Inter-partner relationships and performance in Western-Chinese joint ventures: an interaction approach.

Wilson, Jonathan Stuart (2006) Inter-partner relationships and performance in Western-Chinese joint ventures: an interaction approach. PhD thesis, Middlesex University. [Thesis]

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Abstract

Although relationships, interaction and networks in business markets have been well documented (Turnbull and Cunningham, 1981; Hakansson, 1982), there is a lack of
research analysing relationships between international joint venture partners. A joint venture parent company needs to understand how to interact with their partner, together with the impact cultural values have on performance, in order to prevent possible conflict. Many of the empirical studies into joint venture performance have focused on measures such as control, financial data and partner satisfaction (Killing, 1983; Beamish, 1984; Geringer and Herbert, 1991; Yan and Gray, 1994). China's recent entry into the World Trade Organisation, underlines the importance of understanding the influence cultural values have on performance.

This project is an empirical study into inter-partner relationships and performance in Western and Chinese joint ventures. The research primarily focuses on the Western parent perspective. Most of the relationships studied featured British firms. Measures are used to examine how interaction constructs, exchange episodes, and cultural values in these relationships impact joint venture performance. China's accession to the WTO is also addressed as a possible change factor to existing joint venture relationships. This project draws on literature on inter-firm relationships from the IMP tradition in industrial
marketing, from Chinese management studies, and from the field of cultural analysis. Since the research is cross-cultural, emic and etic; constructs that can be used in the measurement of the joint venture have been applied in order to attain conceptual equivalence.

Methodological triangulation is used to address the research questions. First, a total of 25 interviews were conducted with mostly British parent company managers responsible for establishing, and/or involvement with the joint venture. Second, a questionnaire survey was administered to 'fill in gaps' identified by the qualitative study. This produced a total of 57 responses.

Findings suggest that cultural values, in particular guanxi, continue to be regarded as an important part of relationships in Chinese and Western joint ventures. Based upon the case findings, the author proposes an empirically testable model of factors impacting joint venture performance. These factors include (1) Commitment; (2) Cultural understanding; (3) Control; (4) Communication; (5) Co-operation and (6) Consensus.

The research contributes to the three bodies of literature: IMP, foreign direct investment and Chinese cultural values, by illustrating how combining elements of these disciplines
can be applied in the context of joint venture performance.

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