Executive Insights: Relationship Formation in International Joint Ventures: Insights from Australian–Malaysian International Joint Ventures

Many international joint ventures are unsuccessful, and managers partly blame the “softer” issues related to partner relationships. The authors study these relational (behavioral) aspects of the formation process using seven international joint ventures involving Australian and Malaysian firms. During the five stages of formation (i.e., need determination, partner search, partner selection, negotiations, and operations), four dimensions of trust (i.e., personal, competence, contractual, and goodwill) and three dimensions of commitment (i.e., intentions based, contractual, and affective) play prominent roles. Managers need to focus on these dimensions during the five stages of formation to improve chances of success.

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