Post‐Formation Processes in Eastern and Western European Joint Ventures*

Abstract

 This study examines the post-formation processes that firms use to create successful international joint ventures (IJVs). Scholars have suggested that IJV performance is dependent on the post-formation processes firms institute to overcome barriers to success created by differences in national culture, trust, ownership positions and control mechanisms. Based on a longitudinal study of eight eastern/western European IJVs, our study provides insights into these post-formation processes, how these processes relate to each other, and how they relate to managers' evaluations of IJV success.

Response strategies in an international strategic alliance experimental context: Cross-country differences

“…However, they only focus on alliance dissolution, without examining other possible responses aimed at avoiding dissolution. Brouthers and Bamossy (2006) show that within the context of Eastern-Western European joint ventures, cultural differences exacerbate the detrimental effect of adverse situations, but their results indicate that managing adverse situations and cultural differences fosters relationship development and reduces the likelihood of alliance failure. However, their study does not detail the different response strategies that might help manage adverse situations.…”

“…Extant ISA studies demonstrate that cultural differences affect relationship development, because they tend to exacerbate adverse situations (e.g., Barkema and Vermeulen, 1997;Brouthers and Bamossy, 2006). We improve understanding of this issue by shifting attention from the overall effect of cultural differences to the underlying direct and moderating mechanisms through which national cultures influence managers' decision making (Boyacigiller and Adler, 1991).…”

“…Partners satisfied with the relationship instead appreciate the contacts with their counterparts, and the relationship likely is characterized by trust, respect, and commitment (Ariño et al, 2001). In such a situation, managers should use constructive response strategies (Brouthers and Bamossy, 2006), whether active or passive. For example, Hibbard and colleagues (2001) argue that managers with positive views of a relationship place less importance on an adverse situation and instead remain patient, believing that the transient negative situation will improve.…”

“…In an ISA's context, previous studies have examined the influence of national cultural differences between partners on relationship development (Barkema and Vermeulen, 1997;Brouthers and Bamossy, 2006;Meschi, 1997), but they have not systematically identified how people respond to adverse situations nor how culture influences their preference for certain responses. For example, Barkema and Vermeulen (1997) demonstrate that cultural differences between partners increase the likelihood of alliance termination, because differences breed disagreement and conflicts.…”

“…International strategic alliances (ISAs) are voluntary, long-term, contractual, cross-border relationships between two firms, designed to achieve specific objectives through collaboration (Brouthers and Bamossy, 2006). Because of their ability to capitalize on cross-border opportunities, ISAs have grown increasingly popular, yet their failure rate remains high (Park and Ungson, 2001).…”