Toward Understanding IJV Control: Parent Inside and Outside Control – An Exploratory Case Study

Yang Fan


Previous studies have failed to recognize the difference between parent control over its ‘own people’ and ‘other
people’ in IJVs. The paper for the first time in the literature separates parent control into two modes of control
–inside and outside control upon the nature of the relationship between parents and respective IJV management
teams. We examine inside and outside control through an analytical inductive case study. Our result shows that
inside control determined by parent ownership is an endogenous contingent control. It has a broad but selective
control focus. It gives a parent adaptability and flexibility in selecting control extent and mechanisms. Outside
control is determined by parent overall bargaining power. It is a pre-determined control with a narrow specific
focus, and its control extent and mechanisms are predefined. Our study contributes to the literature on IJV
control by adding the nature of the relationship between parents and individual management groups into the IJV
control equation, unveiling two distinctive forms of control within IJVs.

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