Lost that lovin’ feeling: The erosion of trust between small, high-distance partners

Couper, Carole; Reuber, A. Rebecca; Prashantham, Shameen

doi:10.1057/s41267-019-00286-w

Cited by 33 publications

(18 citation statements)

References 124 publications

(185 reference statements)

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“…Previous contract research has mainly examined the moderating role of cultural characteristics rather than cultural differences (Table 1), we believe that it is not sufficient to reveal the efficacy of contract governance in internationalization contexts (Boyd and Fulk, 1996; Yang et al , 2012). As culturally relevant differences can create greater barriers to firms’ successful engagement in cross-border cooperation (Couper et al , 2020; Prashantham and Eranova, 2020; Wang and Chung, 2020). Focusing on the differences between the national culture is the key to gaining insight into the perceived and behavioral differences between firms and improving the way that they interact with partners (Bryan et al , 2015; Jia et al , 2020).…”

Section: Discussionmentioning

confidence: 99%

The effect of cultural differences on the relationship between contract governance and opportunism

Wang

Han

Yang

et al. 2023

EJM

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Purpose The purpose of this study is to determine the dimensions of cultural differences, which are theoretically most relevant to contract functions in international marketing. Moreover, the contradiction between contract governance and opportunism is reconciled by exploring the boundary conditions of specific cultural differences. Design/methodology/approach The authors obtained 235 bilateral data provided by Chinese exporters and overseas distributors. The authors matched a secondary data set with the questionnaire data, which were analyzed by confirmatory factor analysis and a hierarchical moderation model. Findings The results demonstrate that while contract specificity is less successful in this area, contingency adaptability is useful in reducing opportunism. Moreover, as the national cultural differences regarding uncertainty avoidance, power distance or individualism-collectivism become more pronounced. One contractual dimension will be more effective at curbing opportunism, while the other will be less effective. Research limitations/implications Despite sample limitations, to the best of the authors’ knowledge, this paper is the first to theoretically identify the effect of cultural difference dimensions in contract governance, unlike past studies taking cultural differences as an aggregated variable. Furthermore, by exploring the boundary conditions of cultural differences, this paper effectively reconciles the conflicting findings on the relationship between contract governance and opportunism in various cultural context. Practical implications Exporters’ managers can design contingency adaptability to complement the limitations of contract specificity and consider cultural differences’ contingency effects. Originality/value First, the authors identify cultural differences dimensions related to contract governance, refining and emphasizing the research context. Second, comparing the efficacy of contract specificity and contingency adaptability in specific cultural context can show which contract is better at preventing opportunism.

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Section: Discussionmentioning

confidence: 99%

The effect of cultural differences on the relationship between contract governance and opportunism

Wang

Han

Yang

et al. 2023

EJM

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“…Therefore, establishing and maintaining trust is very important, especially for non-equity (guanxi based) IJVs (Tsui-Auch and Möllering, 2010; Wang and Fulop, 2007; Ng et al , 2007; Li et al , 2006). Trust acts as a bridge to manage the information asymmetry during the formation and development of IJVs and IJV partners need to coordinate efforts to achieve common goals through development of trust and commitment (Couper et al , 2020; Huang et al , 2015). Without having a trusted partnership, the risk of expropriation or opportunism is greater for foreign firms than it would be for them in a domestic context and that many firms do underestimate such difference between their domestic and foreign markets (Robson et al , 2008; Cheng et al , 2016; Luo, 2007).…”

Section: Analysis Of the International Joint Ventures Literature Through The Lenses Of Guanximentioning

confidence: 99%

“…Trust is also essential in overcoming cultural and geographical distance that is common in IJVs (Tsui-Auch and Möllering, 2010; Ng et al , 2007). Couper et al (2020) assert that during IJV formation, “high distance can lead partners to erroneously attribute cues to a potential partner’s high quality, leading to over-expectations of partner performance” (p.326). Later, once the IJV is operational, high distance leads to misinterpretations of failures.…”

Section: Analysis Of the International Joint Ventures Literature Through The Lenses Of Guanximentioning

confidence: 99%

“…For example, with guanxi bonding, top managers who make an effort in socialising and interacting with their IJV colleagues and subordinates can gain their respect and trust (Wai On et al , 2013; Tsui-Auch and Möllering, 2010; Robson et al , 2008; Wang and Fulop, 2007). Respecting these cultural norms has a profound impact on trust development in IJVs (Couper et al , 2020; Ng et al , 2007).…”

Section: Analysis Of the International Joint Ventures Literature Through The Lenses Of Guanximentioning

confidence: 99%

“…Some scholars have found that most failures in the context of IJVs in China resulted from ineffective management of aligning performance goals and HR practices (Couper et al , 2020; Tsui-Auch and Möllering, 2010; Ng et al , 2007; Li et al , 2006). For instance, the increasing rate of local senior managers turnover is an acute problem for IJVs (Li, 2008).…”

Section: Analysis Of the International Joint Ventures Literature Through The Lenses Of Guanximentioning

confidence: 99%

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Unravelling the role of guanxi in the formation and management of international joint ventures – a systematic review of the literature

Zhao

Castka

2021

RIBS

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Purpose The formation of international joint ventures (IJVs) is one of the prevalent approaches for Western companies to conduct business in China. Yet, doing business in China is difficult for many firms, partially because of the institutional voids that are created by weak formal institutions. The paper aims to focus on the role of guanxi (an informal institution and a company capability that fills such institutional void) in the formation and management of IJVs. Design/methodology/approach A systematic literature review on the role of guanxi in IJV formation and management is conducted based on papers published in top international business journals between 2005 and 2020 – in total, 47 papers are included in the review. Findings The findings of the study are presented in four themes, namely, the role of guanxi as social capital in IJV formation, the role of trust in guanxi-based IJVs, the role of control mechanisms in balancing high reliance on trust in guanxi-based IJVs and the role of guanxi in managing inconsistencies in the regulatory environment. The analysis also reveals that guanxi has a positive effect on the development of IJVs if control between the parent firms is well balanced; otherwise, guanxi can trigger opportunism and leads to failures. Practical implications The study unravels how guanxi leads to successful outcomes in IJV formation and management, which assist managers who operate IJVs with their decision-making. Originality/value To the best of the authors’ knowledge, no previous paper has critically analysed the literature on IJVs using a guanxi perspective at micro (personal), meso (business) and (macro) governmental levels. This approach allows for providing more nuanced view of the role of guanxi in the formation and management of IJVs and aligns more closely with managerial decision-making.

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Home is best: Review source and cross-border online shopping

Fang,

2024

Electronic Commerce Research and Applications

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Lost that lovin’ feeling: The erosion of trust between small, high-distance partners

Abstract: This is a repository copy of Lost that lovin' feeling: The erosion of trust between small, high-distance partners.

Cited by 33 publications

References 124 publications

The effect of cultural differences on the relationship between contract governance and opportunism

The effect of cultural differences on the relationship between contract governance and opportunism

Unravelling the role of guanxi in the formation and management of international joint ventures – a systematic review of the literature

Home is best: Review source and cross-border online shopping

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