (IJV) literature on the relationship between parent control structure and IJV outcomes (Geringer and Hebert, 1989; Yan, 1998). The crux of the debate centers on whether joint ventures perform best when there is a dominant partner2 exercising relatively greater control over key decisions, or when partners share power evenly. Proponents of the first position (e.g., Ding, 1997; Killing, 1983) draw on transaction cost theory and suggest that a dominant-partner control structure streamlines decision-making and strategy implementation in joint ventures by avoiding unnecessary disputes and conflict over operational decisions. Advocates of the latter position suggest that shared control creates mutual respect and a sense of fairness that promotes trust and reduces conflict between joint venture parents (e.g., Yan and Gray, 1994; Steensma and Lyles, 2000). Although these two perspectives are contradictory, both have been empirically supported (e.g., Killing, 1983; Yan and Gray, 1994; Ding, 1997; Steensma and Lyles, 2000). This has prompted some to
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