Managing Functional Diversity to Improve the Performance of International Joint Ventures.

Mohr, A.T. and Puck, J.F. (2005) Managing Functional Diversity to Improve the Performance of International Joint Ventures. Long Range Planning, 38 (2). pp. 163-182. ISSN 0024-6301 . (The full text of this publication is not available from this repository)

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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.

Item Type: Article
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Faculties > Social Sciences > Kent Business School > International Business and Strategy
Depositing User: J. Ziya
Date Deposited: 15 Oct 2010 09:38
Last Modified: 15 Oct 2010 09:38
Resource URI: http://kar.kent.ac.uk/id/eprint/25858 (The current URI for this page, for reference purposes)
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