International Joint Ventures With Foreign Parent Company's Relationship Embedded In The Impact Study Of Its Performance

International Joint Ventures (IJVs) have been the major channel for the multinational corporations (MNCs) to do multinational management and gain knowledge. In the past few decades, the increasing total number of IJVs shows that IJVs have become the chief way for the MNCs to enter the global market, to achieve internationalization, and even to stand out in the global competition. IJVs also provide a bilateral platform for the organization learning-learning from each other, getting more knowledge, and improving performance. Meanwhile, it is beneficial to promote company's own organization learning, to practise knowledge management, and to enhance competitive advantage. On one hand, foreign parent corporation can learn how to manage its multinational alliance, to get familiar with the local market, to gain acquaintance to local laws and policies, and to make use of the local logistics through IJVs. On the other hand, depending on its overseas partner, the local corporation can learn the partner's advanced technologies, management and operation patterns to accelerate its own development, and to push forward the technological upgrading and the industrial configuration adjustment in the country.With the reform and opening-up for more than 30 years, China has attracted substantial Foreign Direct Investment (FDI), which has stimulated our economic development. Among them Sino-Foreign joint ventures have made great contribution to give impetus to the "Market for Technology" policy, corporation independent innovation, industrial upgrading, and strategy-making of using foreign investment. As the reform and opening-up deepen, they are confronted with many problems, mainly including how to strengthen the relationship management between the local company and the foreign parent company, how to implement organizational learning and knowledge management (digest, absorb and recreate), and how to raise corporations' organizational performance. Those issues have been put in front of both the theoretical analysts and pragmatic managers. Moreover, the three problems mentioned above, namely, the relationship between the local company and the foreign parent company, the knowledge acquisition of Sino-foreign joint venture enterprises, and organizational performance, are inter-related and twisted together. This paper, using IJVs as subjects and sino-joint ventures as samples, explores IJV relational embeddedness, knowledge acquisition, and organizational performance. It is intended to analyzing and answering the current questions about sino-foreign joint ventures.Firstly, based on literature review, this paper defines IJV relational embeddedness, knowledge management (knowledge acquisition and knowledge integration) and organizational performance, analyzing their relationship, establishing theoretical models, and raising research hypotheses. This research was based on embeddedness theory. Profound analyses were given to the definition, dimension and function of IJVs and foreign parent companies. Based on the theories of knowledge, research was carried out to explore the definition, process, mechanism, and influential elements of IJVs who acquire and integrate the knowledge learnt from the foreign parent company. Based on organizational performance theory and the features of IJVs-multi-investors and co-administration, analyses were made about the complexity of evaluating IJV performance. The author gave the method and standards of evaluation. On this basis, a theoretical model of "relational embeddedness-knowledge management-organizational performance" has been formed. A series of hypotheses have been discussed, focusing on the mediating function of knowledge acquisition in the sino-foreign joint venture enterprises' relational embeddedness in the influential process of organizational performance, which helped further understand the way of how relational embeddedness, knowledge management, and organizational performance interact with each other.Secondly, following the requirement of empirical studies, this paper designed research methodology, developed a variable measurement table, and made questionnaires. According to the rubrics of empirical studies, the research layout decided the subject, place, sample volume, and data-collection methods. A measurement table consisted of independent variable, media variable, and dependent variable, was generated through the integration of current tables used in archives and research. Through EFA and CFA analyses, the reliability and validity of the sub-tests for relational embeddedness, knowledge management, and organizational performance were approved. In the end, this research collected 220 valid questionnaires in the area of Yangtze Delta, recorded and examined the data, used descriptive statistical analyses on the samples and participants, and analyzed the relativity of variable. This provides a solid foundation for the further analyses and hypotheses verification in the theoretical model. Thirdly, through SEM, this paper analyzed and tested the theoretical model and got a series of empirical findings. Those findings showed that the relational embeddedness between IJVs and foreign parent companies plays a significant role in organizational performance, in which different dimensions (shared system, degree of trust, and strength of relationship) of the relational embeddedness have different effect on the organizational performance (commerce performance and creation performance). They also showed that IJVs'knowledge management (knowledge acquisition and knowledge integration) plays an important part in the their organizational performance. In particular, in the process of influencing organizational performance, IJVs'knowledge acquisition and integration works as a vehicle in relational embeddedness. Those results displayed the profound and clear points on a concrete way, implementing the mechanism and functioning of the interaction among the three entities.In the end, the results of this research will be thought-provoking in the micro-management practice of sino-foreign joint ventures, our corporations' internationalization, and the macro-policy making on how to use the foreign investment. As for the management and organization of sino-foreign joint ventures, they need to strengthen the relationship management, actively to nurture harmonious intra-organization relations, to promote organization learning in IJVs, to achieve knowledge transfer, enhance knowledge integration, and to gain relationship rental for sino-foreign joint ventures through the refinement of management and technological innovation. As for our corporations'internationalization, we need to appreciate the contact, communication and interaction among the local government, local companies, and various social associations, to build fine social relations, and to boost intercultural transfer to succeed in multinational operation. As for the policy-making in a governmental level, we need to positively encourage our corporation to participate in the strategic alliance of MNCs, to improve relationship management, emphasize digestion, absorption, and recreation, to accelerate industrial upgrading and economic structure adjustment, to enhance the quality of using foreign investment, and to consolidate our competence of independent innovation in the future.