Drivers and outcomes of parent company intervention in IJV management: a cross-cultural comparison

Johnson, Jean L.; Cullen, John B.; Sakano, Tomoaki; Bronson, James W.

doi:10.1016/s0148-2963(99)00081-8

Cited by 54 publications

(49 citation statements)

References 27 publications

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“…Building on this research, we suggest that the shared arrangement in IJVs and, in particular, the idiosyncratic commitment of resources, complicate the ability of parent firms to observe and evaluate how these resources are deployed in foreign markets compared to the arrangements in WoS (Johnson et al, 2001). Parent firms operating IJVs thus often find it more difficult to assess whether the competences and resources transferred abroad yield their highest productive value compared to their counterparts operating WoS.…”

Section: Hypotheses Developmentmentioning

confidence: 97%

“…Following research by Chang and Taylor (1999), O'Donnell (2000), Johnson, Cullen, Sakano, and Bronson (2001), and Roth and O'Donnell (1996), among others, we build on agency theory to describe the relationship between the parent firm and the foreign subsidiary management. For the purpose of our study, the parent firm represents the principal, while the management of the foreign subsidiary represents the agent.…”

Section: Call the Bextent Of Control^and Thementioning

confidence: 99%

“…Furthermore, ambiguity stemming from third-party (i.e., the joint venture partner) involvement complicates the ability of firms to align subsidiary managers' actions and behavior with corporate objectives. In IJVs, this increase in information asymmetry may provide scope for managerial opportunism and suboptimal decision-making (Johnson et al, 2001). This ambiguity may enhance the likelihood of goal incongruence and managerial conflicts more substantially in IJVs than in WoS given that the integration of diverse management approaches may hamper IJV operations.…”

Section: Hypotheses Developmentmentioning

confidence: 99%

“…Agency theory suggests that in order to reduce agency costs, parent firms may use controls over the decision-making process in a subsidiary (Johnson et al, 2001). Eisenhardt (1989: 63), for instance, maintained that agency theory is about Bthe optimal structuring of control relationships^to manage complexity, which arises from the difficulties in verifying the claims from subsidiary agents.…”

Section: Hypotheses Developmentmentioning

confidence: 99%

“…When agency conflicts are significant, a greater extent of control may increase the efficiency of HQ-subsidiary relationships. Specifically, greater extents of control may serve as an effective means of curbing managerial opportunism and limiting the potential for irrational decision-making on the subsidiary level (Johnson et al, 2001). Moreover, higher control is expected to improve the transfer and implementation of management practices in complex relationships.…”

Section: Hypotheses Developmentmentioning

confidence: 99%

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Ownership mode, cultural distance, and the extent of parent firms’ strategic control over subsidiaries in the PRC

et al. 2016

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Previous studies often associated a specific type of ownership mode with the extent of control a parent firm may have over (strategic) decision-making in a foreign subsidiary, suggesting that parent firms should have higher control over wholly-owned subsidiaries (WoS) than international joint ventures (IJVs). Building on principal agent theory, we argue that in the Chinese context higher ownership levels do not necessarily have a positive effect on the extent of control over the foreign subsidiary. We further argue that cultural distance between the parent firm and the subsidiary moderates this relationship. We test our hypotheses using data from a sample of 156 foreign subsidiaries in the People's Republic of China (PRC) and find strong support for our arguments. Our findings show that in WoS parent firms reduce their extent of control, while in IJVs parent firms increase their extent of control. Moreover, we find that extent of control over WoS (IJVs) declines (increases) when cultural distance increases. Our results have significant theoretical implications for international business (IB) research as they challenge existing views with regard to the relationship between ownership mode and control as well as the moderating effect of cultural distance.

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Section: Hypotheses Developmentmentioning

confidence: 97%

Section: Call the Bextent Of Control^and Thementioning

confidence: 99%

Section: Hypotheses Developmentmentioning

confidence: 99%

Section: Hypotheses Developmentmentioning

confidence: 99%

Section: Hypotheses Developmentmentioning

confidence: 99%

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Ownership mode, cultural distance, and the extent of parent firms’ strategic control over subsidiaries in the PRC

et al. 2016

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Resource dependence theory in international business: Progress and prospects

Jiang

Luo

Xia

et al. 2022

Global Strategy Journal

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Research Summary Resource dependence theory (RDT) has been widely applied in the context of international business (IB) over the past four decades. This study reviews and synthesizes the insights of RDT in IB literature accumulated over the past 40 years and derives an integrative addendum for future research. We highlight three critical dependence dimensions (i.e., locational, interorganizational, and intraorganizational dependencies) and three essential RDT themes (i.e., dependence solutions, dependence‐managing outcomes, and macro environmental conditions of RDT) in the IB context. Our review concludes that the IB literature has reached a good level of conceptual and empirical consensus concerning how multinational corporations (MNCs) take a large array of resource dependence actions and manage their resource dependence in various situations. We also find a strong need for further extension of RDT in IB research, offering suggestions for future research, including additional theoretical integration, underlying processes, and new dynamics that change the course of cross‐border interdependencies under the new global reality. Managerial Summary This study systematically reviews the stock of knowledge over the past 40 years on how the logic of resource dependencies unfolds in IB practices (e.g., cross‐border M&As, alliances and joint ventures, global supply chains, corporate political strategies, headquarters‐subsidiary relationships, and upper‐echelon decisions). Our findings and conclusions offer a decision roadmap for IB practitioners to assess various resource dependence situations with external and internal stakeholders in IB operations and to effectively manage such interdependencies. We also elaborate on the important implications of MNCs' strategies for effectively managing their resource dependencies in international exchanges in the modern world, which is characterized by the coexistence of trends leading of both globalization and de‐globalization.

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The Market Orientation–Performance Relationship: The Empirical Link in Export Ventures

Julian

Mohamad²,

Ahmed

et al. 2013

Thunderbird Intl Bus Rev

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This study examines the empirical link between three dimensions of market orientation, namely, customer orientation, competitor orientation and interfunctional coordination, and overall export marketing performance in Indonesian export market ventures. The study was based on an empirical investigation of firms involved in exporting to foreign countries from Indonesia. The primary data for the study were collected from a self‐administered mail survey of 877 export market ventures from the manufacturing sector in Indonesia resulting in a sample of 109 usable responses being returned. From the application of the multiple regression analysis it was concluded that all three dimensions of market orientation had a significant impact on export marketing performance when measured via a composite measure of export marketing performance that included economic indicators, strategic indicators, and satisfaction with performance. © 2013 Wiley Periodicals, Inc.

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Drivers and outcomes of parent company intervention in IJV management: a cross-cultural comparison

Cited by 54 publications

References 27 publications

Ownership mode, cultural distance, and the extent of parent firms’ strategic control over subsidiaries in the PRC

Ownership mode, cultural distance, and the extent of parent firms’ strategic control over subsidiaries in the PRC

Resource dependence theory in international business: Progress and prospects

The Market Orientation–Performance Relationship: The Empirical Link in Export Ventures

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