International Joint Ventures at the Crossroads: Building Leadership Bridges

International Joint Ventures at the Crossroads: Building Leadership Bridges

Teresa Martinelli-Lee (University of La Verne, USA) and Kathleen B. Duncan (University of La Verne, USA)
Copyright: © 2015 |Pages: 18
DOI: 10.4018/978-1-4666-6551-4.ch007

Abstract

While leading theorists, researchers, and practitioners are currently engaged in the discussion of global leadership, the perspective has been in terms of case studies of multi-country or multi-company approaches. This chapter frames the role of competencies by introducing a new model of shared leadership called the Five Lenses of Shared Leadership. The model uses grounded theoretical foundations to support its components and provides implications for use across various partnership and business relationships. The collaborative structure of an International Joint Venture (IJV) is defined in terms of market share and a competitive advantage. Critical discussion on the development of global leaders, organizational conflicts and culture, and embedded effectiveness across borders and boundaries serves as a methodology for understanding knowledge transfer.
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If you destroy a bridge, be sure you can swim (African [Swahili] Proverb)

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Introduction

Creating a recognizable brand in retail, entertainment, and hospitality in the global marketplace requires the application skills of marketing bridge-builders. Both public relations and marketing must merge to maximize impact and results. Leadership generation where an international joint venture (IJV) is concerned is driven by integrated yet key factors. Optimizing communication, B2B technology, product-market focus, geographic locations, strategy, expertise, and the client’s corporate goals, set the stage in terms of ROI. Attributed to marketing development such optimization tends to map out a company’s strategic goals, which is further nurtured by leadership that enables collaborative engagement. In the context of shared leadership, entering into an IJV, alliance, or partnership offers organizations strategic and valuable growth options (Folta & Miller, 2002; Kogut, 1991). To make the distinction, this chapter will introduce five competencies of shared leadership as these apply to international joint ventures. Accordingly, these idiosyncratic components of function, timeframe, power, risk, and form are approached using theoretical lenses (Armstrong, 2007). Such an approach allows a more meaningful and deeper exploration to understand an IJV as a collaborative and resource-sharing arrangement among multinational organizations.

Despite international and domestic constraints, most organizations find the idea of global competitiveness not so much a challenge as an opportunity to participate and invest regardless of socioeconomic barriers such as culture, political stability, and economic development. When entering foreign markets, having a solid marketing base for performance outcomes gives rise to innovation, integrated managerial schemes, and mission focused strategies. However, studies have found a gap in international joint ventures relations and the role of the leader (Giocomo, Gustafson, Duberstein, & Boyd, 2012; Lee, Madanoglu, & Ko, 2013; Tong, Reuer, & Peng, 2008). Not until recently have studies illustrated the importance of leadership and its development as a successful service strategy for marketing in foreign or international markets (Huber & Harvey, 2006; Huber & Walker, 2005). Some would argue that IJVs in fact do not work and have a high rate of failures regardless of the embedded growth options or market entry values (Nippa, Beechler, & Klossek, 2007; Tong, et al., 2008).

Other researchers (Talay, Dalgic, & Dalgic, 2010) oppose such thinking citing a number of examples of IJVs that work. More recently than Talay’s et al., examples can be found in a number of industry news sources such as in the utility industry, the marriage and continuing relationship between multinational oil and gas ExxonMobil and Rosneft, the Russian government owned integrated oil company, operate together in Russia as well as Mexico among other locations (Rosneft, 2013; RT, 2012). In the retail industry, Walmart and the Spanish international network Univision Communications signed a three-year partnership in an effort to expand into the Latin market (Walmart, 2013). Also in retail, the UK’s multinational grocery and general merchandise retailer, Tesco PLC and China Resources Enterprise (CRE) united to expand their Chinese retail operations (Tesco PLC, 2013). While in the hospitality industry, MGM Mirage established an agreement with Mubadala Development of Abu Dhabi, U.A.E, for branding of distinctive hotels (PR Newswire, 2013). In the entertainment and media (E&M) industry the UK’s Pinewood Shepperton PLC (Pinewood) signed an IJV agreement with China’s Seven Stars Media Limited, an expanding creation and distribution media conglomerate (Pinewood, 2013). These are but a few examples of the voluminous output of companies entering foreign markets.

Key Terms in this Chapter

Function: The dynamics and interplay among and between groups based on intervening organizational behaviors. Function can also refer to the operational relationship between organizations both domestic and international. Specific functions can be attributed to either collective or individual contributions.

Risk: Is the exposure to liability in any joint venture or shared leadership role. Thus, effective organizational outcome is dependent on the level of performance, reputation, and information shared among joint venture relationships.

Global Leadership: The bridging of people between organizations yet across established demarcations, boundaries, and borders through the reciprocal benefit of culture, resources pooling, and intellectual property.

Power: Is the focus on the organic, inherent, and unique trait of who within the organization either shares or has singular leadership authority, decision-making, and/or autonomy. Shared leadership then is the power and process in the making of joint decisions.

Form: Sometimes also called structure of the operational behaviors of any given organization. Based on the Aristotelian axiom whereby “form follows function,” the purpose of which is tempered by the relationship, which is established and further balanced as roles are delineated throughout the organization.

Competencies: The proficiencies that surround shared leadership in any joint venture in terms of function, timeframe, risk, power, and form.

Shared Leadership: Is expressed in terms of the mutual leadership conveyed among types of organizational relationship such groups, teams, partnerships, joint ventures, mergers, acquisitions, coalitions, and alliances.

Timeframe: Can be attributed to two key factors. The first is the relationship (between organizations) that takes place through stages whereupon an investment of time is being given and developed. The second is the anticipated length of time expected in the development of the relationship. The purpose of which is to build internal operations, develop maturity in the relationship, and explore the dynamics of the relationship through longevity or the natural lifecycle of the joint venture.

International Joint Ventures: Is much as a partnership whereby two or more organizations establish a footprint that joins profits, people, and property across international boundaries with the objective that the joint enterprise will seek to share resources, risks, as well as rewards depending primarily on the nature of the venture.

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