Academic journal article International Journal of Management

The Effect of Cultural Similarity on International Joint Ventures: An Empirical Study

Academic journal article International Journal of Management

The Effect of Cultural Similarity on International Joint Ventures: An Empirical Study

Article excerpt

This paper's goal is to evaluate the effect of different national management styles on Lin and Germain's (1998) model. We re-examine their findings using a sample of Japanese-Chinese and Taiwanese-Chinese international joint ventures in China. The majority of findings in the current study conflicts with Lin and Germain's. They suggest that the impact of national culture on IJV conflict resolution strategies and performance is complex.

Introduction

Many scholars (e.g. Werner, 2002) have called for direct comparisons of theoretical frameworks in different countries to advance understanding of international joint ventures (UVs) since contradictory results have been observed in empirically testing W models (Yan and Gray, 1994; Calantone and Zhao, 2000). Lin and Germain (1998) developed a LISREL model examining the relationships between context variables (cultural similarity, relative power, and relationship age) and conflict resolution strategies on IJV performance in a sample of US-Chinese IJVs in China. The purpose of this paper is to evaluate the effect of different national management styles on the variables in Lin and Germain's model. We re-examine their findings using a sample of Japanese-Chinese and Taiwanese-Chinese UVs in China. We control for nationality by including only those IJVs with a general manager from either Japan or Taiwan, thus avoiding Lin and Germain's pooling of US and Chinese respondents.

Lin and Germain's Model and Our Modifications

Lin and Germain's conceptual framework is presented in Figure 1. Data was collected from managers in US-Chinese UVs. 118 of 143 questionnaires were collected, of which 94 were usable (35 US managers and 59 Chinese managers). Our variables are not exactly same as Lin and Germain's (1998) as in some cases, simplification was appropriate.

1. Context

Lin and Germain (1998) suggested that three context variables (i.e. cultural similarity, relative power, and relationship age) determine conflict resolution strategies in IJVs. Cultural similarity refers to the degree that one party perceives another party as similar to them in perceptual and behavioral patterns (Kim, 1991). Our study adopts this variable exactly. Relative power refers to the ability to affect the other party's decision-making, and is obtained from the resources that a party contributes (Lin and Germain, 1998). This variable was measured by (1) a three-item scale indicating dependence, influence, and power and (2) equity share. Our study utilizes only equity share as an easily measured and objective variable. Finally, relationship age is measured by the length of time that an IW had endured or the age of the IJV. Our study uses the actual age of the IJV.

2. Conflict Resolution Strategy

Lin and Germain (1998) suggest four types of conflict resolution strategies: (1) problem-solving, (2) compromising strategy (3) forcing, (4) legalistic strategy. Each strategy is measured by four questions in their survey. Problem-solving involves concerns, ideas, and issues discussed frankly, and the search for satisfactory solutions for both parties (Pruitt, 198 1). A compromising strategy for an IJV manager means that he would look for the middle ground between the initial positions of the two parents (Friedmann and Béguin, 1971). Forcing refers to the situation where one party attempts to dominate decision-making (Thomas, 1976) For instance, an IJV manager may use his advantage in ownership, technical or management know-how to pressure the other party (Killing, 1983). An IJV manager could use a legalistic strategy, such as referring to written contracts or informal binding agreements in order to achieve the preferred result in conflicts (Frazier and Summers, 1984). We utile the same approach.

3. Performance

Performance was measured by the responses to three questions, which reflect an IJV partner's satisfaction with: (1) the IJV s financial performance, (2) the 'personal relationship' with the other IUV parent and (3) the overall IN relationship (Lin and Germain, 1998). …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.