Sino-foreign Joint Venture Enterprise Bargaining, Management Control And Knowledge Acquisition

Joint venture is an important way used by multinational company for global expand, it also amain approach for organizational learning and knowledge acquiring used by companies indeveloping country. Nowadays the theories mainly discussed on joint-venture company'soperation and management from the view of multinational company. But joint venture as anorganizational forth built by multinational and local company, there are few researches analyzedthe control problem from the view of local company; management control and knowledgeacquiring are two important topics in research of JV, the existing research analyzed themseparately. This makes it becomes blur how the local company accomplished its strategic goal bymanaging the joint venture efficiently, disclosing the relationship between them have realisticmeaning.As the shortage existing in present researches, Based on the Sino-foreign joint venture, thisstudy analyzed the formation of management control structure in Sino-foreign joint venturecompanies from the Chinese cooperate partner's point of view. This research have analyzed thebargaining power's influences on manage control structure of joint venture by using bargainingpower theory and management control theory. Further by using the organizational learning theory,this paper finds how the strategic and operational control influence different kinds of knowledgeacquiring of Chinese cooperate partner. This finding suggests that learning ability and cooperationtrust have moderate effect to management control and knowledge acquiring, which are validatedby demonstration. Based on the data gained by questionnaires, we testified the relationshipbetween bargaining power theory and management control, and identified the influence ofmanagement control on tacit and explicit knowledge acquiring. This explorative study may be aguide for joint venture management practice.Based on the theoretic discussions and sample company's demonstrations, this study gets theconclusions as follows: (1) The result of joint venture management control is a negotiation of bothpartners, such a result is dependent on the bargaining power of each one of the cooperation. In thefour factors of the bargaining power, strategic importance of foreign partners to the Chinese onepromote it accomplish strategic and operational control; when Chinese partners have more choices, the operational control to the joint-venture company is lower. This study also found thenon-capital resources input by Chinese partners had positive effect on the management controlstructure. But the capital resources input had no remarkable effect on the management controlstructure, which means that although Chinese partners can input more capital resources to holdmore equity, it can't make sure that Chinese partners can hold the strategic and operational controlnecessarily. (2)This study testified that Chinese partner's operational control to the joint venturedescrease its knowledge acquiring whatever the knowledge type is tacit or explicit. And the effectof Chinese partner's strategic control to tacit and explicit knowledge acquiring is not significant.So this finding makes it clear the relationship between joint venture management control andknowledge acquiring.(3)Discussion of the characteristic of joint venture, we get the conclusionthat the joint venture larger, the knowledge acquired by Chinese partner is more; when the jointventure starts earlier, the knowledge acquired by Chinese partner is less; when Chinese partnerhold equal equity with foreign one, the knowledge acquired by Chinese partner is higher than thatholds more or less. Moreover there are remarkable differences in the knowledge acquired byChinese partner when considering the origin country of foreign partners, the knowledge acquiredfrom EU and USA partners have highest level, less from Japan, and lest from Singapore, HongKong and Taiwan.(4)Cooperation trust have moderate effect on the relationships betweenmanaging control and knowledge acquiring, but learning ability haven't such a role in my study.All this findings deepen the understandings of the effect of Cooperation trust and learning abilityto organizational learning and knowledge acquiring.All the conclusions mentioned above make us have a furthermore complete and deepunderstand the relations of bargaining power, management control and knowledge acquiring injoint venture which built by China and foreign countries. Dependent on exist theories, thisresearch get some more findings as follows: (1)This article discloses the influence mechanism onjoint venture by different bargaining power of Chinese parent company based on bargainingtheory and management control theory. (2)This article innovatively builds a model about therelations between joint venture management control and knowledge acquiring, explains theinfluence of strategic and operative control on different kinds of knowledge, even more presents agood solution and suggestion on how to effectively deal with the relations of management controland knowledge acquiring especially for the joint venture in developing countries as our country, which I think may be explorative. (3)This article finds that there exist differences to knowledgeacquiring on the characteristics such as foundation time of joint venture, joint venture scale, theequity of Chinese partner and the origin country of foreign partner, then clearly testified thatlearning ability and cooperation trust have moderate effect on management control and knowledgeacquiring. The two findings may have meaning to guide the operational practice of joint venture.Certainly, this research does exit many limitations, we point out the deficiency of this studyand future research at last part of this paper.