International Joint Ventures Essay Research Paper Summary

International Joint Ventures Essay, Research Paper

Summary: Knowledge, Bargaining Power, and the Instability of International Joint Ventures The purpose of the journal article is to identify the primary reason for instability within international joint ventures. The authors begin by defining instability and then continue by linking it to bargaining power. Inkpen and Beamish define instability as a major change in partner relationship status that is unplanned and premature from one or both partners perspectives. When an international joint venture is formed, two firms form an alliance and become dependent upon one another. The amount of dependency depends upon the resources provided by the partners. Typically, firms seeking market penetration in a foreign market form a joint venture in order to access local information in the foreign country. Local information, therefore; becomes a very important resource. The degree to which one firm depends upon the other firm s resources, and visa-versa, reflects the amount of bargaining power one has upon the other. After the initial agreement of the partners in an IJV, there may be a shift in bargaining power. The shift is generally due to the acquisition of local knowledge by the foreign partner. As the foreign partner acquires local knowledge, it also gains bargaining power. Instability develops when the foreign partner acquires enough local knowledge to make the local partner s resources obsolete. Knowledge acquisition can also be turned around. The local partner might gain enough knowledge from the foreign partner to make the foreign partner s resources obsolete. The acquisition of local knowledge can either be passive or active. The foreign firm will eventually acquire local knowledge by just doing business in the host country, however; firms with a strategic objective of acquiring local knowledge will take a much more active approach. In general, foreign firms that form IJV s in order to acquire local knowledge intend to eventually form foreign subsidiaries. The initial allocation of responsibilities is a good indicator of instability. When a foreign firm is initially responsible for important local knowledge, the probability of a shift in bargaining power becomes greater. If the firms have worked together in the past, or have some type of individual attachment, the probability of instability decreases. Sometimes an attachment between the two firms creates what the authors call dormant instability. This occurs when a partner has gained a significant amount of bargaining power but chooses not to alter the relationship because of the attachment between partners. Contrary to what some may believe, instability amongst IJV s can be prevented. A local partner might consider the foreign partner s previous relationships, or deter the foreign partner from actively acquiring local knowledge. If both partners take precautionary measures, instability can be prevented. Summary: The Impact of Cultural values on Employee Resistance to Teams: Toward A Model of Globalized Self-managing Work Team Effectiveness

In today s corporate world, more and more firms are beginning to move towards self-management work teams. SMWT s have become popular, in this time of downsizing, because it allows companies to operate with less employees. Multinational companies are also using the SMWT approach in order to cut costs. These SMWT s are referred as globalized SMWT s. Due to the vast differences between cultures, globalized SMWT s experience more resistance than typical North American SMWT s. The authors classify resistance into two different categories, resistance to self-management and resistance to teams. The first category, resistance to self-management, is primarily affected by three cultural values: power distance, being orientation, and determinism. The second category, resistance to teams, is primarily affected by two factors. The first is whether team members are collectivists or individualists. The second is how the team members view team-based pay. There are a number of factors that can increase or decrease the effects of both types of resistance. These factors include: team size, task interdependence, diversity of the team, and the status of the resisters. Taking all of these factors into consideration, the author developed a model and a table of guidelines for use in selecting and implementing globalized SMWT s. These can be used as tools for multinational corporations seeking to employ SMWT s in the global environment. The author concludes by emphasizing the significance of studying national culture and it s relation to organizational behavior.Characterization: The general character of the Academy of Management Review is that of management research and development. The journal articles seem to take widely-accepted ideas and philosophies a step further. The journal acts as a mechanism for the advancement of management. The journal articles tend to focus on contemporary management problems and offer some type of solution. In both of the previous journals, the authors concluded by suggesting others to do additional research on the topics. The journal also acts as a medium for debate. The journal has a section for readers to respond to previous articles and express their views. Application: The Academy of Management Review can be used for a number of applications. The most useful application would be in situations when contemporary management techniques are being employed. The AMR provides insight and suggestions for applying new management techniques. The AMR can be used as a reference for all levels of management. The journal offers new ideas and suggestions that managers might want to consider when employing their own managerial techniques. REFERENCES Inkpen, A. C., & Beamish, P. W. (1997). Knowledge, bargaining power, and the instability of international joint ventures. The Academy of Management Review, 22,177-202. Kirkman, B. L., & Shapiro, D. L. (1997). The impact of cultural values on employee resistance to teams: toward a model of globalized self-managing work team effectiveness. The Academy of Management Review, 22, 730-758.