The impact of cultural distance on the management style and performance of Japanese and Taiwanese joint ventures with local partners in China

Abstract

This study aims to examine the impact of cultural distance on the management issues of international joint ventures QJVs). Previous IJV research, which used Hofstede's five dimensions or Kogut and Singh's (1980) formula to examine the impact of cultural distance on IJVs, tendered mixed and conflicting results. Two models are built to link the relationships between culture and IN management issues (i. e. management styles, conflict resolution strategies, role stress, and performance) by the perspectives of parent firms and IN general managers. A conceptual model explores the relationships between the three dimensions (i. e. three party's perspectives, four approaches of performance measure, and long-term orientation). Furthermore, a replication examines the Lin and Germain's (1980) model of linking context variables, conflict resolution strategies and IJV performance. Hypotheses are tested by the primary data collected by an international mail questionnaire from a sample of 165 IJV general managers in China and foreign parent firms in Japan and Taiwan. First, IJV management issues are found significantly different between the two national groups by ANOVA test. Second, it is found that cultural similarity and Hofstede's five dimensions have weak relationships with IJV management issues. Third, the link between the three dimensions of performance measure is proved by confirmative factor analysis. Finally, Lin and Germain's findings are weakly supported by this replication using LISREL test