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    Managing functional diversity to improve the performance of international joint ventures.

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    Publication date
    2005
    Author
    Mohr, Alexander T.
    Puck, J.F.
    Keyword
    International Joint Ventures
    IVCs
    German-Chinese IJVs
    China
    Functional diversity
    Peer-Reviewed
    Yes
    
    Metadata
    Show full item record
    Abstract
    International Joint Ventures (IJVs) have become one of the most important ways for companies to expand their activities and exploit business opportunities abroad. In China, for example, which has become the world's largest recipient of Foreign Direct Investment, IJVs with local companies are the most important way of doing business. However, many companies have learnt that the performance of their joint ventures in China does not meet their expectations. This study focuses on functional diversity - differences in business practices between foreign and local companies - and its influence on IJV performance. We investigate the influence of this functional diversity on the performance of IJVs and discuss how companies can moderate this influence through adaptation, trust, commitment and communication. Hypotheses are formulated and empirically tested using data gathered through a questionnaire survey of managers of German-Chinese IJVs. The results show that although functional diversity has a negative impact on IJV performance, managers can influence the magnitude of this impact. We use insights from interviews with managers of German-Chinese IJVs in China to supplement our discussion and provide some indication of best practice.
    URI
    http://hdl.handle.net/10454/3644
    Version
    No full-text available in the repository
    Citation
    Mohr, A.T. and Puck, J.F. (2005). Managing functional diversity to improve the performance of international joint ventures. Long Range Planning. Vol. 38, No. 2, pp. 163-182.
    Link to publisher’s version
    http://dx.doi.org/doi:10.1016/j.lrp.2005.02.004
    Type
    Article
    Collections
    Management and Law Publications

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