International Joint Venture Essay - 560 words

International Joint Venture IJVs (International Joint Ventures) have increased significantly in popularity in recent years (Beamish and Delios 1997) as firms find themselves under more pressure to expand internationally, to be competitive. However, international joint ventures (IJVs) continue to be challenging to manage and, as a result, often lead to failure. In a meta-analysis of 12 past studies of IJVs, Beamish and Delios (1997) found that the performance of between 32 and 61 percent of the IJVs' in each sample was unsatisfactory. Consequently, both managers and academics are keenly interested in what firms can do to increase their IJVs' chances of success. One of the most common reasons given for IJVs not performing well is difficulties between parent firms (Hyder 1988). It is therefore essential to consider how such difficulties can be avoided. One hypothesis is that the more dissimilar parent firms are, the more likely they are to experience difficulties with their joint venture.


Several authors have suggested, but not tested, that interfirm diversity can severely impede the ability of companies to work together effectively (Harrigan 1988a; Parkhe 1991; Perlmutter and Heenan 1986). One way of measuring dissimilarity is to examine how firms' organizational climates differ. This is the approach chosen in this study, which focuses on the relationship between the dissimilarity in organizational climate between the parent firms and the joint venture organization (JVO) and the performance of the joint venture. The importance of inter-firm organizational culture/climate similarity for firms involved in joint ventures has received little systematic attention in the literature. Some IJV researchers have alluded to the drawbacks of organizational culture/cl ...................................................................................................................................................................................................................................................................................................................................................................

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Essay Tags: joint venture, joint, venture, organizational, climate

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