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The design of coordination and control mechanisms for managing joint venture–parent relationships
Author(s) -
Kumar Sanjiv,
Seth Anju
Publication year - 1998
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/(sici)1097-0266(199806)19:6<579::aid-smj959>3.0.co;2-8
Subject(s) - pooling , joint venture , equity (law) , control (management) , empirical research , business , industrial organization , pace , microeconomics , economics , marketing , management , business administration , computer science , philosophy , geodesy , epistemology , artificial intelligence , political science , law , geography
Joint ventures (JVs), defined as independent organizations formed by the pooling of resources and sharing of equity by two or more firms, are being formed at an increasingly rapid pace. While much empirical research has examined the conditions which favor the formation of JVs, less attention has been paid to the equally important issues of control and implementation which are the focus of interest in this study. We identify two factors which are expected to influence the design of control mechanisms, i.e., (1) the strategic interdependence between the JV and each parent and (2) the environmental uncertainty faced by the JV. Our empirical examination confirms the importance of the degree of strategic interdependence and the moderating role of environmental uncertainty in explaining the design of control mechanisms. © 1998 John Wiley & Sons, Ltd.