The impact of cultural distance on the management style and performance of Japanese and Taiwanese joint ventures with local partners in China

This study aims to examine the impact of cultural distance on the management issues of international joint ventures QJVs). Previous IJV research, which used Hofstede's five dimensions or Kogut and Singh's (1980) formula to examine the impact of cultural distance on IJVs, tendered mixed and conflicting results. Two models are built to link the relationships between culture and IN management issues (i. e. management styles, conflict resolution strategies, role stress, and performance) by the perspectives of parent firms and IN general managers. A conceptual model explores the relationships between the three dimensions (i. e. three party's perspectives, four approaches of performance measure, and long-term orientation). Furthermore, a replication examines the Lin and Germain's (1980) model of linking context variables, conflict resolution strategies and IJV performance. Hypotheses are tested by the primary data collected by an international mail questionnaire from a sample of 165 IJV general managers in China and foreign parent firms in Japan and Taiwan. First, IJV management issues are found significantly different between the two national groups by ANOVA test. Second, it is found that cultural similarity and Hofstede's five dimensions have weak relationships with IJV management issues. Third, the link between the three dimensions of performance measure is proved by confirmative factor analysis. Finally, Lin and Germain's findings are weakly supported by this replication using LISREL test.

[1]  K. Glaister,et al.  Learning to manage international joint ventures , 2003 .

[2]  L. Brouthers,et al.  Product Stereotypes, Strategy and Performance Satisfaction: The Case of Chinese Exporters , 2002 .

[3]  Rosalind Evans,et al.  Organizational Factors and Perceptions of Climate in Three Psychiatric Units , 1988 .

[4]  Sheila M. Puffer.  A riddle wrapped in an enigma: Demystifying Russian managerial motivation , 1993 .

[5]  Wee Liang Tan,et al.  The Socio-Cultural Environment for Entrepreneurship: A Comparison Between East Asian and Anglo-Saxon Countries , 2001 .

[6]  Alfred G. Meyer,et al.  Culture, a critical review of concepts and definitions , 1953 .

[7]  G. Barnett,et al.  PREDICTING ORGANIZATIONAL EFFECTIVENESS FROM COMMUNICATION ACTIVITIES: A MULTIPLE INDICATOR MODEL , 1983 .

[8]  David Stewart,et al.  The Application and Misapplication of Factor Analysis in Marketing Research , 1981 .

[9]  Don Hellriegel,et al.  Critical Contingencies in Joint Venture Management: Some Lessons from Managers , 1994 .

[10]  X. Song,et al.  The Impact of Strategy on Conflict: A Cross- National Comparative Study of U.S. and Japanese firms , 1997 .

[11]  P. Lloyd,et al.  Ownership and Technical Efficiency: A Cross‐Section Study on the Third Industrial Census of China* , 2002, Economic Development and Cultural Change.

[12]  Ming Zeng,et al.  International Joint Venture Instability: A Critique of Previous Research, A Reconceptualization, and Directions for Future Research , 1999 .

[13]  Henry Wai-chung Yeung,et al.  Qualitative personal interviews in international business research: Some lessons from a study of Hong Kong Transnational Corporations , 1995 .

[14]  M. Erramilli,et al.  Nationality and Subsidiary Ownership Patterns in Multinational Corporations , 1996 .

[15]  W. Powell,et al.  The iron cage revisited institutional isomorphism and collective rationality in organizational fields , 1983 .

[16]  Yigang Pan.  Influences on Foreign Equity Ownership Level in Joint Ventures in China , 1996 .

[17]  Richard Germain,et al.  Sustaining Satisfactory Joint Venture Relationships: The Role of Conflict Resolution Strategy , 1998 .

[18]  Philip H. Birnbaum,et al.  Organizational Structure of Multinational Banks in Hong Kong from a Culture-Free Perspective. , 1985 .

[19]  Charles N. Greene,et al.  The Effects of Formalization on Professional Involvement: A Compensatory Process Approach. , 1981 .

[20]  Ken-ichi Ohbuchi,et al.  Cultural styles of conflict management in Japanese and Americans : Passivity, covertness, and effectiveness of strategies , 1994 .

[21]  L. Greiner,et al.  Managing organizational decline: The case for transorganizational systems , 1983 .

[22]  Leonidas C. Leonidou,et al.  Factors influencing international joint venture performance: Theoretical perspectives, assessment, and future directions , 2002 .

[23]  Randall S. Schuler,et al.  Role Conflict and Role Ambiguity: Integration of the Literature and Directions for Future Research , 1981 .

[24]  William D. Todor,et al.  Effects of Organizational Formalization on Alienation Among Professionals and Nonprofessionals , 1986 .

[25]  S. Schneider.  Strategy Formulation: The Impact of National Culture , 1989 .

[26]  J. Child,et al.  Strategies of cooperation: managing alliances, networks, and joint ventures , 2000 .

[27]  Roger J. Calantone,et al.  Joint Ventures in China: A Comparative Study of Japanese, Korean, and U.S. Partners , 2001 .

[28]  Richard P. Larrick,et al.  Conflict Management Style: Accounting for Cross-National Differences , 1998 .

[29]  Alma T. Mintu.  Cultures and Organizations: Software of the Mind , 1992 .

[30]  John Vickers,et al.  Pre-emptive patenting, joint ventures, and the persistence of oligopoly , 1985 .

[31]  Arvind Parkhe.  Strategic Alliance Structuring: A Game Theoretic and Transaction Cost Examination of Interfirm Cooperation , 1993 .

[32]  Ann Marrinr,et al.  Improving Leadership Effectiveness: The Leader Match Concept , 1979 .

[33]  Peter J. Buckley,et al.  A theory of co-operation in international business , 1987 .

[34]  J. Selmer.  Culture shock in China? Adjustment pattern of western expatriate business managers , 1999 .

[35]  Paul W. Beamish,et al.  Joint venture general managers in LDCs , 1987 .

[36]  S. Schneider,et al.  Interpreting and responding to strategic issues: The impact of national culture , 1991 .

[37]  Eric W. K. Tsang.  Managerial Learning in Foreign-invested Enterprises of China , 2001 .

[38]  J. Dunning.  Toward an Eclectic Theory of International Production: Some Empirical Tests , 1980 .

[39]  W. Friedmann,et al.  Joint International Business Ventures , 1961 .

[40]  Christopher A. Higgins,et al.  Work—family conflict: A comparison of dual‐career and traditional‐career men , 1992 .

[41]  D. Silverman.  Interpreting Qualitative Data , 1993 .

[42]  W. Ouchi,et al.  Theory Z: How American Business Can Meet the Japanese Challenge. , 1981 .

[43]  Kevin Au,et al.  How MNCs Choose Entry Modes and Form Alliances: The China Experience , 1997 .

[44]  Marjorie A. Lyles.  Learning among joint venture sophisticated firms , 1987 .

[45]  Yadong Luo,et al.  Self-selection, socialization and budget control in the PRC: a study of a U.S.–Sino joint venture and Chinese state-owned enterprise , 2001 .

[46]  Yigang Pan.  Equity Ownership in International Joint Ventures: The Impact of Source Country Factors , 2002 .

[47]  Kuo-shu Yang,et al.  Will societal modernization eventually eliminate cross-cultural psychological differences? , 1988 .

[48]  Jone L. Pearce,et al.  Bringing Some Clarity to Role Ambiguity Research , 1981 .

[49]  R. Duane Hall,et al.  The International Joint Venture , 1984 .

[50]  T. K. Peng,et al.  Quantitative methods in cross‐national management research: Trends and equivalence issues , 1991 .

[51]  J. Steenkamp.  The role of national culture in international marketing research , 2001 .

[52]  Yadong Luo,et al.  Building Trust in Cross-Cultural Collaborations: Toward a Contingency Perspective: , 2002 .

[53]  D. Lecraw,et al.  Performance of Transnational Corporations in Less Developed Countries , 1983 .

[54]  J. Davies,et al.  International market entry and development: Strategies and management , 1989 .

[55]  R. Guzley.  Organizational Climate and Communication Climate , 1992 .

[56]  Ezra F. Vogel,et al.  Japan as Number One: Lessons for America. , 1979 .

[57]  G. Hofstede.  The Cultural Relativity of Organizational Practices and Theories , 1983 .

[58]  Sanjeev Agarwal,et al.  Leadership Behavior and Organizational Commitment: A Comparative Study of American and Indian Salespersons , 1999 .

[59]  S. Park,et al.  The Effect of National Culture, Organizational Complementarity, and Economic Motivation on Joint Venture Dissolution , 1997 .

[60]  Thomas G. Rawski,et al.  Chinese Industrial Productivity: Trends, Measurement Issues, and Recent Developments , 1996 .

[61]  Freek Vermeulen,et al.  What Differences in the Cultural Backgrounds of Partners Are Detrimental for International Joint Ventures? , 1997 .

[62]  P. Dorfman,et al.  UNDERSTANDING CULTURES AND IMPLICIT LEADERSHIP THEORIES ACROSS THE GLOBE: AN INTRODUCTION TO PROJECT GLOBE , 2002 .

[63]  P. Earley.  Playing follow the leader: Status-determining traits , 1999 .

[64]  B. Kleiner,et al.  The Nature of Effective Management in Singapore , 1990 .

[65]  J. M. Geringer,et al.  Strategic Determinants of Partner Selection Criteria in International Joint Ventures , 1991 .

[66]  N. Adler.  A Typology of Management Studies Involving Culture , 1983 .

[67]  John Saunders,et al.  Competition in Global Markets: A Case Study of American and Japanese Competition in the British Market , 1992 .

[68]  Andrew C. Inkpen,et al.  KNOWLEDGE, BARGAINING POWER, AND THE INSTABILITY OF INTERNATIONAL JOINT VENTURES , 1997 .

[69]  R. Kahn,et al.  Organizational Stress: Studies in Role Conflict and Ambiguity. , 1965 .

[70]  J. Hennart,et al.  The transaction costs theory of joint ventures: an empirical study of Japanese subsidiaries in the united states , 1991 .

[71]  Robert A. Snyder,et al.  Organizational communication and performance , 1984 .

[72]  C. Cooper,et al.  Organizational Stress: A Review and Critique of Theory, Research, and Applications , 2001 .

[73]  P. P. McDougall,et al.  Toward a theory of international new ventures , 1994 .

[74]  A. Morrison,et al.  Joint Venture Partner Selection: Strategies for Developed Countries , 1989 .

[75]  Peter J. Buckley,et al.  Is the International Business Research Agenda Running Out of Steam? , 2002 .

[76]  Pierre Dussauge,et al.  Cooperative Strategy: Competing Successfully Through Strategic Alliances , 1999 .

[77]  M. Pillutla,et al.  Negotiating in the United States and Hong Kong , 1998 .

[78]  J. Ruiz Moreno.  [Organizational learning]. , 2001, Revista de enfermeria.

[79]  B. Kogut.  Joint ventures: Theoretical and empirical perspectives , 1988 .

[80]  M. Afzalur Rahim,et al.  A STRUCTURAL EQUATIONS MODEL OF LEADER POWER, SUBORDINATES' STYLES OF HANDLING CONFLICT, AND JOB PERFORMANCE , 2001 .

[81]  Chongwoo Choe,et al.  Do China's State-Owned Enterprises Maximize Profit? , 2000 .

[82]  K. P. Kuchinke,et al.  Leadership and culture: Work-related values and leadership styles among one company's U.S. and German telecommunication employees , 1999 .

[83]  William B. Gudykunst,et al.  Bridging Japanese/North American Differences , 1994 .

[84]  J. Hennart,et al.  A transaction costs theory of equity joint ventures , 1988 .

[85]  Celeste P.M. Wilderom,et al.  Cultural influences on leadership and organizations : Project GLOBE , 1999 .

[86]  D. Womack,et al.  A Review of Conflict Instruments in Organizational Settings , 1988 .

[87]  Yoram Zeira,et al.  Human Resources Management in International Joint Ventures: Directions for Research , 1987 .

[88]  Mary Ann Von Glinow,et al.  Paradoxes of Organizational Theory and Research: Using the Case of China to Illustrate National Contingency , 1994 .

[89]  Arvind Parkhe.  “Messy” Research, Methodological Predispositions, and Theory Development in International Joint Ventures , 1993 .

[90]  Steve Werner.  Recent Developments in International Management Research: A Review of 20 Top Management Journals , 2002 .

[91]  W. Mitchell,et al.  SURVIVAL OF BUSINESSES USING COLLABORATIVE RELATIONSHIPS TO COMMERCIALIZE COMPLEX GOODS , 1996 .

[92]  S. Clegg,et al.  Trends in Japanese Management , 2001 .

[93]  Mark F. Peterson,et al.  The Manager as Mediator of Alternative Meanings: A pilot Study from China, The USA and U.K. , 1996 .

[94]  S. Lirtzman,et al.  Role Conflict and Ambiguity in Complex Organizations. , 1970 .

[95]  Measures of Joint Venture Performance from Multiple Perspectives: An Evaluation by Local and Foreign Managers in Vietnam , 2001 .

[96]  Yadong Luo,et al.  International Joint Ventures: Theory and Practice , 2000 .

[97]  S. Vachani,et al.  Distinguishing Between Related and Unrelated International Geographic Diversification: A Comprehensive Measure of Global Diversification , 1991 .

[98]  Joseph W. Leonard,et al.  Alliance Advantage: The Art of Creating Value through Partnering , 1998 .

[99]  D. Faulkner.  International Strategic Alliances: Co-Operating to Compete , 1996 .

[100]  P. Ghauri,et al.  Managing international joint venture relationships - A longitudinal perspective , 2000 .

[101]  G. Hofstede.  THE INTERACTION BETWEEN NATIONAL AND ORGANIZATIONAL VALUE SYSTEMS[1] , 1985 .

[102]  M. Gelfand,et al.  Cultural influences on cognitive representations of conflict: interpretations of conflict episodes in the United States and Japan. , 2001, The Journal of applied psychology.

[103]  Yoram Zeira,et al.  Role Conflict and Role Ambiguity of Chief Executive Officers in International Joint Ventures , 1992 .

[104]  Shaomin Li,et al.  The impact of FDI on the productivity of domestic firms: the case of China , 2002 .

[105]  M. Ismail.  Factors Affecting Effectiveness Of , 2003 .

[106]  Yuan Lu,et al.  Management Decision-Making in Chinese Enterprises , 1996 .

[107]  H. Gatignon,et al.  Modes of Foreign Entry: A Transaction Cost Analysis and Propositions , 1986 .

[108]  M. Ross.  The Management of Conflict: Interpretations and Interests in Comparative Perspective , 1995 .

[109]  John O. Summers,et al.  Interfirm Influence Strategies and Their Application within Distribution Channels , 1984 .

[110]  Andrew G. Walder,et al.  Local Governments as Industrial Firms: An Organizational Analysis of China's Transitional Economy , 1995, American Journal of Sociology.

[111]  Eric G. Flamholtz,et al.  Toward an integrative framework of organizational control , 1985 .

[112]  Yigang Pan,et al.  International Joint Ventures in East Asia , 1996 .

[113]  Jeannie L. Johnson,et al.  Drivers and outcomes of parent company intervention in IJV management: A cross-cultural comparison , 2001 .

[114]  Ralph H. Kilmann,et al.  Thomas-Kilmann Conflict Mode Instrument , 1974 .

[115]  J. M. Geringer,et al.  Measuring Performance of International Joint Ventures , 1991 .

[116]  Harbir Singh,et al.  The Effect of National Culture on the Choice of Entry Mode , 1988 .