Based on: Multi-cultural
international
leadership teams and organizational
joint ventures
identification
in
Jiatao Li, Katherine Xin, Madan Pillutla
Reprinted from International Journal of Human Resource Management, Voll3,
No 2, March 2002, with permission from Taylor and Francis (www.tandf.co.uk)
Jiatao Li and Katherine Xin are Associate Professors of Management of
Organizations, HKUST Business School
Madan PillutIa was Assistant Professor of Management of
Organizations, HKUST Business School, from 1995to 1999
WHO CALLS THE SHOTS IN
A JOINT VENTURE?
A Western beverage company thought it had
found the answer to the problem of expatriate
managers failing to stay the course after they had
been assigned from its headquarters to one of its
six joint ventures in China. Many experienced
difficulties working in the local environment and
left their positions before their full term was up.
THE COMPANY CHANGED its recruiting strategy and
dilemma goes some way to showing the complexity
began hiring expatriates
of life in a top management
who knew the country well,
only to be faced with an unexpected
These "country-expert"
drawback.
professionals
took the side of
the local joint venture partner whenever there were
conflicts
between it and the parent company,
team where staff of
different national origins, cultural values, social
norms and varying experience
must get together and
run daily operations.
instead
of backing their original employer.
They can face simultaneous
executives
demands from different
in each parent company
and from various
The HKUST Business School researchers use this
employee groups within the IJV, leading to confusion
as an example of how international
and stress. Split loyalties frequently
joint ventures
(IJVs) can suffer from divisions in the top
management
result in factions
being formed in line with where team members'
team brought about by where they see
their loyalties lying.
loyalties lie. The quality of management
result, as does the performance
suffers as a
of the IJV itself.
Jiatao Li, Katherine Xin and Madan
"Split loyalties frequently result in factions
being formed in line with where team
members' loyalties lie. The quality of
management suffers as a result, as does
the performance of the IJV itself."
Pillutla delved into IJV operations
and conducted
Sino-foreign
interviews with
joint ventures while
also drawing on social identity
theory to produce a paper which
contains a raft of conclusions
about key issues facing IJV
managers and the companies
employ them. Large-scale
who
field
study is now needed to put their
It's an unusual case, the academics
admit. Problems
concepts
to the test, they say.
normally occur when managers identify with the
parent company they have been seconded
find themselves
company.
from, or
split between the IJV and their home
Local managers may also identify with the
local partner company.
But the beverage company's
They use another example, of a Sino-Western
venture in the automobile
of the problem.
joint
industry, to show the scope
"Some of the senior Chinese
managers clearly still identified with their original
Chinese state-owned
enterprise that was a partner in
this IJV," they write. "In one case the executive was
counting the days until he could leave the IJV and
return to the parent firm. One of the senior executives
on the American side clearly saw his duties as temporary and anticipated
soon. Interestingly,
returning to the parent firm
two younger IJV managers, one
Chinese and one American, talked as if their primary
identification
was with the IJV itself."
Obvious conclusions
may not hold good when
looking at the field as a whole. "Since each parent
presumably
wants the IJV to succeed,
expect [parent companies]
one might
routinely to support
strong TMT [top management
team] member identi-
fication with the IJV. But, in case after case, either
intentionally
or unintentionally,
assign executives
executives
parents seem to
to IJVs with the idea that the
should 'watch out for our interests'
rather
than 'make sure you work it out there in the IJV'," the
researchers write.
IiIf top management throws itself wholly
behind the joint venture, factionalism will
be reduced, they will function more
effectively as a team and the company
itself will see improvements
in its performance."
Li, Xin and Pillutla follow these generalizations
with more specific conclusions
that cover:
• Role conflict and stress when managers identify
"The result seems to be that a large number of IJV
with both the IJV and the parent company
top management
which, in turn, affects the management
team members identify more with
the original parents than with the IJVs they now work
in. Especially for expatriate
managers who expect to
return home eventually, identification
firm may relate to career aspirations
with the parent
as well."
efficiency
and the company's
• Increased cooperation
managers identifying
quick decisions
team's
performance
that comes with
with the IJV, leading to
and commitment
to the team
• How managers may be less likely to focus fully
Strong identification
company
with both the IJV and the parent
is not the answer either. A manager can
find he has conflict or ambiguity
factionalism
in his role,
will still be a problem and management
teams will become ineffective.
But, if top management
will function
company
more effectively
image and large-scale
• Inconsistency
has a strong
operations
elsewhere
over the objectives
of parent
firms which may force the manager to pay more
attention to the bigger company
throws itself wholly behind
the joint venture, factionalism
on the IJV if a parent company
will be reduced, they
as a team and the
itself will see improvements
in its
• How the success of an IJV, the length of tenure
a manager has with it and the way his career
and pay are linked with its performance
increase his identification
with the operation
performance.
Examining identity issues in IJVs can provide
valuable insights into key challenges facing their
managers, the researchers say. They believe that the
factors they have identified will help managers
understand
and minimize the effects of factionalism
and role conflict. The company,
in turn, will perform
better, to the benefit of its partners and the people
who work for it.