Balancing IJV knowledge contributions and trust needs

Abstract

Purpose – This paper aims to present a model that explains how knowledge contributions of international joint venture (“IJV”) partners can be balanced or imbalanced, which affects each partners’ trust needs, with implications for future partner relationships. Design/methodology/approach – Illustrative examples aid in explaining propositions associated with the knowledge/trust needs balance model. In addition, consideration is given to the trust-building complication of liability of foreignness and the implications balance or imbalance. Findings – In total, 12 illustrative cases are evaluated to determine whether the knowledge contributions of the IJV partners are balanced. Knowledge intensity associated with the venture is assessed to determine the value of the foreign firm partner’s knowledge contribution. Cultural distance between the relevant countries provides a measure of the host country partner’s knowledge contribution. Balance is assessed after factoring in mitigating partner experience. The cases provide examples of four different balance/imbalance situations. Practical implications – A critical aspect of a successful IJV is knowledge sharing and trust is required for the freest flow of information. It is important for firms entering into IJVs to more fully understand the relationship between the knowledge contributions of IJV partners and trust. When knowledge contributions are more evenly balanced, the relationship between the partners will be stronger. Originality/value – The paper distinguishes between balance and stability/instability, expands the literature on knowledge intensity and contributes the new concept of trust needs. Balance at the start of an IJV has implications for the future relationship of the partners.

COVID-19 driven challenges in international B2B customer relationship management: empirical insights from Finnish high-tech industrial microenterprises

“…Extant studies indicate the importance of personal relationships in B2B relationship initiation and customer relationship management in the B2B context. Scholarships suggest that B2B relationships benefit from more personal (human touch) relationships as they tend to result in enhanced knowledge development and sharing between the exchange partners (Kotabe et al , 2003), a better understanding of complex inter-organizational issues (Kogut and Zander, 1992) and greater trust (Doney and Cannon, 1997; Calhoun and Harnowo, 2015), which result in reduced conflict and increased synergy between the exchange parties (Mohr and Spekman, 1994; Barmeyer et al , 2020). In such settings, employees acting as boundary-spanners between various business exchange firms play a vital role in creating value for the firms involved in complex B2B activities.…”

Market challenges, learning and customer orientation, and innovativeness in IJVs

“…National culture differences can create ambiguity in interactions between partners (Park and Ungson, 1997), which can increase the likelihood of conflicts and mistrust (Morgan and Hunt, 1994). Conflict and mistrust could lead to a reduction in the synergistic nature of the collaboration (Calhoun and Harnowo, 2015). In an effort to include this theoretically relevant variable of national culture differences, we tested the moderating effect of national culture differences between partners on the relationships between strategic orientations and IJV innovativeness.…”

Unintended change of ownership structure and acquisition of IJVs: the effect of initial structural conditions

“…In addition to the arguments stated above, continuous interactions may lead to leak of information, which can be appropriated by IJV partners to change their bargaining power. These interactions could lead to imbalanced contribution of knowledge, which may cause trust issues and lead to IJV instability (Calhoun and Harnowo, 2015). Higher number of partners also increases transaction costs, which in turn leads the IJV to experience partners' withdrawal (Greve et al, 2010).…”