BARGAINING POWER, MANAGEMENT CONTROL, AND PERFORMANCE IN UNITED STATES-CHINA JOINT VENTURES: A COMPARATIVE CASE STUDY

A. YAN, B. GRAY
1994 Academy of Management Journal  
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more » ... reports a comparative case study of four joint ventures between partners from the United States and the People's Republic of China. The bargaining power of potential partners affects the structure of management control in a joint venture, which affects venture performance. Several informal control mechanisms interacting with formal control structure and influencing performance are identified. We also investigated the joint ventures' evolution over time. An integrative model of management control in joint ventures is presented. We would like to thank Martin Kilduff, James Thomas, and two anonymous reviewers for this journal for their insightful comments on the earlier versions of this article. 1478 tionship (Blodgett, 1991; Fagre & Wells, 1982; Killing, 1983; Lecraw, 1984) , the studies are difficult to compare because they have measured both variables differently. Research findings on the relationship between control and performance offer conflicting results (see Geringer and Hebert [1989] for a review). Lecraw (1984) noted that the relationship between parent control and performance generates continuing controversy in the international joint venture literature. Additional problems with prior research also warrant further study. For example, (1) conflicting results have been obtained for joint ventures in developing and developed countries (Beamish, 1984 (Beamish, , 1985 (Beamish, , 1988 ); (2) longitudinal studies are underrepresented in research to date and, as a result, little is known about how joint ventures evolve over time; (3) most joint venture research on developing countries adopts the perspective of the multinational partner and excludes the views of the developing country partner; and (4) only two studies have examined the relationships between bargaining power and control and control and performance simultaneously (Killing, 1983; Lecraw, 1984). In this research, we utilized a comparative case study approach to reexamine the relationships among bargaining power, control, and performance. We sought to overcome the limitations mentioned above in several ways. First, we looked at the relationships among all three variables in the same study. By adopting in-depth, comparative case studies, we tried to sort out the confusion and inconsistencies with respect to these relationships in the existing literature. By providing detailed explanations that survey methods miss, case studies offer the prospect of new insights into the connections among these variables (Eisenhardt, 1989; Glaser & Strauss, 1967; Yin, 1989) . Second, we sought to improve on existing models by accounting for the dynamic aspects of joint ventures, a topic largely ignored in research to date (Parkhe, 1993a). By tracing the evolution of joint ventures, we identified changes in the ventures over time. In this respect, comparative case studies are useful because they are particularly appropriate for studying organizational changes (Van de Ven & Poole, 1990). Third, our data reflect the interpretations of both parents. Fourth, research on international joint ventures that has examined bargaining power, control, and performance has primarily focused on ventures created among developed country partners. In our study, we aimed at a deeper understanding of joint ventures in a developing country, the People's Republic of China, thus enriching the literature with the Chinese experience. Recent research has focused on the rapid proliferation of international joint ventures in transformational economies (those in transition from central control to a market orientation) such as that of the People'
doi:10.2307/256796 fatcat:wd4il577qbbyfa2drq64aerwoq