Influence of Parent Company’s Organizational Dimensions on Its JV Performances – Opportunism Occurrence and Control Efficacy

Yang Fan

Abstract


How does a parent company organizational dimension affect its joint ventures’ performance in a transitional
economy? We explored that question through an analytical inductive case study. Our findings indicate that the
confluence of a function-oriented matrix form and lack of formal procedures at the strategic level led to a
fief-like organization in which its functional departments hold high power and low accountability while its JVs’
management team hold low power but high accountability. Such a fief-like organizational parent makes a
negative contribution to its JV performance by adding difficulty to its JV formal control, introducing
department-driven opportunism through imposing inside hierarchical goals upon its JV, leading to a low
opportunism control efficacy as the result of the separation of opportunism beneficiary from the costs. The
negative contribution from the fief-like organization is due to its organizational injustice and a reverse
arrangement between authority power and accountability.


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International Journal of Business and Management   ISSN 1833-3850 (Print)   ISSN 1833-8119 (Online)

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