Bargaining power,Management control,and performanc

BargainingPower,ManagementControl,andPerformanceinUnitedStates-ChinaJointVentures:AComparativeCaseStudyAiminYan;BarbaraGrayTheAcademyofManagementJournal,Vol.37,No.6.(Dec.,1994),pp.1478-1517.StableURL:=0001-4273%28199412%2937%3A6%3C1478%3ABPMCAP%3E2.0.CO%3B2-FTheAcademyofManagementJournaliscurrentlypublishedbyAcademyofManagement.YouruseoftheJSTORarchiveindicatesyouracceptanceofJSTOR'sTermsandConditionsofUse,availableat://@jstor.org.:252007AcademyofManagementJournal1994,Vol.37,NO.6,1478-1517.BARGAININGPOWER,MANAGEMENTCONTROL,ANDPERFORMANCEINUNITEDSTATES-CHINAJOINTVENTURES:ACOMPARATIVECASESTUDYAIMINYANBostonUniversityBARBARAGRAYPennsylvaniaStateUniversityThisarticlereportsacomparativecasestudyoffourjointventuresbetweenpartnersfromtheUnitedStatesandthePeople'sRepublicofChina.Thebargainingpowerofpotentialpartnersaffectsthestructureofmanagementcontrolinajointventure,whichaffectsventureperfor-mance.Severalinformalcontrolmechanismsinteractingwithformalcontrolstructureandinfluencingperformanceareidentified.Wealsoinvestigatedthejointventures'evolutionovertime.Anintegrativemodelofmanagementcontrolinjointventuresispresented.Internationaljointventuresarearapidlygrowingorganizationalformthathasreceivedincreasinginterestfromresearchersinavarietyofaca-demicdisciplines.Despitethisattention,academicunderstandingofjointventuresisstilllimitedinscopeandindepth.Previousstudieshavere-portedhighfailureandinstabilityratesamongjointventures(Franko,1971;Harrigan,1986;Kogut,1989;Levine&Byrne,1986),andthefactorspredic-tiveofsuccessfulventureperformanceremainunclear(Geringer&Hebert,1991;Parkhe,1993a).Inaddition,theempiricalstudiesthathavebeendonetotestexistingconceptualmodelshaveeitherproducedcontradictoryre-sultsorbeendifficulttocomparebecauseofdifferencesinhowvariablesweremeasured.Thisstudyadoptsaninterpartnernegotiationsperspectiveonjointven-tureformation.Weenvisionedjointventuresasmixedmotivegamesbe-tweenpartnerswhocooperateandcompetesimultaneously(Lax&Sebenius,1986;Hamel,Doz,&Prahalad,1989).Accordingtothenegotiationsperspec-tive,therelativebargainingpowerofeachjointventurepartnershapesthepatternofmanagementcontrolthataventureadopts.Inaddition,parentcontrolishypothesizedtobeacriticalfactorthatdeterminesperformance.Althoughpreviousresearchershaveempiricallyinvestigatedthefirstrela-WewouldliketothankMartinKilduff,JamesThomas,andtwoanonymousreviewersforthisjournalfortheirinsightfulcommentsontheearlierversionsofthisarticle.1994YanandGray1479tionship(Blodgett,1991;Fagre&Wells,1982;Killing,1983;Lecraw,1984),thestudiesaredifficulttocomparebecausetheyhavemeasuredbothvari-ablesdifferently.Researchfindingsontherelationshipbetweencontrolandperformanceofferconflictingresults(seeGeringerandHebert[I9891forareview).Lecraw(1984)notedthattherelationshipbetweenparentcontrolandperformancegeneratescontinuingcontroversyintheinternationaljointventureliterature.Additionalproblemswithpriorresearchalsowarrantfurtherstudy.Forexample,(1)conflictingresultshavebeenobtainedforjointventuresindevelopinganddevelopedcountries(Beamish,1984,1985,1988);(2)longi-tudinalstudiesareunderrepresentedinresearchtodateand,asaresult,littleisknownabouthowjointventuresevolveovertime;(3)mostjointventureresearchondevelopingcountriesadoptstheperspectiveofthemul-tinationalpartnerandexcludestheviewsofthedevelopingcountrypartner;and(4)onlytwostudieshaveexaminedtherelationshipsbetweenbargain-ingpowerandcontrolandcontrolandperformancesimultaneously(Killing,1983;Lecraw,1984).Inthisresearch,weutilizedacomparativecasestudyapproachtore-examinetherelationshipsamongbargainingpower,control,andperfor-mance.Wesoughttoovercomethelimitationsmentionedaboveinseveralways.First,welookedattherelationshipsamongallthreevariablesinthesamestudy.Byadoptingin-depth,comparativecasestudies,wetriedtosortouttheconfusionandinconsistencieswithrespecttotheserelationshipsintheexistingliterature.Byprovidingdetailedexplanationsthatsurveymeth-odsmiss,casestudiesoffertheprospectofnewinsightsintotheconnectionsamongthesevariables(Eisenhardt,1989;Glaser&Strauss,1967;Yin,1989).Second,wesoughttoimproveonexistingmodelsbyaccountingforthedynamicaspectsofjointventures,atopiclargelyignoredinresearchtodate(Parkhe,1993a).Bytracingtheevolutionofjointventures,weidentifiedchangesintheventuresovertime.In