Desactivación de los módulos

In addition to examining the exercise of control in international strategic alliances, researchers have also tried to enhance the understanding of the relationship between control and the performance. For example, Tomlinson (1970) studied the control-performance relationship for UK international joint ventures in India and Pakistan. Tomlinson (1970) argued that dominant control was not necessary for successful joint ventures since the sharing of responsibility was more than compensated for by the other contributions made by the local partner. He found that international joint ventures were more successful when the UK parent firms had a more relaxed attitude towards control. However Tomlinson (1970) used profitability (ROI) as a measure of success and reported approximately between 50%-80% of the international joint ventures to be unsatisfactory. The validity of his findings is questionable since the use of profitability as a measure for a multi­ industry study is inadequate and may have produced unreliable results (Geringer and Herbert 1989).

Janger (1980) investigated 168 international joint ventures in both developed and developing countries in which he considered the relationship between parental control and the success of the venture. He found no relationship between the control and success of an international joint venture for either shared or dominant joint ventures.

From a sample of 34 joint ventures between North America and Europe, Killing (1983) investigated the overall division of control as a predictor of joint venture success. Killing (1983) however relied on the perceptual assessment of the performance of the joint venture from the perspective of the parent firms and reported that seventy-seven percent of the dominant joint ventures were performing satisfactorily with fifteen percent of these terminated. Of the shared management ventures only forty-five percent were satisfactory and fifty percent were terminated. The independently managed ventures were satisfactory seventy- five percent of the time and none were terminated. Schaan (1983), also using the joint venture’s management’s assessment, investigated control as a predictor of success in ten Mexican joint ventures. While Killing’s (1983) study focused on the amount of overall control, Schaan’s (1983) examined control in terms of the mechanisms used. Schaan (1983) found that the most successful joint ventures were those in which managers in the parent firm achieved a fit between their criteria of success, the activities or decisions they controlled and the mechanisms they used to exercise control. Beamish (1984), using Killing’s measure of control, investigated a sample of joint ventures set up by multinational companies in less- developed countries. While Beamish (1984) found that shared or local dominant ventures performed better than when the multinational was the single largest shareholder, he identified a small number of cases where dominant control was associated with unsatisfactory performance. In all of the above studies, except for Tomlinson (1970), performance was based on the assessment of managers.

More recently Bleeke and Ernst (1991), in their analysis of 49 strategic alliances, found that alliances with an even split of ownership were more likely to be

successful than those in which one partner held a majority stake. Of the 49 alliances analyzed, only fifty-one percent were successful for both parents. They further reported that most alliances, even successful ones will terminate. Likewise Blodgett (1992), based on a sample of over a 1000 international joint venture in manufacturing and retailing, found that ventures with equal ownership were more successful than dominant partner ventures.

Yan and Gray (1994) investigated the relationship between bargaining power, management control and performance and found that a shared management structure of control determined by the bargaining power of potential partners is associated with the success of a joint venture.

Although the above research has indicated that there is a relationship between control and performance, inconsistencies in the empirical findings have led to inconclusive results (Geringer and Herbert 1989). Geringer and Herbert (1989) have noted a number of limitations in the conceptual and operational definitions of control and performance. Firstly, the majority of the studies have looked at only one dimension of control. They propose that all three dimensions of control

(focus o f control, mechanism o f control and extent o f control) need to be examined together to get a better understanding of how control can effect the performance of international strategic alliances. Similarly, most studies have relied on a variety of objective measures of performance ranging from profitability (Tomlinson 1970) to survival (Killing 1983), duration (Kogut 1988), instability (Franko 1971). Geringer and Herbert (1989) argue that the validity of these studies may be questionable since these measures do not adequately reflect the

extent to which the international alliance has achieved its objectives. To overcome this methodological problem they suggest the use of a perceptual measure based on the satisfaction of the alliances objectives achieved. Previous researchers such as Killing (1983); Schaan (1983) and Beamish (1984) have also used these measures. Geringer and Herbert (1989) thus argue that the control- performance relationship within international joint ventures is limited and more empirical analysis of this relationship is needed.

Based on this review, the current study suggests the following propositions:

Proposition 12: U K in te r n a tio n a l s tr a te g ic a llia n c e s th a t s e e k to f o c u s

th e ir in flu e n c e o v e r p a r tic u la r a llia n c e a c tiv itie s , r a th e r

th a n c o n tr o l a l l a c tiv itie s w ill b e m o r e s u c c e s s f u l

Proposition 13: U K I n te r n a tio n a l s tr a te g ic a llia n c e p a r tn e r s th a t u s e a

v a r ie ty o f c o n tr o l m e c h a n is m s to m o n ito r a llia n c e

a c tiv itie s w ill b e m o r e s u c c e s s fu l.

Proposition 14: S u c c e s s f u l U K in te r n a tio n a l s tr a te g ic a llia n c e s a r e th o s e

in w h ic h th e m a n a g e m e n t o f th e a llia n c e is s h a r e d

c o m p a r e d to le s s s u c c e s s f u l in te r n a tio n a l s tr a te g ic

2.6 SUMMARY

This chapter has provided a review of the relevant literature in the field of international strategic alliances and has discussed the theoretical background for the current study. The research model within which the research objectives are investigated integrates the behavioural and organizational characteristics that may impact the success of international strategic alliances. These include, partnership attributes, communication attributes, conflict, structure and control. In terms of the behavioural factors impacting the success of UK international strategic alliances, the focus has been on the level of commitment, coordination, trust and interdependence between partners in alliance relationships as well as the communication behaviour and the degree and resolution of conflicts. It has been determined that higher levels of commitment, coordination, trust and interdependence between UK firms and their international partners will result in

higher success for these international alliances. Likewise, greater levels of

communication combined with lower levels of conflict will also result in more

successful international alliances. The examination of the organizational

characteristics that may impact the success of international alliances suggested that structure and control may be important determinants of international strategic alliance success.

Several researchers have attempted to measure the success of international strategic alliances. However the diversity of definitions and measurement criteria used have created some confusion. The chapter analyzed the literature on the

measurement of strategic alliance success in order to determine the most

appropriate measure to use in this study. Relationships between various

performance criteria and strategic alliance success were also investigated.

While the literature has addressed the importance of the behavioural and organizational characteristics on the success of international strategic alliances, there are very clear gaps in our understanding of these characteristics in relation to international alliance success especially in the case of UK international alliances. By addressing the propositions, the current study will make a valuable contribution to the growing body of literature on international strategic alliances. The literature review also revealed that there is little agreement among researchers as to the operationalization of both the behavioural and organizational measures and the success measures. Clearly more empirical evidence is needed to develop a better understanding of what characteristics determine success and the meaning of success. The current study will attempt to further this understanding through the use of improved operational definitions and measures.

CHAPTER THREE