Skip to main content
SpringerLink
Log in

Organizational culture and partner interaction in the management of international joint ventures in India

  • Published:
Asia Pacific Journal of Management Aims and scope Submit manuscript

Abstract

Different from previous research that focused on the formation phase of partnering processes in joint ventures, this study focuses on the post-formation phase and argues that partner interaction processes of communication, cooperation, and conflict resolution play a key role in the implementation and management of joint ventures. We examine how organizational culture differences (OCD) and integration acculturation strategy (IAS) affect international joint venture (IJV) performance through the mediation of partner interaction processes. We develop hypotheses and test them by survey data from 202 executives of IJVs in India. The results suggest that the interaction processes fully mediate the negative effect of OCD but partially mediate the positive effect of IAS on partners’ satisfaction with the joint venture performance. We discuss the implication of these findings for research and practice on post-formation management of IJVs.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Figure 1
Figure 2

Similar content being viewed by others

Notes

  1. According to Beamish and Lupton (2009: 79), the six joint venture issues are performance, knowledge management, internationalization, cultural differences, governance and control, and valuing a joint venture; all of which, except internationalization, are salient for the implementation and management phase of partnering process.

  2. We assume that separation and marginalization are not viable strategies in the post-formation phase because an IJV’s effectiveness depends more on achieving synergy than on domination of one partner. Domination is unappealing because unlike acquisitions (Nahavandi & Malekzadeh, 1988) or parent-subsidiary relationships (Selmer & De Leon, 1996) that are characterized by asymmetrical relationships of power differential, in IJVs, especially those with an evenly distributed ownership, neither of the partners can unilaterally impose its organization’s culture on the venture (Meschi, 1997). Moreover, researchers have observed that the partners of collaborative ventures face the dual pressures of maintaining their own cultural identity and adapting to their partners’ cultural practices (Selmer & De Leon, 2002). Overall, IJV studies suggest that either shared or split control is preferred to dominant control for the effectiveness of joint ventures (Beamish & Lupton, 2009).

  3. The data for this paper were part of the original data in Pothukuchi and colleagues’ (2002) survey. However, except for OCD, none of the major variables in this paper were used by Pothukuchi and colleagues (2002). In addition, this study addresses a set of different research questions and tests new hypotheses by employing a different analytical procedure.

  4. NCD is computed by the following formula (Kogut & Singh, 1988): \( {\hbox{NC}}{{\hbox{D}}_{\rm{j}}} = \sum\limits_{{\rm{i}} = 1}^4 {\left\{ {{{\left( {{{\hbox{I}}_{\rm{ij}}} - {{\hbox{I}}_{\rm{id}}}} \right)}^2}/{{\hbox{V}}_{\rm{i}}}} \right\}/4}, \) where Iij stands for the index for the ith cultural dimension and jth country, Vi is the variance of the index of the ith dimension, d indicates India, and NCDj is national cultural distance of jth country from India.

References

  • Adler, N. J. 1997. International dimensions of organizational behavior. Cincinnati: South-Western.

    Google Scholar 

  • Ahlstrom, D. 2010. Publishing in the Asia Pacific Journal of Management. Asia Pacific Journal of Management, 27(1): 1–8.

    Article  Google Scholar 

  • Anderson, E. 1990. Two firms, one frontier: On assessing joint venture performance. Sloan Management Review, 31(2): 19–30.

    Google Scholar 

  • Anderson, E., & Weitz, B. A. 1989. Determinants of continuity in conventional industrial channel dyads. Marketing Science, 8: 310–323.

    Article  Google Scholar 

  • Ariño, A. 2003. Measures of strategic alliance performance: An analysis of construct validity. Journal of International Business Studies, 34: 66–79.

    Article  Google Scholar 

  • Bagozzi, R. P. 1981. Evaluating structural equation models with unobservable variables and measurement error: A comment. Journal of Marketing Research, 18: 375–381.

    Article  Google Scholar 

  • Bagozzi, R. P., Yi, Y., & Phillips, L. W. 1991. Assessing construct validity in organizational research. Administrative Science Quarterly, 36(3): 421–458.

    Article  Google Scholar 

  • Bandura, A. 1977. Social learning theory. Englewood Cliffs, NJ: Prentice-Hall.

    Google Scholar 

  • Barkema, H., Bell, J., & Pennings, J. 1996. Foreign entry, cultural barriers, and learning. Strategic Management Journal, 17: 151–166.

    Article  Google Scholar 

  • Beamish, P. W., & Lupton, N. C. 2009. Managing joint ventures. Academy of Management Perspectives, 23(2): 75–94.

    Article  Google Scholar 

  • Bell, J., den Ouden, B., & Ziggers, G. W. 2006. Dynamics of cooperation: At the brink of irrelevance. Journal of Management Studies, 43(7): 1607–1619.

    Article  Google Scholar 

  • Bentler, P. M., & Chou, C. 1987. Practical issues in structural equation modeling. Sociological Methods and Research, 16: 78–117.

    Article  Google Scholar 

  • Bentler, P. M., & Wu, E. J. C. 1995. EQS for Windows: User’s guide. Encino, CA: Multivariate Software, Inc.

    Google Scholar 

  • Berry, J. W., Kim, U., Power, S., Young, M., & Bujaki, M. 1989. Acculturation attitudes in plural societies. Applied Psychology: An International Review, 38(2): 185–206.

    Article  Google Scholar 

  • Birkinshaw, J., Bresman, H., & Hakanson, L. 2000. Managing the post-acquisition integration process: How the human integration and task integration processes interact to foster value creation. Journal of Management Studies, 37: 395–425.

    Article  Google Scholar 

  • Black, J. S., & Mendenhall, M. 1991. The U-curve adjustment hypothesis revisited: A review and theoretical framework. Journal of International Business Studies, 23(2): 225–247.

    Article  Google Scholar 

  • Brouthers, K. D., & Bamossy, G. J. 2006. Post-formation processes in Eastern and Western European joint ventures. Journal of Management Studies, 43(2): 204–229.

    Article  Google Scholar 

  • Buono, A. F., & Bowditch, J. L. 1989. The human side of mergers and acquisitions. San Francisco: Jossey-Bass.

    Google Scholar 

  • Butler, J. K. 1983. Reciprocity of trust between professionals and their secretaries. Psychological Reports, 53: 411–416.

    Article  Google Scholar 

  • Chen, R., & Boggs, D. J. 1998. Long term cooperation prospects in international joint ventures: Perspectives of Chinese firms. Journal of Applied Management Studies, 7(1): 111–126.

    Article  Google Scholar 

  • Christiansen, J. A. 2000. Competitive innovation management. London: Macmillian Press.

    Google Scholar 

  • Danis, W. M., & Parkhe, A. 2002. Hungarian-Western partnerships: A grounded theoretical model of integration processes and outcomes. Journal of International Business Studies, 33: 423–455.

    Article  Google Scholar 

  • Das, T. K., & Teng, B. S. 1998. Between trust and control: Developing confidence in partner cooperation in alliances. Academy of Management Review, 23: 491–512.

    Google Scholar 

  • Earley, P. C., & Mosakowsky, E. 2000. Creative hybrid team cultures: An empirical test of transnational team functioning. Academy of Management Journal, 43: 26–49.

    Article  Google Scholar 

  • Elsass, P. M., & Veiga, J. F. 1994. Acculturation in acquired organizations: A force-field perspective. Human Relations, 47(4): 431–453.

    Article  Google Scholar 

  • Fang, T. 2010. Asian management research needs more self-confidence: Reflection on Hofstede (2007) and beyond. Asia Pacific Journal of Management, 27(1): 155–170.

    Article  Google Scholar 

  • Fey, C. F., & Beamish, P. W. 2001. Organizational climate similarity and performance: International joint venture in Russia. Organization Studies, 22: 853–882.

    Article  Google Scholar 

  • Geringer, J. M., & Hebert, L. 1991. Measuring performance of international joint ventures. Journal of International Business Studies, 22(2): 249–263.

    Article  Google Scholar 

  • Gong, Y., Shenkar, O., Luo, Y., & Nyaw, M. K. 2005. Human resources and international joint venture performance: A system perspective. Journal of International Business Studies, 36: 505–518.

    Article  Google Scholar 

  • Gribbons, B. C., & Hocevar, D. 1998. Levels of aggregation in higher level confirmatory factor analysis: Application for academic self-concept. Structural Equation Modeling, 5(4): 377–390.

    Article  Google Scholar 

  • Griffith, D. A., Hu, M. Y., & Ryans, J. K. 2000. Process standardization across intra- and inter-cultural relationships. Journal of International Business Studies, 31(2): 303–324.

    Article  Google Scholar 

  • Gudykunst, W. B. 1994. Bridging differences: Effective intergroup communication. Thousand Oaks, CA: Sage Publications.

    Google Scholar 

  • Hair, J. F., Anderson, R. E., Tatham, R. L., & Black, W. C. 1992. Multivariate data analysis. New York: Macmillan Publishing Company.

    Google Scholar 

  • Hall, E. T., & Hall, M. R. 1990. Understanding cultural differences. Yarmouth, ME: Intercultural Press.

    Google Scholar 

  • Haspeslagh, P. C., & Jemison, D. B. 1991. Managing acquisitions. New York: Free Press.

    Google Scholar 

  • Hofstede, G., Neuijen, B., Ohayv, D. D., & Sanders, G. 1990. Measuring organizational cultures: A quantitative study across twenty cases. Administrative Science Quarterly, 35: 286–316.

    Article  Google Scholar 

  • Hulland, J. 1999. Use of partial least squares (PLS) in strategic management research: A review of four recent studies. Strategic Management Journal, 20: 195–204.

    Article  Google Scholar 

  • Jehn, K. A. 1995. A multimethod examination of the benefits and detriments of intergroup conflict. Administrative Science Quarterly, 40: 256–282.

    Article  Google Scholar 

  • Joreskog, K. G., & Sorbom, D. 1993. LISREL 8 user’s reference guide. Chicago: Scientific Software International.

    Google Scholar 

  • Julian, C., & O’Cass, A. 2004. The impact of firm and environmental characteristics on international joint venture (IJV) marketing performance in Thailand. Thunderbird International Business Review, 46(4): 359–380.

    Article  Google Scholar 

  • Kale, P., & Anand, J. 2006. The decline of emerging economy joint ventures: The case of India. California Management Review, 48(3): 62–76.

    Google Scholar 

  • Katz, D., & Kahn, R. L. 1978. The social psychology of organizations. New York: Wiley.

    Google Scholar 

  • Kimberly, J. R. 1976. Organizational size and the structuralist perspective: A review, critique, and proposal. Administrative Science Quarterly, 21: 571–597.

    Article  Google Scholar 

  • Kline, P. B. 1998. Principles and practices of structural equation modelling. New York: Guilford.

    Google Scholar 

  • Kogut, B., & Singh, H. 1988. The effect of national culture on the choice of entry mode. Journal of International Business Studies, 19: 411–432.

    Article  Google Scholar 

  • Kostova, T. 1999. Transnational transfer of strategic organizational practices: A contextual perspective. Academy of Management Review, 24: 308–324.

    Google Scholar 

  • Lane, H. W., & Beamish, P. W. 1990. Cross-cultural cooperative behavior in joint ventures in LDCs. Management International Review, 30(Special Issue): 87–102.

    Google Scholar 

  • Larsson, R., & Lubatkin, M. 2001. Achieving acculturation in mergers and acquisitions: An international case survey. Human Relations, 54(12): 1573–1607.

    Article  Google Scholar 

  • Lin, X., & Germain, R. 1998. Sustaining satisfactory joint venture relationships: The role of conflict resolution strategy. Journal of International Business Studies, 29(1): 179–196.

    Article  Google Scholar 

  • Lu, L. 2006. The relationship between cultural distance and performance in international joint ventures: A critique and ideas for further research. International Journal of Management, 23(3): 436–445.

    Google Scholar 

  • Luo, Y., & Park, S. H. 2004. Multiparty cooperation and performance in international equity joint venture. Journal of International Business Studies, 35: 142–160.

    Article  Google Scholar 

  • Malekzadeh, A. R., & Nahavandi, A. 1990. Making mergers work by managing cultures. Journal of Business Strategy, 11 (May/June): 55–57.

    Article  Google Scholar 

  • Merchant, H., & Schendel, D. 2000. How do international joint ventures create shareholder value?. Strategic Management Journal, 21: 723–737.

    Article  Google Scholar 

  • Meschi, P. X. 1997. Longevity and cultural differences of international joint ventures: Toward time-based cultural management. Human Relations, 50: 211–228.

    Google Scholar 

  • Ministry of Commerce and Industry. 2003. Manual on foreign direct investment in India. New Delhi: Government of India.

    Google Scholar 

  • Mohr, J., & Spekman, R. 1994. Characteristics of partnership success: Partnership attributes, communication behavior, and conflict resolution techniques. Strategic Management Journal, 15(2): 135–152.

    Article  Google Scholar 

  • Nahavandi, A., & Malekzadeh, A. R. 1988. Acculturation in mergers and acquisitions. Academy of Management Review, 13: 79–90.

    Google Scholar 

  • Olie, R. 1994. Shades of culture and institutions in international mergers. Organization Studies, 15(3): 381–405.

    Article  Google Scholar 

  • Osland, G. E. 1994. Successful operating strategies in the performance of US-China joint ventures. Journal of International Marketing, 2(4): 53–78.

    Google Scholar 

  • Pablo, A. L. 1994. Determinants of acquisition integration level: A decision-making perspective. Academy of Management Journal, 37: 803–836.

    Article  Google Scholar 

  • Park, B. I. 2010. What matters to managerial knowledge acquisition in international joint ventures? High knowledge acquirers versus low knowledge acquirers. Asia Pacific Journal of Management, 27(1): 55–79.

    Article  Google Scholar 

  • Park, S. H., & Ungson, G. R. 1997. Re-examining national culture, organizational complementarity, and economic motivation on joint venture dissolution. Academy of Management Journal, 40(2): 279–307.

    Article  Google Scholar 

  • Piccolo, R. F., & Colquitt, J. A. 2006. Transformational leadership and job behaviors: The mediating role of core job characteristics. Academy of Management Journal, 49: 327–340.

    Article  Google Scholar 

  • Podsakoff, P. M., MacKenzie, S. B., Lee, J. Y., & Podsakoff, N. P. 2003. Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, 88: 879–903.

    Article  Google Scholar 

  • Pothukuchi, V., Damanpour, F., Choi, J., Chen, C. C., & Park, S. H. 2002. National and organizational culture differences and international joint venture performance. Journal of International Business Studies, 33: 243–265.

    Article  Google Scholar 

  • Rindova, V. P., Williamson, I. O., Petkova, A. P., & Server, J. M. 2005. Being good or being known: An empirical examination of the dimensions, antecedents and consequences of organizational reputation. Academy of Management Journal, 48(6): 1033–1049.

    Article  Google Scholar 

  • Ring, P. S., & Van de Ven, A. 1994. Developmental processes of cooperative interorganizational relationships. Academy of Management Review, 19: 90–118.

    Google Scholar 

  • Salk, J. E., & Brannen, M. Y. 2000. National culture, networks, and individual influence in a multinational management team. Academy of Management Journal, 43: 191–202.

    Article  Google Scholar 

  • Satorra, A., & Bentler, P. M. 2001. A scaled difference chi-square test statistic for moment structure analysis. Psychometrika, 66: 507–514.

    Article  Google Scholar 

  • Schuler, R. S. 2001. Human resource and activities in international joint ventures. International Journal of Human Resource Management, 12(1): 1–52.

    Article  Google Scholar 

  • Scott, W. R. 1992. Organizations: Rational, natural, and open systems. Englewood Cliff, NJ: Prentice-Hall.

    Google Scholar 

  • Selmer, J., & De Leon, C. T. 1996. Parent cultural control through organizational acculturation: HCN employees learning new work values in foreign business subsidiaries. Journal of Organizational Behavior, 17: 557–572.

    Article  Google Scholar 

  • Selmer, J., & De Leon, C. T. 2002. Parent cultural control of foreign subsidiaries through organizational acculturation: A longitudinal study. International Journal of Human Resource Management, 13(8): 1147–1165.

    Article  Google Scholar 

  • Simons, T. L., & Peterson, R. S. 2000. Task conflict and relationship conflict in top management teams: The pivotal role of intragroup trust. Journal of Applied Psychology, 85: 102–111.

    Article  Google Scholar 

  • Sirmon, D. J., & Lane, P. J. 2004. A model of cultural differences and international alliance performance. Journal of International Business Studies, 35: 306–319.

    Article  Google Scholar 

  • Spekman, R. E., Forbes, T. M., Isabella, L. A., & MacAvory, T. C. 1998. Alliance management: A view from the past and a look to the future. Journal of Management Studies, 35: 747–772.

    Article  Google Scholar 

  • Swierczek, F. W., & Dhakal, G. P. 2004. Learning and its impact on the performance of manufacturing joint ventures in developing countries. Technovation, 24(1): 53–62.

    Article  Google Scholar 

  • Tadmor, C. T., Tetlock, P. E., & Peng, K. 2006. Biculturalism and integrative complexity: Testing the acculturation complexity model. Proceedings of the Sixty-Fifth Annual Meeting of the Academy of Management, Honolulu, Hawaii, US, August.

  • Tiessen, J. H., & Linton, J. D. 2000. The JV dilemma: Cooperating and competing in joint ventures. Canadian Journal of Administrative Sciences, 17(3): 203–216.

    Article  Google Scholar 

  • Tihanyi, L., Griffith, D. A., & Russell, G. J. 2005. The effect of culture distance on entry mode choice, international diversification, and MNE performance: A meta-analysis. Journal of International Business Studies, 36: 270–283.

    Article  Google Scholar 

  • Tsang, E. W. K. 2002. Acquiring knowledge by foreign partners from international joint ventures in a transition economy: Learning-by-doing and learning myopia. Strategic Management Journal, 23(9): 835–854.

    Article  Google Scholar 

  • UNCTAD (United Nations Conference on Trade and Development). 2009. World investment prospects survey 2009–2011. Switzerland: United Nations.

    Google Scholar 

  • Van de Ven, A. H., Dennis, C. E., & Koenig, R. 1975. Frameworks for interorganizational analysis. In A. R. Negandhi (Ed.). Interorganizational theory: 19–38. Kent, OH: Kent State University Press.

    Google Scholar 

  • Very, P., Lubatkin, M., Calori, R., & Veiga, J. 1997. Relative standing and the performance of recently acquired European firms. Strategic Management Journal, 18(8): 593–614.

    Article  Google Scholar 

  • Ward, C., & Kennedy, A. 2001. Coping with cross-cultural transition. Journal of Cross-Cultural Psychology, 32: 636–642.

    Article  Google Scholar 

  • Weber, Y., & Schweiger, D. M. 1992. Top management culture conflict in mergers and acquisitions: A lesson from anthropology. International Journal of Conflict Management, 3: 285–302.

    Article  Google Scholar 

  • Weber, Y., Shenkar, O., & Raveh, A. 1996. National and corporate culture fit in mergers/acquisitions: An exploratory study. Management Science, 42: 1215–1227.

    Article  Google Scholar 

  • Werts, C., Linn, R., & Joreskog, K. 1974. Intraclass reliability estimates: Testing structural assumptions. Educational and Psychological Measurement, 34: 25–33.

    Article  Google Scholar 

  • White, S., & Lui, S. S. Y. 2005. Distinguishing costs of cooperation and control in alliances. Strategic Management Journal, 26: 913–932.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Management and Global Business, Rutgers University, 1 Washington Park, Newark, NJ, 07102, USA

    Fariborz Damanpour & Chao C. Chen

  2. Department of Business Administration and Marketing, Universitat Jaume I, Campus de Riu Sec, 12080, Castellon, Spain

    Carlos Devece

  3. Midas Touch Infrastructure India Pvt Ltd, 401 Sarada 1, Road # 1, Banjara Hills, Hyderabad, India, 500 034

    Vijay Pothukuchi

Authors
  1. Fariborz Damanpour
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Carlos Devece
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Chao C. Chen
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Vijay Pothukuchi
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Fariborz Damanpour.

Appendix

Appendix

Table 2 Measurement model properties.
Full size table

Rights and permissions

Reprints and permissions

About this article

Cite this article

Damanpour, F., Devece, C., Chen, C.C. et al. Organizational culture and partner interaction in the management of international joint ventures in India. Asia Pac J Manag 29, 453–478 (2012). https://doi.org/10.1007/s10490-010-9204-x

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10490-010-9204-x

Keywords

Search

Navigation