Successful Operating Strategies in the Performance of U.S.-China Joint Ventures

Evaluations of the performance of international joint ventures (IJVs) in China have produced mixed conclusions. This study sought to uncover performance criteria used by various groups of managers and to identify critical factors in IJV performance in China. Using in-depth case studies, matched data were collected from personal interviews with managers from Chinese and U.S. parent companies, joint venture operating managers from both partners, and government officials from both countries. The performance criteria used by joint venture participants appear to be converging, with profitability emerging as the dominant element. This exploratory study uncovered four important strategic factors in the performance of large, established U.S.-China manufacturing joint ventures. These are controlling decision making, establishing a sales network, retaining interpartner learning, and influencing government officials. The results suggest that the importance of decision-making control is moderated by size of the venture and nationality. Whether the IJV is a part of the government's National Plan also appears to be an important contingency. Managerial implications and directions for future research are provided.