Toward a Multidimensional Performance Measure for International Joint Ventures in Construction
Publication: Journal of Construction Engineering and Management
Volume 137, Issue 6
Abstract
Measuring the performance of joint ventures has been an important research topic for a few decades. No consensus on an appropriate definition and measurement of performance of international joint ventures (IJVs) has yet emerged, and the validity of the underlying measures is still questionable. In this study, the construct validity of measures that define IJV performance in construction is evaluated using data obtained through a questionnaire survey. A second-order performance construct is proposed, which is measured by means of project performance, partner performance, performance of IJV management, and perceived satisfaction with IJV. The validity of the performance measures is evaluated by means of tests that assess content validity, reliability, and convergent and discriminant validity. The findings reveal that all proposed indicators are valid measures of IJV performance and that they correspond to different dimensions of performance. This research is expected to trigger further work on developing a multidimensional performance measure for IJVs in construction. In addition, the findings can help practitioners reflect on how they operate and measure the success of their IJVs.
Get full access to this article
View all available purchase options and get full access to this article.
References
Anderson, E. (1990). “Two firms, one frontier: On assessing joint venture performance.” Sloan Manage. Rev., 31(2), 19–30.
Anderson, J., and Gerbing, D. (1988). “Structural equation modeling in practice: a review and recommended two-step approach.” Psychol. Bull., 103(3), 411–423.
Arino, A. (2003). “Measures of strategic alliance performance: An analysis of construct validity.” J. Int. Bus. Stud., 34(1), 66–79.
Ashley, D. B., Lurie, C. S., and Jaselskis, E. J. (1987). “Determinants of construction project success.” Proj. Manage. J., 18(2), 69–79.
Bagozzi, R. P. (1980). “The nature and causes of self-esteem, performance, and satisfaction in the sales force: A structural equation approach.” J. Bus., 53(3), 315–331.
Bagozzi, R. P., Yi, Y., and Phillips, L. W. (1991). “Assessing construct validity in organizational research.” Administrative Sci. Q., 36(3), 421–458.
Barkema, H., and Vermeulen, F. (1997). “What differences in the cultural backgrounds of partners are detrimental for international joint ventures?” J. Int. Bus. Stud., 28(4), 845–864.
Beamish, P. W. (1985). “The characteristics of joint ventures in developed and developing countries.” Columbia J. World Bus., 20(3), 13–19.
Beamish, P. W., and Banks, J. C. (1987). “Equity joint ventures and the theory of the multinational enterprise.” J. Int. Bus. Stud., 18(2), 1–16.
Beamish, P. W., and Delios, A. (1997). “Incidence and Propensity of Alliance Formation in.” P. W. Beamish, and P. J. Killing, eds., Cooperative strategies: European perspectives, New Lexington Press, San Francisco.
Beamish, P. W., and Inkpen, A. C. (1995). “Keeping international joint ventures stable and profitable.” Long Range Plann., 28(3), 26–36.
Beamish, P. W., and Kachra, A. (2004). “Number of partners and JV performance.” J. World Bus., 39(2), 107–120.
Blodgett, L. (1992). “Factors in the instability of international joint ventures: An event history analysis.” Strategic Manage. J., 13(6), 475–481.
Bollen, K. A. (1989). Structural equations with latent variables, Wiley, New York.
Bprc. (1999). “The construction industry key performance indicators.” 〈http://www.cbpp.org.uk/cbpp/themes/bm/KPIs/index.html〉 (Apr. 21, 1999).
Chan, A. P. C., Chan, D. W. M., Chiang, Y. H., Tang, B. S., Chan, E. H. W., and Ho, K. S. K. (2004). “Exploring critical success factors for partnering in construction projects.” J. Constr. Eng. Manage., 130(2), 188–198.
Child, J., and Yan, Y. (2003). “Predicting the performance of international joint ventures: An investigation in China.” J. Manage. Stud., 40(2), 283–320.
Choi, C. B., and Beamish, P. W. (2004). “Split management control and international joint venture performance.” J. Int. Bus. Stud., 35(3), 201–215.
Chowdhury, J. (1992). “Performance of international joint ventures and wholly owned foreign subsidiaries: A comparative perspective.” Manage. Int. Rev., 32(2), 115–133.
Contractor, F. J., and Lorange, P. (1988). “Why should firms cooperate? The strategy and economics basis for cooperative ventures.” Cooperative strategies in international business, F. J. Contractor and P. Lorange, eds., Lexington Books, Lexington, MA.
Demirbag, M., and Mirza, H. (2000). “Factors affecting international joint venture success: An empirical analysis of foreign-local partner relationships and performance in joint ventures in Turkey.” Int. Bus. Rev., 9(1), 1–35.
Dunn, S. C., Seaker, R. F., and Waller, M. A. (1994). “Latent variables in business logistics research: Scale development and validation.” J. Bus. Logist., 15(2), 145–172.
Fey, C., and Beamish, P. W. (2001). “Organizational climate similarity and performance: International joint ventures in Russia.” Organ. Stud., 22(5), 853–882.
Garver, M. S., and Mentzer, J. T. (1999). “Logistics research methods: Employing structural equation modeling to test for construct validity.” J. Bus. Logist., 20(1), 33–57.
Gentia Software. (1998). “Balanced scorecards.” Gentia & balanced scorecard, GartnerGroup, Stamford, CT.
Geringer, J. M. (1988). Joint venture partner selection: Strategies for developing countries, Quorum, New York.
Geringer, J., and Hebert, L. (1989). “Control and performance of international joint ventures.” J. Int. Bus. Stud., 20(2), 235–54.
Geringer, J. M., and Hebert, L. (1991). “Measuring performance of international joint ventures.” J. Int. Bus. Stud., 22, 249–263.
Glaister, K. W., and Buckley, P. J. (1998). “Measures of performance in the UK international alliances.” Organ. Stud., 19(1), 89–118.
Gomes-Casseres, B. (1987). “Joint venture instability: Is it a problem?” Columbia J. World Bus., 22(2), 97–101.
Hair, J. F. Jr., Anderson, R. E., Tatham, R. L., and Black, W. C. (1998). Multivariate data analysis, Prentice Hall, Englewood Cliffs, NJ.
Handa, V., and Adas, A. (1996). “Predicting the level of organizational effectiveness, a methodology for the construction firm.” Constr. Manage. Econ., 14(4), 341–352.
Hanvanich, S., Miller, S. R., Richards, M., and Cavusgil, S. T. (2003). “An event study of the effects of partner and location cultural differences in joint ventures.” Int. Bus. Rev., 12(1), 1–16.
Hennart, J. F., and Zeng, M. (2002). “Cross-cultural differences and joint venture longevity.” J. Int. Bus. Stud., 33(4), 699–716.
Horii, T., Jin, Y., and Levitt, R. E. (2005). “Modeling and analyzing cultural influences on project team performance.” Comput. Math. Org. Theory, 10(4), 305–321.
Hoskisson, R. E., Hitt, M. A., Johnson, R. A., and Moesel, D. D. (1993). “Construct validity of an objective (entropy) categorical measure of diversification strategy.” Strategic Manage. J., 14(3), 215–235.
Joreskog, K. G. (1971). “Statistical analysis of congeneric tests.” Psychometrika, 36(2), 109–133.
Joreskog, K. G., and Sorbom, D. (1989). LISREL 7: A guide to the program and applications, 2nd Ed., SPSS, Inc., Chicago, IL.
Julian, C. C., and O’Cass, A. (2002). “Examining the internal-external determinants of international joint venture (IJV) marketing performance in Thailand.” Australas. Market. J., 10(2), 55–71.
Kagioglou, M., Cooper, R., and Aouad, G. (2001). “Performance management in construction: A conceptual framework.” Constr. Manage. Econ., 19(1), 85–95.
Killing, J. P. (1983). Strategies for joint venture success, Routledge, New York.
Kline, R. B. (1998). Principles and practice of structural equation modeling, Guilford, New York.
Kogut, B. (1988). “Joint ventures: Theoretical and empirical perspectives.” Strategic Manage. J., 9(4), 319–332.
Lasserre, P. (1999). “Joint venture satisfaction in Asia-Pacific.” Asia-Pac. J. Manage., 16(1), 1–28.
Luo, J. (2001). “Assessing management and performance of Sino-foreign construction joint ventures.” Constr. Manage. Econ., 19(1), 109–117.
Luo, Y. (2002). “Contract, cooperation, and performance in international joint ventures.” Strategic Manage. J., 23(10), 903–919.
Luo, Y., and Park, S. H. (2004). “Multiparty cooperation and performance in international equity joint ventures.” J. Int. Bus. Stud., 35(2), 142–160.
Makino, S., and Beamish, P. W. (1998). “Performance and survival of international joint ventures with non-conventional ownership structures.” J. Int. Bus. Stud., 29(4), 797–818.
Makino, S., and Delios, A. (1996). “Local knowledge transfer and performance: Implications for alliance formation in Asia.” J. Int. Bus. Stud., 27(5), 905–928.
Merchant, H. (2005). “The structure-performance relationship in international joint ventures: A comparative analysis.” J. World Bus., 40(1), 41–56.
Merchant, K. A. (1998). Modern management control systems text and cases, Prentice-Hall International, London.
Millington, A. I., and Bayliss, B. T. (1997). “Instability of market penetration joint ventures: A study of UK joint ventures in the European Union.” Int. Bus. Rev., 6(1), 1–17.
Mjoen, H., and Tallman, H. (1997). “Control and performance in international joint ventures.” Organ. Sci.: J. Inst. Oper. Res. Manage. Sci., 8(3), 257–274.
Mohamed, S. (2003). “Performance in international construction joint ventures: Modeling perspective.” J. Constr. Eng. Manage., 129(6), 619–626.
Mohr, A. T., and Puck, J. F. (2005). “Managing functional diversity to improve the performance of international joint ventures.” Long Range Plann., 38(2), 163–182.
Norwood, S. R., and Mansfield, N. R. (1999). “Joint venture issues concerning European and Asian construction markets of the 1990’s.” Int. J. Proj. Manage., 17(2), 89–93.
Nunally, J. (1978). Psychometric theory, McGraw-Hill, New York.
Osland, G. E., and Cavusgil, S. T. (1996). “Performance issues in US-China joint ventures.” Calif. Manage. Rev., 38(2), 106–130.
Ozorhon, B. (2007). “Modeling the performance of international construction joint ventures.” Ph.D. thesis, Middle East Technical Univ., Graduate School of Natural and Applied Sciences, Ankara, Turkey.
Park, S. H., and Ungson, G. R. (1997). “The effect of national culture, organizational complementarity, and economic motivation on joint venture dissolution.” Acad. Manage. J., 40(2), 279–307.
Parkhe, A. (1993). “‘Messy’ research, methodological predispositions, and theory development in international joint ventures.” Acad. Manage. Rev., 18(2), 227–268.
Pothukuchi, V., Damanpour, F., Choi, J., Chen, C. C., and Park, S. H. (2002). “National and organizational culture differences and international joint venture performance.” J. Int. Bus. Stud., 33(2), 243–265.
Schaan, J. L. (1983). “Parent control and joint venture success: The case of Mexico.” Ph.D. thesis, University of Western Ontario, London, Ontario, Canada.
Sillars, D. N., and Kangari, R. (2004). “Predicting organizational success within a project-based joint venture alliance.” J. Constr. Eng. Manage., 130(4), 500–508.
Sim, A. B., and Ali, M. Y. (2000). “Determinants of stability in international joint ventures: Evidence from a developing country context.” Asia-Pac. J. Manage., 17(3), 373–397.
Tatoglu, E., and Glaister, K. W. (1998). “Performance of international joint ventures in Turkey: Perspectives of Western firms and Turkish firms.” Int. Bus. Rev., 7(6), 635–656.
Turkish Contractors Association (TCA). (2005). “Turkish Contractors Association.” 〈http://www.tmb.org.tr/genel.php?ID=2〉 (Dec. 26, 2005).
Tihanyi, L., Griffith, D. A., and Russell, C. J. (2005). “The effect of cultural distance on entry mode choice, international diversification, and MNE performance: A meta-analysis.” J. Int. Bus. Stud., 36(3), 270–283.
Tomlinson, J. W. C. (1970). The joint venture process in international business: India and Pakistan, MIT Press, Cambridge, MA.
Xu, T., Bower, D. A., and Smith, N. J. (2005). “Types of collaboration between foreign contractors and their Chinese partners.” Int. J. Proj. Manage., 23(1), 45–53.
Yan, A., and Gray, B. (1994). “Bargaining power, management control, and performance in United State–China joint ventures: A comparative case study.” Acad. Manage. J., 37(6), 1478–1517.
Yan, A., and Gray, B. (2001). “Antecedents and effects of parent control in international joint ventures.” J. Manage. Stud., 38(3), 393–416.
Yan, A., and Zeng, M. (1999). “International joint venture instability: A critique of previous research, a re-conceptualization and directions for future research.” J. Int. Bus. Stud., 30(2), 397–414.
Information & Authors
Information
Published In
Journal of Construction Engineering and Management
Volume 137 • Issue 6 • June 2011
Pages: 403 - 411
Copyright
© 2011 American Society of Civil Engineers.
History
Received: Dec 3, 2008
Accepted: Oct 25, 2010
Published online: Oct 28, 2010
Published in print: Jun 1, 2011
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.