Academic journal article
By Frayne, Colette A.; Geringer, J. Michael
Human Resource Planning , Vol. 15, No. 4
Joint ventures (JVs) have become an increasingly important element of many companies' competitive strategies. These ventures involve two or more companies (the partners), each of which participates in the decision making activities of the jointly-owned entity. JVs offer the potential for promoting organizational learning and improving a company's competitiveness by reducing risk, promoting economies of scale or scope, and providing access to complementary technologies or other resources. The strategic importance of JVs is intensified since they are usually formed between existing or potential competitors and involve products or markets which constitute the primary or "core" activities of the partner firms.(1)
Although they are increasing in frequency and strategic importance, many JVs perform poorly and fail to achieve their objectives.(2) JV performance problems are often attributed to the complexity associated with the presence of two or more partners, which may be competitors as well as collaborators. In addition to running the venture itself, the JV's general manager (JVGM) must manage relationships with each of these partner organizations, which often have conflicting motivations, operating policies, and cultures. Yet, despite the unique managerial challenges associated with this job, the role of the JVGM and its relationship to JV performance have largely been overlooked as human resource concerns.(3) There has been essentially no effort to identify variables associated with successful or unsuccessful JVGM performance, or to develop training programs which might enable JVGMs to improve their performance.
Research and practice in clinical psychology and organizational behavior have shown that self-management techniques have had a significant relationship with performance of individuals in a variety of demanding contexts. After interviews with JVGMs and their superiors, it was apparent that self-management practices might also be useful for improving the performance of JVGMs. The potential value of self-management techniques was further reinforced by results of our pilot study examining JVGMs, details of which are contained in this paper's Appendix. Therefore, our objective here is to propose a program for training JVGMs to become more effective self-managers, and thus to improve the performance of JVGMs and their ventures. First, we will discuss the challenging nature of the JVGM's role and variables which are associated with JVGM performance. We then introduce the concept of self-management, techniques required for a comprehensive self-management training program for JVGMs, and the anticipated benefits from a self-management training program.
The Challenging Nature of the JVGM'S Role
The role of the JVGM typically differs from that of a general manager in a wholly owned subsidiary. Indeed, in our study, 86 percent of JVGMs and 82 percent of executives from the partner companies indicated that the skills required by a JVGM were different from the general management skills required for similar positions in the partners' non-JV subsidiaries. When asked to identify the different skill requirements, the managers commonly mentioned an increased need to communicate with multiple and diverse partner company executives, to negotiate and closely monitor JV performance, and to continuously try to separate the problems associated with managing the JV from those incurred by trying to satisfy the preferences of multiple partners. Further, 74 percent of JVGMs and 58 percent of partner company executives indicated that the requirements of the JVGM position were more challenging than those of similar GM positions in the partners' non-JV businesses. None of the JVGMs and only 6 percent of partner company executives indicated that the JVGM position was less challenging than similar non-JV positions.
As several executives in our study remarked, the additional challenges of the JVGM's position are often not readily apparent, particularly for managers who have not previously been involved directly with one of these ventures. …