Skills and complexity in management of IJVs: Exploring Swedish managers' experiences in China

ARTICLE IN PRESS

international

business

review

International Business Review 16 (2007) 229–250

0969-5931/$ -

doi:10.1016/j

�CorrespoE-mail ad

www.elsevier.com/locate/ibusrev

Skills and complexity in management of IJVs:Exploring Swedish managers’ experiences in China

Robert Demir�, Sten Soderman

Stockholm University School of Business, SE-106 91 Stockholm, Sweden

Received 9 March 2005; received in revised form 14 July 2006; accepted 11 January 2007

Abstract

Recent Chinese growth and development has had a tremendous impact on the world economy,

especially in terms of the absorption of a significant amount of global foreign direct investment

(FDI). Most of this FDI has taken the form of joint ventures between local and foreign firms. Some

researchers typically see this as a race by local firms to learn from and eventually outperform foreign

firms. The aim of this paper is to explore the evolving experiences, concerning acquired knowledge,

resourcing, and control activities, of managers in Sino-Swedish joint ventures. For this purpose, a

theoretical framework based on Buckley, P. J., Glaister, K. W., and Husa, R. [(2002). International

Joint Ventures: Partnering skills and cross-cultural issues. Long Range Planning, 35, 113–134] and

Child, J., and Yan, Y. [(2003). Predicting the performance of International Joint Ventures: An

investigation in China. Journal of Management Studies, 40(2)] is developed. Within this framework—

The Actor Oriented Approach—four propositions emerge. These are then tested against nine

Swedish cases in China. The cases are based on data from a study of Swedish expatriate CEOs. Based

on the findings a five stage, sequential approach to foreign firm entry and evolution into foreign

markets is constructed. The paper concludes with a discussion of the model’s more general

applicability and suggestions for further research.

r 2007 Elsevier Ltd. All rights reserved.

Keywords: Skill; Experience; Knowledge; Learning; International joint ventures; Swedish companies; China;

Transitional economies

see front matter r 2007 Elsevier Ltd. All rights reserved.

.ibusrev.2007.01.010

nding author. Tel.: +468 16 46 53; fax: +468 674 74 40.

dresses: [email protected] (R. Demir), [email protected] (S. Soderman).

www.elsevier.com/locate/ibusrev

dx.doi.org/10.1016/j.ibusrev.2007.01.010

mailto:[email protected]

ARTICLE IN PRESSR. Demir, S. Soderman / International Business Review 16 (2007) 229–250230

1. Introduction

A central challenge to China’s transition to a market economy is to transform publicenterprises from passive, command-based producers into relatively efficient market andcustomer-oriented businesses. In this light, it seems reasonable to assume that thetransitional process of Chinese enterprises is a quest of acquiring skills in a complexcontext; it is a struggle towards improvement or a ‘‘race to learn’’ (see e.g. Hamel, 1991),which includes learning to produce and apply advanced technologies in diverse fields(Child & Yan, 2003). Also, as the Chinese rate of growth has accelerated, China isincreasingly considered as an important market for a diverse range of goods and services,including the advanced and complex. This has caught the attention of foreign firms ingeneral and Swedish multinational companies in particular.The latest foreign direct investment (FDI) inflow figures clearly indicate this: FDI

inflows grew by almost 20 percent over the previous year and the country is now the third-largest recipient of FDI after the UK the US (UNCTAD, 2006). This inflow of foreigninvestment, technology and expertise supports China’s growth and transition to a marketeconomy, with all that this means for public and private enterprises; but there are manyimplications to consider. For example, Nee (1992, p. 24) argues that there is ‘‘tendency for‘‘rush growth’’ and an inefficient allocation of resources’’. In consequence, the formationof strategic alliances with foreign firms is prone to opportunistic behavior (Williamson,1975).Yan and Duan (2003, p. 554) explain that the underlying strategy for Chinese firms to

establish partnerships, such as joint ventures and strategic alliances, with foreignmultinational enterprises (MNE) is ‘‘to extract and internalize the skills of their partnersand thus either improve their own competitive position or reduce their partner’s capabilityfor autonomous action within and outside the partnership’’. At the same time, it is alsosuggested that foreign firms are likely to ally with local firms as they recognize a shortageof resources, such as market specific business knowledge (Lindstrand, 2003). Opportunisticbehavior is thus likely to occur for both parties, especially since they may be heavilydependent on each other for resources (Guler, Guillen, & Macpherson, 2002).Mohr and Puck (2006) present yet another view from their study of German–Chinese

joint ventures. They found that German joint venture partners adjust their practices to theChinese partners’ at a lower rate in areas where they consider themselves morecompetitive. This reluctance to behavioral adaptation signals that as the Chinesecounterparts run their economic and market oriented transitional agenda, the counter-actions taken by the foreign partners results in ‘slowing’ down or even resisting theChinese’s quest for rapid transition. This line of argument thus suggests that previousnotions are incommensurable in the sense that mutual resource interdependence is only aspecial case, which will depreciate as the Chinese transition process continuously improvesthe local firms’ own resources and knowledge. However, Buckley, Glaister, and Husan(2002) asserted that the relation between partners rely on the skills of managing culturaldifferences and the local language. Further, they suggest diplomacy, negotiation and evenpolitical skills as focal issues rather than imposing their own norms or moral onto thepartner.With this in mind, how do foreign firms comply with issues such as resourcing their

operations, learning, and exercising control over their activities in China? How are foreignfirms’ (including expatriate CEOs) actions and behavior affected by (and affect) China as

ARTICLE IN PRESSR. Demir, S. Soderman / International Business Review 16 (2007) 229–250 231

a country in transition? Addressing these questions is indeed part of the scope of thepresent paper, but they do indicate a complexity that needs to be explored from a numberof perspectives. The overall ambition of this paper is to elaborate and explore a specificquestion: how do foreign managers cope with, and adjust to, multifaceted and emerging (inthe sense of not initially known) business complexities in the Chinese context?

The present paper aims to contribute to this debate by exploring cumulative experiencesof Swedish managers in China. In the next section we outline a theoretical framework inwhich a few propositions are developed. In the third section, we discuss our researchapproach. In the fourth section, and in Appendix A, details and findings from interviewsand participative in-depth discussions with nine Swedish managers in Swedish–Chinesejoint ventures are presented, as well as the implications of these findings for our theoreticalframework. The final section concludes with implications for theory and practice, andproposes future avenues for research.

2. Conceptual framework

In this section, we first define and discuss the actors involved in the formation of an IJV.In the subsequent sections, this will be named the Actor Oriented Approach, which is bynature a pluralistic aspect of the management of IJVs. Within this frame a number ofpropositions are developed for the purpose of refining the understanding of whatimplications the specific Swedish management style brings about. This approach is inspiredby Buckley et al. (2002) and further complemented by the idea that IJV activities need totake into consideration the cumulative experiences of managers as they learn and decide onnew operational and strategic issues in the Chinese context (Child & Yan, 2003). Theframework and the propositions developed will help in the analysis of the nine Swedishcase companies. After that, some indications and implications will be discussed displayedas a revised understanding of the skills that managers possess during their management ofIJVs in China.

2.1. The actor-oriented approach

Cross-border strategic alliances are essentially cooperative activities in which companiesshare a certain set of skills. Such activities and skills include capital investment, transferand management of knowledge and practices, technology transfer, and, not least, theexposure to cultural features that persist in the form of management behavior, style, andtechniques. From their analysis of 20 Anglo-European joint ventures, Buckley et al. (2002)have identified four categories of skills: (i) inter-partner skills; (ii) ‘downward’ skills ofmanaging the IJV managers; (iii) ‘upward’ skills of managing the partners; and (iv) skills ofmanaging the IJV. Their findings propose important implications for the management ofIJVs with respect to the selection and training of managers.

In Child and Yan’s (2003) study, skills are dependent on the ability to learn throughexperience. Therefore, they conceptualize and measure experience in terms of: ‘‘Chineseparent’s international experience’’; ‘‘Foreign parent’s international experience’’; ‘‘Chineseparent experience: IJV’s/investments outside China’’; ‘‘Foreign parent experience: IJVs/investments in China’’; Parent companies’ combined international experience’’; and‘‘Parent companies’ combined IJV experience’’.


In combining these two views, it is suggested that skills on the one hand, and experienceon the other, are intrinsically determined by the capacity of (a) managers to learn andchange as they act upon and respond to the institutional properties of the host country,(b) the parent companies, (c) the IJV under management, and (d) other host countrycharacteristics.The complementary views of Buckley et al. (2002) and Child and Yan (2003) lead to a

number of implications (Fig. 1). The institutional properties of the home country aredecisive for the skills of both (1a) the foreign firm and (1b) expatriate manager in terms ofcultural, social, legal, economic, and political features. It also follows that (2) a foreignparent company’s previous experience enables (or ‘‘disables’’) the management of the IJVin certain ways. For instance, it may be assumed that (3) the expatriate manager’s overallskills are decisive in the day-to-day management of the IJV. Further, it also follows that(4) the manager needs to have a specific mindset or set of skills in handling the local parentcompany. Finally, (5) the expatriate manager needs to be equipped with the capability ofinterpreting, internalizing and making use of the host country characteristics. Since thispaper specifically examines the Swedish managers’ experience, our framework does nottake the local parent company’s challenges and skills into consideration. Instead, in orderto set this framework into the Swedish context, we delineate the specific characteristics thatfollow from being Swedish. In the following sections each of the categories enumerated inFig. 1 will be treated separately.

2.1.1. The institutional properties of the home country

Although this category, is not by itself a point of departure, it still contributes anessential background to the understanding of Swedish companies and managers. To startwith, Swedish culture can be most simply described in Berglund and Lowstedt’s (1996)assertion of four cultural characteristics of Swedes. First, they are a fairly homogeneouspopulation, which has throughout history allowed refinement of the Swedish mentality andway of doing things. Second, Swedes are reserved in terms of trust and in their approach to

Institutional Properties of the Home Country

Host Country Characteristics

Foreign Parent

Company

Local Parent

Company

IJV

Management

1a

1b

2 3

4

5

Fig. 1. Skills and capabilities in the actor oriented frame.


other people. Third, the common Swede is likely to avoid conflicts, yet clear and direct inthe way of expressing a standpoint. In a sense, this can be understood as a diplomaticapproach. Finally, there is a strong belief among Swedes that rational planning andorientation can accomplish much; a way that easily can be understood as risk anduncertainty avoidance, or at least a risk minimizing, approach. As a result, Lewis (2000)argues that Swedish management relies on the team for initiatives, and avoids internalcompetition with peers.

Significantly, as suggested by Smith, Anderson, Ekelund, Graversen, and Ropo (2003,p. 503), Swedish management is strongly dependent on consensus building in teams (Lewis,2000; Smith et al., 2003, p. 505). In their survey including 345 Nordic respondents, Smithet al. (2003) concluded that Swedish management is rather strongly dependent on thetradition of consensus building in teams, which often leads to team-spirit (Lewis, 2000;Smith et al., 2003, p. 505). Czarniawska-Joerges (1993, p. 16) argues that ‘‘consensuscontinues to be a pragmatic technique for handling difficult interactions’’ and is variablyinterpreted as a cultural trait, i.e. conflict avoidance (see Hofstede, 1980). To this extent,Swedish managers act according to institutionalized values such as decentralized anddemocratic management, maintain egalitarian relationships, they are informal, they have alow reliance on their own experience and training, and they have a cost conscious businessbehavior (e.g. Lewis, 2000, pp. 282–284; Salzer, 1994, p. 151; Smith et al., 2003).

Altogether, the specific features of the Swedish mindset characterize Swedish managersas skilled at handling human resources, being charismatic, and having a cleverpsychological approach (Lewis, 2000). As opposed to this view, Bjorkman and Schaap(1994, p. 148) claim that expatriates running Sino-Western joint ventures haveconsiderable problems in developing personal relationships. Another line of argumentthat potentially undermines Bjorkman and Schaap’s (1994) argument, is that Swedishmanagers tend not to issue orders; instead they are better described as giving guidelines orsuggestions (Lewis, 2000, pp. 282–284). Also, Westerberg, Singh, and Hackner (1997)concluded from their study that the Swedish CEO’s characteristics, such as tolerance forambiguity, need for cognition, and self-efficacy, play a dominant role and has positiveimplications for firm orientation and performance. Building on this understanding, wetherefore suggest a proposition that considers the specific characteristics of Swedishmanagement:

Proposition 1 (P1). The Swedish management of IJV is characterized by a deliberate

exploration of alternative solutions and execution of rational decisions.

In an attempt to grasp the complexity of such norms and culturally based behavior, itmay be assumed that Swedes are keen on developing, following, and executing rational andlogically defendable options in their daily operation of IJVs, in order to avoid beingcriticized or even opposed by employees, peers and top management at the parentcompany. It may be argued that the Swedish characteristic of managers at an institutionallevel, typically corresponds with the idea that socialization or ‘clan’ control (see e.g. Ouchi,1979) is relatively high since outcome and behavioral control are both hard to accomplishby Swedish parent companies lacking experience in highly uncertain environments such asChina. In the following sections, these characteristics are treated as influential to thedevelopment of some further propositions.


2.1.2. Managing the CEO and the IJV

Managing an international joint venture from the perspective of the parent companyunavoidably concerns skills such as diplomacy, communication, the ability to exerciseinfluence across the boundaries of the firm, commitment, and a flexible approach (Buckleyet al., 2002). Buckley and Casson (1998, p. 40) assert that ‘‘the globalization of markets hasbeen a major factor in the growth of volatility’’. One of the most central concerns ininternational business theory has thus been the issue of handling risks, as has normallybeen suggested by gaining control of manageable operations and tasks in the foreignbusiness environment (see e.g. Andersson, Bjorkman, & Forsgren, 2005; Buckley &Casson, 1976; Dunning, 1988; Johanson & Mattson, 1988; Johanson & Vahlne, 1977;Johanson & Wiedersheim-Paul, 1975; Penrose, 1959; Williamson, 1975). One such way toincrease control, as suggested by Lasserre (1996), is to establish regional headquarters forcompanies operating in the Asia pacific region.However, if the quality of resourcing is poor, for instance in handling technology and

capital, it is more critical for the foreign partner to compensate for this through exercisinga higher level of outcome control (Child & Yan, 2003, p. 312; Eisenhardt, 1985). Li, Qian,Lam, and Wang (2000), argue in a similar yet more specific way, that pursuing a capitaland technology (see also Martinsons & Tseng, 1995, p. 56) intensive strategy in China willreward more than having a labor-intensive strategy. This implies that capital andtechnology resourcing brings about a higher level of outcome control, but this is notreplaceable by social control (Eisenhardt, 1985). At the same time, it may be argued thatthe higher the level of resourcing leads to more complex control mechanisms being used tomonitor the IJV.

Proposition 2 (P2). The degree of capital investment and resourcing in the IJV decides the

level and type of control mechanisms.

This proposition also implies that the degree of responsibility taken by the IJV managerincreases as the degree of capital and resourcing increases. This proposition shouldnot be equated with the level of controllability (Eisenhardt, 1985). Rather it is related tothe initial strategic plan, as outlined in the pre-entrance period prior to foreign marketentry.

2.1.3. The CEO’s ability to manage the IJV

Managing a joint venture often concerns creating partner relationships throughenhancing communication, sharing power, building trust, and transferring marketknowledge, and so forth (Harrigan, 1985; Kanter, 1994; Killing, 1983; Lei & Slocum,1992; Perlmutter & Heenan, 1986). In doing so, this process unavoidably includes the skillof managing the relationship with local partners (Buckley et al., 2002). They furthersuggest that the ability to manage an IJV requires a certain degree of diplomacy, culturalsensitivity, language skills and communication, as well as commitment, and the setting ofclear goals.Another challenging aspect to the skills approach is the ability to bargain. It can be

argued that if bargaining power is a function of relative dependence, it should be possibleto lessen dependency and improve bargaining power by out-learning one’s partner (Hamel,1991). It is then plausible that the ‘‘weaker’’ local partner (i.e. in this case the Chinese) interms of resources and international business experience, tries to keep control of localknowledge and thereby holds foreign company from acquiring critical knowledge that will


allow the foreign company to ‘‘go it alone’’. We suggest that the cooperative styles of theSwedes facilitate to out-learn local partners in the IJV. Given this and the fact thatcooperation is a key feature of Swedish management, it can be argued that such conditionsand characteristics facilitate out-learning the Chinese partner:

Proposition 3 (P3). The specific Swedish management style, based on informality and team-

spirit, renders Swedish managers of IJV the capacity to out-learn the rest of the local

organization and the local partner.

2.1.4. Managing the local parent

In their study, Carson, Madhok, and Wu (2006) found that volatility is problematic forformal contracting, but on the other hand ambiguity is even more problematic forrelational contracting, which is often inter-personal and thus more flexible thancontractual relations. This suggests that for managers to succeed, a complex set of skillsare required. To manage local partners, Buckley et al. (2002) assert that managers need topossess the skills of cultural sensitivity, communication, diplomacy, and share objectivesand visions (clarity as opposed to ambiguity). Altogether, it may be assumed that theseskills also fulfil the function of keeping stability in the IJV.

Maintaining stability in the relationship however also includes trust and localization ofdependence. Gil and Butler (2003) concluded from their study of international jointventures that there are three key factors affecting stability: trust, conflict and dependence.As opposed to stability, instability is defined as ‘‘the dynamics of partner interactions thatcould result in an unplanned or premature exit from a joint venture’’ (Gil & Butler, 2003,p. 544). This implies that dependence has a key role in ensuring stability in interpartnerrelationships.

Although relevant, the issue of stability and dependence, from a transaction costs view,it could be argued that the Western company will in time back out from the joint venturepartnership because of the risks of being deceived or subject to opportunistic behavior(Williamson, 1975) by the Chinese partner. In their study, Groot and Merchant (2000)found that IJV partners’ level of trust in other partners has a causal effect on IJV controlmechanisms. They also conclude that a partner’s unique knowledge and capabilities havecausal effects and require a broad control focus (i.e. control over the entire range of theIJV’s activities); it also imposes a tighter (more extensive) need for control. However, ifthere are imbalances in bargaining power over the partners’ contribution to the IJV, thiswill ultimately result in reduced mutual contributions to the joint venture (Hamel, 1991).Therefore, we assume that:

Proposition 4 (P4). Dependence on local owners and clarity of objectives is a means of

keeping stability.

3. Method

In a preparatory interview for the purpose of this study, the General Manager at SwedenChina Trade Council (SCTC) interestingly notes that ‘‘many Swedish companies often lackenough business experience and critical market knowledge, both in terms of culturaldifferences and business conditions in China’’. From the discussions it also followed thatSwedish managers are often misguided and tend to perceive opportunities and problems


differently on arrival as compared to anticipated judgments prior to investment decision.The speed of establishment seems to vary, depending on many factors such as marketposition and the parent company’s ambitions, according to the General Manager. Firmsengaged in manufacturing are normally more rapid in their establishment process (about 1year from the decision to take action) than those involved in local sales, which often needaround double the time for market research.However, to be more specific, we examine IJVs where (a) the Swedish firm is a dominant

owner, (b) superior in terms of capital and knowledge, but (c) inferior in terms ofknowledge about local cultural and institutional properties, and thus (d) less amenable tofully respond to changes and control its operations in the host country. Given this, weassume that the IJV is likely to control its local operations and develop strategies for thehost country by help of an expatriate Swedish manager. In this sense, expatriate managersare regarded as boundary spanning, with a key role in inter-group relations (Aldrich &Herker, 1977; Friedman & Podolny, 1992; Thompson, 1967) and the specific task oftranslating and implementing socially bound operational practices to the host countrycontext.This paper explores the experiences of managers in nine Sino-Swedish joint ventures.

Seven of them are listed on the Stockholm Stock Exchange and they have all beenestablished in China for more than five years. The nine Swedish companies representdifferent sectors and industries, but most are engaged in manufacturing. The expatriatemanagers have either operational or general management positions with an extensivefield of strategic responsibility and influence. This paper is the cumulative result of alongitudinal study with tracking ingredients, conducted during a period of five years. Theempirical findings presented here are only part of a larger sample of material collected inChina (Hong Kong, Beijing, and Shanghai) during the period 2000–2005.In this study we employ an interpretive approach, which is based on our perceptions

of the managers’ experiences in the transitioning China. Further, in applying aprocessual research approach, we are able to follow each company, its strategies, andthe outcomes over time in the form of sequences (Pettigrew, 1997). More specifically,this research has been carried out as a participant observation of an ‘‘ExperienceSharing Group’’, established by the companies under observation, and this has thusallowed the examination of ongoing processes and changes (Daymon & Holloway, 2002,p. 204).The Experience Sharing Group is a specific method for problem diagnosing aimed at

improving management knowledge and industry logic. A group of selected managers, fromnon-competing industries, meet at a minimum twice a year. Each session is focused on aspecific case related to a strategic problem presented and ‘owned’ by the participantintroducing it to the group. To qualify as a case, it must also be real, not yet realized, andclose in time. As all the members of the group are potential case presenters, there is anatural driver to contribute to the ongoing discussion by asking relevant questions andgiving their most prominent advice. The issues discussed often concern sensitive issues, forinstance power relations, related strategies, profit levels, and questions concerningpotential issues on a ‘hidden agenda’. Further, in order to promote openness andtrust between the members, the participants agree on keeping the discussions in strictconfidence, exclusively between the members participating at a given meeting. Therefore,the member companies are in this paper codified in order to protect their names and othersignificant attributes.


However, observational studies, being the fundamental base of most research methods(Adler & Adler, 1994), offer a holistic perspective (Daymon & Holloway, 2002, p. 203). Inallowing the researcher to be an active participant, he or she are acceptably considered asan ‘‘insider’’ and will thus have all the benefits of ‘‘getting behind the veil’’ (Marshall, 1997,p. 42). This is especially true in the context of Experience Sharing Groups, since much‘secrecy’ is unique to that specific group and thus not repeated to outsiders.

A final note should also be made on the potential weakness. Generally, studies onIJVs are biased, since only one of at least two parents (as is the case also here) is used as aunit of analysis. This reduces the researcher’s ability to exhaust the interrelationshipsof both parts, as only one part’s experiences are taken into account. This may thusundermine the quest for a multifaceted approach. Geringer and Hebert (1991), however,argue that reliance on a single-sided data source might as well be a justifiable optionwhen the respondent represents one of the key stakeholders. In this way, what is derivedfrom the inquiry is justifiable on the basis of reliance on the key stakeholder’s powerof action.

4. A sample case and major findings

This chapter contains a sample description of one of the nine companies in a way thatenables a comparison with the propositions presented in the conceptual framework. Theoverall findings are presented in the table (see Table 1). For further details on and the restof the nine cases see Appendix A.

4.1. The nail supplier

In 1996, The Nail Supplier partly acquired a local parts manufacturer within thetelecommunications industry. The local company’s general manager was kept asadministrative manager in the new construct due to his well-established personal relationswith local authorities. In time, the administrative manager was suspected for conductinglabor strikes against the company’s warehouse, which became a crisis of trust between theCEO and the manager. Another problem concerned information disruption between theCEO and the headquarters in Sweden; this was partly due to lack of team-spirit andsupport from top management. Solving this situation needed a specific set of skills; theanticipated method was on the one hand to discharge the administrative manager withoutloosing face towards other co-workers, and on the other hand to avoid creating a trustconflict towards the headquarter in Sweden.

As soon as the CEO started to investigate the situation further it became evident that theadministrative manager also was the head of an unofficial group of co-workers within thecompany. The next problem was instead, how to gain control over the situation withoutloosing or in worse case getting the group against the company. However, the appliedmethod was to treat the administrative manager according to the concept of face—keepingfaith and trust among peers. Besides, the CEO made an organizational change in order toincrease control over the employees and keeping a productive atmosphere among the otherworkers. The implications of these changes meant enhancing communication withheadquarters in order to justify the CEO’s deeds. But unfortunately, the CEO did notunderstand the value of creating personal relations with local authorities in time in order tobe able to handle his problems more efficiently.


4.2. Major findings

In this section, we will elaborate on the propositions and put them in relation to theempirical findings, i.e. the nine cases from the previous section and Appendix A. Thenumerical results are presented in Table 1. Considering our propositions, it seems clearfrom the cases that the specific features of the Swedish management style havesome challenging implications. First, by systematically going through each one of thepropositions and discussing the possible implications and their relative explanatory valueto transitional economies. Second, more specifically, we will elaborate further on the issuescomplexities that arise in the management of Sino-Swedish IJV.

P1. The Swedish management of IJV is characterized by a deliberate exploration of

alternative solutions and execution of rational decisions.Overall, this proposition is supported on the basis of three major issues. First, it seems

from the cases that the Swedish managers lack the ability or skill to link anticipatedproblems with appropriate entry strategies and cooperation strategies with Chinese firms.Second, this may be interpreted as a certain amount of rationality among Swedish firms.Third, considering the vulnerability of the Chinese business atmosphere, rational planningmight help but is not isolated, nor a stand-alone characteristic, from the managers’seemingly strong ability to learn. This may be due to the overall support that the managersin this research perceive their job as an overwhelming challenge. In order to sustain qualitywork in operations, the managers seem to seek stability in extensive strategic planning.Interestingly, this should not be confused with the Swedish parent company’s previousinternationalization experience in developing and/or transition economies. One reason tothis might be the limited experience from market entries similar to those challengesspecifically required to enter China among the case companies involved in this study.Another interesting finding related to this is that some of the managers seem to have had

problems in predicting subsequent or emerging problems related to the operations of theChinese IJV. This specific finding, we believe correlates with the mother company’sprevious experience. Those managers amenable to claim this were also the same as thosehaving limited or no internationalization experience in transitional economies on theparent company level. The Swedish managers’ ability to create value in operations mightbe another explanatory factor. It is though difficult to see from our findings if‘‘Swedishness’’ is the explicit reason for this. However, given that development ofpersonal networks is an aspect of value creation, it seems for most of the companies thatwere established long ago, that extensive negotiations on different issues, such as energy,

Table 1

Aggregated results from interpretive analysis; support (+) and reject (�)

The

media

firm

The

vehicle

company

The

paint

firm

The

hospital

supplier

The

electronics

producer

The

metal

processor

The

healthcare

company

The

nail

supplier

The

innovative

engineer

Support

(+) reject

(�)

P1: + + + + + + + + + +

P2: � + � + + + + � + +

P3: � + + + + + + � + +

P4: + + + + + + + + + +


taxes, employment regulations, and so forth, with politicians and local governmentofficials have helped in creating some business benefits.

P2. The degree of capital investment and resourcing in the IJV decides the level and type of

control mechanisms.Looking at the case companies, this proposition seems to have a significant relevance

since the six companies supporting it have all larger portfolios in China compared to thethree others. The size of the investments might in turn be correlated to the length of each ofthe companies’ presence in China. However, the three firms not supporting the propositionare all characterized by lacking local production; sales are done through exporting or localrepresentatives, and they all are notably smaller than the rest of the firms.

The cases also indicate that there is no local support from a regional headquarters. Onlyone of the companies has a headquarters in the region. This might indicate that the Swedesprefer having direct control from the Business Area office in Sweden or any other location.On the other hand, this also has an economic perspective. Swedish organizations aretypically decentralized and cost-conscious, which requires extensive performance and costcontrol mechanisms.

P3. The specific Swedish management style, based on informality and team-spirit, renders

Swedish managers of IJV the capacity to out-learn the rest of the local organization and the

local partner.If informality is to be interpreted as extended freedom of taking decisions, then the

characterizations previously made on ‘‘Swedishness’’ makes sense for the support of thisproposition. But, looking closer at the case of The Nail Supplier, it serves as a goodexample on the lack of ‘downward’ skills of handling the IJV manager and vice versa, the‘upward’ skill of managing the parent. The problem here was that the CEO lacked a senseof belonging and thus team-spirit with the top management team in Sweden. The relationwith the head office became even worse as the CEO did not have a well-established systemor a well worked through practice for handling and reporting critical events in China. ThePaint Firm (see Appendix A) serves as another example of strained relation with theheadquarters; the marketing manager’s resignation is as described in the case as one suchcause. The CEO played an important role in learning; especially the teaching of theheadquarters but this was abruptly cancelled.

Although, we find that some of the managers in this study have not directly addressedthe type of skills maintained in this proposition, we can still assume that the relationsbetween the CEO and the home organization are important in two aspects. First, thereneed to be an explicit strategic reason to out-learn the local Chinese organization. In ourview, one such reason could be to maintaining an overall stability in operations ingradually increasing market specific knowledge. Second, the cost aspect may helpexplaining the decision to out-learn the local organization. For example, if the localpartner explicitly or implicitly charges the host organization for services related to itssuperior market knowledge, then it may be assumed that the expatriate CEO will try out-learning the local organization especially if there are significant costs to save and therelative losses are reasonable.

P4. Dependence on local owners and clarity of objectives is a means of keeping stability.Initially, in this study, there were some reasons to believe that the local partners’ unique

knowledge forces the foreign partners and the expatriate manager to apply tighter controlmechanisms over the IJV activities. From the result, we found that this was not thecase with the companies involved in this study. Rather, we assume that the Chinese


partners’ unique knowledge does not play any role at all. And if it does, the cost ofaccessing that knowledge is probably exceeding the potential value as compared toother informational sources, such as setting up online-based facilities and closecollaboration with local consultancy firms, lawyers, and other professionals. The VehicleCompany serves as a good example. When the company revised their strategy for enteringinto Mainland China, they also abandoned a very long relation with the existingpartner, due to the relative low value of their knowledge as compared to the potential‘bring-along-costs’.Finally, the overall analysis (not presented in the table above) of the firms included in

the present paper, suggest that the Swedish firms, and specifically Swedish managers havean ability to accept changing conditions. This is possible due to the decentralized natureof Swedish firms, which also allows making ‘decoupled’ decisions without any particularinvolvement from the headquarters. In informational aspects, the managers know exactlywhich people to contact at headquarters, because a Swedish MNE is flat and hierarchiesare informal. However, the challenges appear when the expatriate Swedish managershave to make fast advancing decisions and do not have access to legitimate supportfrom Sweden.

5. Towards a sequential approach

Departing from these findings, we suggest that the traditional linear aspect of skills formanaging IJV may be inappropriate for understanding foreign firm’s process of entry anddevelopment into China—and likely other economies in transition or development. Theever increasing entry of multinational producers into foreign markets and a generalcommitment to continuous innovation has increased volatility in global markets (Buckley& Casson, 1998). The consequences seem therefore obvious—anticipated problems willcontinuously change while firms with limited market knowledge or experience will have tomake gradual revisions of their problem perceptions. In other words, this suggests acumulative approach, as suggested above by Child and Yan (2003), which follows processoriented thinking and decision making. Harrison (1996, p. 52) asserted that any suchstrategic decision process ‘‘begins with the concept of strategic gapy which focuses on thefit between the capabilities of the organization and its most significant external entities’’.For example, avoiding a closely following market changes in China may lead tomisunderstandings or wrong decisions about the choices available, application and use ofappropriate resources, misinterpretations of success and failure factors, and thus astrategic gap between intended strategy and realized strategy (Mintzberg & Waters, 1985)occurs. This suggests a process based view on decision making.An instructive formal definition, as linked to this view, is offered by Van de Ven (1992,

p. 169), who posits that a process may be viewed as a sequence of events that describes howthings change over time. It may thus be argued that as events emerge over time, andinteraction takes place with the consequences that those events bring about, learning takesplace. In saying so, the decision making capability of IJV managers wrest on his or herposition in the learning process. Using Child and Yan’s (2003) suggestion, that is theexperience, formation, and the operational aspects of learning, it reveals a contribution tothe process or sequence-based view.These three aspects of learning are likely to have particular relevance for the specific case

of IVJs (Child & Yan, 2003). First, it may be argued that previous experience, acquired


from earlier joint ventures and international business is of significant relevance to theoperations of the new IJV (also see e.g. Eriksson, Johanson, Majkgard, & Sharma, 1997).From a sample of Scandinavian firms in China, Carlsson, Nordegren, and Sjoholm (2005)showed that firm’s with experience from Hong Kong, Singapore, and Taiwan, are quickerin acquiring market specific knowledge and thus help boosting the performance of the firmin China. In contrast to much previous literature on learning as a property of theindividual (e.g. Cohen & Levinthal, 1990), Carlsson et al. (2005) argue that theperformance of Scandinavian firms is related to the learning capacity of the firm as anorganization. This implies an increased role for the foreign parent, as stressed by Child andYan (2003).

In relation to this, also included should be transfer of knowledge between the parentfirms and the alliance partners on the one hand, and between the partners within thealliance on the other (Nonaka, 1994). Further on, also the issue of knowledge repatriationby the alliance partners to the parent firms needs to be regarded in this process of learning(Beamish & Berdrow, 2003).

Second, concerns the formation of learning (Child & Yan, 2003). This takes place in theprocess of seeking and negotiating terms with new partners, the more extensive andthorough that process is, the greater the learning opportunity it provides. For example,Quinn (1992) suggested that the creation of new knowledge takes place through integrationand transformation of resources and competencies contributed by the parent firms and thealliance partners.

Third, in relation to such joint activities, Child and Yan (2003) stress the importance ofoperational learning, which is learning on how to work effectively with one or morepartners in the subsequent operation of an IJV. The amount of learning is likely to begreater when the joint venture partnership crosses national boundaries, especially if thehost location is a developing transition economy like China, where the environment isturbulent and many local partners have had little previous experience of working ortrading with foreign counterparts (Boisot & Child, 1999; Luo & Peng, 1999). Otherresearchers have also emphasized the application of such knowledge created in the alliancein order to improve the operations in the existing ventures (see Inkpen, 1995; Inkpen &Crossan, 1995).

From this, it is reasonable to argue that the learning ability of the firm is based in (a) thespecific institutional properties of the home country that enable or disable group-wide coherence and maintenance of practices and skills of knowledge acquisition anddissemination, and (b) the firm’s ability through internal practices and communicationsystems to overcome knowledge transfer inertia, and (c) the accumulated and intensefirm knowledge of host country characteristics (Eriksson et al., 1997; Johanson & Vahlne,1977, 2006; Lindstrand, 2003). Given this, previous internationalization experiencehelps to develop specific skills in generating business opportunities, reduce marketuncertainty, and the cost of new related market entries (Forsgren, 2002; Johanson &Vahlne, 1990).

In regard to these three aspects of learning, we argue that the decision making capabilityby expatriate managers of IJVs is sequential. From the above we conclude that decisionmaking is five-staged, each stage comprising a sequence of the decision making process as awhole. In doing so, this allows the formation of a conceptual framework that considers theperceptions and reactions of Swedish expatriate managers when they try to meet theemerging problems in China.


5.1. Stage one—the anticipated problem

At this stage, the companies’ accumulated experience from other or similar situations islikely to have an impact on the interpretation of the anticipated problem. Decisionsconcerning purchase, development, and production are parts of these experiences. Themanagers are thus likely to elaborate on questions such as: Which are the expectedproblems within the IJV? How to set clear goals? What issues were anticipated as centralprior to entering China? However, given the information and knowledge acquired fromprevious experiences, the foreign parent and the manager will set out a strategy that isintended to be followed, unless unforeseen problems emerge (Mintzberg & Waters, 1985).

5.2. Stage two—the anticipated strategy

With regard to the characteristics of problems and the amount of resources that thecompany holds, managers will try to elaborate on what methods that should be used whensolving the anticipated problems. Certainly, the IJV itself may be perceived as a method tosolve entry related problems. Acquisition is another method, which is increasingly appliedwhen there is a desire to increase market power and for consolidating with the industry(Hitt & Uhlenbruck, 2002, p. 228). Acquiring a firm that already exists on a market ofinterest also increases the speed with which a firm can enter that market and begin itsbusiness operations.

5.3. Stage three—the emerging problem

As the process of solving the anticipated problem proceeds, the company finds itself withextended understanding of the actual problems; hence it becomes more relevant to changefocus and ask. What were the actual problems and which of these problems will have to bemanaged? Referring to other researchers (e.g. Brandt, 1990; Brown, Rugman, & Verbeke,1989), Groot and Merchant (2000, p. 580) claim that in order to being able to foreseeemerging problems, IJV partners have to monitor operations in settings within which theyhave little experience (e.g. markets, distribution systems, legal systems). In doing so, it maythus be argued that the IJV manager’s ability to identify emerging problems will increaseand bring attention to emerge a new strategy different from the intended strategy(Mintzberg & Waters, 1985).

5.4. Stage four—the emerging strategy

As a crisis or gap occurs between the intended strategy and the actual situation, it willbring about the emergence of a new strategy (Mintzberg & Waters, 1985) and necessitate anew set of alternative decisions (Harrison, 1996). Lasserre and Schutte (1999, p. 207) arguethat joint ventures normally have a learning period and a crisis period over time, wheremutual benefits are high in the beginning of the cooperation and low at the end. But at acertain point both partners often feel they have acquired whatever expertise or competitiveadvantage they sought for from their association with each other. It is also at thismoment that the impetus for further collaboration can dissipate and the entire jointventure partnership can degenerate into a crisis. Cooperation between partners is thusnot an objective for joint ventures, but rather a stipulation to achieve competitive ends


(Hamel, 1991). Beamish and Berdrow (2003) agree on this and suggest that learningoutcomes do not typically motivate production-based IJVs, instead, the main reason firmsinvest internationally is to increase profits. Questions that are likely to be dealt with arethus: How can these emerging problems be solved? Will they be permanently solved or dowe have to revise our strategy in order to be more prepared for market changes andunforeseen obstacles?

5.5. Stage five—implications for sustainable operations

Based on the experiences and skills developed during the previous stages, the CEO’s taskevidently becomes to develop a sustainable business model in order to be able to managethe parent company; to try to cope with the new organization (IJV); handling the localpartners; and to be able to manage institutional properties, such as culture in the broadsense, rules and legislations, and developing a capability to see emergent issues in China’stransition. This is an overwhelming task when daily operations often dominate strategicplanning, refinement, and enactment, and follow-up. Making changes on operational levelwill probably have effects on strategic issues and vice-versa. Therefore, the drivers forstability must be stronger than the drivers for intra-firm changes and from the surroundingenvironment. Whichever, the up most importance for the company is to identify whatimplications these changes have and how these will increase operational learning.

6. Conclusions

The present study has made one potentially significant contribution: the development ofa systematic, sequential approach that particularly addresses the emergence of problemsand related strategies as foreign firms try to realize intended strategies in entirely new—possibly ‘‘alien’’—environments, especially developing countries or economies in transi-tion. Our framework proposes five distinct stages. First, the CEO and the hostorganization are challenged to define and anticipate problems related to an intendedentry into a (relatively) unknown market. Second, they set off to carry out a strategyrelated to the anticipated problems identified. Third, they need to respond to theemergence of new problems and revise old perceptions as they realize the actual challengesof the environment. Fourth, often at this point the CEO is exposed to a strategic crisis, andneeds to radically revise the original strategy, usually developed at the parent level, or tomaintain a fac-ade towards the headquarters in order to not risk losing control over the‘project’. The fifth stage results in the development of an appropriate business model,based on the experiences and skills gathered from the previous stages, for sustainableoperations in the host country.

As compared to previous linear views concerned with the accumulation of experiencesand skills while foreign companies manage IJV in developing/transition economies ingeneral, and in China in particular, our findings suggest that cross-border operations insuch economies evolve sequentially, but are non-linear. This means that previousconceptions, which accept that a linearity of experiences help the accumulation ofknowledge are probably misleading in China and similar economies. Instead, we suggeston the basis of our findings that the concept of ‘co-evolution’ (Eisenhardt & Galunic,2000), which typically refers to continuous change of decentralization of intelligence incollaborative links, could be incorporated in our model.


The findings also suggest the CEOs ability to outlearn the IJV partners in China (seeProposition 3) is affected by the strong demand to employ young, skilled and well-educated Chinese, especially in complex industries, by offering the advantage of workingwith advanced technological solutions, interesting customers, complex operations,sophisticated products, and so forth. In that respect, it may be argued that the singlesided learning-race view as postulated by some researchers (Hamel, 1991; Pucik, 1988;Reich & Mankin, 1986) is rather a double sided one. Hence, it is reasonable to assume thatforeign CEO’s are also running the risk of being out-learned, internally as well asexternally.Finally, in a spirit of self-critique, we can say that the present study is only tentative and

can be strengthened in many ways. We have developed our model on the basis of theexperience of a small number of Swedish managers in China. These may be a special case,but the model can be further developed and tested in other contexts. Does it apply to non-Swedish firms? More importantly, does it apply beyond China? One major issue is thatChina is both a developing and a transition economy, so are the factors being addressed bySwedish managers in China the consequence of one or both of these aspects. Further studyusing our data, as well as other studies, may wish to look more carefully at this issue.Another issue is the sheer size, scale and complexity of China. To what extent do ourfindings potentially apply to other economies? We would submit that they are applicable tothe entry of (relatively) newcomer foreign entrants in an increasing number of large,developing economies such as China, India, Bangladesh, Egypt, Nigeria—and evenRussia. All of these countries, and others, are in transition in one way or another, certainlyin many cases from public sector domination of the economy, and are keen that local firmsacquire advanced technology and expertise through joint ventures or other activity withforeign firms. The model we propose can therefore be tested in other contexts and, oncetested, can be used as a concrete basis for policy recommendations to both companies andcountries.

Acknowledgements

This study was financially aided by the Marketing Technology Center Foundation,MTC in Sweden. The authors would like to direct their special thanks for valuable supportand comments from the guest editors. Thanks also go to the managers for theirparticipation in this research.

Appendix A. The nine cases

A.1. The media firm

This firm is a medium-sized media company developing and producing entertainment,mainly castings with high interactivity. Their international experiences show that lottery isa vital part of the concept, which resulted in the following anticipated problem: Whatadjustments/adaptations have to be made in order to fit into Chinese circumstances, i.e. tofind a partner? The Media Firm mapped the future market and tried to understand how tocontrol the value chain. Lobbying the right politicians in order to get the necessarybusiness licenses turned out to be a time consuming activity that changed the course of


activity. The need for a locally stationed CEO could not be decided upon, which implied apartial withdrawal from China.

A.2. The vehicle company

China’s WTO membership means a deregulation of the industry as whole and lesseningimport restrictions. The industry deregulation will gradually give The Vehicle Companyand their competitors a possibility to increase sales. Therefore, the anticipated problemwas to determine in what ways the company can make market segmentation in order tokeep better control of the customers. The anticipated method was chosen between fouralternatives: (1) Non-exclusive presence for the only agent in China. (2) Exclusivity for thesingle agent in some parts or provinces. (3) Restrict to only sales license in parts of China.(4) Sales license for the agent’s two strongest markets Hong Kong and Taiwan. But theproblem turned out differently: since regulations would mean increase of sales, it mightalso be more beneficial for the firm to allocate production to China. The applied method isto starting an assembly plant locally, instead of selling via agents or distributors. Aftersome calculations, it turned out that the investment would destabilize The VehicleCompany’s value chain requirements.

A.3. The paint firm

Professional products have been sold in Asia during many years without any targetedefforts. During the summer of 2000, the firm decided to structure their export sales to Asiawith focus on the summer Olympic Games in 2008. As an anticipated method the first stepwas to setting up a legal unit in Singapore for logistics and accounting and two regionalsales units will help structuring the export activities.

The complex environment of coalitions with and integrated State Owned Enterprises(SOEs) hamper a needed breakthrough of sales in China. Therefore, the main problemconcerns business ethics—to play the game by the rules of the local market, i.e. payingentry fees, or not. A change of method involved out-learning partners in order to increasecontrol over sales activities. Surprisingly, as a result of weak ties in the top generalmanagement team, the marketing manager withdrew from the company head quarter inSweden. This led to that the expatriate CEO’s position fell, which finally made him resignfrom his position in China.

A.4. The hospital supplier

The Hospital Supplier first entered China about 10 years ago through its mothercompany. For several reasons, they had to close down the office after 5 years. The mainanticipated problem, however was how to match previously acquired knowledge on doingbusiness in Mainland China with a new entry. As a direct answer, the regional headquarterin Singapore initiated cooperation with a local distributor in Beijing.

After a certain period of time, the firm found itself loosing control and stability, as thepartner showed unwillingness to share unique market knowledge. However, the informalcooperation structure was replaced by a representative office in Beijing in order to learnmore about the market and the business conditions in China. This action had somewhatunexpected outcomes: First, The Hospital Supplier realized that they had to engage personal


relations with necessary people in order to achieve critical market knowledge. Second, thefirm had to define a clear market strategy by considering outsourcing sales and moveproduction units to China in order to create value with potential customers and authorities.

A.5. The electronics producer

During the late 1990s, there was a clear trend within the telecommunications industry tomove production from the US and Europe to low cost countries, as did this firm. Theirprevious experience, except from a failed market entry in the USA is limited, whichtherefore forces them to find a Chinese partner in order to be able to transfer knowledgeand that way appropriate value to a newly setup semi-assembly unit outside of Beijing. Asthe Chinese plant is rather capital and technology intensive they anticipated a controltightness approach, involving knowledge transfer channels, recruiting, training, andfinancial measurement and control, which were expected as a suitable method.As the whole operation was dependent on a rapidly changing and demanding market

both from end customers and suppliers, the actual problem was rather concerned withmanaging external and internal volatility. The latter was aimed to be solved by knowledgetransfer from Sweden to China, while the external volatility involved a method to ensurethat ethics were implemented in the business model. This however meant that politicalissues such as rules and regulations (e.g. local content) were partly left out. The ultimateimplication was that a CEO with more extended knowledge had to take over the operationin China.

A.6. The metal processor

The Metal Processor began in the 1980s to investigate the possibilities for enlargementinto Asia. Since they knew very little on doing business in China, the firm entered an IJVwith a Chinese partner in 1993. In 2001, both partners of the venture agreed in a letter ofintent that the Swedish company would acquire the rest of the shares from the Chineseowners. However, the problem was that the agreement was not followed by the Chinese.As a consequence, the relation between the parts became very volatile and jeopardized theproduction process. Owing to strong dependence on the Chinese partner, the anticipatedmethod was simply to increase control over the major parts of the operations.After several efforts to solve the situation, the actual problem turned out to be internal,

among the Chinese owners. First, the local owners wanted to create a better bargainingposition for the takeover when finally time has come to close the deal. Second, the Chinesepartners’ refusal to follow the letter of intent concerned their plans to grow in the shade ofthe Swedish Metal Processor—to outlearn the Swedes by devaluing their contribution tothe JV. In this rather complex situation, The Metal Processor had to put counter pressureon the Chinese partners to follow up the deal by threaten to build a new production plant.All together, this resulted in a resolution of the Chinese owners, which made it possible forthe Swedes to take over the whole Chinese plant—though to a high price.

A.7. The healthcare company

Owing to the high production costs in Japan, The Healthcare Company moved theirmanufacturing plant to China in 1994. Since their business in China is deeply dependent on


exports, the anticipated problem was to gradually take control over production costs. Inorder to do so, an extended reconstruction plan was set up, involving major parts of theactivities that needed large skills of managing the Swedish headquarters, the local Chineseorganization, and the environment with all its specific production, import, and exportregulations.

In time, the actual problem concerned trust for the firm’s sales personnel who weremaking arbitrary credit grading and private arrangements with customers. The HealthcareCompany applied group incentive programs in order to keep control and increase loyaltywithin the sales organization. The direct implication of this was a strong dependence on thesales organizations unique market knowledge. However, the CEO found that theimportance of personal relations in doing business in China was a critical source forincreased sales.

A.8. The nail supplier

See a comprehensive case description is in the text above.

A.9. The innovative engineer

Since many years The Innovative Engineer is driving a global multi brand strategy. In2002, the firm acquired a Chinese competitor as a means to revaluate the contribution tothe partnership and increase market control. The anticipated problem at an early stageproved to concern how to out-learn the former Chinese SOE and eventually turn it into astate of the art ‘‘Swedish company’’. This meant the local general manager, a Chinese withvaluable personal relations with local authorities, was offered to accomplish managementtraining the Western way so that he can manage to run the new firm. A significantreduction of employees from 1200 people to less than 200 was possible only by help of thepersonal goodwill between the former Chinese manager and local politicians.

Further on, the Swedish company became aware that the actual problem was: How tokeep the two unique brands apart, both internally when it comes to development, trainingand production, and externally (i.e. marketing, sales and service). Previous experiences hadto be consulted for the application of a method. The Innovative Engineer made sure tointegrate internal functions, which was mainly about managing the new technology and atthe same time distinguish external operations through design improvements and upgradingof core technology. The implications of this acquisition brought about intense localgovernment interaction that forced the company to redundancy payments to noticedemployees. Another implication was that Western engineers held the positions asoperations managers during the transition period.

References

Adler, P. A., & Adler, P. (1994). Observational techniques. In N. K. Denzin, & Y. S. Lincoln (Eds.), Handbook of

qualitative research (pp. 377–392). London: Sage.

Aldrich, H., & Herker, D. (1977). Boundary-spanning roles and organization structure. Academy of Management

Review, 2, 217–230.

Andersson, U., Bjorkman, I., & Forsgren, M. (2005). Managing subsidiary knowledge creation: The effect of

control mechanisms on subsidiary local embeddedness. International Business Review, 14(5), 521–538.


Beamish, P., & Berdrow, I. (2003). Learning from IJVs: The unintended outcome. Long Range Planning, 36,

285–303.

Berglund, J., & Lowstedt, J. (1996). Sweden: The fate of human resource management in a ‘folkish’ society. In

T. Clark (Ed.), European human resource management. Oxford: Blackwell.

Bjorkman, I., & Schaap, A. (1994). Outsiders in the Middle Kingdom: expatriate managers in Chinese-Western

joint ventures. European Management Journal, 12, 147–153.

Boisot, M., & Child, J. (1999). Organizations as adaptive systems in complex environments: The case of China.

Organization Science, 10, 237–252.

Brandt, S. A. (1990). Perspectives on joint venturing with the Japanese in the United States. SAM Advanced

Management Journal, 55(1), 34–36.

Brown, L. T., Rugman, A. M., & Verbeke, A. (1989). Japanese joint ventures with western multinationals:

Synthesizing the economic and cultural explanations of failure. Asia Pacific Journal of Management, 225–242.

Buckley, P. J., & Casson, M. C. (1976). The future of the Multinational Enterprise (25th Anniversary ed.).

Palgrave.

Buckley, P. J., & Casson, M. C. (1998). Models of the multinational enterprise. Journal of International Business

Studies, 29(1), 21–44.

Buckley, P. J., Glaister, K. W., & Husan, R. (2002). International Joint Ventures: Partnering skills and cross-

cultural issues. Long Range Planning, 35, 113–134.

Carlsson, J., Nordegren, A., & Sjoholm, F. (2005). International experience and the performance of Scandinavian

firms in China. International Business Review, 14(1), 21–40.

Carson, S. J., Madhok, A., & Wu, T. (2006). Uncertainty, opportunism, and governance: The effects of volatility

and ambiguity on formal and relational contracting. Academy of Management Journal, 49(5), 1058–1077.

Child, J., & Yan, Y. (2003). Predicting the performance of International Joint Ventures: An investigation in

China. Journal of Management Studies, 40(2).

Cohen, W. M., & Levinthal, D. A. (1990). Absorptive capacity: A new perspective on learning and innovation.

Administrative Science Quarterly, 35(1), 128–152.

Czarniawska-Joerges, B. (1993). Swedish management: Modern projects, postmodern implementation. Interna-

tional Studies of Management and Organization, 23(1), 13–27.

Daymon, C., & Holloway, I. (2002). Qualitative research methods in public relations and marketing

communications. USA: Routledge.

Dunning, J. H. (1988). The eclectic paradigm of international production: A restatement and some possible

extensions. Journal of International Business Studies, 1, 1–31.

Eisenhardt, K. M. (1985). Control: Organizational and economic approaches. Management Science, 31(2),

134–149.

Eisenhardt, K. M., & Galunic, D. C. (2000). Coevolving: At last, a way to make synergies work. Harvard Business

Review, 78(1), 91–101.

Eriksson, K., Johanson, J., Majkgard, A., & Sharma, D. (1997). Experiential knowledge and cost in the

internationalization process. Journal of International Business Studies, 28(2), 337–360.

Forsgren, M. (2002). The concept of learning in the Uppsala internationalization process model: A critical review.

International Business Review, 11(3), 257–277.

Friedman, R. A., & Podolny, J. (1992). Differentiation of boundary spanning roles: Labor negotiations and

implications for role conflict. Administrative Science Quarterly, 37(1), 28–47.

Geringer, J. M., & Hebert, L. (1991). Measuring performance of international joint ventures. Journal of

International Business Studies, 22(2), 249–263.

Gil, J., & Butler, R. J. (2003). Managing instability in cross-cultural alliances. Long Range Planning, 36,

543–563.

Groot, T., & Merchant, K. A. (2000). Control of international joint ventures. Accounting, Organizations and

Society, 25, 579–607.

Guler, I., Guillen, M. F., & Macpherson, J. M. (2002). Global competition, institutions and the diffusion of

organizational practices: The international spread of ISO-9000 quality certificates. Administrative Science

Quarterly, 47, 207–232.

Hamel, G. (1991). Competition for competence and inter-partner learning within international strategic alliances.

Strategic Management Journal, 12(12), 83–103.

Harrigan, K. R. (1985). Strategies for joint ventures. Lexington, MA: Lexington Books.

Harrison, E. F. (1996). A process perspective on strategic decision making. Management Decision, 34(1),

46–53.


Hitt, M. A., & Uhlenbruck, K. (2002). Entering foreign markets through strategic alliances and acquisitions. In

M. Kotabe, & P. S. Aulakh (Eds.), Emerging issues in international business research (pp. 223–240).

Cheltenham: Edward Elgar.

Hofstede, G. (1980). Culture’s consequences. Beverly Hills, CA: Sage.

Inkpen, A. (1995). The management of international joint ventures: An organizational learning perspective.

New York: Routledge Press.

Inkpen, A. C., & Crossan, M. M. (1995). Believing is seeing: Joint ventures and organizational learning. Journal of

Management Studies, 32, 595–618.

Johanson, J., & Mattson, L. G. (1988). Internationalization in industrial systems. In N. Hood, & J. E. Vahlne

(Eds.), Strategies in global competition. Beckenham: Croom Helm.

Johanson, J., & Vahlne, J.-E. (1977). The internationalization process of the firm—A model of knowledge

development and increasing foreign market commitments. Journal of International Business Studies, 8(1), 23–32.

Johanson, J., & Vahlne, J.-E. (1990). The mechanism of internationalization. International Marketing Review,

7(4), 1–24.

Johanson, J., & Vahlne, J.-E. (2006). Commitment and opportunity development in the internationalization

process: A note on the Uppsala internationalisation process model. Management International Review, 46(2),

165–178.

Johanson, J., & Wiedersheim-Paul, F. (1975). The internationalization of the firm—Four Swedish cases. Journal

of Management Studies, 305–322.

Kanter, R. M. (1994). Cooperative advantage. Harvard Business Review, 96–108.

Killing, P. (1983). Strategies for joint venture success. New York: Praeger.

Lasserre, P. (1996). Regional headquarters: The spearhead for Asia pacific markets. Long Range Planning, 29(1),

30–37.

Lasserre, P., & Schutte, H. (1999). Strategies for Asia Pacific—Beyond the crisis. Palgrave.

Lei, D., & Slocum, J. W. (1992). Global strategy, competence-building and strategic alliances. California

Management Review, 35, 81–97.

Lewis, R. D. (2000). When cultures collide: Managing successfully across cultures. Nicholas Brealey Publishing.

Li, J., Qian, G., Lam, K., & Wang, D. (2000). Breaking into China: Strategic considerations for multinational

corporations. Long Range Planning, 33, 673–687.

Lindstrand, A. (2003). The usefulness of network experiential knowledge in the internationalization process.

Doctoral dissertation. Sweden: Department of Business Studies, Uppsala University, unpublished

Luo, Y., & Peng, M. (1999). Learning to compete in a transition economy: Experience, environment and

performance. Journal of International Business Studies, 30, 269–296.

Marshall, P. (1997). Research methods: How to design and conduct a successful project. UK: Plymouth.

Martinsons, M. G., & Tseng, C. S. (1995). Successful joint ventures in the heart of the dragon. Long Range

Planning, 28(5), 45–58.

Mintzberg, H., & Waters, A. (1985). Of strategies, deliberate and emergent. Strategic Management Journal, 6(3),

257–272.

Mohr, A. T., & Puck, J. F. (2006). Local responsiveness of German firms in international joint ventures in the

PRC. In S. Soderman (Ed.), Emerging multiplicity: Integration and responsiveness in Asian business development

(pp. 202–214). Hampshire: Palgrave Macmillan.

Nee, V. (1992). Organizational dynamics of market transition: Hybrid forms, property rights, and mixed economy

in China. Administrative Science Quarterly, 37(1), 1–27.

Nonaka, I. (1994). A dynamic theory of organizational knowledge creation. Organization Science, 5(1), 14–37.

Ouchi, W. G. (1979). A conceptual framework for the design of organizational control mechanisms. Management

Science, 25(9), 833–848.

Penrose, E. (1959). The theory of the growth of the firm. London: Basil Blackwell.

Perlmutter, H. W., & Heenan, D. A. (1986). Cooperate to compete globally. Harvard Business Review,

136–142.

Pettigrew, A. M. (1997). What is a processual analysis. Scandinavian Journal of Management, 13(4), 337–348.

Pucik, V. (1988). Strategic alliances, organizational learning, and competitive advantage: The HRM agenda.

Human Resource Management, 27(1).

Quinn, J. B. (1992). Intelligent enterprise: A knowledge and service based paradigm for industry. New York: The

Free Press.

Reich, R. B., & Mankin, E. D. (1986). Joint ventures with Japan give away our future. Harvard Business Review,

64(2), 78–86.


Salzer, M. (1994). Identity across borders: A study in the IKEA-World. Ph.D. thesis. Sweden: Linkoping

University.

Smith, P. B., Anderson, J. A., Ekelund, B., Graversen, G., & Ropo, A. (2003). In search of Nordic management

styles. Scandinavian Journal of Management, 19, 491–507.

Thompson, J. D. (1967). Organizations in action. New York: McGraw-Hill.

UNCTAD, 2006. FDI from developing and transition economies: Implications for development. World Investment

Report.

Van de Ven, A. H. (1992). Suggestions for studying strategy process: A research note. Strategic Management

Journal, 13, 169–188.

Westerberg, M., Singh, J., & Hackner, E. (1997). Does the CEO matter? An empirical study of small Swedish

firms operating on turbulent environments. Scandinavian Journal of Management, 13(3), 251–270.

Williamson, O. E. (1975). Markets and hierarchies: Analysis and antitrust implications. New York: The Free Press.

Yan, A., & Duan, J. (2003). Interpartner fit and its performance implications: A four-case study of US–China

joint ventures. Asia Pacific Journal of Management, 20(4), 541–564.

Skills and complexity in management of IJVs: Exploring Swedish managers' experiences in China

Documents

Transcript of Skills and complexity in management of IJVs: Exploring Swedish managers' experiences in China