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Split management control and international joint venture performance

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An Erratum to this article was published on 16 July 2004

Abstract

A framework is presented to characterize four different ways in which management control is partitioned between a multinational enterprise (MNE) and local partners within international joint ventures (JVs): split control management, shared management, MNE-partner-dominant management, and local-partner-dominant management. The framework was tested using a sample of international JVs in Korea. We found that JVs following the split control management performed better than any other approach. No performance differences were found among the remaining three types of management control. This suggests that MNEs and local partners should split control: that is, choose the activities to control so that those chosen activities can be matched with their respective firm-specific advantages.

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Notes

  1. In theory it is possible to have a JV where neither the MNE nor the local partner exercises control. Here both partners presumably designate the responsibility to an independent (third) party. In practice, this is highly unusual. There were no examples in our sample.

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Authors and Affiliations

  1. Bryan School of Business and Economics, The University of North Carolina at Greensboro, USA

    Chang-Bum Choi

  2. Asian Management Institute, Richard Ivey School of Business, The University of Western Ontario, Canada

    Paul W Beamish

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  1. Chang-Bum Choi
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  2. Paul W Beamish
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Correspondence to Chang-Bum Choi.

Additional information

Accepted by Arie Lewin, Editor in Chief, 31 January 2004. This paper has been with the author for one revision.

An erratum to this article is available at http://dx.doi.org/10.1057/palgrave.jibs.8400101.

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Choi, CB., Beamish, P. Split management control and international joint venture performance. J Int Bus Stud 35, 201–215 (2004). https://doi.org/10.1057/palgrave.jibs.8400078

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  • DOI: https://doi.org/10.1057/palgrave.jibs.8400078

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