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Deutsches Institut für Japanstudien

Management of Cross-Cultural Cooperative Ventures: On the Relationship between Trust, Control, Problem-Solving Strategies and Success

The operating characteristics and performance of international cooperative ventures have been examined frequently in the international business literature on ownership strategies. An international cooperative venture could be a joint venture, an industrial collaboration agreement, licensing, franchising, subcontracting, a management contract or a counter trade agreement. Compared to a 100% equity ownership of a foreign affiliate, international cooperative ventures offer substantial economic and political advantages for internationalization strategies, especially for small and medium sized enterprises (SMEs): there is less risk; and some investment requirements can be eliminated through the use of the partners’ existing infrastructure, for example local marketing and distribution resources. Sales volumes are also likely to be realized more quickly. Overall, international cooperative ventures appear to offer greater revenues, lower costs, and less financial risks than other foreign market entry options for SMEs.


However, as well as having advantages, international cooperative ventures are also one of the most sophisticated ownership options in international business: given that the goals of both partner companies in an international cooperative venture do not conflict, the performance for SMEs depends mainly upon qualitative variables such as the personalities of the entrepreneurs, administrative styles and management philosophies. International cooperative ventures are often complex organizational structures and difficult to manage effectively. So far as the general concept of cooperation is concerned in this context, the international dimension is much less important than the intercultural dimension. In a conventional transaction costs analysis, the focus is on the legal enforcement of contracts, and so the role of the nation state is clearly paramount, in respect to both its legislation and its judicial procedures. However, the mechanism of a functioning cooperation is trust rather than control, and legal sanctions and trust depend much more on the unifying influence of the social behaviour or the social group than on coercive legal power.


The fundamental necessity for trust in intercultural cooperative ventures is mostly associated with an improvement in decision-making concerning strategic priorities, goals and management systems. Cultural attitudes are certainly likely to dominate in respect of the disposition to cooperate with other firms. We might assume that cooperative ventures involving firms with different cultural backgrounds have a higher potential for conflict, require different strategies for conflict solving and control due to intercultural differences and potential misunderstandings between business partners. The evolution of trust and mutual understanding becomes even more difficult in cooperative ventures with companies from countries such as China, Mexico and Japan, where people are comparatively hesitant to trust anyone outside.


In summary we propose to analyse the phenomena of trust, control and conflict solving behaviour in relation to business success, by focussing on the following questions:



  • What aspects of behaviour, which are reciprocally recognized by both German SMEs and their foreign cooperating partners, promote trust?
  • How do German SMEs and their foreign cooperating partners try to create and develop trust?
  • What measures of governance and control do the cooperating companies use?
  • What kind of conflict solving behaviour do the cooperating partners use?
  • Which effects of trustful cooperation have been noticed?

Staff

Previous Staff

Harald Dolles Harald Dolles
(Business Administration)

Selected Publications

Articles

2005
[Giroud, Alexe; Yang, Deli; Mohr, Alexander] Trust or Distrust? China's Accession to the World Trade Organization and its Strategic Implications for Chinese-foreign Joint Ventures
In: Giroud, Alexe; Yang, Deli; Mohr, Alexander (Ed.) Multinationals and Asia: Organizational and Institutional Relationships. Abington/New York: RoutledgeCurzon. p.87-109.
2003
[Kopp, Horst] Trust in Intercultural Co-operative Ventures between Japanese and German Small and Medium-sized Companies
In: Kopp, Horst (Ed.) Area Studies, Business and Culture. Research Results of the Bavarian Research Network forarea. Hamburg: LIT-Verlag. S. 372-382.
2003
[Dorow, Wolfgang; Groenewald, Horst] Vertrauen, Mißtrauen und Kontrolle - Erfolgskritische Faktoren im internationalen Management deutsch-japanischer Unternehmenskooperationen
In: Dorow, Wolfgang; Groenewald, Horst (Ed.) Personalwirtschaftlicher Wandel in Japan – Gesellschaftlicher Wertewandel und Folgen für die Unternehmenskultur und Mitarbeiterführung. Wiesbaden: Gabler Verlag. S. 159-180.
2002
[Pohl, Manfred; Wieczorek, Iris] Internationale Kooperationen im Mittelstand: Vertrauen und vertrauensbildende Maßnahmen in deutsch-japanischen Unternehmenskooperationen
In: Pohl, Manfred; Wieczorek, Iris (Ed.) Japan 2001/2002. Politik und Wirtschaft. Hamburg: Institut für Asienkunde. S. 140-163.

Working Papers (Book)

2005
[Dolles, Harald; Wilmking, Niklas] International Joint Ventures in China after WTO Accession: Will Trust Relations Change? . Working Papers | Reports. Tokyo: Deutsches Institut für Japanstudien. 34 p.
2002
[Dolles, Harald] Spielt Vertrauen eine Rolle? Analysen deutsch-japanischer Unternehmenskooperationen . Working Papers | Reports. Tōkyō: Deutsches Institut für Japanstudien. 28 p.

Working Papers (Article)

2002
[Kopp, Horst] Chancen und Risiken interkultureller Kooperationen kleiner und mittlerer Unternehmen: Struktur, Verlauf und Erträge
In: Kopp, Horst (Ed.) Abschlußbericht über die dritte Förderphase 2000-2002. FORAREA Arbeitspapiere, Nr. 18. p. 55-88.
2002
[Kopp, Horst] Vertrauen in interkulturellen Kooperationen kleiner und mittlerer Unternehmen: Japan
In: Kopp, Horst (Ed.) Abschlußbericht über die dritte Förderphase 2000-2002. FORAREA Arbeitspapiere, Nr. 18. p. 171-184.

Other Articles

2004
Reputation als Erfolgsfaktor im internationalen Geschäft
In: Japan Markt, April 2004 (Wissenschaft und Praxis). Tōkyō: Deutsche Industrie- und Handelskammer in Japan. p. 28-30.
2002
[Mirza, Hafiz; Giroud, Axèle; Yang, Deli; Mohr, Alexander] Trust or Law? China's Accession to the World Trade Organization and its Effects on Chinese-Foreign Joint Ventures
In: Mirza, Hafiz; Giroud, Axèle; Yang, Deli; Mohr, Alexander (Ed.) Proceedings of the 19th Annual Conference of the Euro-Asia Management Studies Association. Bangkok (Thailand). p. 9-26.
2002
日独企業間の国際提携における信頼関係
In: Die Brücke - Kakehashi, 563 (2003). Tokyo: p. 9.
2002
"Vertrauen ist gut, Kontrolle ist besser" - Zum Stellenwert von Vertrauen und Kontrolle in deutsch-japanischen Unternehmenskooperationen
In: Japan Markt. Magazin der Deutschen Industrie- und Handelskammer in Japan. 11. Jg., Nr. 7 (Juli). Tōkyō: p. 22-24.
2001
[Kopp, Horst] Vertrauen in interkulturellen Kooperationen kleiner und mittlerer Unternehmen: Ein Vergleich zwischen Mexiko und Japan
In: Kopp, Horst (Ed.) Zwischenberichte der Projekte der dritten Förderphase 2000-2002, FORAREA Arbeitspapiere, Nr. 15. p. 53-85.