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Joint ventures in the UKconstruction industry : acritical examination of thedeterminants of success and
failure
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JOINT VENTURES IN THE UK CONSTRUCTION INDUSTRY
A Critical Examination of the Determinants of Success and Failure
by
ADRIAN CHARLES SMITH, BSc (Hons)
A Master's Thesis submitted in partial fulfilment of the requirements for the award of Master of Philosophy
of the Loughborough University of Technology
MAY 1994
© Adrian Charles Smith
Loughborough University of Technology Ubrary _ .. ,.,,',.,--, ..... -
Date ... 6.~j Class
Acc. G\t [)<:) " 'f i:1. r No.
------ ------------
TABLE OF CONTENTS
TITLE PAGE
Abstract
Declaration 111
Acknowledgements IV
List Of Chapters V
List Of Appendices viii
List Of Figures IX
List OfTables xi
Chapters I to 132
References 133 to 139
Appendices
ABSTRACT
The joint venture, is a management strategy that is easily misidentified and so in
turn mis-used, thereby considered a panacea for many situations and circumstances
both within the construction and other market industries. As a strategy vehicle,
the joint venture can be used as a means to mitigate or obviate the risk associated
with a company's or organisation's particular objective or need(s). The joint
venture is best defined as a legally separate corporate entity formed by a number of
parent-companies with the sole purpose of achieving a common set of objectives
with shared ownership and control, utilising both the strengths and weaknesses, for
either a definite or indefinite period of time.
The formation of the joint venture arises out of the need for another, in a given
situation where the potential venturer cannot alone achieve their given
objectives(s). This primarily revolves around the need to share risk and utilise the
skills, knowledge and resources if a potential partner. Principal reasons are to
minimise the risk associated with the rising complexities of modern advancement
and technology, to expand one's market geographically, to combine specialist
abilities and so collaborate competitively.
The correct use of the joint venture strategy in turn necessitated the need to fully
comprehend the true nature of the joint venture, specifically with regard to the UK
construction industry, and interpret the necessary and critical criteria for success.
A clear understanding of the overall joint venture concept was necessary to allow
an organisation to predict the determinants of success.
The main objectives of this research therefore were to develop an understanding of
the conceptual joint venture, and subsequently it's practical implications within the
construction industry. A clear and concise formulation of the elements of success
was established from an in-depth survey of national contractors within the UK
construction industry. The hypotheses tested within the scope of the research
revolved around the need for common control and shared ownership, a mutuality
of aims and objectives, co-operation and collaboration amongst the partner
companies and their respective personnel. A compatibility of partner size and joint
venture experience, with an inherent flexibility for adapting to changes and the
understanding oftheir respective organisational cultures were also considered
within the research.
The survey of contractors, and resultant analysis stemmed from the use of an in
depth questionnaire detailing and testing the given hypotheses. With the use of the
statistical mathematical tool, S.P.S.S, the results and analysis confirmed the
following points. The prospective joint venturer must become familiar with and so
understand their partners goals and objectives, assessing their willingness to
contribute to the ventures success, with a full commitment of resources. There
must be an attempt to provide a compatibility of cultures, partner size and
experience, with a provision for shared ownership and joint control. The partner
companies further need to provide a strong joint venture board, with the due
autonomy and freedom to achieve the ventures main objectives. Use of a strong
project manager, through which the control and feedback of information is passed
is essential. There needs to be a great degree of trust produced amongst the
partners with the sharing of information with free access to all. Without these
aforementioned components of success, a potential joint venturer may endanger
the potential for a successful project.
DECLARATION
No portion of this research referred to in this thesis has been submitted in support of an application for another degree or qualification at this or any other university or institute of learning.
iii
ACKNOWLEDGEMENTS
I wish to express my sincere gratitude and thanks to my supervisor, Professor Victor Torrance, for his guidance and inspiration throughout this research. His invaluable knowledge and experience in this particular field of Construction Management helped to both initiate and develop the work presented here.
In addition, I am most grateful to my internal supervisor, Dr. Tony Thorpe, for his guidance, encouragement and patience throughtout the latter portion of this research. His guidance, during the writing of this thesis is most greatly appreciated. I wish to thank Dr. Nancy Spencer, for her advice and assistance in my rationalization of the statistical methods applied in this research.
I am grateful and indebted for the assistance lent to me, during my survey of the construction contractors, by the following managers and their companies:
Mr Phillip Wilding, Wilmott-Dixon Ltd. Mr F. Hill, Balfour Beatty Ltd. Mr J. D. Bevan and M. Napier, Richard Costain Ltd. Mr D. Thornton, Haymills Building Contractors. Mr B. R. Palmer, Kier Construction Ltd. Mr B. Crossley, Alfred McAlpine Construction. Mr P. 1. Connolly, 1. F. Miller Ltd. Mr D. A H. Ewing, Midas Construction Group. Mr 1. Seddon, Seddon (Stoke) Ltd. Mr R. S. Bowen, Try Group. Mr D. Orr, Taylor Woodrow Construction. Mr D. Barratt, Wiltshier Construction Ltd.
I would like to thank Bowrner & Kirkland Ltd, specifically Mr 1. R. Shallcross, for the opportunity to pursue this research study.
Many thanks to my colleague, Mohammed Yussuf, for the continual assistance given to me and the pleasure of his friendship.
Finally, my deepest gratitude is due to my wife, Helen, for her patience, und~!\.~aqding and help during both the research study and the preparation of this thesis.
iv
LIST OF CHAPTERS
Chapter
1. Introduction
1.1 Background
1.2 Objectives
1.3 Methodology
1.4 Main Achievements
1.5 Guide to the Thesis
Chapter Two The Conceptual Joint Venture
2. Introduction
2.1 Joint Venture Research Methodology
2.2 The True Joint Venture - A definition
2.3 Joint Venture Formats
2.4 ~e Needs of the Joint Venturer
2.4.1 Competitive Collaboration
2.4.2 Client - led Needs
2.4.3 Summary
v6 Advantages and Disadvantages
24.
2.5.1 Advantages
2.5.2 Disadvantages
2.6 Autonomy of a Joint Venture
v
Page
1.
3.
4.
6.
7.
9.
9.
13.
17.
19.
21.
22.
23.
24.
26.
29.
2.7 Joint Venture Management
2.7.1 Board Composition
2.7.2 Operational Running
2.8 Control and Ownership
2.8.1 Co-operation and Trust
2.9 Organisational Behaviour and Culture
39.
39.
2.9.l Organisational Culture
2.9.2 Summary
2.9.3 Compatibility
2.9.4 Motivation of the Venture Personnel
2.9.5 Success Factors for a Joint Venture
2.10 The Literature Review - A Summary
Joint Ventures in the U.K. Construction Industry
3.l Introductions
3.1.1 Testing the Hypotheses
3.l.2 The Joint Venturers
3.2 The Management Board
4.1 Co-operation and Collaboration
4.2 Determinants of Success
32.
33.
34.
38.
4l.
42.
42.
43.
48.
55.
60.
65.
67.
4.2.1 Correlation Between the Determinants of Success 72.
4.3 Common Control and Shared Ownership 76.
4.4 Autonomy from the Sponsor Company Parents
vi
5/1
/.2 Disadvantages
Advantages
5.3 Correlations Between Advantage Components
5.4 Correlations Between Disadvantage Components
5.5 Correlations Between Advantages & Disadvantages
5.6 Success and Failure
6.1 Culture of the Organisation
6.2 Power and Motivation
Chapter Seven Conclusions, Recommendations and Further Research
7.1 The Contractors Survey - A Summary
7.1.1 The Management Board
7.1.2 Co-Operation, Control and Ownership
( 7.1.3 Advantages of the Joint Venture
7.1.4 Disadvantages of the Joint Venture
7.1.5 Success and Failure
7.1.6 A Joint Ventures Organisational Culture
7.1.7 A Partners Power through the Joint Venture
83.
86.
91.
92.
94.
97.
101.
107.
1l0.
112.
114.
118.
120.
7.2 Conclusions 122.
7.2.1 Shared Ownership and the Dominant Partner 123.
7.2.2 Mutuality of Aims and Co-operation Between Partners
7.2.3 Autonomy
7.2.4 The Need to Joint Venture
vii
124.
125.
7.3
7.4
7.2.5 Size and Experience of Partners 125.
7.2.6 Comparative Cultures Within the JV Organisation 126.
7.2.7 Success Determinants 127.
7.2.8 Structure,Organisation and the Team of the Joint Venture
7.2.8.1 Structure 127.
7.2.8.2 Organisation 128.
7.2.8.3 The Team 129.
Limitations and Recommendations
Further Research
viii
131.
131.
- ---- --- --------------------------
LIST OF APPENDICES
A. Survey Questionnaire
B. Glossary of Terms
C. SPSS Data Analysis of Survey
D. Figures
E. Tables
viii
LIST OF FIGURES (APPENDIX D)
Figure
1.0 Typical Corporate Joint Venture Structure 5.1.1 Advantages: Main Group 5.1.2 Advantages: Class I, Large and Experienced Contractors 5.1.3 Advantages: Class 2, Large and Inexperienced Contractors 5.1.4 Advantages: Class 3, Small and Experienced Contractors 5.1.5 Advantages: Class 4, Small and Inexperienced Contractors 5.1.6 Advantages: Class 5, Experienced Contractors 5.1. 7 Advantages: Class 6, Inexperienced Contractors 5.1.8 Advantages: Class 7, Large Contractors 5.1.9 Advantages: Class 8, Small Contractors 5.2.1 Disadvantages: Main Group 5.2.2 Disadvantages: Class I, Large and Experienced Contractors 5.2.3 Disadvantages: Class 2, Large and Inexperienced Contractors 5.2.4 Disadvantages: Class 3, Small and Experienced Contractors 5.2.5 Disadvantages: Class 4, Small and Inexperienced Contractors 5.2.6 Disadvantages: Class 5, Experienced Contractors 5.2.7 Disadvantages: Class 6, Inexperienced Contractors 5.2.8 Disadvantages: Class 7, Large Contractors 5.2.9 Disadvantages: Class 8, Small Contractors 5.3.1 Relationship Between Advantages: Market Share & Project Participation 5.3.2 Relationship Between Advantages: Spread Risk & Defend Current Posture 5.3.3 Relationship Between Advantages: Competitive Collaboration and
Technology 5.3.4 Relationship Between Advantages: Technology Transfer and Nationalistic
Barriers 5.3.5 Relationship Between Advantages: Nationalistic Barriers and Competitiors 5.4.1 Relationship Between Disadvantages: Divided Loyalties of Both Managers
and Personnel 5.4.2 Relationship Between Disadvantages: Divided Loyalties Between
Managers and Joint Liability 5.4.3 Relationship Between Disadvantages: Joint Decision Making and Disputes 5.4.4 Relationship Between Disadvantages: Political Risk and Rapidly Arising
Disputes
ix
5.4.5 Relationship Between Disadvantages: Division of Profit and After Effects of Failure
5.4.6 Relationship Between Disadvantages: Political Risk and the After Effects of Failure
5.5.1 Relationship etween Advantages and Disadvantages: Divided Loyalties and Parent Posture
5.5.2 Relationship Between Advantages and Disadvantages: Team Creation and Spreading Risk
5.5.3 Relationship Between Advantages and Disadvantages: Lack of Trust and Offers an Increase in Market Share
5.5.4 Relationship Between Advantages and Disadvantages: Joint Liability and Large Projects
5.5.5 Relationship Between Advantages and Disadvantages: Time Consuming and National Barriers
5.5.6 Relationship Between Advantages and Disadvantages: Divided Loyalties and Parents Posture
x
TABLE
3.2.1
3.2.2 3.2.3
3.2.4
3.2.5
3.2.6
3.2.6a 3.2.6b 3.2.6c 3.2.6d
4.1.1
4.1.2
4.2.1 4.2.2 4.2.3 4.2.4 4.2.5 4.2.6 4.2.7 4.2.8 4.2.9 4.2.10 4.2.11 4.2.12 4.2.13 4.2.14 4.2.15
LIST OF TABLES (APPENDIX E)
"The Management of the Joint Venture must be given considerable freedom by the Sponsor Parents". "Creation of a full-time management team and staffis a problem". "How Regularly does the Joint Venture Management Board meet with the Sponsor Parents". "Who is responsible for the creation formation of the Ventures Management Team". "Due to a lack of team evolvement, the Joint Venture management are not as likely to act as one". "In a single one-off Joint Venture, the Board is fundamentally weak for the following reasons". "Unfamiliarity with one another". "Virtual Overnight Existence". "A Lack of Membership Control". "Parents are Unlikely to Consider the Balance of Functions of the Board during the Selection Process". "Was a Deadlock Situation ever found during the Decision-making Process". "Did a Deadlock Situation ever lead to the Termination of the Joint Venture". The Importance of Determinants of Success By Size and Experience. The Importance of Determinants of Success By Experience. The Importance of Determinants of Success By Size. Correlations Between Determinants of Success (I of 14). Correlations Between Determinants of Success (2 of 14). Correlations Between Determinants of Success (3 of 14). Correlations Between Determinants of Success (4 of 14). Correlations Between Determinants of Success (5 of 14). Correlations Between Determinants of Success (6 of 14). Correlations Between Determinants of Success (7 of 14). Correlations Between Determinants of Success (8 of 14). Correlations Between Determinants of Success (9 of 14). Correlations Between Determinants of Success (10 of 14). Correlations Between Determinants of Success (11 of 14). Correlations Between Determinants of Success (12 of 14).
xi
4.2.16 4.2.18 4.3. I 4.3.2 4.3.3 4.3.4 4.3.5 4.3.6
4.3.7
4.3.8
4.3.9 4.3.10 4.3.11 4.4.1 4.4.2 5.1 5.1.1 5.1.2 5.1.3 5.2 5.2.1 5.2.2 5.2.3 5.2.4 5.2.5 5.2.6 5.2.7 5.2.8 5.2.9
6.1.1 6.1.2 6.1.3
6.1.4
6.1.5
Correlations Between Determinants of Success (13 of 14). Correlations Between Determinants of Success (14 of 14). Importance of majority equity for control. The Composition of the Joint Venture. Extent of Equity Ownership within Joint Ventures. Comparison of managing partners to joint venture success. Equity and Control in the Joint Venture. Control Mechanisms used within the Joint Venture. Mean Rank for Group. Control Mechanisms used within the Joint Venture. Mean Rank by Contractor Size. Control Mechanisms used within the Joint Venture. Mean Rank by Contractor Experience The Balance of Power and Lesser Control. Experience of Spiders Web Joint Ventures. Balance of Managerial Controls and Autonomy. The Importance of Autonomy. Partner Beliefs Towards Autonomy. Importance of the Advantages for the Main Group. Importance of the Advantages by Experience and Size. Importance of the Advantages by Experience (Classes 5 & 6). Importance of the Advantages by size (Classes 7 & 8). Importance of the Disadvantages for the Main Group. Importance of the Disadvantages by Experience and Size. Importance of the Disadvantages by Experience. Importance of the Disadvantages by Size. Correlations Between the Importance of Advantages. Correlations Between the Importance of Advantages and Disadvantages Correlations Between the Importance of Advantages and Disadvantage Correlations Between the Importance of Advantages and Disadvantages Correlations Between the Importance of Advantages and Disadvantages Correlations Between the Importance of Advantages and Disadvantages
Advantages to be gained from differing cultures. Disadvantages attributed from differing cultures. An Organisation's Outline is a powerful force in determining the Venture operation and performance.
An Organisation's Outline is a powerful force in determining how it operates and performs. Occurences of a Ventures adaption to external forces.
xii
6.1.6 Age ofJoint Venture Personnel. 6.1.7 Organisational Socialisation. 6.1.8 Development period of Organisational Socialisation. 6.1. 9 Problems with Ethical Codes. 6.2.1 "Power is an Essential Element of Organisational Success". 6.2.2 The Distribution of Power in a Joint Venture, Equal of Unequal? 6.2.3 The Motivation of Personnel and their performance is directly related in a
joint venture. 6.2.4 To Motivate Personnel, is it necessary to Assign Specific Goals. 6.2.5 To Motivate Personnel, is it neceesary to Assign Difficult Performance
Goals. 6.2.6 To Motivate Personnel, is it necessary to Provide Feedback concerning
Goal Attainment. 6.2.7 To Motivate Personnel, is it necessary to Provide Job Designs.
xiii
CHAPTER ONE
Chapter One: Introduction
1.1 Background To Research
The Joint Venture, both as a management strategy and as a project delivery system has
actively been used, within many industries, and for a variety of reasons, from the
middle of this century. If traced further back, in a variety offorms, it can be also
traced back to the late medieval centuries in western europe.
The development and progression of the joint venture stratagem arose out of the
remnants of the second world war, predominantly in the north americas, and through
the sixties and seventies drifted to mainland europe. In the 1980's it saw a resurgence
in rise with the Japanese as a means to penetrating the european market in their
giobalisation strategies, and is currently used world-wide in a wide spectrum of uses
and industries.
The joint venture, is essentially used as a management tool in situations in which a
single company or contractor cannot on their own, satisfy a particular need or
objective. This in turn necessitates a combining of skills, talents, abilities and resources
with other companies so as to pool their combined strengths and weaknesses. When
these partners come together, in the ideal situation, a totally separate, independent
operating entity is usually formed, utilising a combination of financial, material and
personnel resources to produce a joint venture capable of achieving their mutually
agreeable goals and objectives.
The joint venture is best defined therefore as a legally separate corporate identity,
formed by a number of parent-companies with the sole purpose of achieving a common
set of objectives with shared ownership and control, utilising the strengths and
weaknesses of their respective partners for a definite or indefinite period oftime.
Within the construction industry, there was a need to research the concept of the joint
venture, to fully identifY and clarifY the strategy of joint venturing amongst contractors.
Coupled to it's understanding were the components of the joint venture, it's inherent
composition and management. Essentially, to comprehend the motivations, needs and
reasons for joint venturing, to gain an insight into it's main advantages and
disadvantages, structure and management. From these fundamental blocks of
information and knowledge, it would then realise a set of date generating the necessary
components or determinants of success. Such determinants would enable both
potential
and venturing contractors to perceive the necessary guidelines that would enhance the
potential achievements and successes of future joint ventures.
Sanvido (1993) considered the critical success factors ofa construction project, and
these, when coupled to the conceptual definitions and needs of a joint venture, and the
Coming Glass Works' own criteria for success, produced a definitive list of criteria that
is supported by the contractors surveyed within the research programme.
The research covered in this programme, primarily covers the aegis of the National
Contractors Group and it's associated contracting company members. It has been used
to prove the need and validity of a number of success determinants, comprising of the
primary motivation to share risk with a partner of compatible size and experience,
sufficiently motivated with mutually agreeable objectives. Such a unison is based upon
the co-operation and collaboration of all partners and their personnel working on a
basis of total trust with one another.
The internal, or organisational culture of a joint venture, as with any organisation, was
a necessary point of comparable contract, and coupled to the aspect of power and
control meant the success or failure of a joint venture.
2
-- -- --------------------
1.2 Objectives
The previous discussion shows the current need to fully comprehend and understand
both the concept of a joint venture and it's practical implications within the
construction industry. The main aims of the research programme were to achieve a
comprehensive and definitive set of current opinions concerned primarily with the main
determinants of success in a joint venture, and secondly to comprehend and so
understand the true concept of the joint venture. It was necessary to detail it's true
definition, composition and structure highlighting the reasons necessitating it's pursuit
by contractors. Armed with such knowledge, it would thereby enable a potential joint
venturer, through it's understanding, predict the necessary components for a
successful joint venture.
The data to achieve these main objectives were gathered by survey and interview from
national contractors in the UK and analysed statistically with respect to:
(a) The need for common control and shared ownership
(b) A mutuality of aims and objectives amongst the partner companies
(c) The necessary independence and autonomy of a joint venture company from it's
parent companies
(d) The necessity of co-operation and collaboration between the partners and their
personnel
(e) The degree of compatibility of the partners when concerned with size and
expenence
(f) The degree of influence or necessity of culture within the joint venture.
The above six points would then be formulated to validate a common core or set of
determinants for success in a joint venture, outlining the strengths and weaknesses of I
the ventures inherent abilities, the management board, components for success and
failure and a partner's power within the company organisation. Thereby identifYing
3
criteria for success and suggesting any further and necessary steps to be taken. Such
research had to be achieved through the use of a comprehensive literature survey and
review, subsequent sturdy and validation of information collected and the collection of
data from the construction industry through use of a questionnaire survey.
1.3 Methodology
To achieve the objectives laid down in the previous section, within the limited and
prescribed period of research available to the research programme it was necessary to
limit the scope of the survey to those contractors within the National Contractors
Group.
The research was broken down into three phases.
The first and initial stage, concentrated on the literature survey, which was carried out
over a period of eight months, and was reviewed every six months thereafter. The
survey led to the establishment of a primary database of information and knowledge
attributable to the joint venture. It should be noted that through use of the survey,
north American references and sources were identified as the dominant form of
information available to the research.
Armed with the results of the survey, an initial and core set of hypotheses was
established upon which to formulate the next phase of the research. It was necessary
therefore to produce a questionnaire survey, as a tool for extracting data with which to
test the hypotheses and generate success criteria.
The second phase of research fell into two halves. The first half concerned itself with
identitying contractors in the construction industry who had experienced joint ventures
first hand. Thus enabling the second half of the phase to test the hypotheses laid down
and also obtain additional information in support of criterion for success.
4
Organisational culture, within a joint venture does exist. In order to overcome any
associated problems between the differing partners it is necessary to fully understand
all their differences, their attitudes and priorities, thereby comprehending the varying
degrees of importance and values. When the differing personalities come together,
there is a socialisation period in which the differing joint venture members integrate
with one another, overcoming the differing attitudes, misunderstandings and company
and personnel goals. The compatibility oftheir cultures, particularly with the smaller
companies, ensured a more smooth transition and easement of problems. Therefore to
enhance both performance and the personnel's disparate cultures, ideally there needs to
be a strong project manager, chosen for his functional rather than availability merits.
The associated venture personnel, then need to be of the optimum age for experience,
with the age grouping between 35 and 50 years of age.
One aspect of management not readily identified by the contractors, was the potential
to utilise personnel or managers who are independent from the joint venture
companies. That is to say independent people free from bias or divided loyalties to any
one partner company.
The ability to override decisions essentially, the power of a partner over another
partner is something that whilst highly sought out by the contractors, is not always the
default situation, and is project dependent. With the opposite situation, prevalent in the
majority of the joint ventures, the equal distribution of power did however ensure joint
discussion and key decision making resulting in unanimity amongst the partners.
Utilising the contractor listings from the National Contractors Group, an initial
questionnaire was issued to its members essentially to determine the extent of their
experience in joint venture, if any, whether in the UK or overseas. Subsequently, a
high response rate was achieved, identifYing a number of contractors with such
knowledge and experience. The main questionnaire survey was first issued to five
randomly selected contractors, in order to pilot and so test the validity and logic of the
questionnaires format and structure. the remaining questionnaires were then issued to
the respondent contractors when the pilot questionnaires had been returned and
identified as fit for distribution.
5
The respondent contractors were then either personally interviewed or contacted via
telephone or postal service in connection with the survey to ensure a fully completed
questionnaire, competently completed by a member of the contractor organisation who
was fully conversant and experienced in joint venturing.
The next and final stage was that of the data analysis, and was covered by two aspects
of study. With the questionnaire survey comprising of both open ended questions and
closed responses, both sides of the data were analysed, utilising both subjective
answers and the use of the SPSS statistical mathematical tool for the results analyses
respectively.
To establish any correlation's or relationships amongst the respondent contractors, they
were sub-divided into size and experience categories to offer nay contrasts to their
main and undivided group. In order to ensure a statistical validity of the data analysis,
and its small sample size, when concerned with the sub-groups produced, assistance
was sought and found from a statistician.
1.4 Main Achievements
The main achievements of this research are given below:
(I) A better and clearer understanding of both the conceptual joint venture,
and that of the joint ventures carried out within the UK construction industry.
(2) The review of the joint ventures in the UK construction industry, gave the author a
better knowledge of the needs and reasons of contractors with respect to their
perceptions of the joint venture.
(3) This review, together with the questionnaire survey and personal interviews helped
to identify the extent of use within the construction industry of joint ventures, and in
turn confirm the needs of the conceptual venture, namely:
6
For shared ownership, but ideally with majority control. Common control,
however is still considered the norm.
A mutuality of aims and objectives amongst the parent companies, thereby
ensuring an understanding of each others partners and their willingness to
contribute resources and so achieve the same goals.
To ensure and provide independence for the joint venture, giving it the
necessary freedom to react and adapt to their own needs for success.
To ensure a compatibility of size and experience of the parent companies,
providing the necessary level of trust for full collaboration, and the
sharing of information and resources among the partners.
Further points or criteria for success were identified, notably the
contractors experience did make an impact on their perceptions of the
determinants of success. As the level of experience increased, they aligned
themselves more closely to the conceptual joint venture and so identified the
need for a well organised and cohesive management team, with a mutual and
comparable commitment for success.
The ability and need for power was although highly sought after by the
contractors, not always the default situation and so tended to be project-led.
1.5 Guide to the Thesis
This thesis begins with background information concerning joint ventures, identifying
the need for understanding and clarifying the concept strategy and the determination of
potential criteria for success. The range and spectrum of the research is contained to
the experiences of UK construction contractors in the UK.
The formatting of the thesis was made to simplify the chronology of the research
programme. It begins with the needs and objectives of the research, and progresses to
detail the methodology selected for identifying the joint venture concept, hypotheses,
statistical tools for analysis and main findings.
7
Chapters 3, 4, 5 and 6 comprise the research survey and analysis. To present the
information more readily, without a large, cumbersome and cohesive central chapter
they are broken down into the survey, management, motivational and organisational
elements respectively. The individual chapters contents are as follows:
Chapter 1 contains the objectives of this research, the methodology to achieve these
objectives and the main achievements ofthis research.
Chapter 2 of this thesis examines the conceptual aspects of the joint venture. It is
essentially a review of the true nature of the joint venture, detailing the definition,
needs, advantages and disadvantages, autonomy, management and culture of the joint
venture. Section 2.9.4 reviews the project success factors within the construction
industry and presents an example of such factors and rules.
Chapter 3. proceeds with the knowledge gained from the literature survey and so tests
the main hypotheses of the research. This necessitated a survey of national
construction contractors, drawn from the questionnaire survey and initially presents the
attributes of the management board.
Chapter 4, continues with the analysis, and investigates the levels of co-operation
between the contractor partners, their perceptions of the determinants of success,
control, ownership and autonomy issues. Comparisons are made between the levels of
experience amongst the contractors, and their varying sizes, large and small.
Chapter 5 reviews their advantages and disadvantages of the joint venture, so analysing
the correlation's that exist between each of the components. As laid down within the
conceptual joint venture, the most important aspects of a true need for others, trust
and mutuality of aims was found to be of deep importance.
Chapter 6 addresses the team aspects of the joint venture, so analysing the contractors
views and opinions concerned with the organisational culture and power that exists
within the venture organisation. The need for compatible cultures and the need for
domineering power is discussed and identified.
Chapter 7, the final chapter draws the conclusions on the research considering the
analysis and the results obtained in the previous chapters. Discussion of the initial
8
hypotheses and their subsequent identification within the survey is made, with
recommendations for the
contractors and the need for further research. Specifically into the differing opinions of
the contractor partners, and the seeking of case studies to test the material produced.
9
CHAPTER TWO
2.0 An introduction
Joint ventures, as a management strategy can be mistakenly considered as the only
panacea for a troublesome marketplace or industry, and thereiore mis-used and
abused, in an effort to mitigate risk. Interestingly, joint ventures have been traced back
to the late medieval century in Europe between cities, called the Hanseatic League
(Adler, 1966), and were used to share risk for exploration of the new world. The use
of this strategy has been recently fully utilised as a management tool for (Anderson,
1990), the decades, proceeding the turn of this century notable examples being the by
product of the light bulb invention as identified by Mitchell (1988) and the pioneering
United States Railway industry in the late nineteenth century (Levine 1986).
V 6int vent~~~g, predominantly arose in the United States and began to expand overseas. lfiltlally after the end of the Second World War (Burnham 1988).
. - " ,
Interestingly, during the sixties and seventies, a particular necessity for the joint
venture arose out of the need for overcoming foreign governmental policies restricting
foreign ownership of companies and their market invasions (Gomes-Casseres 1987).
Yet, towards the late 1970's, for a period of time, the United States multi-national
company whilst hesitant over the need to share ownership'S (Gomes,! 989) and control,
began to expand globally via use of the venture (Burnham 1988). )hiS resurgence of
the joint venture in the 1980's coincided with the globalisation plans of Japanese
construction companies including their expansion into the United Kingdom, and ever
increasing need to cope with the integral complexities of modem construction,
resulting in higher risks and capital outlaf.{progression of the venture strategy through
the 1980's has now led the 1990's to be classed as the time of the corporate or strategic
alliance (Taylor 1990). ) . .3 .
2.1 Joint Venture Research Method
In order to adequately formulate a clear and aptly thought set of hypotheses
enveloping the concept of the Joint Venture, it was necessary to carry out an extensive
literature review. The primary purpose of the review being to collate recent
information pertaining to the Joint Venture, thereby building up a typical model of this
10
management vehicle. The questions to be addressed were: What were the components,
who were actually involving themselves in the ventures and to what purpose?
The aforementioned points became the basic search parameters for the literature
research and so initiated the starting point for the search procedure.
The procedures laid down for the search were:
1. Establish search parameters.
2. Determine the extent of the available information sources.
3. Determine the benchmark for historical information.
4. Collation of research material.
5. Analysis of material.
The establishment of search parameters was, as before described, the agreeing of
information required from the search. The next step was to determine what sources of
information were realistically available to us. This encapsulated use oflibrary indexes
at the University and other universities such as U.M.I.S.T. and Salford. Contact was
to be made with both other academic institutes and professional institutes. If possible
preliminary feedback was also to be taken from the Industry itself in the form of
Contractor interviews. This latter information approach was to be later maximised in
the form of questionnaires to a limited selection of U.K Contractors.
Beginning first with the universities libraries a computer index search was initiated to
determine the extent of Joint Venture information within the confines oftheir
campuses. This was applied at Salford, UMIST and Loughborough. The reason for
the two former locations being selected at this early stage stemmed from the Writers
previous association with both universities, coupled with their known interest in this
area of research.
11
Many references soon became apparent which built up a database from which to sift,
analyse and produce a concept of what exactly a joint venture was. The majority of
the authors came from an international community and covered a number of industries.
However, from the wealth of information gained, a common set of valid factors arose
spanning both domestic and international scenarios and the market industries i.e.
production and construction.
It was at this early stage of the literature search that by way ofa professional
introduction, an opportunity arose to meet with the directors from two reputable
construction organisations based in the United States. One a general contractor, and
the other a construction manager. Both provided a real and practical insight of their
joint venture experiences and focused particularly on their control requirements. That
is to say that whilst in theory joint common control is a facet of the joint venture
syndrome, in practise, in their opinion, this is not necessarily sought. In both cases
they stipulated direct or majority control. As will be seen in the following chapters
dealing with the composition of the joint venture, their thoughts were both
contradictory and thought provoking. Although such information was taken from the
US. construction industry, it did initiate questions as to validity of joint ventures within
the U.K. This is turn was reappraised during the questionnaire stage.
Whilst the search progressed through the relevant available text books, journals and
conference proceedings held within the libraries, careful thought was given to the
collection of feedback from other academic institutions. The reasoning behind this
thOUght was twofold. Firstly, contact was necessary for obtaining information from
outside the current search network. By raising requests for joint venture references,
further basic knowledge of the concept could be culled. Secondly, such contact was to
be used to determine whether or not similar research was being carried out at the time,
thereby duplicating research. For this to be of any realistic use, it was therefore
necessary to provide a draft guideline for the forthcoming these paper, an outline
hypotheses. Thoughts concerning the criteria had to be formulated for successful joint
venturing, coupled with the need for effective control through organisation
management.
12
- --------- -- - ----~--------------------------
2.2 The True Joint Venture - A Definition
The title ofJoint Venture is an easily mis-defined strategy label, closely aligned with
other labels such as strategic aIIiaucllS, consortium and symbiotic marketing. r..'./
Q):.what exactly is a Joint Venturg TIh.re~pmI"'euiviously-describedliteratur.e.searcb brought
6) f~beruf-definitions;-aH-witll-a.commQJl~rntra\.core.. As described by ~dall (1989) and (Janger, 1980) the term joint venture is "virtually a metaphor for
the sharing of risks, opportunities and the management of international enterprises~ . ,
Elaborating further, the enterprise. corporation or partnership is formed by two or
more companies, individuals or organisations at least one of which is an operating
entity which wishes to broaden it's activities for the purpose of conducting a new profit
oriented business of permanent duration. Ownership is shared by the participants with
more or less equa\ distribution and without absolute dominance of one party (Young &
Bradford, 1977). )cf)
Fong (1985) puts the definition more succinctly by saying that the expression is
commonly understood in it's generic sense as referring to any agreement or
arrangement which enables two or more parties to jointly execute some commercial
enterprise. The essence of this feature that the business undertaking is a multi-party
effort which may take the form of a consortium, partnership or a joint venture. The
scope of the project may broadly include other jointly owned business enterprises or
long term projects (Christelow 1987). This is re-inforced by the necessity of a true
joint venture to comprise 3 essential elements, a single legal entity, joint ownership of
the legal entity by the joint venturers and also the joint management by the partners of
the separate legal entity (Webster, 1987). It is neither an external, market based
method of organising economic activity nor a traditional intra-firm structure, but a
hybrid complying with neither forms of pure business administration (Davidson, 1987),
The traditional Joint Venture is also described as having the need to form an
independent entity (Taylor 1989), as a strategy or device that is available to any
organisation, which in turn is used to undertake a project that would not be normally
achievable by the single would be joint-venturer, with all risks being shared (Selby
1992). Operation of the venture should be under joint control (Fahmy 1987) for
prescribed and limited purposes (Andrews 1984). This latter statement is cited as the
founding statement for the joint venture definition by virtue of the "consortia"
13
\~
definition proposed by Harding (A Boulton 1961). The venture can be either ofa
domestic variety, comprising of a national pool of companies or internationaIlmuiti
national with operations overseas on a global strategy scale (Harrington 1984). Such a
jointly invested enterprise can be managed by a foreign firm, enterprise or organisation
on an equally shared basis of risk, profit, and loss to the mutual benefit of the parties,
utilising a limited liability company status (Fan 1992).
An American construction association (AGCA 1975) has actually produced a set of
joint venture guidelines, in which their simplified definition states "a joint venture to be
in a pooling of assets and abilities of two or more firms for the purpose of
accomplishing a specific goal and on the basis of the sharing of profits and losses".
This definition was actually used partially within the initial questionnaire survey
(described within chapter three) for the clarification ofthe surveyed contractors. The
A.G.C.A. definition was utilised due to it succinctly and simply encompassing the
general parameters of the joint venture laid down earlier by the other references.
Essentially the combining of strengths and weaknesses, with the sharing goals,
objectives and profit and losses.
Expanding the generic aspects of the joint venture definition, there is also the need to
couple it to the legally separate entity, since the joint venture can be considered to be a
separate company to that of it's parent companies. The definition can be enhanced
within the legal sense taking the U. S. legislature as a benchmark within the guidelines
set within the Anti-trust Enforcement Guidelines for International Operations (Griffin
1989) "the term encompasses a variety of arrangements including the creation of new
corporate "offspring" by the venture parents as well as contractual arrangements such
as joint bidding and teaming which involve no equity transactions and quasi-mergers
(acquisitions by one parent of a portion of the stock or assets of the other parent). The
venture may be for one "deal" or permanent or for a fixed time period and may in turn
involve two or more parents or even an entire industry.
This latter definition makes reference to time constraints. These time periods are more
often than not of an indefinite nature, since the aim of a number of venturers is to
establish a "foothold" with which to expand their market share (refer to section 2.4).
A "one-off" or "one-deal" project would only draw a short term plan for a company,
unless it was of the "Competitive Collaboration" nature (Ohmae 1990). Similarly, a
14
'. \.
venture that was tanned on a short tenn basis, for example in order to achieve a higher
"insurance bonding" for tender and construction purposes would be in the nature of a
"shipboard romance". This interesting analogy was referred to by a senior executive of
a leading US. Construction Manager (Vaughan 1990) who compared the joint venture
to shipboard romance, "great during the voyage, but once back in port, it was essential
to get off the ship and get on with your life". Another source of reference, within an
article in American Jurisprudence was that the joint venture "was an association of
persons with the intent, by way of contract express or implied, to engage in and carry
out a single business venture for joint profit for which purpose they combine their
efforts, property, money, skill and knowledge, without creating a partnership or a
corporation pursuant to an agreement that there shall be a community of interest
among them as to the purpose of the undertaking, and that each venturer shall stand in
the relation of the principal, as well as the agent, as to each co-venturer, with an equal
right of control of the means employed to carry out the common purpose of the
venture". (Herzfe1d 1989). Note that this definition also states "without creation ofa
partnership or corporation" and yet in the pursuit of the Joint Venture, per se, there are
examples where the Parents fonn a joint venture company. Clearly this particular
definition clashes with the general concept of the joint venture companies.
The tenn for this particular strategy can be progressed to the term and definition by
renaming it an "operating joint venture" (Harrigan 1986) which is where again "two or
more companies create an entity or child to carry out an activity, each partner takes an
active role in the decision making process, if not also in the joint venture 'child's'
operational running. There should be no passive financial involvement, i.e. sleeping
partners, and the venture should be a separate entity. Each party to the operating joint
venture should make a substantial contribution in the fonn of capital, technology,
marketing experience, personnel and physical assets" (Harrigan 1984 & 1986).
The joint venture should be fonned before tendering for work or negotiating a
contract, pooling the assets and expertise to share the responsibilities and so be obliged
and liable to one another (Harrington 1984). Such a commitment is for, at least the
duration of a project, of funds, facilities and services by contractors ..... to their
mutual benefit (Tomlinson 1970).
15
Looking to the cross definition of the strategic alliance, consortia and symbiosis, the
difference between the consortia to that of the joint venture was that in the case of the
fonner, it was a temporal)' co-operation of several large interests to effect some
common purpose. This in reality defined the Joint Venture too (Harrington 1984).
However in the case of the Strategic Alliance, it is a contractual agreement between
parties to pool their resources for a specific project, they differed to the Joint Venture
by way of the fact that a new corporate identity was not fonned to operate the
construction project (paap 1990).
A cross correlation with respect to the semantics of the joint venture" tenn was
contained within the constraints of "symbiotic marketing" (Adler 1966), although
different tenns were used they essentially describe the joint venture. The key words
used here were "synergism" and "symbiosis". Synergism referred to the "working
together" of parties and "symbiosis" the state of two different parties working in close
and hannonious relationship, each benefiting from the other. Adler makes the case that
with the increasing demands of industry, both technological and economical, pressure
increases upon the companies to move towards the joint venture. Whilst written in the
mid-sixties such a theol)', in the opinion of the Writer still holds true. The more
synergistic the fonnation, then the greater the value to the members of the alliance.
Summarising this symbiotic approach, it is a meeting of organisations, who together
wish to fulfil a common need with the Parents sharing control equally.
Such casual use of these tenns was cemented by Pipilis (1981), who referred to
symbiosis as a continuous process with partial contribution from the Parents, a joint
venture was a single project with partial contribution and the consortium a single
project with continuous production and total contribution from the Parents. Clearly in
contrast to some previous authors. the full definition by Pipilis "association between ..
. . companies to undertake a specific project ..... pooling and sharing economic assets
and human responsibilities" holds common elements of the joint venture ingredients,
but with a slightly different composition. Interestingly, a recent paper from a ECI Task
Force (Smith and Weame 1993) also show that the consortia to be a jointly owned
subsidi8l)' company for one or more projects, and the joint venture being for a
particular project, with all sharing in expertise and risk.
16
- -------
Summarising the joint venture definition, it can therefore be considered to be a legally
separate corporate entity formed by a number of parent-companies with the sole
purpose of achieving a common set of objectives with shared ownership and control,
utilising both the strengths and weaknesses, for either a definite or indefinite period of
time.
2.3 Joint Venture Formats
The joint venture itself may be found in a number of differing formats and
classifications, and is so formed relative to it's own specific and unique project needs
and requirements. When looking at the formation of the joint venture, there are two
elements to consider, it's legal form and it's operational form (Cunningham and Hunter
1989). -Cunningham and Hunter (1989) classify three types of the legal form. The loosest and
most informal is by the 'consortium', which is used for one-off projects, secondly, a -~r~N£..which is more formally structured, ensures that the contracting partners
are both jointly and severally liable for the venture project, with overall responsibilities,
obligations and benefits proportional to their share of the venture (McCormack 1993).
Thirdly there is the more 'permanent. aIld institll~ionalised' incorporation whereby a
subsidiary company is formed from which to form a single joint venture company.
Both Herzfeld (1989) and Webster (1989) share this classification, but label them the
'contractual' 'unincorporated' and 'Corporate' joint ventures respectively.
Tyebee (1988) utilises the biological analogies of adoptive, rebirth, procreation and
family ties joint venture for his classifications. In these scenarios, the adoptive venture ------ - --~-----acquires an equity position within an established company, the infusion of technical
skills, expertise, innovation and or money will result in a rebirth joint venture. The
most commonly used and innovative is the procreation venture, which forms a new
independent entity. Tyebee chooses specific parameters for it's needs and use, by a
requirement for equality in decision making, co-operation and with an aggressive
attitude towards a world market.
17
< Linklater (1990) furthered the description or definition of the forms, according to
l:nglish law, by stating the former as an unincorporated association which does not fall
to be treated as a partnership, secondly as an unincorporated association with the legal
status of a partnership. In the latter form, the venture company has it's share capital
held by the venture company partners.
When attempting to detail the minute aspect of the contractual form, an example of the
partner contributions, would be use of monetary funds and equipment by one partner,
/ i1nd labour supervision, with the other (see Eiteman 1990). In the case of the equity or
'" incorporated venture, all partners contribute jointly providing the capital, management
and subsequent share in the profits.
When looking at it's form and classification there is also the necessity to closely align it
to both it's external environment and project requirements. Drucker (1973) accepted
that there were several kinds of joint venture, but mainstreamed two specific variations
of their theme. The strengths of the partners, with different and independent
businesses, would produce a joint venture in a totally new area of business or industry.
Alternatively, partners with the same background and field of work would form the
joint venture. This latter premise was accordingly called "aggregation by joint
venture". This was broken down by Anderson (1990) who made reference to four
'cells'. These were namely:
Cell 1.
Cell 2.
Cell 3.
Ce114.
Ventures that are in a newly found or poorly understood market or
industry, requiring some form of research and development;
Ventures that operate in an information-poor environment, with low
entry barriers and an undefined competition;
Ventures that operate in an information-rich environment, with cost
reduction as a major objective within a non-dominant industry;
Ventures that operate within an old and established industry (line
construction) with familiar environments, defined competition and with
high entry barriers.
18
----------------------~- - ---
f
At the operational level of the venture (see Cunningham & Harrisl987 and Armitt
1984) there is the single team (integrated) approach with all the contractor partners
working together as a single unit; or the non-integrated approach with partners
working on their separate portion of the work with a equal share of the liability and
profit. Andrews (1984) sub-classifies this into either a common approach or common '/
agency furmat. Common approach is a company alliance, with responsibility attributed
to each partner's section of work, and so responsible to the client. Common agency,
provides a mechanism for one of the partners to be in overall control and singularly
answerable to the client.
2.4 The Needs of the Joint Venturer
In order to form a joint venture, the parent as a potential venturer, needs some form of
motivation, as has previously been stated this strategy arises out of need for others to
combine mutual benefits with complimentary assets as stated by Connolly (1984). If ~ the parent could carry out the venture's objectives without the other venturer, then
naturally this would be the logical move. However, with the joint venture strategy,
there are a multitude of reasons or needs of a parent that in turn necessitate the
formation of the venture. Generally, there must be some compulsion to collaborate
with another company, since whilst there are advantages to be gained, there are also
disad~antages (see section2.D and@) which c~rtainlycover the sharing of both
control and very importan¥, profit.
The Association of General Contractors of America (1975) considered that the '/
principal reasons for pursuing the avenue of joint ventures covered the following
points:
1. The need to minimise risk due to the complexity of projects;
2. In order to expand a geographic market;
3. As a result of governmental involvement;
4. To combine specialist abilities;
19
5. To sharpen procedures;
6. To expand capital sources;
7. Foster additional responsible competition;
8. It allows the 'packaging' of major products;
9 As a means to increase a company's bidding and bonding capacity;
10 To maximise utilisation of resources; and
11. To develop reciprocal interests.
One of the fundamental reasons to joint venture is to spread or amortise risk. Such
vulnerability to risk is an aspect that contractors are eager to avoid ( Nigh and Smith
J9_89,l::Iarrigan,.-l.987d and_Webster.1289). The ever increasing advances within our
world technology, give as a by-product, the ever advancing levels of complexity and
finance (Drucker 1973 and Burnham 1988). This can therefore mean that the need by
contractors to share particular aspects of a project, or to minimise the loss of capital, is
increased. Should the project then go awry, a parent company would then not lose all
ofit's investment and may also in turn have gained specialist knowledge from the
other.
In certain market conditions and industries, it may be beneficial for a parent company
to expand their horizons either by entering into new geographical territories or new
fields of work. Such expansion may even be a strategic move based upon a company's
globalization program (see Osbourn and Baugh 1987). The globalization programme 1-may be in response to the needs of the venturer to overcome aspects of a industry'S
economic maturation and deregulation (Harrigan 1987). Christielow (1987) takes this
further and states it as a requirement to protect their expansion positions in world
markets through consolidation. By manoeuvring themselves into the foreign
geography market, this can also be seen as a means to overcome a particular political
hurdle, (Goldenberg 1986) that ofa "protectionist" industry. A government for
example may require that there be no operation of a fully owned foreign subsidiary
(Gomes-Casseres 1989). In return for this particular means oflocal attachment, the
20
\
goverrunental demands would achieve favourable investment proposals, (see
Contractor 1982 and Fan 1990) and so enhance the local economy. As briefly
mentioned earlier, advanced technology can be a motivation for joint ventures and is a
key strategic tool for the gaining of new markets and technology (Houghton 1987).
Beamish (1987) produced three tenets for this facet of technology. Firstly, the need to
acquire new and advanced technology, whether it be foreign or domestically owned.
Secondly, there is a need to acquire the skills for the management of the advanced
scientific technology and finally as a means to technically renovate a company for less
investment and increased profit. In the case of this particular reason of technology
transfer it is not necessarily directly attributable to the construction industry.
This increased level of technology is also coupled to the increased (Herzfeld 1989)
costs associated with the highly complex nature of projects today. As such, companies
may wish to reduce their financial risk and exposure in this area, whilst not rejecting
this particular area of their market. These risk diversifiers according to Brandt (1990)
allow a financially weak company, whether this be due to the workload commitments
or size, to minimise any potential loss and investment to themselves.
A facet of cost reduction again not necessarily totally construction orientated is the
immense cost of research and development, especially since Taylor (1989) and Griffin
(1989) considered that independent efforts had become limited not only by way of
costs, but the increased specialisation that were required in the development of the
company's market. This could certainly be readily applied to the advancement
construction techniques and project delivery systems, and the joint venture is a method
of achieving the cost economics necessarily. Examples of such R & D joint ventures
could involve use of computer and information technology in the construction industry.
2.4.1 Competitive Collaboration
The need to obtain specialist abilities and hence sharpen a parent's management
procedures is another joint venture propagator. It can be used to exploit the existing
strengths of another, by integrating and manifesting the interdependence of skills, so
overcoming the integral complexity of a project (Boulton 1961) and also be used to
learn from their venturers skills (Lyles and Reger 1993 ).However it should be noted
that such benefit can also, at a later date lead to future competition, alternatively
21
known as "take-over by stealth" or "competitive collaboration". (This is later
discussed in section 2.5.2). Lorenz (1989) reinforces this statement, by stating that if
not totally aware of their partner's objectives, a parent company may allow their
partner to "disarm" them of valuable information and expertise in a new region or field
of work with which to later employ against at a later date. In the reverse situation
however, the parent may wish to use their "hidden agenda" with which to increase their
competitive edge. Osbourn and Baugh (1987) stated that this particular reason had
given US. firms cause of concern with examples of them selling their future worths for
a short-term gain.
Both Armitt (1984) and Falls (1980) agreed that with contractors continually taking on
projects, they would readily absorb all their insurance and financial bonding capacity.
Therefore, in order to overcome this problem, they in turn would need to increase their
capabilities in this area from their potential joint venture partners.
2.4.2 Client Led Needs
The joint venture may also be used to enhance a parent's standing towards obtaining a
competitive tender from a client (Linklater & Paines 1990). It also allows the client
the opportunity to use a contractor group with both the increased financial stability
from a number of companies and increased performance, who in turn are bound jointly
and severally to one another ( McCormack 1993). The client may have a particular
preference for a contractor, with an established relationship to work with them on a
particular project, even with another foreign contractor, as yet untried or unfamiliar to
the client thereby providing an increased sense of security and confidence to the client.
A rather interesting and yet extreme reason was forwarded by Herzfeld (1989), and
whilst appearing unique is worthy of representation. The achievement of" critical
mass", which is (as also referenced by Mergers and Acquisitions 1989) the combining
of companies and organisations to achieve world class "player" status. This could be
construed as the egotistical need, and could not be readily identifiable to the
construction industry.
22
Gomes-Casseres (1989) also valued the joint venture as a vehicle for both building
trust and as a means of tracking performance in another company as the precursor to
take-over or acquisition. The particular aspect of trust is discussed further in section
2.8.1
Adler (1964) appends three final items to this list of reasons.
(1 )The need to stimulate synergy between companies;
(2) the need to buy time with which to manipulate the parent's business to a
readily defensible position;
(3) the need to avoid cyclical or seasonal instability.
Synergy, is the need to work together and therefore meld one partners assets and
strengths to the other and so multiply their singular efficiencies. Time may
undoubtedly be needed to fend off a potential competitor whilst at a vulnerable time,
and the joint venture vehicle is a means to strengthen their stance within the market
place. Such potential weakness may be drawn from the troughs and peaks of the
industry's work throughput, and this instability can be driven by a weak economy i.e.
recession or seasonal/financial changes Le. public sector contracts.
2.4.3 Summary
Joint ventures are a valued strategy for a company that wishes to reduce it's level of
risk associated with the undertaking of a particular project. The prime common
denominator for it's use, is the fact that the task(s) or objective(s) at hand cannot
unilaterally be achieved. This vehicle is useful for potentially weak companies to
gather information and catch-up with the competitor (Randall 1989). Small
contractors can utilise the experiences oflarger and more sophisticated partners (see
Levy 1990) and so participate and cope with large projects within their grasp (Smith
and Wearne 1993). Nationalistic and geographic barriers can also be hurdled, with the
dual objective of utilising a local partner with which to harmonise the domestic attitude
and penetrate new markets.
23
2.5 Advantages and Disadvantages
When considering the use of the strategic vehicle of joint ventures, it is necessary to
highlight and so balance it's advantages and disadvantages. In some cases the
advantages may well outweigh the disadvantages and thereby prove worthy of
progression, and vice versa causing concern, to all potential venturers.
2.5.1 Advantages
Joint venturing is certainly considered as an excellent means for a company to "sharpen
their claws" (see Adler 1966) and so hone their skills and abilities. It can offer the
company a means to leverage their advantages in order to succeed with their global
strategies (see Harrigan 1984). To balance the use of their (company) skills and
abilities, the joint venture may also be used to acquire advantages from their co
venturers, such as intangible assets like reputation, and also organisational knowledge
(see Gomes-Casseres 1989). Further, Levy (1990) states these to include, that less
sophisticated companies can team up with more highly experienced partners and so
train their personnel and management. There is also the aspect of technology transfer,
use of local knowledge to gain both an entrance into a foreign market and to establish
better control of costs through their own subcontractor relationships. Pipilis (1981)
interestingly states that a joint venture may decrease the dependency on another firm
within the industry, for example a supplier. However, this does clash with a
disadvantage indicated in the next section, and as such should be considered unique to
each case. Reynolds (1984) thought that use of a local partner could contribute
valuable information for a particular situation and so provide access to scarce
resources. Risk, the control and sharing thereof, is a prime motivator for venturing,
since due to the ever increasing challenges associated with the advancement of
technology it results in increased complexity and costs of one's industry. The sharing
of risk, will enable the Partner to share finance (see McCormack 1993) and the
associated risks of a business project undertaking, which would normally prohibit the
single Partner from participating in (see Webster 1989) a project.
24
The Construction Industry Institute (1991) readily identitied the advantages of a joint
venture as providing an improved ability to respond to the changing business
conditions, with improved quality, effective utilisation of resources and reduced costs
with improved profits and earnings. The aspect of reduced cost is fortified by both
Herzfeld (1989) and Osborn & Baughn (1987) who also append the ability to
overcome nationalistic prejudice offoreign companies and governments.
Selby (1992) adds the fact that the joint venture may also be used to bypass restrictions
on acquisitions, thus allowing the potential venturer to learn and use the co-venturers
resources and abilities without the need for a merger. It can in turn be also used as a
precursor to a merger where a company may joint venture with another company that
it intends to merger with, and so on a limited and short term basis interact with, and
fully understand and comprehend their strengths and weaknesses. Foster (1974)
suggests the ability of a 50:50 joint venture to provide a relative immunity from take
over, and gain from the contribution discharged from a top calibre management board
consisting of the partner's senior executives.
Knowledge is advantageous to all parties and as such the cross-pollination of ideas
between partners, is according to Harrigan (1987), transferred to the parent's
organisation. This is affectionately known as 'bleed through'.
Clearly it can be seen that the advantages observed cover a number of industries, and
that in general they are used to mitigate the level of risk that a company may
experience in certain circumstances. There is the underlying fact that the joint venture
is used to meld and compliment the strengths of one partner with the weaknesses of
the other partner (see Taylor 1989 and Pipilis 1981).
25
\~
2.5.2 Disadvantages
With the positive tactors of joint venturing, there are the negative aspects to consider.
The joint venture, in itself is always the second best option, since if there were any
other options than to couple with another company, then it would be taken. Boulton
(1961) considered it unwise to Create the joint venture unless there is a compelling
reason for such a course, and this was reinforced by Herzfeld (1989) who confinned
that this 'second best option' , and subsequently if believed too strongly by the
partner(s) can increase the risk offailure.
Failure, is considered a major potential disadvantage, since the joint venture is
considered to be risky with a high rate of failure by a number of references (Osbourn
and Baughn 1987, Harrigan 1984 and Lorange 1987).
Actual failure rates of joint venture rates of 70% from Gomes-Casseres (1987) and
Levine and Byme (1986) and of 46% from Harrigan (1986) would seem to
substantiate this claim. However, one discrepancy has arisen from Reynolds (1984)
who actually found a 75% success rate from his research. This should also be coupled
to the success rates generated from this paper's survey in section 4.3, with a success
rate of 89%, which clearly shows an extreme contrast worthy of note.
Dual allegiances and split loyalties between joint venture management and personnel
can also occur, thereby distancing them from their prime role within the joint venture.
Harrigan (1987) indicates that personnel may not always become detached from their
loyalties to the parents, and still consider themselves as an extension of their parent
company. Andrews (1984) further couples this point to the fact that due to having a
number of parents, dual (or multiple) objectives can in turn lead to dual (or multiple)
allegiances and result in conflicts of interests. It is therefore essential for unity
amongst the venture team, and that they are committed to the venture without any
'residual allegiances' (refer to Houghton 1987).
Interestingly such scenarios with mUltiple parents, in turn can encourage the joint
venture and it's personnel to be treated as outsiders by the parent, this results in the
26
questioning of their commitment to the parent. Should problems then occur, according
to Anderson (1990), the joint venture and it's troubles can become a "political football"
with the parents passing responsibility for it's resolution from one to another.
Gomes-Cassares (1989) identifies the huge costs that a venture may incur should it be
used at the wrong time or situation, since it may operate in a financial setting that may
already suggest a poor performance as a result of the operations environment or
location (Anderson 1990). The loss of control is a factor that is not easily managed,
and as a result managers may have a fear of losing control over their proprietary
information (Taylor 1989), and the necessity for a joint decision making process (Lyles
1993).
With the joint decision making process, it can mean that a partner previously used to
controlling their situations, now can only readily influence them (Paap 1990). This in
turn leads to prolonged and protracted periods of management influx where, the
management difficulties can lead to what Webster (1989) terms "intrinsic-negotiated
compromises" which hinder the management process.
Parents can also become involved in the "misreading" and "impedance mismatching" of
their partners. In the former case, this revolves around the fact that the parent
misreads the ability of the partner to carry out their obligations; and the latter where
companies of different sizes will act on different frequencies thereby not fully
synchronising with one another's corporate workings.( Taylor 1989). Thus providing a
direct relational link to the aspects of success, those of compatibility between partners
and mutuality of aims and objectives. Harrigan (1987) called this disparity between
partner objectives, as the most unanimous argument against a joint venture.
Use of the joint venture may also result in the parent becoming reliant upon their
partner( s) (see Brandt 1990). This dependence is reiterated by the Construction
Industry Institute (1991). They further appended the disadvantages of the clashing of
corporate cultures and their subsequent integration and the maintaining of the focus
upon the parent's business objectives. This certainly suggests the concerns aimed at
dissimilar company organisations and their attitudes towards mutual strategies.
27
\ \
\
This can evolve into what Drucker (1973) calls "politicking", where the joint venture's
personnel play one parent off against another, in a bid to achieve their own objectives,
thereby poisoning any harmony that may exist in the venture. Conflicts of interest
between parties would readily arise from such an environment.
A fundamental point of concern is the potential unwillingness of a parent (Selby 1993)
to share the earning's of the venture. By sharing a business, the partners must also
share profits, and they may well have to review their financial policies, aligning them
with one another (Brooke 1986).
Joint ventures, on an international basis, can hollow out the domestic economy, the
foreign partner fully utilising all the local resources at hand and so drain the local
assets.
Time plays a part in the joint ventures negative side, with a newly formed venture,
there is no past history with which to base a reputation upon. The venture does not
have their parent's financial strengths or credit ratings to use (Boulton 1961), such
needs require time and experience to develop.
When considering the need to joint venture, the disadvantage of creating a future
competitor must be reviewed (Gomes-Cessares 1987) since it may prove a fatal or
harmful manoeuvre at a later date.
Such a situation is sometimes called competitive collaboration and can be used by a
potential partner as a means to gain information, knowledge and access to other
previously forbidden markets. This hidden agenda would not necessarily be visible to
the unsuspecting co-venturer.
Interestingly, when concerned with a partners strategies and there is a risk that one
partner has global aspirations in mind, and the other, local strategies (Gomes-Cessares
1989). This again refers to the need and ability to fully comprehend and understand
the aims and objectives of each partner.
28
To conclude the list of disadvantages the potential joint venturer must be fully aware to
the fact that should the co-venturer not fully discharge their responsibilities and
obligations, then it would be left to the other partner(s) to continue out the work
requirements fully. (Falls 1990 and Cunningham and Hunter 1989).
2.6 Autonomy Of A Joint Venture
Joint ventures that operate as a single independent entity, separate from their parents,
require a certain amount of freedom in which to operate (Drucker 1973 and Lorange
& Probst 1987) and so discharge their operational brief. The role of the venture is a
highly mercurial position, since it operates in a particular environment, with a relatively
high risk factor, that the parent could not alone act within. It in turn necessitates a
degree of flexibility in which to adapt itself to the external and internal forces that
occur in it's life. For example, changes in market conditions, strategic and operational
decisions, design complications and the need to actively pursue all the interests of the
joint venture contribute to a flexible, and autonomous vehicle for management. It
provides a ready advantage in the venture, by way of utilising local and recent
developments in the operations more quickly than the parent company.
The joint venture as a "standalone entity", can with autonomy maximise their own
performance, rather than dwell on their parents performance (Anderson 1990), and so
can promote the harmonious interaction of their parents. Beamish (1985) and
Houghton (1987) supports this performance claim by stating that given the necessary
autonomy, from his research it clearly indicates that the autonomously managed joint
venture have very high performance levels, which led to their success. (Note:
determinants of success are discussed in section 2.10).
Initially, during the early stages of the joint venture there must be to a certain degree,
reliance upon the parent companies for capital, technological and managerial resource.
However this will diminish with time. Until that point however, the joint venture
managers must defer to the legitimate authority of their parent-companies.
29
The autonomy of the joint venture will certainly develop and so mature, gaining
momentum as the venture progresses through it's life (Lyles & Reger 1993) gaining
higher levels of independence by the development of control through it's own resources
such as management, technological skills, marketing abilities and developed innovative
ideas and skills.
It should be noted, that whilst autonomy is considered necessary for a joint venture,
especially from it's point of view, however, there is the case for the parent wishing a
joint ventures dependence upon itself. Pipilis (1981) suggests that the dependence of
their 'progeny' upon them can subsequently ensure special returns and privileges from
their joint venture employees. Whilst understandable, this particular facet was not
highlighted by the other authors so referenced.
Lyles & Reger (1983) produced, in their opinion, five factors that can both gain and
influence a joint ventures autonomy.
I. The use offormal relationships with their parental firms can be minimised
with regard to formal reporting procedures.
2. Informal relationships with the parental firms however, would be enhanced
and informal reports and communications used for the benefit of the venture.
3. The utilisation of other parties, from without the parental consortium,
in order to obtain their support, and so decrease dependence and increase
autonomy,would be eagerly sought.
4. Characteristics of both the venture and the venture managers are also
deemed a necessary influencing factor. With the venture, it can attempt to
increase it's use of independent facilities, such as remote physical locations
and also equipment, collectively known as "structural independence". Thereby
inducing a physical segregation to achieve the decision making autonomy. Not
necessarily attributable to the consortium industry, is the coupled aspect of
"strategic differentiation" in terms of alteration of products, markets, suppliers
and technology, again as a means to achieve decision making autonomy.
30
5. Finally there is the managers characteristics, where increased uncertainty
and ambiguity surrounding such issues as control, can thereby provide a
greater opportunity for autonomy via decision making influences.
Also worthy of note is the unity of parent companies, since a "unified constellation" of
parents can reduce the ability of the venture to achieve autonomy. Ifthere are mixed
emotions between the parents, then this may be so used to exploit any differences or
divisions to the benefit of the venture autonomy (see Lyles 1987).
In this element of a joint venture, from the material collected to date, it is certainly
evident that in the opinion of a number of researchers, autonomy is an important factor
for consideration. The mistake the parent(s) can make is to become too 'paternal' and
so smother the venture, stifling any room for it's growth by direct involvement in the
daily operational running of the joint venture.
The decision-making process within the joint venture can be a cumbersome
mechanism, especially with the numerous lines of reporting communication between
the different parent companies. In certain ventures, according to Lynch (1989), this
mechanism is related to the fact that all decisions regarding the venture's operational
running needed to be ratified by the parental companies. The differing companies each
responded to the feedback of information and necessary decisions with differing
timetables. This obviously prolonged the decision-making process. In order to
alleviate such a situation, Houghton (1987) suggests that once strategies have been
developed by the parents, then the common decision making should be limited to a few
critical issues, thereby maximising the fluidity of the ventures actions.
31
2.7 Joint Venture Management
As part of the definitionofa conceptual joint venture, (see section 2.2) it was stated
that there is the inherent need for shared and joint management control. This therefore
means that there needs to be close liaison between the parent companies, a high level
of trust and it need for a integrated management structure. According to Janger
(1980), shared management is not conducive to the rapid, unified responses to change,
and the coherent and integrated philosophy required for a business. In particular, with
regard to the joint venture, there can be a fear that without unitary leadership and
unanimity of decision making a joint venture can break down into a series of warring
factions. To therefore manage it effectively, there must be a unified and unambiguous
direction and control for the effective participation of all partners concerned. This in
turn can be accommodated by a unified joint venture management structure.
When examining a joint venture company, especially at it's management, it can be
divided into two halves. First, there is the operational management of a venture on a
day to day basis which is attended to by the management team via a project manager.
Secondly, there is the strategic management, concerned with the policy decisions and
long term planning of the venture, which is managed by the joint venture management
board.
Generally speaking, since the joint venture is treated as a separate company by the
parent companies, it's structure and composition should be similar to that of it's parent.
The management board, according to Armitt (1984) has responsibility for the principle
strategic decisions of the venture that can directly affect the conditions and objectives
that gave vent to it's formation. It is the locus of power within the joint venture and is
so made up of the directorial members of the parent companies participating in the
venture (see also Cunningham & Hunter 1987).
32
2.7.1 Board Composition
Beamish & Cooley (1986) stated the need of the board composition to be determined
with reference to the proportion of the investment contributed. Control of the joint
venture operations is not ensured by any majority ownership, a point that is discussed
in the next section, but rather that decisions are made by consultations of the parties,
through their board executives, based upon the principle of equity and mutual benefits.
It is worthy of note, that the board of directors are not the employees of the joint
ventures, according to Janger (1980) who further confirms their responsibility to
include the asserting and protecting each of their own company interests. This
manifests itself into the accommodation of the interests and objectives of their other
partners, and also the maintenance of the 'environments' oftrust, vitality and common
interests between the parties. Any conflicts 'that may arise are also dealt with at board
level. At the early stages of the venture's life, the board directors will undoubtedly
have to spend a considerable proportion of their time upon the joint venture, especially
to ensure a smooth transition of the negotiations from the pre-contract stages. It is
therefore in the best interests of all parties concerned, in Harrigan's opinion (1986b and
1987c) that the board members should not be too highly placed within the parent
company, since their time, initially will be highly valued and so required. They in turn
need to be extremely competent managers of people, with substantial diplomatic skills
and in positions that are functionally related to the venture's activities armed with the
necessary knowledge to co-ordinate the decisions of both the venture and parent
companies. The management board, must have the necessary authority to review and
make policy decisions. (This point also refers back to the fluidity of the decisions
making process previously described in section 2.6), and as such reviews are held on a
regular basis by way of board meetings. The regularity ofthe board meetings is
subjective, since it is dependent upon the particular control requirements of a joint
venture. Boulton (1961) actually considers the need to hold board meetings as long
intervals to discuss policy decisions and let the project manager carry out as necessary
the operating elements.
A factor of consideration, particular to the joint venture concept is the fact that with a
normal company, the board of directors have a sense of history together, and can so
act as a cohesive team, evolving the management structure together. Difficulties can
arise causing discontent, especially when the incentive to overcome them is not there
from a lack of previous evolvement. It is therefore evident that fundamental
33
weaknesses can arise, namely in unfamiliarity of one another, a virtual overnight
existence, lack of membership control and functional usage of directorial choice for
their board representative.
2.7.2 Operational Running
The underlying tier of management (see Linklater & Paines 1990) is that of the project
management committee (or team) responsible for the day to day co-ordination and
execution of the operation of the joint venture. The project or general manager at this
leve~ is the key figure and focal point for the management board to act through, and as
such must be fully trusted with the powers and procedures determined by the board.
Trust is an issue that will be discussed further within this chapter, and is also a key
consideration for the board as well, since the maintenance of trust is extremely
important.
The role of 'internal management', that is to say the project manager and his team is to
primarily implement the directions of the board of directors. Their main objectives
encompass the need to manage the venture as an autonomous body, relate
operationally to the organisation of one or more of the parent companies and ensure
the full integration of the parents' joint venture objectives.
From the above statements of the venture management, it can be seen that for the
effective use of the co-operative strategies of the parents, there is a clear necessity for
the strong, new internal management system, that can offer the parties involved a
strategic flexibility ( Harrigan 1987e). Drucker( 1973) further insists that the joint
venture must have it's own independent management structure, with the ability to run
as a separate business. A key ingredient to the effective use of the management
structure, ensuring that it works well is the need for good communication and logistics
( Harrigan 1989).
34
2.8 Control and Ownership
Common control and shared ownership are two authorities of the conceptual joint
venture, which are closely linked to one another. In fact, Beamish (1985) indicated
that numerous researchers have pointed out that there is no necessary correlation
between ownership and controL and yet states that in practice a correlation does exist.
Goldenberg (1986) highly values the importance for a venturer to make the distinction
between ownership and management, since for many companies management control is
more important than majority ownership. The first point, that of control, is defined by
Beamish (1985) in terms ofthe element of decision making, and whether it is passive
or an active role. Joint venture control can either be via majority, equal or minority
participation and has in each case a number of supporting attributes. This is added to
in Bearnish & Wang (1989), where it is stated that equal ownership does not
necessarily mean equal control, since decision making can be either shared or split.
According to Groves (1976), Harrigan (1984), Connolly (1984) and Bell (1990)
majority control is considered an important factor for a number of reasons. It can
allow a contractor to take charge, and so to manage in the character of their strategy.
Interestingly, Grove (1976) further states in contrast to Beamish & Wang that the
equity a parent has in the joint venture, is dependent upon the amount of control they
wish to have. This is certainly an interesting premise and also reflects Janger's (1980)
thoughts towards the use of equity as a gauge on the character and strength of a
partner's management role. However, Bearnish & Conley (1986) in their opinion and
experience suggest that it is not the case, but as earlier stated, the decisions are made
through consultation of the parties, based on the principle of equity and mutual
benefits.
Majority control can arise out of the preference for a weaker partner, for as an
example in order to gain access to a particular market without the other imposing
overriding control or influence upon their wishes and directives. It can be a means to
protect an integral part of their business, and prevent the process of "bleed through"
of proprietary knowledge, business and or managerial skills. This could be considered
to be a "hidden agenda", and is even used to accept lesser control to obtain other
hidden objectives.
35
\~
If the joint venture is not symmetrical i.e. not a 50;50 ownership Bell (1990) suggests
that the partners form the joint venture company whereby the majority investor holds
overall control, which would in turn necessitate the safeguarding of the minority
partner interests by unanimity clauses within the joint venture agreement (Beamish &
Coniey 1986).
Lyles & Reger (1993) note that with increased profitability comes the increase in the
parent's desire for control, clearly suggesting the aspect of greed into the situation.
Control is obviously more difficult to achieve with shared ownership and multiple
parents, and the difficulties are so exacerbated by this fact. Drucker (1973) even
forwards the opinion that the aspect of dual-nationalities coping with the complexities
of joint management control will cause serious problems and failures.
However, although most contractors (Groves 1976) do resign themselves to a
"dilution of control" and whilst the ideal situation does lend itself to joint control, they
can still strive to maintain their authority. The reasons forwarded for wishing to
maintain control encompass the need to maintain prograrmne requirements, maintain or
enhance profit, ensure that good client/contractor relations are kept, ensure the parents
strategic policies are easily transferred to the venture and maintained and control the
resolution of any disputes and conflicts between the parties. This requirement or
preference for majority control is particularly interesting when compared to the
definition of a joint venture and the need for a shared and jointly controlled company.
Even Andrews (1984) concedes the point that joint control does not need to occur in
every aspect, since joint venture can have a delegated individual management in a joint
direction. Beamish (1985) quotes the following percentages for 'controlled' joint
ventures:
(a) 70% of dominantly management control joint ventures were majority owned;
(b) 76% of shared management control joint ventures were equally owned.
Whilst primarily revolving around projects in the P.R.C. contrary to the earlier
statement by Goldenberg (\986) there is a clear relationship between control and
36
ownership. Janger (1980) intimated that of joint ventures within the survey, 86% were
with managing partners. This is further discussed in section 4.3.
Moving on to the equally shared control, Janger (1980) considers it most fundamental
to share the overall management planning and control of the joint venture amongst the
partners. Although, the degree of management may vary with the long or short range
policy of the companies involved. Harrigan (1987) maintains the fact from her
research, equally controlled joint ventures are difficult to manage, and can lead to
disputes and deadlock situations.
With control, there must be some form of tools or mechanisms with which to handle
the joint venture. If the parents employ control mechanisms that are inappropriate or
ineffective to the joint venture activities, they can therefore destroy any opportunity to
realise any synergies or so transfer knowledge. For control and implementation of a
partner's need, Pekar (1989) suggest the use of:
(1) top management;
(2) fixed responsibilities of partners;
(3) high calibre of resources;
(4) management consensus;
(5) the linking of budget and resource.
This is further achieved with the use of financial reports, financial audits, informal
inspections by the parent companies, designing and implementing procedures for the
reporting and planning structures, and the evolution of performances.
Issues of ownership may also cause discomfort and tension within the venture, use of
equal ownership can invariably lead to deadlock situations in corporate decision
making. Contractor (1984) best summarises the issue of minority ownership and
reduced control. With the minority ownership venture, there is a fear of losing control
to the other, and with this, reduced leverage in decision making. However, even in this
37
situation, there are alternative ways to maintain an element of control, especially when
linked to the asset that the other partner relies upon. This should be coupled to the
fact that the minority partner will still benefit from the enterprise and capital a partner
brings to the venture, with more importantly a lower level of risk.
Operating control is a very important issue to parent companies, and whilst there are
situations where a company will take a slight minority ownership position, majority
managerial authority must be obtained. This is further discussed in section 4.3,
indicating the particular peculiarities rising from the research survey.
2.S.1 Co-operation and Trust
When two or more companies come together for the purposes of forming and
operating a joint venture, they must co-operate and collaborate with one another so
that they may form a unified and synergistic entity. This is a point that has been
particularly stressed by a number of researchers, Pipilis (1981), Andrews (1984) and
Houghton (1987) indicate the key need for trust. Problems can begin with trust, or the
lack thereof. Trust is a virtue that cannot be readily given, and time and consideration
must be given to achieve the necessary goodwill. In fact (see Bearnish 1984) until
some form of trust has developed, the earlier negotiation and formation of the venture
can be particularly tough. Since there is the concern that proprietary information or
knowledge may be lost to the other. The necessity to prevent the learning of their
methods and procedures, and so letting outsiders comprehend and understand your
core business can undoubtedly strip away any competitive advantage one has.
As a means to overcome this potential barrier of distrust, Cunningham & Hunter
(1987) suggest that if the venture is for a series of project collaborations, then the
associated 'power base' may be rotated in an effort to build up the trust and experience
in all the venture partners. Levine & Byrne (1986) also suggest that in order to keep
their partners 'hones', there is also the option oflearning to "exchange hostages" or
find a way to reinforce mutual dependence.
38
This potential distrust of one another, in itself can be disarming attitude, and can infer
that an inherent problem already exists. If the joint venture is to succeed, there is a
fundamental need for a change of attitude. The collective distrust and the "us and
them" approach must be removed. There must be an understanding of the venture's
activities and it's management team must be trusted so as to avoid any possible
irritation to the partnership.
2.9 Organisational Behaviour and Culture
When investigating the concept of joint ventures, it is necessary to understand and so
cope with the internal mechanisms of it's structure, it's organisational behaviour. The
initial question to be raised therefore was what are organisations? Baron and
Greenberg (1991) describe the organisation as any social structure or system,
consisting of two or more people who are interdependent and yet work together in a
co-ordinated manner to attain common goals. In every organisation there is an internal
structure, which can and do vary with each separate organisation. The actual structure
is derived from technology such as knowledge and processes and the external
environment factors such as the economy and social and legal needs. Coupled to this
structure is it's inherent mannerisms, the beliefs, values, attitudes and expectations
shared by most of the organisations members, known as it's organisational culture.
This culture, which is often a powerful force determining how the organisation
operates, can develop from the organisations experience with the external
environment.
2.9.1 Organisational Culture
The organisational culture is defined as the beliefs, values, attitudes and expectations
shared by most organisation members. This culture is to a human group what a
personality is to the individual. It's relevance, as voiced by Lynch (1989), to the joint
venture is that when people come together, they encounter common problems with
establishing direction, co-ordination and motivation. Subsequently, the culture affects
how these problems are perceived and how they are resolved. The actual cultural
39
differences encountered between the various partners can provide a potential barrier
between the personnel, since each organisation is different. The differing
organisations, in turn are composed of different people, who form several 'subcultures'
within them, and are based upon professional, functional and occupational divisions.
An example of the subcultures, would be where personnel in one department or field
share more attitudes and beliefs with others in their own company department or field.
According to Andrews (1984), organisational and management difficulties will arise in
relation to the cultures differences between the various partners and their associated
commitment to the venture. Cultural differences are on two levels (see Lyles 1987),
firstly that of the national differences and secondly, and more relevant to this paper the
organisational culture. Whilst they are not to be considered a major mistake or totally
contributable to failure, according to Lyles, they are an important issue.
In the first instance, an example by Beamish (1984) states that when different
economic philosophies that can exist between differing nationals are coupled to partner
inexperience it can lead to inflexibility and friction between the partners. On the other
hand, a particular culture may well place a high value upon individualism (see Wynn
1988) making it particularly difficult to joint venture with for example a US.
characteristic, thereby intimating that co-operation is not an easy concept for them to
grasp. Davidson (1987) adds the reverse aspect of the individualistic partner being too
critical of the homogenous cultural characteristic of the other partner, as hardships that
cannot readily be taught to potential, interested foreign partners. The cultural
influences, can instil characteristics in the local venture managers, especially when one
partner has a very different cultural perspective then their foreign partners. Ideally, the
joint partner should bring complimentary skills and homogenous corporate cultures to
the joint venture union. It is said by Reynolds (1984) that in certain cases,
corporations in some industries (not specifically construction), develop different
strategies and different structures from others, as a result of the differing levels of their
partners importance attributed to the economic and political imperative.
In the second instance, the organisational culture is responsible for a number of
inherent characteristics to the venture. A venture's personnel will develop a culture
that differs from that of the parents of the venture. In fact, Harrigan (1986b) furthers
this by saying that time is a relevant cultural factor, since the longer managers stay in
the venture the more loyal they become to the venture. This point supports to the
earlier section concerned with autonomy, and the dependence (or lack of) upon the
40
., ., \
parents. It leads to 'organisational socialisation', which is defined by Baron &
Greenberg (1990) as the process through which newcomers to an organisation (or joint
venture) are converted to fully fledged members who share it's major values and
understand it's policies and procedures. These individuals are then transformed from
being outsiders to effective, participating members of the organisation. This aspect of
personnel being associated as outsiders is reiterated by Anderson (1990), where the
parent companies' personnel view the joint venture personnel with suspicion and are
hypercritical of them, as a result of the joint venture organisation, politics and multiple
ownership. With any group, such as this situation, conflict can and will occur through
possible misunderstandings of working methods, culture, interpretations and objectives
of the other partner. For example, a partner may be used to a faster approach in
construction contracting procedures and methods than the other and so cause potential
complications may arise between the differing venture personnel and how they interact
with one another. This difference in cultural management techniques within
organisations can obviously result in complications. It is therefore necessary,
according to Selby (1993) to ensure that the personnel become familiar with the
culture of their partner, and so adapt to any necessary changes for cross-cultural
managerial decisions. Each team will undoubtedly have their own preferred system of
working, and reluctance to bridge the cultural gap may manifest itself. It is at this
point that more emphasis should be put into an information handling system, that can
accommodate the needs of the differing personnel to know, understand and
comprehend fully the cultural mannerisms of their partners and the joint venture union
( Lynch 1989).
Ethical codes, are also considered serious dilemmas, since whilst some codes are
universal, to companies, not all are for the individuals that conduct themselves within
cultures with widely differing moral values. This can encompass aspects of how
suppliers, subcontractors, clients and their own personnel are handled and treated.
One partner may have a more autocratic and cavalier approach to the venture than the
other, resulting in conflicts, stress and de motivation with differing levels of
accountability and review.
2.9.1.1 Summary
Ideally then we can see that it is necessary for parent companies to have similar basic
business philosophies and cultures (see Randall 1989 and Houghton 1987) in order to
41
mitigate any fundamental personnel conflicts. The perfonnance of a joint venture can
be said therefore to depend upon such qualitative variables as individual personalities,
organisational culture, administrative style and managerial philosophies. The joint
venture managers and their personnel may thus be unwilling to defer to the differing
corporate cultural needs and so needs to be overcome. Boulton (1961) agrees with
this point, and appends the criteria that it is essential to select the correctly minded
personnel, with personalities to suit the ever-changing, and mercurial personnel
environment of the joint venture. For the effectiveness ofthe venture, managers and
their personnel need to develop special liaising skills to cope with mixed loyalties and
cultures that are coupled to the joint aspects of ownership and shared decision control.
There is the need for a greater receptivity to their partners ideas and mannerisms.
2.9.2 Compatibility
When confirming the need for a homogenous culture group amongst the partners, the
factor of compatibility requires consideration. Since compatibility between partners is
vitally essential as the bedrock of the joint venture (Goldenberg 1986). Partners must
compliment on another, being of comparable strength, size and temperament (Harrigan
1987, Wynn 1988 and Boulton 1961). Interestingly, Gomes-Cessares (1989) even
suggest that the potential for greater gains to greater the more dissimilar partner, and
yet the greater the similarity between them the lower is the likelihood of conflict
between the partners. Clearly, there needs to be a balance between the partners hope of
gain, within a joint venture, against the rising risk of conflict within a joint venture.
2.9.2 Motivation of the Venture Personnel
The prospect of motivation and subsequently the power within a joint venture is briefly
discussed in this section to produce and give an overview in this area of human
behavioural science. Power is an essential element of organisational success and the
gaining of power is the desired goal of individual personnel without an organisation.
42
Power is defined as having the capacity to change the behaviour or attitude of another
in a desired manner (see Baron & Greenberg 1990). Since the power and authority a
joint venture manager has is drawn from the directives of the multiple parents, it can be
limited and non-directional and therefore a potential disadvantage to the manner (Lyles
& Reger 1993). The managers therefore have a number of control techniques with
which to harness the various forms and types of power.
These are namely the controlling of valued resources (reward power), controlling
punishment or penalties for lack of productivity or progress (coercive power) and the
rise of recognised organisational authority over others (legitimate power). Control can
also be administered by way of administration and respect for the venture management
(referent power) and finally the use of control upon superior knowledge and skill of the
venture management (expert power).
All the above tools are valid mechanisms for control of motivation and power within a
joint venture organisation, thereby enhancing the joint venture organisations
harmonious well being and operation.
2.9.3 Success Factors for a Joint Venture
Joint ventures are considered to be a relatively precarious management strategy, as
established earlier in section 2.4, with no real guarantees for success. It is therefore
essential to attempt to identify any factors for a joint venture success that may in turn
predict and enhance a potential venturers chances of success. Citing Randall (1987)
the way to increase the odds for a successful joint venture is to invoke the first law of
'Terpsichorean', waltz to the same tune and then start on the right foot.
Sanvido (1992) who looked at project success, defined the term 'success' as being
unique to each joint venturer, since they will certainly have their own viewpoint of
success. Success is generically defined as the degree to which project goals and
expectations are met. Such goals may include aspects of a technical, financial, social
and professional nature. It is this definition that will change from one project to
43
....... ~
another. Critical success factors are defined therefore, as factors that predicts success
on projects.
From the contractors point of view, as opposed to the owner/designer, Sanvido further
stated a number of success criteria:
(I) Meet schedule (preconstruction, construction and design);
(2) Under budget;
(3) Achieve quality inspection or exceed;
(4) No 'claims' by others;
(5) Achieve client satisfaction;
(6) Achieve safety (particular to the contractor);
(7) Good communication;
(8) Minimal or no surprises during the project.
It is of use to point out at this stage that the importance attributed to each factor, can
and is subjective, dependent both upon the parent company and the individual
personnel. From his research, Sanvido found four critical success factors:
(1) A well organised, cohesive facility team, to manage, plan, design and
construct the facility. Team chemistry was developed through common goals
and activities;
(2) The various specialist partners, behave as a team without conflicts of
interests and differing goals;
(3) Experienced management, and knowledge of the task or operation at hand;
44
(4) Timely, valuable optimisation information from all project parties in the
planning and design phases of the project.
Both Mitchell (1988) and Houghton (1987) make reference to the Coming Glass
Company, who have had joint venture experiences that date back to the turn of the
century. In fact, one of their earliest joint ventures was with Edison's light bulb,
manufacturing the glass bulbs for this particular innovative invention. Coming are
quoted as having considerable experience and success with joint ventures, and whilst
also encountering failure, they have drawn up their own formula for success
comprising of five basic rules:
(1) Seek compatibility and commitment from the partner(s). The key
ingredient here is trust and it's propagation. A new company needs it's
energy and commitment directed towards the venture's business, and not
towards it's parents. The parents need the same basic business philosophies
and with no fundamental conflicts of interests.
(2) There must be comparable contributions of resources and abilities from all
partners. It is essential to bring more than just capital investment to the
venture, rather there is a need to actively contribute expertise and talent from
the group partners.
(3) Mutual agreement upon the long term goals and aims of the partners,
before the venture is initiated, with realistic assessment of their needs.
(4) Ensure strong joint venture management, since there is no substitute for
talent. It is necessary to prevent any dilution of management strength, such as
using the venture either as a dumping or training ground for burnt out or
inexperienced managers respectively. The management team must be
committed to the strategies of the business without any dual or residual
allegiances
to the parent companies.
(5) Independence from the parent companies. The joint venture should be
given enough breathing space with the autonomy for it's own progression.
Ideally there should be effort to minimise common decision making,·
45
------------
amongst the team to a few critical fundamental issues.
Detailing the Coming rules for success further, some of the most referenced factors
were:
( I) The use and understanding of clear obj ectives and goals from each partner
coupled to the need for mutual benefits, and the necessity to meet your partners
goals (Brooke 1986, Lyles 1987, Falls 1980, Selby 1993, Anderson 1990,
Eiteman 1990,
1989*);
Paap 1990, Andrews 1984, Brandt 1990 and Webster
(2) Correctly choosing, knowing and understanding your partner, with the need
for
good relationship and sense of rapport (*also see Pekar 1989, Randall
1989, Beamish 1984 and Harrigan 1984);
(3 )The implicit need for trust and respect between partners is strongly
emphasised
*also see McCormack 1993, Goldenberg 1986 and Harrigan
1984);
(4) A need for flexibility and adaptability of the joint venture for the future;
(5) The understanding, and subsequently the establishment and harmonisation
of cultural differences amongst the partners. It is especially warranted when
dealing with a partner with a drastically different culture;
(6) The sharing of risk, and so reducing the vulnerability of a parent company
to forms of financial and political risk is a factor requiring the anticipation of
(*also Nigh & Smith 1989);
(7) There is a need for a compatible chemistry with partners of a similar level of
experience (see Harrigan 1986) complimentary skills, with a synergism
between all parties concerned (C.l.l.1991);
(8)Interestingly, Brandt (1990) and Harrigan (1984) both consider it essential
46
to understand the pitfalls of failure and the elements of suceess before entering
into a joint venture. Stressing the need to understand one's limitations, and
shortcomings, their strengths and weaknesses;
(9) Osbourn & Baugh (1987) consider there to be a need for development of
co-operative relationships, notably to give a short term advantage, but with a
long
term risk to the partner (co-operation and collaboration);
(10) According to Webster (1989) and Randall (1989) it is necessary to
develop appropriate strategies, as well as a strong business and legal structure,
in order that the joint venture may dovetail into the parents corporate
strategies. Brookes (1986) appends the point, that those predetermined and
agreed upon policies on corporate strategy are needed to enhance long range
plans and so adequately incorporate them within the venture. When dealing
with the strategic values of a venture organisation, the partners involved need
to readily take the long term view (Beamish 1984 and C.I.I. 1991), and
accurately assess their commitment for success;
(11) Brandt (1990) stated the need to co-ordinate their partner(s) efforts,
motivating their performance, and so maintain the techniques necessary in key
interfacing functions;
(12) There is a need to define the full extent and willingness of their partner( s)
resource contribution ensuring that there is both adequate capital support, and
a minimum threshold capital investment with a mobility of assets;
(13) Pekar (1989) and Brooke (1986) considered there to be a valid need for a
good compatible controls system, using a high level board to monitor progress
and adequately review the joint venture operation regularly and closely
monitor risk. However, coupled to the need for control, it is important to
distance oneself away from a fixed and rigid mentality to that of a business
building mentality;
47
(14) From a management viewpoint, a factor for consideration is the need for
ensuring a good and comprehensive selection of managers, with versatile
managerial skills (Andrews 1984, Webster 1989 and Pekar 1989);
(15) There is also the need to protect proprietary information and company
knowledge and to ensure that the parent can maintain it's competitive edge both
during and after the venture;
(16) Lyles (1989) states that a valuable lesson can be learnt from previous
mistakes, thereby taking corrective action to enhance the abilities of the venture
and
subsequent operation
Whilst the above list is not a totally exhaustive spectrum of success factors, it can be
considered to be a definitive list based upon the scope and depth available to this
research paper. Summarising these points and those generated throughout this chapter
it is clear that there needs to be a sharing of power and control, with parent companies
seeking compatible control systems and like-minded partners. Those partners will need
to show a true need for their partner, with clear and mutual objectives, detailing their
commitment to success and willingness to contribute fully to the venture. The key
ingredient linking the various components of a successful joint venture is that of trust
and respect between the partners for one another. Without trust, the venture cannot
function properly, since there needs to be a comprehensive and integrated meeting of
different companies and cultures.
2.10 The Literature Review - A Summary
As a result of the literature search and review. detailed in Chapter Two, the definition,
characteristics and parameters for the conceptual joint venture were established. The
joint venture, according to the researchers, was defined as :
Having shared ownership with joint management by the Partners.
48
An independent legal entity with joint control.
The joint venture, as an incorporated company, meant that all the partners were
required to contribute jointly,
providing the capital, management, and subsequent share in profits. Control was
considered as an equal right of all
the partners to carry out the common purpose of the joint venture, with each partner
taking an active role in the decision-making process.
The two attributes of the conceptual joint venture, were those of:
Common control.
Shared ownership.
and were believed to be correlated with one another, with control having a direct link
to the decision-making process. It was outlined, that equal ownership did not
necessarily mean equal control. The aspect of majority control. The aspect of majority
control (as indicated in section 2.8) was also considered as important, especially since
it allowed a partner to take control of and so manage the joint venture, to their own
particular strategies. This in turn could be used to overcome the "bleed through" of
information and skills.
It was interesting to note that both Groves (1970) and Young & Bradford (1977)
thought that there should be no absolute dominance by one member of the venture or
that the equity or ownership was linked to control. Clearly in contrast to both the
researchers and the contractors opinions.
Andrews (1984) further intimated that joint control did not occur in every aspect, and
that a joint venture could have a delegated individual management in a joint decision.
Control was obviously considered more difficult to achieve with shared ownership and
with multiple parents.
Taking the discussion of control further, into the fundamentals of sharing overall
management planning and control, it had been stated that management difficulties
49
could in the particular case of the joint venture lead to disputes and in the worst
scenarios deadlock. To mitigate such concerns, specific control mechanisms were
needed, especially since majority managerial authority and operating control are
considered as highly important by the parent companies. These mechanisms were
namely:
Top management.
Fixed responsibilities of the partners.
High calibre of resources.
Management consensus.
The linking of budget and resource.
Autonomy, of the joint venture from it's parents was also considered a highly important
factor for it's (venture) survival and subsequent success. Since a parent overseeing it's
'child', as an investment, can be too paternal, smothering the venture and so stifling it's
growth and potential worth.
Initially however the joint venture will be dependent upon their parents for their
resources and strengths, but such dependence will lessen as it gains it's own strengths
and abilities through it's own maturation and stability.
Coupled to the need for autonomy, is the need for a strong new internal management
system that can offer, the parties involved, a strategic flexibility in their actions, so as
to obtain an effective use of their parent's co-operative strategies. Good
communication and logistics are considered necessary for the effective use of the
management structure.
When investigating the team aspects of the joint venture, it was noted that
organisational behaviour and it's culture can have an impact on the ventures
operations. Culture can affect the way in which problems are perceived, and in turn
50
how they are resolved. Actual cultural differences between the partners can provide a
potential barrier to the venture's personnel. The differing economic philosophies can
thus lead to inflexibility and friction between the partners. According to the
researchers in the ideal situation, the partners should bring complimentary skills and
homogenous corporate cultures to the union. This organisational culture, responsible
for the inherent characteristics of the venture, enables the venture's personnel to
develop a culture that is different from their parent companies. The ventures
performance will in turn depend on the qualitative variables such as the internal culture
and managerial philosophies. Their managers need to develop special liaison skills
with which to cope with the mixed loyalties and cultures coupled to the
aforementioned ownership and control issues.
Prior to joint venturing there it is necessary to understand the need for joint venturing,
the reasons, advantages and disadvantages. Summarising those detailed in the
literature review, it was found that the main underlying factor contributing to the joint
venture's formation is that it arises out of a need for others. The potential joint
venturer requires r another's resources, knowledge and skills, without which the joint
venture could not exist. The potential joint venturer may also wish to amortise their
risk for the fol1owing reasons:
To expand a company's horizons, either by entering into a new geographical
territory or field of work i.e. as a strategic move for reasons of globalization or
to break into a protected market.
To obtain specialist skills and abilities.
For reasons of competitive col1aboration.
To increase either bonding or insurance abilities
As a vehicle for building trust.
Meld one partners strengths to another's weaknesses.
This leads to the formation of advantages and disadvantages. As an advantage,
essentially it allows a company to sharpen their abilities, and so balance their use of the
51
skills and abilities. To team with more experienced partners in order to obtain use of
local knowledge, gain skills, enter new markets, technology transfer and to establish
better cost control measures. The controlling of risk is considered the prime
motivator, with an improved ability to respond to the changing business conditions
with improved quality, effective use of resources and costs.
Looking towards the disadvantages, there must be a compelling reason to joint
venture, which necessitates a sharing of control and profits. The joint venture is
considered a highly risky management vehicle, with a quoted failure rate ranging from
46% to 70%. This sharply contrasted with the surveys success rate of 89% and would
indicate that in the particular case of the respondent contractors used within this
research, they appear to be a highly successful in their applications towards the
venturing. This in turn may stem from an ability or level of experience that is highly
useful in a joint venture.
The loss of control to a parent, is a factor that is not easily managed, with the joint
venture managers having a fear of losing control over their proprietary information.
Other matters include the misreading or mismatching of the partner's objectives and
needs, the clashing of corporate cultures, politicking and competitive collaboration all
leading towards potential problems for the joint venturer.
For a successful joint venture, it is necessary to understand and comprehend the factors
of success for a joint venture. Success factors can be unique to each joint venture
project and are considered to be subjective, depending upon the person or manager
within the parent company resppnsible for designing the particular project criteria.
Generally, it was found that the critical success factors to fall under the aegis of 3
parameters, those of cost, time and quality.
Sanvido' critical success factors encompassed the following points:
Use of a well organised and cohesive team.
52
Use of team building techniques, without differing goals and points of interest.
Experienced management.
Optimisation of information through the project's life.
The Coming Glass Company, an industry example of a highly experienced company
(not however in the construction industry) had generated their own rules for success,
which were utilised in all their joint ventures:
Compatibility and commitment with complete trust.
Comparable contribution of resources.
Mutual agreement and understanding of partner goals.
Strong joint venture management, with a full commitment towards the joint
venture.
Independence, and autonomy from the parent companies.
There must in their opinion, be a clear set of objectives and goals, coupled to the
correct choice of partner, with a compatible chemistry and level of experience. There
also needs to be:
Inherent flexibility.
An understanding of strengths and weaknesses of their partner.
An understanding of any cultural differences.
Developing appropriate, mutual strategies.
Partner motivation.
Define a partner's willingness to contribute.
53
Compatible control systems.
Comprehensive selection of managers.
Protect proprietary information.
Essentially, to summarise the aforementioned researchers opinions, there needs to be a
sharing of power and control with like-minded partners. There should be a true need
for the others, with clear mutual objectives.
This chapter has established a solid platform of information concerning the joint
venture which can be utilised as the basis for the testing of the hypotheses through the
survey of UK construction contractors. the joint venture has been defined, with it's
varying format permutations and so identified the needs of the potential venturer
outlining their reasons for pursuing this particular management vehicle. Use of shared
ownership and control, through the venture's management board is needed to ensure
the necessary level of independence from the parent companies.
The next logical phase is the testing of the hypotheses drawn from the literature review
findings, by way of a questionnaire survey and analysis of the current opinions of UK
contractors. Such a survey is discussed in the following chapter, and the analysis
obtained reviewed and continued through to chapter six. Discussion of the derived
hypotheses is progressed to envelope the aspects of the chosen sample of contractors,
their backgrounds and subsequently leads onto the management board of the joint
venture. Use of regular reporting systems, management team creation and personnel
selection are components of the venture's board that are so identified, with details
concerning their operation.
54
-
CHAPTER THREE
3.1 Introduction
This chapter presents and discusses the research hypotheses, to provide a suitable
platform from which a survey of contractors can be performed generating the
necessary level of integrity required for the research findings. Control and ownership,
compatibility between the partners based upon their size, experience, culture and
company strategies coupled to the venture's independence are considered.
In earlier chapters, it was stated that the joint venture concept, was an easily mis
defined strategy of a highly risky nature, and as such worthy of detailed research. It
was necessary to therefore fully comprehend and understand it's usage and practical
implications within the construction industry. A number of points manifesting into
hypotheses were used to achieve definitive and current opinions from the contractor
population regarding the determinants of success.
The knowledge gained from the literature search enabled a set of hypotheses,
encompassing the necessary components of success. These were namely:
(1) Common Control and Shared Ownership
Shared ownership between the sponsor-companies is a pre-requisite of the joint
venture, but with common control being the secondary motivator to that of
majority control.
(2) Mutuality of Aims
For success in a joint venture, prospective joint venturers must have similar
goals and objectives to one another.
(3) Autonomy from the 'Sponsors'
55
----- ----------- ------- ---
Autonomy of the joint venture company is a necessary component for success, in
order to mitigate any loss of fluidity in it's management action and reaction.
(4) Co-operation and Collaboration
For success the joint venture partners must co-operate with one another. Such
co-operation and collaboration must be based upon trust ••
(5) Compatibility
Prospective partners should look for partners of both equal size and equal joint
venture experience.
(6) Flexibility
A joint venture must be a flexible instrument with which to control any
unanticipated events.
(7) Cultures
It is essential to understand the cultural differences between the differing
company organisations so as to accommodate the differences and mitigate any
barriers and conflicts for the success of the joint venture.
3.1.1 Testing the Hypotheses
With the outline hypotheses established, there was a need to test the hypotheses, by
means of a national questionnaire survey from national construction companies. There
was a need for a definitive population size, and between the research team, the decision
to rise the membership of the National Contractors Group was made. This choice was
made in tandem to the need of other associated researchers, involved in the Joint
Venture Research Programme, so as to minimise any duplication of enquiries to
contractors. The initial brief was to determine the extent of construction contractors
with joint venture experience within my population listing.
56
The original listing from the National Contractors Group encompassed seventy five
contractors and were contacted via a postal survey, to establish the necessary
feedback. From the seventy five contractors, fifty two replied, representing a 69.3 %
response rate. Of these responses thirty three contractors acknowledged some form of
joint venture experience whether it be up to tender stage or post contractor. This
thereby represented a 63.5% joint venture experience rate amongst the UK contractor
group responses.
The next logical stage was to issue a questionnaire to these thirty three contractors,
detailing the aspects of the aforementioned hypotheses in order to test their validity.
The questionnaire surveying these contractors is shown in Appendix A.
Of the thirty three contractors, even after a series of interviews and telephone
conversations, only twelve contractors responded with the questionnaire survey. This
thereby produced a 36.4% response rate with which to formulate the forthcoming
analysis and set of conclusions.
3.1.2 The Joint Venturers
In order to fully identify the logic and adaptability of the questionnaire, a pilot survey
was initially issued to five randomly chosen contractors. It's purpose was to identify
any errors within it's structure, which would ultimately reflect deficient or incorrect
responses. From those first five, no problems were encountered with it's structure.
The next procedure was to issue the questionnaire to the remaining twenty-eight
contractors, with a stated response time of six weeks. After this period of time, to
ensure a substantial sample response, a further letter was issued to all outstanding
questionnaire contractors. This was further followed up by a telephone calL requesting
their response. To facilitate the fullest response possible, all contractors were offered
the opportunity to be personally interviewed, at which time the questionnaire would be
completed jointly by the contractor and the researcher. This facility was gratefully
received by four of the contractors. To conclude the survey, a final letter was issued to
the remaining contractors, who had not responded, with a final telephone call
requesting their assistance.
57
Of the thirty three contractors, only twelve responded to the questionnaire survey. This
produced a 36.4% response rate with which to test the developed hypotheses and draw
the set of conclusions.
Of the responding construction contractors (to be termed Sponsor Companies) within
the sample, twelve (12) companies formed the main analysis group. In order to
adequately desegregate the limited number of responses, and to so identifY analysis
patterns, the main group was initially broken down into four main sub-groups, those
experienced in joint ventures and large in size to those with minimal experience and
small in size. These were further reduced by a simplistic separation based upon size
and experience individually. The term "small" in relation to the contractors was
defined as those companies whose turnover was seventy five million pounds or less.
This particular monetary threshold was chosen primarily from the need to adequately
differentiate the much larger contractors with turnovers in the hundreds of millions to
those of smaller concerns. The contractors from the chosen population encompassed a
wide spectrum of companies with variable levels of turnover, generated from a
selection of projects and types of business. It was therefore decided that the chosen
threshold should not be so low that there was too great a financial differential. For
example, if the threshold was one million, when compared to either a contractor with
a turnover of four hundred million or two million, the credibility of such classes would
be in doubt.
For the purposes of the analysis, the sub-groups were identified as:
Class One
Class Two
Class Three
Class Four
Class Five
Class Six
Class Seven
Class Eight
Experienced and Large Contractors;
Inexperienced and Large Contractors;
Experienced And Small Contractors
Inexperienced and Small Contractors;
Experienced Contractors;
Inexperienced Contractors;
Large Contractors;
Small Contractors.
The term "experience" was defined as having two or more joint ventures and that of
"large" as opposed to "small" based upon a turnover of seventy five million pounds.
The numerical composition of the "classes";:
58
Class One 6 contractors
Class Two 3 contractors
Class Three 2 contractors
Class Four I contractor
Class Five 8 contractors
Class Six 4 contractors
Class Seven 9 contractors
Class Eight 3 contractors
As a result of discussions with a statistician, it was established that utilising the sub
groups, classes 2, 3 and 4, where the sample size (cases) numbered 3 or less than 3
was not a statistically reliable form of data. This therefore meant the general exclusion
of data responses from the classes 3 and 4, leaving only 6 sub-groups. However for
classes 3 and 4, with respect to their open ended responses, their information has been
included to provide further background to the main statistical approach used.
From these 12 respondent contractors, a core set of joint ventures were drawn
together, identifying fifty (50) joint ventures (as shown in Table 3.1). It is clear from
the data collected within table 3.1 that a 90% success rate was achieved by the
contractors. Such a rate contrasted sharply with the failure rates identified by the
references laid down by the references reviewed in this research. Such a discrepancy
can be said to result from a number of points. Namely that the researchers failure rates
revolved around a number of industries, and not subject solely to the construction
industry or the domicile of the United Kingdom. A construction project, or joint
venture is also a short-lived activity with limited expectations and can so contribute to
a more active management process within the joint venture. It can then be stated that
in this instance, it would appear that the internal variables denoted such as the
management composition, organisation and culture are dominant not the external
variables.
The joint ventures identified, included three foreign locations, and four failures that
were solely due to a failure at tender stage. For the purposes of this research, the joint
ventures for consideration are centred on ventures that actually operated on the UK.
mainland. Taking these aspects into account, the revised success rate is 42/43%, and
omits the aforementioned seven joint ventures from the statistics analysis.
59
When looking at the joint ventures location, type of project, use of foreign partners,
size and business of partner, it is very clear that from the data produced, there is no
evidence that they can influence the success or failure of the joint venture. However,
this research is based upon a limited sample size and can therefore only indicate a
situation rather than categorise and determine a definitive characteristic of the joint
venture strategy.
3.2 The Management Board
In order to establish the necessary feedback from the Sponsor Companies, a number of
statements concerning the joint venture management board were proposed, refer to
section 2.7, their responses produced the forthcoming information.
It was important that the management of a joint venture be given considerable freedom
at the Sponsor Companies, (see Drucker 1973, Gomes - Casseres 1987, and Harrigan
1987) when referring to both the main and sub-groups.,( Table 3.2.1) ,the two sub
group companies that did not agree with this particular aspect of freedom were those
who were experienced in the concept of the joint venture. They stated that the Sponsor
Companies interests needed to be maintained since ultimately they were responsible for
the actions ofthe venture. (see Pipilis 1981). This was achieved by ensuring that the
management team sought instruction from their Sponsor Companies (Parents) utilising
accurate reporting systems which in turn set clearly defined limits for their authority.
The creation of a full-time management team and staff did not appear to offer any clear
obstacles to the Sponsor Companies, as shown on Table 3.2.2 The only two sub
group companies that disagreed, and stated this as a problem, came from the large and
experienced contractors. The main reasons for such a problem, stemmed from the
selection of key and senior management positions, such as the project manager or
board director, which often meant that they in turn had other priorities, separate to the
operational running of the venture i.e. parental duties.
The control and subsequent accountability of the joint venture to the Sponsor
Companies was comprised of a combination of a management reporting systems,
control targets and selection of venture personnel. Specifically this meant the
incorporation of a reporting and accounts system that incorporated all the aims and
financial targets of the Sponsor Companies with regular meetings by senior
management in order to assess both progress and the joint venture management limits
60
and constraints. The report system, would ideally utilise a procedures manual that set
out clear lines of communication, budget and cost monitoring and clear defined work
descriptions for the mutually agreeable project manager and site team. Generally, the
necessary accountability was made via the joint venture board to the Sponsor
Companies, where any decisions contrary to the venture's agreed policies and charter
could be appraised prior to rectification at operations level. Regular meetings between
the joint management board and the Sponsor Companies were necessary and from the
analysis, ten out ofthe twelve contractors (83.3%), as shown on Table 3.2.3, to be
held on monthly meetings. Only in one instance (8.3%) was there a case for bi
monthly meetings and so supported the case laid down by Armitt (1984.).
In the initial stages of a joint venture, it is essential to construct the managerial
structure of the joint venture, this responsibility fell into four categories, that of the
joint venture board of directors, the sponsor companies, general (project) manager or
both the board and manager. It was clear that the majority of contractors seven out of
twelve (58.3%) of the group (see Table 3.2.4), considered the venture board of
directors to be the driving force behind the formation and building of the joint venture.
A typical example of a corporate joint venture structure, as agreed and approved by
the responding contractors is shown in Figure 1.0.
Generally, the management structure should be kept to a minimum number of tiers of
management, thus ensuring that the communication lines are short and precise. The
joint venture board of directors (JVBD) or management board, is made up of the
Sponsor Companies directors, with their sponsor guarantees and executive powers of
command.
The next aspect associated with the joint venture was the selection of the personnel,
and it was found to be principally related to the suitability and necessary experience of
a position as considered by the Sponsor Companies. They in turn volunteer personnel
and staff to match the particular specification. It should be noted that the specification
for lower tiered personnel was drawn from the requests and needs of the Project
Manager. Staff from each Sponsor Company were generally "willingly ordered into
position." by their superiors.
As with any construction process, both management and personnel are continually
assessed and processed in order to control the work load, thereby building up and
running down labour levels to suit the venture's requirements. It was noted by
contractors within classes 1 and 4, that rarely were the management positions full -
61
time appointments, since existing staff had been allocated as part of their main duties
and not exclusively to the joint venture.
A factor associated with the joint venture, that differentiates if from the traditional
strategy, was the time factor. In a venture with a number of sponsor company
partners, it was proposed that the directors and other managerial personnel were not as
likely to act as a cohesive team through a lack of team evolvement. When questioned,
as a group, no clear preference was noted, see Table 3.2.5, since half of the contractors
supported this premise and the remaining half did not. Further still, from those whom
agreed, members of classes I to 4, stated that time was needed to learn and develop
common points of ground, goals, thought processes and patterns. The individual styles
required time to merge and integrate. Within a single construction company, this
evolvement of team cohesion is already in existence. The various members of
personnel from the individual sponsor companies also tended to react only to their own
company. With an increase in the number of Sponsor Companies, it increases the
number of communication interfaces and hence compounds the time for the
evolvement of working relationships.
In contrast, to the large Sponsor Companies, Classes I and 2, valued the aspect of
team cohesion and evolvement, but did not consider it to be a real concern. The
personnel from the joint venture were firstly drawn together in the pursuit of a
common set of goals and needs. Enthusiasm for the venture was coupled to the
motivation for success is generated, since all parties present wished to work together
to achieve the common objectives. In certain instances, Sponsor Companies have had
previous knowledge of one another, therefore having an understanding of the others
philosophies and thought processes. This lends itselfto an inherent degree of
confidence and co-operation that is present at the start of the joint venture. In
situations where the Sponsor Companies are new to one another, management and
their personnel are considered to be sufficiently experienced and intelligent enough to
understand and cope with the differing attitudes and perceptions of others. Within the
construction industry, people are considered to be well-equipped to adapt to the ever
changing work environment, with project teams varying from project to project.
Preparation is necessary for the negation of evolvement problems and the likelihood
that the personnel involved in the joint venture will continue with it's growth is quite
high. This is therefore believed to ensure that all parties involved are "in simpatico"
and a synergy of Sponsor Company personnel occurs.
In a single one off joint venture, on the basis of the literature search, it was thought
that there were four fundamental weaknesses associated with the joint venture
62
board.(as stated by Boulton 1961) Namely, the unfamiliarity of members with one
another, virtual overnight existence, a lack of membership control and that the Sponsor
Companies, when selecting their representatives were unlikely to consider the balance
necessary for the best selection for the group. see the Tables 3.2.6a - 3.2.6d.
Seven out of twelve contractors (58%) agreed that the joint venture board was weak
out of a result of unfamiliarity with one another. The aspect of the overnight existence
of the board did not appear to be unanimously thought of, since half(50%) thought it a
weakness and the remaining half did not. However, the prime group, the large and
experienced contractors in the main, four of six (67%), did not agree. Lack of
membership was overwhelmingly discounted as a venture board weakness, with ten
out of twelve contractors voicing this opinion. This was so repeated with regard to the
potential weaknesses of a lack of choice with parental selection and was not
considered a weakness.
Other weaknesses advanced by the main group of contractors indicated that a director
may be chosen as a result of a Sponsor Companies majority share holding rather than
for a functional ability. Dual allegiances may arise within the directors, who can act
with a view to the best interests of the Sponsor Company rather than the joint venture.
Difficulties can therefore be manifested from the personnel trying to accept mutual
objectives.
This chapter has established the hypotheses concerning the components for success.
Namely, the use of common control and shared ownership, mutuality, autonomy,
collaboration and compatibility amongst partners with an understanding of their
respective organisational cultures. It was further noted that the management board
needed freedom to act and a comprehensive reporting system with a short and concise
management structure. Weaknesses that were identified arose from the unfamiliarity of
partner members and the need to fill management positions as a 'dumping' ground with
available personnel.
The next logical progression of the venture's knowledge leads onto the areas of co
operation and collaboration ofthe venturer members, which is based upon trust and
the discussion of an identified list of success determinants. Chapter four,
acknowledges and considers these areas in detail, focusing upon the need for trust,
unanimity of aims and the dominance of a single partner in the decision-making
63
process. The importance of the success determinants, in particular those of
compatibility, managerial skills, mutuality of aims and objectives coupled to a joint and
uniform commitment for success is needed amongst the partners. The need for shared
ownership and the wish for majority control by partners is identified as another area for
success.
64
CHAPTER FOUR
Section 4.1 Co-operational Collaboration
One of the basic tenets of the joint venture concept, as derived from the literature
search was that of trust. (Andrews 1984, Harrigan 1987, and Pipilis 1981) It was this
point that was raised to the responding contractors, coupled to that of co-operation.
All twelve contractors agreed that for the success of a joint venture, the sponsor
companies (or Partners) involved must co-operate with one another, and that the co
operation and collaboration is based upon trust. Trust is defined as the reliance on the
integrity or justice of a person or confidence in some quality, feature or attribute of a
thing (Webster Dictionary 1975).
Trust is important since the sponsor-companies must feel that all parties are making
decisions with the best interests of the joint venture in mind, and that all are working
towards a common objective. This is further needed since, there are occasions when
members from each sponsor-company undertake tasks without reporting back to their
joint venture board, for example, reasons of independent meetings with statutory
authorities, resulting in individual agreements. This in turn necessitates trust from the
partners and promotes the need for the collaboration necessary to succeed as a team.
This trust can be audited by way of clear articles of agreement, and use of reports and
accounts.
It is necessary that all partners accept that the success of the joint venture also means
the success oftheir own companies. This in turn will enable them to trust one another
to endeavour to that end, and so ensuring that maximum effort will be given,
especially if all the sponsor-companies are aware of the other commitments, needs and
objectives of the partners.
Now, with the advent of any problematic scenario, such as a dispute over an
operational issue, the sponsor companies (parents) tolerance towards another must be
judged and assessed to maintain the required level of co-operation and collaboration.
Contractors were when faced with this statement, asked to respond with the common
problems normally associated with the joint venture operation. The problems centred
around the handling and management of the joint venture, and manifested themselves
65
both during the fonnation of the venture, when producing the agreement and during its
operations.
The problems of the joint venture encompassed those of trying to establish agreements
that met all the goals of the sponsor companies, assessing the capital and associated
asset requirements of the joint venture and budget needs. Integration of the differing
methods of operation, managerial attitudes and philosophies, sense of priorities and
accounting procedures were necessary, and essentially the understanding of their
temperament and behavioural differences, (this is described in more detail in Chapter
Six ).
The dominance of one sponsor company over another (Bell 1990, Janger 1980 and
Groves 1976) or the determination of the need for a power of veto was an area
particularly raised by the experienced contractors. However, the inexperienced
contractors did in turn stress the slowness of the decision making process, especially
when each board member required authorisations from their sponsor companies on
general issues.
To overcome these problems, regular meetings between the sponsor companies and
the joint venture were used, with strong parental control. It was necessary for each
partner to educate itself of the other companies, their attitudes, procedures and
methods of operation. This was coupled with, according to the large and experienced
contractors, use of a small like minded management team and the, use of team building
techniques. Both hard work and the need to spend time with their partners were
advocated by the inexperienced contractors.
To overcome any disputes, it was necessary to agree a fair and equitable system of
arbitration, where tenns and solutions cannot be accurately agreed within the joint
venture agreement.
Taking the decision making aspect further, in the advent of a prolongation of this
process it can result in a deadlock situation. Only a quarter of contractor, see Table
4. 1.1, indicated such an occurrence in their experiences. Of the contractors, both the
small and the experienced groups expressed a knowledge of joint venture deadlock.
The solutions to the deadlock situations, ranged from using common sense and
agreeing to differ, utilising a small management team to abandoning the joint venture.
66
\
\
When asked whether such a deadlock situation lead to a joint venture termination, only
half of the contractors responded to this question (50%), see Table 4.1.2, all stating
such a situation had not been experienced by themselves.
4.2 Determinants of Success
From chapter two (sections 2.3 and 2.4), clear determinants or factors of success were
established in a joint venture project. These determinants should provide a platform
from which to manage the project satisfactorily.
To further identify these determinants and clarify their relative importance to each
contractor group, a core element of determents were identified and reviewed by the
respondent contractors.
Note: The codes shown in brackets are randomly generated by the S.P.S.S.
Statistical Software Programme.
These were namely:
(I.) Trust is essential (VRI);
(2.) A flexibility to cope with the transient nature of external forces (VRIO);
(3.) Good communication (VRll);
(4.) An ability to share (VRI2);
(5.) Having good management skills (VRI3);
(6.) Having compatible values (VRI4);
(7.) Having compatible cultures (VRI5);
(S.) Understanding the joint venture "etiquette" (VRI6);
(9.) Compatible control (s) systems (VRI7);
(10.) Deliberation and attention in the setting up of the joint venture
agreement (VRIS);
(I I.) Anticipation of risk (VRI9);
(12.) Mutuality of aims and objectives (VR2);
(13.) Knowledge of their Partner(s) (VR20);
(14.) Middle management involvement in the running of the joint venture
(VR21);
(15.) Important to decide (if needed) which member of the large group of
67
companies should become the shareholder in the joint venture;
( 16.) Ensuring that each partner's rights can be enforced especially if a
government body is involved (VR23);
(17.) Management of organisational information transference (VR24);
(IS.) Creation of a number of narrow purpose joint ventures (i.e.
spiders web of joint ventures) (VR25);
(19.) Minimise investment and ensure mobility of assets (VR26.);
(20.) The monitoring of risk (VR27);
(21.) Ensuring that each partner's rights and obligations (inter se) are clearly
defined (VR29);
(22.) Having a realistic assessment of the strengths and weaknesses ofthe
joint venture (VR29);
(23.) Compatibility of size and experience (VR3);
(24.) Assess the partner(s) commitment to success (VR30);
(25.) Accurate assessment of the parent's willingness to contribute resources
to the venture (VR3I);
(26.) Obtaining your partner's (prospective) credit standing (VR32);
(27.) Previous joint venture experience (VR33);
(2S.) Any other determinants (VR34);
(29.) Autonomy from the sponsor parents (VR4);
(30.) Having a true need for the other partner(s) (VR5);
(31.) Co-operation and collaboration (VR6);
(32.) The sharing of power (VR7);
(33.) Use of common control (VRS);
(34.) Neither parent should enter the joint venture out of a position of
weakness (VR9).
The respondent contractors were again asked to indicate their personal importance
attached to each determinant by use ofa value scale (I to 7). The results produced
were subsequently analysed by use of mean ranking.
From the main group of contractors, it was clear that the most highly rated
determinants were that, trust was essential, there was a need for the mutuality of aims
and objectives between partners and also that good lines of communication were to be
used. (see Figure 4.2). In addition, another factor closely associated as of value, was
6S
the need to ensure that each partner's rights and obligations were clearly defined to all
parties. At the lower end of the importance scale was the need to create spider web
joint ventures use of compatible control systems and the choice (if required) of which
group member should become a shareholder in the joint venture. No clear level of
significance (Table 4.2) was found for the main group contractors.
For this general group, it is therefore evident that there was a need for close liaison
between partners in order to generate trust and ensure a mutual understanding of each
other's needs and objectives. Control, whether it be by use of compatible systems,
does not appear to be a strong aspect for success.
When looking at the sub-group classes, initially class one, the large and experienced
contractors (Figure 4.2.1), their identification of importance concerned the need for a
compatibility of size and experience between the sponsor companies, use of the
sponsor companies' middle management in 'the running of the venture and the accurate
assessment of their willingness to contribute resources to the venture during it's
operation. In the lower levels of importance, which mirrored the higher levels, was the
need to minimise investment and to ensure the mobility of assets, coupled to the need
for common control. No clear level of significance was found for the class one
grouping, (refer to Table 4.2.1), or for the classes two to four.
In this prime group, the determinants for success indicate the need for sponsor
company compatibility with a strong managerial input. In direct opposition to the
'conceptual joint venture', common control was not considered a priority.
The large, but inexperienced contractors, class two, surprisingly valued the need for
the spiders web of joint ventures (refer to Figure 4.2.2), but also mirrored the need for
good management skills. Consideration and deliberation in the establishment of the
joint venture in its early stages was a further important determinant. Oflower
importance was the use of shared power and the obtaining of the partners credit
worthiness.
69
The large inexperienced contractor appear to be cautious in their approach to joint
venturing, and value the need for strong managerial skills and control by tightly defined
joint ventures. The sharing of power was not considered important.
The small, but experienced contractors, class three, considered as highly important the
compatibility of company cultures, the minimising of investment and mobility of assets
and shared power. (refer to Figure 4.2.3). Of minor importance (or lesser) was the
need for good communication, middle management involvement and the choice of
shareholder in a group of companies.
With this group, it can be seen that the size of contractor, clearly indicates their
concerns towards cost, organisational culture differences and the need to share power.
Even with their experience, communication and managerial input are lower echelon
considerations.
The small and inexperienced contractors, class four, at the lower range of the sub
groups, tended to identifY more closely with the conceptual joint venture. They highly
rated the determinants more readily associated with a joint venture, namely, a true need
for others, compatible control systems, the management (close) of organisational
information and it's transference and the use of shared power. (Refer to Figure 4.2.4).
However, in contrast, compatibility of size and experience, good management skills
and mutuality of aims and objectives were considered oflow importance. This
indicates that with the particular grouping, whilst appreciating the need for a joint
venture, their focus is tending towards managerial control and power, and the need for
like-minded and sized partners with similar objectives and needs is not required.
Clearly, this represents a narrow approach towards joint venturing and in contrast to
the prime sub-group (class one). Refer to Table 4.2.1.
In order to fully clarifY the extent of the determinants amongst the respondent
contractors, the contractors were further categorised into the variables of experience
and size separately, producing the classes five to eight.
70
The experienced contractors, class five, highly valued (Refer to Figure 4.2.5) the need
for compatibility of size and experience between partners, an accurate assessment of a
potential partners' willingness to contribute to the venture and having mutuality of aims
and objectives. Closely associated to those determinants. (Refer to Table 4.2.2) was a
partners commitment to success, the sharing of power and compatible cultures. At the
lower end of the scale, low importance was shown towards having a time need for
others, use of spiders web joint ventures and use of compatible control systems.
The determinants of mutuality of aims and objectives and the compatibility of size and
experience were ofa level of significance with values of 0.0367 and 0.0289
respectively.
With the inexperienced contractors, class six, they considered a true need for others,
compatible control system(s), creation of spider web ventures and obtaining credit
standings to be of a higher importance. Interestingly this was a direct (Refer to Figure
4.2.6) contrast to the experienced contractors, as just described, and was mirrored in
their view of the unimportant or lower level determinants. These were specifically,
their partners willingness to contribute to the venture, shared power, compatible
cultures and the mutuality of aims and objectives.
When comparing the experienced and inexperienced contractor classes, the former
group indicated a clear preference for similarities and comparative aims between their
partners with a sharing of goals and power. This in turn was the opposite ofthe
requirements of those inexperienced parties who highly valued the true need for others
coupled to compatible control systems. As indicated by the levels of significance
above, mutuality and compatibility were the pivotal points of contrast between these
two sub-groups.
In the case of the large contractors, class seven, the pivotal determinant of success was
that of good communication (see Table 4.2.2). Of high importance to this class was
the need for good communication, deciding which member of a large group of
companies should become a joint venture shareholder, use of middle management
knowledge and a realistic assessment of the strengths and weaknesses of the joint
71
venture. Of lesser or lower importance was the need for management of organisational
information transference, the minimisation of investment and compatible cultures.
(Refer to Figure 4.2.7).
With the small contractors, class eight, again a contrasting response, valued as highly
important the success determinants of management of organisational information
transference, minimisation of investment and compatible cultures (Refer to Figure
4.2.8) with an understanding of joint venture etiquette. Low importance was attracted
to communication, choice of joint venture shareholder and use of middle management
knowledge.
When comparing this two latter sub-groups, there is a clear balance of determinants
which are important or oflesser value to each group. Those experienced in joint
ventures highly value use of middle management experience coupled to clear
communication lines and assessment of the venture's worth to them, the acts of culture
and information transfer appear not to concern them. The size of the company
venturing certainly impacts upon these factors since the small contractors have clear
and opposite values of importance attached to them. Culture and information is of
high interest to the small company.
As an additional statistical measure, correlation's were taken for these determinants of
success, using the Spearman Correlation factor of measurement, in order to further
identifY any additional relationships between these factors. Refer to Tables 4.2.4 to
4.2.18 for details of each correlation co-efficient.
4.2.1 Correlation's Between the Determinants of Success
The following determinants were shown to correlate to one another, with levels of
significance of 0.05 (5%) or less. Note that for further clarification, values close to
0.05 are also shown.
** is used to identifY high levels of significance greater than 1 %.
72
------------------------------------
(I.) Trust is essential and that there is good communication. Significance
0.013
(2.) The ability to share and having the flexibility to cope with transient
forces. Significance 0.009**
(3.) The understanding of joint venture etiquette and having compatible
values between partners. Significance 0.018
(4.) Use of good management skills coupled to deliberation and attention in
setting up the joint venture (Significance 0.00) and anticipation of
risk High significance 0.006***
(5.) Ensuring that each partner's rights can be enforced coupled with trust
(Significance 0.053) and use of good communication. Significance
0.026
(6.) Knowledge of the potential partner(s) coupled with trust (0.042) and
the anticipation of risk. Significance 0.049
(7.) The management of organisational information transference related to
inherent flexibility (highly significant 0.006), an ability to share
(0.022)and having compatible values. Significance 0.033
(8.) Clearly defined rights and obligations of partners related to use of good
communication (0.044) and good management skills (0.013)
(9.) A realistic assessment of strengths and weaknesses of the venture
coupled to good management skills (0.046) and the use of shared
power (0.045)
(10.) Compatibility of size and experience and the need for compatible values
(0.041)
(11.) Trust is essential and the need to assess the partner(s) commitment for
success. Significance >0.000**
73
(12.) Autonomy from the sponsor companies and the flexibility to cope with
transient forces. Significance (high) 0.009**
(13.) Co-operation and collaboration coupled to inherent flexibility (0.003**
highly significant) and having good management skills.
(14.) The anticipation of risk and having the deliberation and attention in
setting up the joint venture. High significance 0.001**
(15.) Mutuality of aims and objectives coupled to compatible control systems
(highly significant 0.009**), compatibility of size and experience
(0.019) and the need for others. Significance 0.021
( 16.) Management of organisational information transference and the
understanding of joint venture etiquette. High significance of 0.001 **
(17.) The anticipation of risk coupled with the creation of spiders web joint
ventures (0.030) and clearly defined partner rights and obligations.
High significance 0.003**
(18.) Understanding joint venture etiquette coupled with shared power.
Significance 0.037
(19.) Deliberation and attention in the setting up of the joint venture coupled
with autonomy from sponsor companies.(High Significance 0.006)**
and co-operation and collaboration. High Significance 0.008**
(20.) Co-operation and collaboration and the anticipation of risk.
Significance 0.013
(21.) Clearly defined rights and obligations of the partners coupled to middle
management knowledge (>0.000) and ensuring that their rights can be
fully enforced. Significance 0.022
(22.) Fully enforcing rights and obligations coupled to assessing a partners
commitment to success (0.014) and obtaining your potential partners
credit worthiness. Significance 0.014
74
(23.) Previous joint venture experience and middle management knowledge.
Significance 0.041
(24.) A true need for others and the creation of spider web joint ventures.
Significance 0.037
(25.) Management of organisational information transference and the need
for shared power. Significance 0.01
(26.) Assess the partner's commitment to success coupled with:
assessment ofa partner's willingness to contribute resources (0.028)
obtaining partner's credit worthiness (0.022)
previous joint venture experience (0.015)
not entering the venture out ofa weak position (0.001)** high
significance.
(27.) Previous joint venture experience and to minimise investment and
ensure a mobility of assets Significance 0.038
(28.) Autonomy from the sponsor parents coupled with:
not entering a venture out ofa position of weakness (0.012)
co-operation and collaboration (0.011)
(29.) Neither parent should enter the joint venture out of a position of
weakness coupled with:
assessment ofa partners willingness to contribute resources (0.042);
obtaining credit worthiness of a potential partner (high significance
autonomy from the sponsor company (0.012)
(30.) Co-operation and collaboration coupled with:
common control (0.045); not entering a venture out of a position
of weakness (0.043)
(31.) Common control and a parent not entering a venture out of a position
75
of weakness (0.018).
Summarising the correlation's of a high significance « I %), we can see that
management skill can engender satisfaction towards preparing a joint venture project
and the anticipation ofrisk(s). Information transference's related to the need for
inherent flexibility in a venture, and that trust between partners is linked to
commitment for success.
Autonomy is a requirement for a joint ventures flexibility, which in turn necessitates
the co-operation and collaboration of all parties.
Anticipation of risk is linked to the pre-planning and thought of a joint venture in it's
infancy, and also defined the rights and obligations of the joint venturers. Mutuality of
needs is related to compatible control systems. This is further highlighted when
referring back to the value of importance attributed to them by the various sub-groups,
share one was important to a sub-group, the other proved unimportant.
Understanding the venture etiquette related to the act of information transference.
The pre-planning and setting-up aspects of the joint venture revolved around the need
for autonomy and co-operation of the partners.
In order not to enter the venture out of a position of weakness, it was also necessary to
fully assess the partner's commitment to success.
4.3 Comm'on Control and Shared Ownership
Conceptually, majority equity is an important factor for control within a joint venture.
When asked to respond to this statement, three quarters of the contractors (75%)
disagreed (see Table 4.3.1). This included over half the large and experienced sub
groups, 58.3% and 50% respectively ..
76
Their reasons for disagreement of the above were namely that if a sponsor company
(partner) were much larger than their partners or had significantly more expertise (see
'class' definitions) on the major elements of the joint venture, it could control the
venture. This is true especially if there is a requirement for specialist knowledge and
subsequent understanding of the client, which enhances the ability for a particular
partner to have control. This could also be used in the minority ownership scenario,
with the managerial control (also see Beamish & Wang 1989) again stemming from
their specific expertise and knowledge, as defined by a small and inexperienced
contractor.
It was generally agreed by the respondent contractors that the joint venture worked
best as a 50:50 ownership and control arrangement, since it was an equitable format
for equal control and equity ensuring a mutual level of effort by all parties. A rule
applied by a number of the respondent contractors was that the majority of their joint
ventures (63.8%) were of equal ownership (see Table 4.3.3) and had proven to be
successful, in turn meaning a successful formula format.
It should be noted that in one instance (class one) a contractor stated that the equity
percentage a sponsor company should have was directly related to the level of risk of
the venture or its value to them.
When looking towards the composition of the joint venture with respect to partners
and the variance of equity ownership (refer to Tables 4.3.2 and 4.3.3), the majority of
joint ventures held either two or three sponsor companies, in the extreme this went up
to ten sponsor companies, an example of which being the TML (Transmanche Link)
Channel Tunnel venture.
Nearly two thirds of the joint ventures (63.8%) were of a fifty, equal share ownership,
and nearly a quarter (23.4%) ofa majority ownership (Refer to Table 4.3.3). This is
interesting when compared to the earlier statement concerning the lack of importance
associated with majority equity. When looking purely to the experienced and large
contractors, over half of the joint ventures were equally shared, with a further fifth
claimed against the majority share. As can be expected, the majority share option was
clearly considered a secondary option to the parties concerned.
77
With regard to those sponsor companies who had managing control over their
partners, for the main group the balance was slightly under half (48.6%), see Table
4.3.4, with nearly 90% successes. The largest number of 'managed' joint ventures fell
into those with the greatest experience and of the larger sizes, classes one, five and
seven, with 38%,43% and 43% of the group respectively. It should be noted that the
term "success", is as earlier described (section 2.9.3), the degree to which p[project
goals and expectations are met.
The majority of the joint ventures polled (52%) were without a managing partner, and
yet those without this facility still provided joint venture success, since 89% of the
ventures were successful nearly double that of the managed joint ventures content
(48% of the group ventures).
The thought that the equity a sponsor company has in a joint venture is determined by
the amount of control they wish to have, was agreed to by three quarters of the
contractors (75%) and reflected by those experienced and ofa large company structure
(see Table 4.3.5). In those instances where the large contractors disagreed, the
reasons for their choice was that control was directly related to the agreement made by
the management board, with all procedures and principles confirmed. Again it was
stated that the equity a sponsor company obtained related to the level of risk and
project value.
In the pursuit of the successful joint venture, a good controls system is essential, a
number of control mechanisms were assimilated for comment, as listed below, that
were considered necessary for this tenet. It should be noted that the following points
are not ranked.
(I.) Top management (at group/company director level)
(2.) A high level of implementation between sponsor companies
(3.) Use of regular updates concerning the results and progress of the
venture
(4.) Fixed responsibilities of the partners/sponsor companies
(5.) Fixed authorities of the sponsor companies
(6.) A high calibre of human resources available to the sponsor companies
(7.) A high level of management consensus
(8.) Linkage of financial strategies
78
In this area, the contractors responses came in the form of a prioritisation of their
importance against each control factor (Refer to Table 4.3.6 and Figure 4.3.1).
Clearly, from the group of contractors, the two most important control factors are
those of regular updates and the use of a high calibre of human resources as indicated
on Figure 4.3.6. When looked at in the context of size and experience respectively, a
high calibre of resources and the linkage of financial strategies are identified as being of
significant interest.
Progressing the aspect further, it was stated to the respondent contractors, that the
balance of power agreed upon is not necessarily symmetrical and that it was possible
that a partner would be willing for lesser control in order to achieve another objective,
a hidden agenda. Over half the main group (58.3%) agreed with the statement (see
Table 4.3.9), excluding one abstainent, and this was also reflected in the sub-group
classes, with just over half agreeing in the size and experience classes (66.6% and
.58.3% respectively). There was no clear and overwhelming consensus on this matter.
The reasons identified by the large contractors, for such lesser controls, were that in
certain circumstances, it was acceptable for a higher profit and less risk, a partner may
wish to have a specific interest in a particular section of the joint venture, and whilst
take the majority of the work's value, the other may have the greater share. A situation
may also arise where a particular project relationship, such as a favoured client, may
request or instruct such a level of control as a preamble for a project contract. This
could in turn be classed as the need to obtain workload and be a compromise situation.
The other reason given was the more sinister strategy, of "competitive collaboration",
as covered by Gomes-Casseres (1987) and Lyles (1987), which was previously defined
in chapter two (section 2.5.2). The small contractor reason (sole) given was directly
related to their need to devote management time to other construction projects.
Those who disagreed to the act of 'lesser control', in the case ofthe larger contractors,
stated that a partner did not necessarily have to have a hidden agenda, that it was
equitable to simply agree to be a lesser partner as a precursor to the joint venture and
discharging such responsibilities. A joint responsibility for decision making, was also
considered to be more healthy in the building up of a true partnership in a joint
venture. The small contractor reason given stated that there must be equal say, and
that in the event of a disagreement, third party arbitration was used (if this failed it lead
to the dissolution of the venture).
79
Examples of the contractor's possible 'objectives' used as a balance for lesser control
are (in no particular ranked order):
(1.) A specific contractual task;
(2.) To joint venture for experience of specific works (a learning process);
(3.) To joint venture for the sharing ofa particular risk upon a project;
(4.) To joint venture for the development ofIand and property;
(5.) For client satisfaction;
(6.) To utilise another's knowledge, skills and abilities.
Once the joint venture 'child' is running operationally, the sponsor companies or
'parents', need to ensure strict avenues of purpose and direction. As such this can
result in the use of 'spiders web' of joint ventures, with a partner, for control, at the
centre of a number of joint ventures. In the cases of the responding contractors, the
overwhelming majority (83.3%) of them had not required or needed such a format of
joint venture (Table 4.3.10). Only 17% had such an experience, and these were
contractors of a large size and of both levels of experience. These spider web joint
ventures, represented 15% of the total joint ventures analysed, and covered both
commercial and industrial building types. All these joint ventures were carried out in
conjunction with sponsor companies outside the group i.e.; external partners.
The reasons associated with their spider web joint ventures (see Harrigan 1987) were
primarily driven by a client-led requirement, for example where a joint venture
contractor is required on a hospital contractor in order to utilise a services
subcontractor. There is therefore a need to sell and prove one's ability to carry out the
type of work, with a proven track record. In such situations a "jointly and severally
liable guarantee with a consultant contractor and services engineer" joint venture is
engendered .. Another reason forwarded was that the success of the initial joint venture
resulted in a number of similar projects being initiated with different partners but in the
same field.
Taking control one step further, from the literature search it was postulated that the
correct balance of managerial controls and autonomy of the venture was essential for
the management of a successful joint venture. Eleven of the twelve contractors agreed
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(92%), refer to Table 4.3.11, with this statement. Interestingly, the only contractor to
disagree, was the class one category, and stated as their reason, that autonomy was not
essential based upon their past experiences.
In the ideal situation, the form of management controls that are favoured by the
contractors, specifically those with greater joint venture experience and or large size (it
should be noted that the other contractors made no comment at this point), were:-
(I.) An excellent Project Manager, responsive to the Joint Venture
Board with the ability to adequately control all operational matters;
(2.) An equal number of Directors from each sponsor company upon the
JV. Board.
(3.) A strong line management system;
(4.) A structured format for a reporting system, which clearly indicates and
makes allowances for, deviations from the planned progress of the venture.
Utilising monthly progress reports and meetings with a detailed agenda for
identification and target items.
4.4 Autonomy from the Sponsor Company Parents
Autonomy, from the literature search (section 2.6), is considered to be one of the basic
ingredients for the typical joint venture. Freedom from one's sponsor companies was
considered necessary in order to achieve a satisfactory operation of a joint venture.
From their previous venture experiences, contractors were asked, whether successful
or not, how important was the aspect of autonomy from their sponsor companies.
Over half(58.3%) confirmed that it was either extremely important or useful, with a
third (33.3%) indicating it had no bearing upon the venture. Of the large and
experienced contractor classes, a full third (33.3%) in each case stated that autonomy
was extremely useful. (Refer to Table 4.4.1). Outlining the smaller and inexperienced
classes, there was no clear preference with regard to its importance, since there was a
balance of those who deemed it important or useful to those who stated it had no
bearing.
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In support of the extreme importance and usefulness ofajoint venture's autonomy,
contractors expressed the need for the venture to be treated as a completely separate
company with all managers and associated personnel acting with it's best interests, first
above their separate sponsor companies, and only returning back to the parent boards
at the regular established intervals. Another aspect for consideration was that a joint
venture needed good competent managers. In order to motivate these managers
therefore, it was essential to provide them with autonomy and a responsibility
commensurate to their tasks. A final thought on this matter was autonomy was linked
to the cash spending of the venture which should be separate from the parents.
The one comment attributed to the lack of direct bearing of autonomy upon the
venture, referred to the fact that the level of autonomy itself was dependent upon what
was appropriate for the particular venture, since they were all unique.
When asked whether, in their opinion, their partners had the same beliefs with regard
to autonomy, ten out of the twelve respondent contractors believed their views and
that of their partners were one and the same. Such a response clearly links itself to the
understanding of the partner(s), their beliefs and attitudes, as discussed earlier. (see
Table 4.4.2).
In this chapter, a number of important points have been identified. The need for trust
amongst the partners and their venture personnel is necessary in order to achieve the
fullest level of co-operation and collaboration. Common control, whilst true to the
joint ventures conceptual definition and in practice the majority is not the considered
aim of control. Had contractors the ability to do so, majority or dominant control
would be the norm for this strategy since the aspect of jointly shared ownership does
hold true. It is necessary to provide a good controls system, with use of a strong
projects manager and management team, reporting procedure and management
structure. Such parameters are also essential to induce the necessary level of joint
venture independence for success. Chapter 5, deals with the components of the
advantages and disadvantages of the joint venture. Prior to commencing with this
strategy vehicle, the potential venturer will need to clearly balance the potential gains
of the joint venture with the potential losses that may arise, be that financial or
otherwise. The need to share risks, penetrate new markets or acquire new skills are
discussed, as are the negative components of the venture which encompass such items
as the sharing of control, the time consuming aspects and the unequal benefits.
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CHAPTER FIVE
5.1 Advantages and Disadvantages
From chapter two (sections 2.5 and 2.6) it was established that there were advantages
and disadvantages involved in utilising the joint venture strategy, as with any other
management format. However, it is belIeved there may be specific components more
relevant to the joint venture concept. Certain aspects of the advantages and
disadvantages may be shared with other forms of construction" project delivery
systems", but given different and more enhanced priorities.
As a result of the literature search, a core element of the advantages and disadvantages
as shown below and reviewed by the respondent contractors. The advantages detailed
were (reference code for tables in brackets). Take note that as previously stated, these
codes are not in any particular ranked order.
(1) Small companies can participate in large construction projects (ADV1);
(2) It can defend a sponsor companies current market or industry posture
(ADV10);
(3) It offers an increase in a sponsor companies market share (ADVJJ);
(4) Less experienced sponsor companies can team up with more experienced
partners and so learn from them (ADV2);
(5) The spreading of risk (ADV3);
(6) It permits technology transfer (ADV4);
(7) It allows sponsor companies to participate in areas other than their
speciality
(ADV5);
(8) It is a means for overcoming nationalistic barriers (ADV6);
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(9) Provides a window for the familiarity with the locality (i.e. building codes
and ordinances (ADV7);
(10) Within a domestic market, prospective partners are potential competitors,
but in another situation they can be collaborators (ADV8);
(11) It offers a means ofleveraging a sponsor companies strength over
another's (ADV9).
With the above factors it was necessary to identify the contractors priorities and levels
of importance attached to both the advantages and the disadvantages. This was
achieved statistically by use of mean ranking techniques. Initially, mean ranking was
applied to the main group of contractors and then to the sub-group classes one to
eight. (Refer to section 3.1.1). Significance was also applied to the mean ranks in
order to validate and identify advantages and disadvantages of importance. From the
main group therefore, were asked to indicate their importance concerned with the
advantages, it was most clear that the spreading of risk was of paramount importance
(Table 5.1). From the histogram produced (Figure 5.1.1) the next valued advantage
was that ofa means for overcoming nationalistic barriers (by foreign nationals). From
the Friedman table, the level of significance to the main group was of import (0.0306)
and as such a valid indicator ofthe results worthiness. The least important aspects
were defending a company's market posture and the teaming up with experienced
contractors. The next progression of the advantages led to a detailed focus upon each .
sub-group classes.
The large and experienced contractors, class one, highly valued the advantages that a
joint venture offered it such as an opportunity to increase it's market share, and it
enabled them to defend it's current market posture. (Refer to Figure 5.1.2) The least
valued component was the need to obtain technology transfer from other companies,
and was further highlighted by a significant value of 0.0389 (3%). as shown in Table
5.1.1
It should be noted, that when referred to, the level of significance is to be defined as
the set level of risk (see Lovejoy, 1975) at a predetermined value such as 5% or 1%,
and is used in the statistical tools to avoid any statistical errors (i.e. Type One Errors).
84
With the large but inexperienced contractors (class two), the most important advantage
(Table 5.1.3) was the need to permit technology transfer, closely coupled to the need
for local knowledge. In contrast, oflesser importance was the requirement to defend
one's current market posture and the need to increase their market share. Clearly this
is a mirror image of the previous class's needs and requirements.
The small and experienced contractors (class 3) considered that the use of potential
competitors as collaborators in a particular situation and the overcoming of
nationalistic barriers were of paramount importance. The use of a joint venture as a
means to permit technology transfer was the lowest rating noted. This suggests that
the smaller companies use their competitors as a springboard in which to collaborate
with others to enter other regions and countries, which in turn supports their work
programme. (Refer to Figure 5.1.4).
In the last of the integrated classes (based upon experience and company size), the
small inexperienced contractors (class four) obviously support the need for small
companies to participate in large construction projects, coupled to the requirements for
a less experienced sponsor company to team up with the more experienced partners
and so learn from them. (Refer to Figure 5.1.5). In this group, it is assured that the
contractors wish to learn from the peers and increase their experiences on the larger
projects which would obviously be out of their grasp.
In section 3.1.1 it was stated that statistical tools used could and would not readily
grasp the data that was produced from cases of fewer than three contractors, a fact
that should be considered with the analysis in general. This necessitates the use of
further sub-groups, dealing with the separate issues of experience and size individually.
The experienced contractors (class 5), highly considered both the ability to defend a
parents current posture, and the use of potential competition as collaborators. It is
also provided them with the ability to overcome nationalistic barriers and to increase
their market share. The use of technology transfer was not highly considered at all.
(as shown in Table 5.1.6) . However the inexperienced contractors (Refer to Table
5.1. 7) rated as most important the need for a joint venture to permit technology
transfer, with secondary importance fell to use oflocal knowledge and the ability to
85
allow the inexperienced parties to learn from the proven joint venturers. The least
important factor here was the need to defend a parents current posture, a direct
opposite to the experienced contractor.
When utilising the levels of significance against the mean ranks attributed to the
advantages, those classed as significant (see Table 5.1.2) was to defend a sponsor
companies current market posture and the need to allow technology transfer.
The large contractors chose to value the transfer of technology very highly (Refer to
Figure 5.1.8), with secondary factors being the use oflocal knowledge and
participation in specialist contracts. The least valued uses for a venture encompassed
overcoming national barriers and collaboration with potential competitors. This
indicated the fact that these contractors were of a sufficient standard to feel
strategically secure in their marketplace and growth, and only required assistance in
areas where the knowledge was minimal or as a platform for additional skills.
However, the small contractors, felt a joint venture greatly enhanced their abilities with
respect to overcoming the national barriers and believed in the collaboration with
potential competitors for greater experience. (Refer to Figure 5.1.9). Technology
transfer was not a great advantage as far as they were concerned.
Clearly when comparing the contractor classes based on size and experience, the main
pivotal advantage concerned with sponsor companies was that of technology transfer,
and was deemed to be highly significant (see Table 5.1.3) when considering the levels
of risk associated with this fact. The large and inexperienced contractors value the
need to permit technology transfer, whilst the small and experienced contractors have
no real need for it.
5.2 Disadvantages
Whilst there are, as discussed, a number of valid and useful advantages associated with
the joint venture concept, to mirror these factors, there are disadvantages that relate to
the unique aspects of a joint venture with respect to control and liabilities.
86
Note: The codes shown in brackets are randomly generated by the S.P.S.S.
Statistical Software Programme.
The disadvantages detailed to the respondent contractors were:
1. Divided loyalties between the managers of the venture (OlS 1);
2. Joint ventures are time consuming in preparation (DIS 10);
3. Joint ventures are slow moving (OlS 11);
4. Disputes may arise more rapidly and frequently (OlS 12);
5. After effects offailure (affecting future business) (OlS 13);
6. Joint decision making (OlS 14);
7. Political risk (OlS 17);
8. The venture's severable personality i.e. multiple managers (OlS 18);
9. No inherent tradition (OlS 19);
10. Divided loyalties between the personnel of the venture (OlS 2);
11. Magnitude and integral complexity of the venture (OlS 20);
12. Unequal benefits, such as profit share, can engender dissatisfaction
(OlS 21)
13. Creation of a full-time management team and staff can be troublesome
(OlS 22);
14. Detrimental influence of the parent companies upon the joint venture
15. Lack of trust (OlS 4); 16. Hollowing out ofthe domestic economy, such as over-use by foreign
(OlS 5);
17. The division of profit between sponsor companies (OlS 6);
18. Managers have trouble overcoming their innate fear oflosing absolute
control of propriety information and skills (OlS 15);
19. Information transfer can be time consuming (OlS 16);
20. There can be a reduction in 'fluidity' of management control (DIS 7);
21. There is a sharing of control between sponsor companies (OlS 8);
22. With joint liability for the venture, the sponsor company is also
responsible for the other's responsibilities (OlS 9).
87
From the main group responses, the histogram (Reter to Figure 5.2.1) of mean rank
disadvantages, clearly indicates the most important factors to be the time consuming
element offorming a joint venture and the fact that divided loyalties between the
venture managers exists. (Table 5.2). The least valued or considered disadvantage
was that there was a possibility of hollowing out a domestic economy by foreign
nationals. Utilising Friedman's level of significance (0.0873) whilst falling outside of
the level of acceptable risk, it was a useful indicator to the validity of the responses
given.
The large and experienced contractors (class one), highly placed the disadvantage of
the after affects of failure associated with a joint venture. Other factors closely
identified were that they were time consuming for information transfer and required
(Refer to Figure 5.2.2) a sharing of control between the sponsor companies. Ofrninor
consideration to this class was the aspect of unequal benefits engendering
dissatisfaction.
The large and inexperienced contractors (class two) mirrored the experienced class,
since their most important disadvantage was that of unequal benefits (Refer to Figure
5.2.3). They also identified, as of high interest, that of the creation ofa full-time
management team. proved to be troublesome. However, their managers did not
appear to have an innate fear of losing control over propriety information and skills,
since this was represented by a low mean rank value.
A reduction in the fluidity of management control, coupled to the time consuming
aspects of a joint venture were identified by the small, but experienced (class three)
contractor group as the disadvantage of prime concern (Figure 5.2.4). These
contractors had no qualms associated with the after effects of failure, or that the
creation of a full-time management team was a problem, political risk or parental
influence.
The inexperienced small contractors, thought most importantly that in their
experiences, influence by the sponsor companies upon the venture could be detrimental
to it's success and that there were concerns attributed to trust, or the lack thereof
88
(Figure 5.2.5). This lack of trust was closely coupled to the existence of divided
loyalties between the managers within the joint venture. As a result of their joint
venture knowledge, they in turn did not consider them to be slow moving or time
consuming in preparation, since this was interpreted from a very low mean rank. In
the cases of these last four contractor classes, no one disadvantage response resulted in
a significant level of risk or importance. (see Table 5.2.3)
Again separating the contractors classes into experience and size categories, we can
see that in the case of the experienced joint ventures ( class five) the main concerns
were attributed to the act of sharing control with sponsor companies and the time
consuming elements of information transfer. This was closely adhered to the reduction
in management fluidity and the fear of their managers losing control over proprietary
information (Refer to Figure 5.2.6).
The lesser valued factors under their consideration fell to the divided loyalties between
venture personnel, unequal benefits and surprisingly in contrast to a major concern, the
time consuming content of a venture's formation.
Those sponsor companies with little experience (class six) tended to identify the
dissatisfaction attributed to the unequal benefits of a joint venture, creation of the full
time management team, lack of trust and the influence of their parents (Figure 5.2.7) ..
Contrasting with joint venture experience of minimal interest as disadvantages was the
time involved in information transfer and the act of sharing control with others. Thus
indicating a relationship between sharing control and information transfer with the level
ofjoint venture experience gained. Such relationships are further dealt with the use of
correlation coefficients later on in this section.
IThe large contracting joint ventures highlighted as important disadvantages the after
effects of failure, reduction in management control and the difficulties involved in
creating a full-time management team. Such selections indicated the concerns of the
sponsor companies (Refer to Figure 5.2.8) towards their managerial structure and
control. Oflesser interest to these contractors, based lIpon their experiences, was the
1!9
aspect of divided loyalties of their venture personnel or the lack of trust that may be
generated.
The small contractors (class eight) indicated their importance (Figure 5.2.9) levied
against the fear of their managers losing control over proprietary information, with the
reduction of fluidity in management control and most importantly the aspect of trust
(or lack of). At the opposite end of the scale, factors of low importance, related to the
detrimental influence of the parent companies, the creation of a full-time management
team. In addendum, surprisingly was the factor of a political risk, not usually
associated with the aforementioned classes. No level of significance (see Table 5.2.3)
was identified for this range of mean ranks.
As an additional statistical measure, correlation's were taken for the advantages and
disadvantages, using Spearman coefficients, in order to further identify additional
relationships between these variables (Refer to Tables 5.2.4 to 5.2.9 for detailed
correlation co-efficient schedules).
5.3 Correlation's Between Advantage Components
The following advantages were shown to correlate to one another, with significance
levels ofless than 0.05 (5%) . It should be noted for clarification values close to 0.05
also shown.
I. It offers an increase in market share and that small sponsor companies
can participate in large projects (Figure 5.3.1).
2. The spreading of risk and the need to defend a sponsor companies
current posture (Figure 5.3.2).
3. Nationalistic barriers are overcome and the requirement to permit
technology transfer (Figure 5.3.4).
4. Use of potential competitors as collaborators and the requirement
to permit technology transfer (Figure 5.3.3).
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5. Leveraging one's strengths over the other partner(s) and the need
to defend a parents current market posture. Highly significant
(0.006).
6. Use of potential competitors as collaborators and the need to overcome
nationalistic barriers (Figure 5.3.5.
5.4 Correlation's between Disadvantage Components
1. The political risk associated with a joint venture and the divided
loyalties of managers in a joint venture.
2. The divided loyalties between both the managers and the personnel of
venture (Figure 5.4.1). Extremely significant relationship (0.000).
3. The joint liability and shared responsibilities of a sponsor partner and
the divided loyalties of the venture managers (Figure 5.4.2). Highly
significant (0.003).
4. Joint ventures are slow moving and the fact that they are time
consuming in their preparation Highly significant (0.008).
5. The after effects offailure and that disputes may arise more rapidly and
frequently than is normal
6. Joint decision making and that disputes may arise more rapidly and
frequently than is normal. (Figure 5.4.3).
7. Political risk and that disputes may arise more rapidly and frequently
than is normal (Figure 5.4.4) Highly significant (0.007).
8. Political risk and joint decision making (Figure 5.4.6.)
9. The division of profit and the after effects of failure (Figure 5.4.5)
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10. The sharing of control and that disputes may arise more rapidly and
frequently
11. The sharing of control and the need of joint decision making.
12. That there is no inherent tradition and that information transfer can be
time consuming.
13. That there is no inherent tradition and there is a severable personality of
the joint venture. Highly significant (0.005).
14. The magnitude and integral complexity of the venture coupled to the
severable personality of the venture. Highly significant (0.001).
15. Creation ofa full-time management team is a problem with the lack of
inherent tradition.
16. The detrimental influence of the sponsor parents and the time
consumption of information transfer.
17. There is a lack of trust coupled to the time consumption of information
transfer
18. The joint liability and shared responsibilities of a sponsor partner
coupled to the aspect of political risk.
19. The joint liability and shared responsibilities of a sponsor partner
coupled to the divided loyalties between the personnel of the joint
venture. Highly significant (0.003).
5.5 Correlation's between Advantages and Disadvantages
1. The divided loyalties between the personnel of the joint venture coupled
to the need to defend a parents current market posture (Figure 5.s.l).
2. Creation of a full-time management team and the spreading of risk
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(Figure 5.5.2).
3. . The hollowing out of the domestic economy and the need for small
companies to participate in large projects.
4. A lack of trust and the fact that it offers an increase in market share.
(Figure 5.5.3)
5. The division of profit coupled to the need to permit technology transfer.
6. The joint liability and the shared responsibilities and the need for small
companies to participate in large projects. (Figure 5.5.4).
7. Joint ventures are time consuming in preparation and that they can
overcome nationalistic barriers. (Figure 5.5.5).
8 The divided loyalties between joint venture managers and the need to
defend a parents current posture. (Figure 5.5.6).
9. Information transfer can be time consuming coupled to the need for
small companies to participate in large projects. (Figure 5.5.7).
10 Information transfer can be time consuming coupled to the need to
increase in market share (Figure 5.5.8). This was highly significant
(0.003).
11. Joint ventures are slow moving and is coupled to the need for local
knowledge. (Figure 5.5.9).
12. An innate fear of the managers oflosing control of proprietary
information coupled to the need of contractors to participate in areas
other than their speciality. This was highly significant (0.009).
13. Unequal benefits engender dissatisfaction between the partners and the
fact that joint ventures are time consuming in preparation.
14. A detrimental influence of the parent companies and the rise of potential
93
competitors collaborators.
15. A reduction in the fluidity of management control with the overcoming
of nationalistic barriers.
5.3 Success or Failure
In the previous section, a comparison of the advantages and disadvantages associated
to with a joint venture, and what were considered primarily by the contractors as the
important issues. Coupled with their responses to the conceptual list of determinants
of success and failure, they in turn were asked how they determined what made a
successful joint venture that is to say the success indicators. These determinants
revolved around the issues of time, equality and cost. All the contractors indicated the
need to achieve or exceed the given profit and to achieve a financially acceptable
outcome. The prime contractor class (one) appended the need for a positive cash flow
throughout the venture's life. There was a need to achieve satisfaction for the client,
which in turn would engender goodwill reflected upon the sponsor companies, by
providing a high standard of quality in construction, which is technically acceptable to
all parties involved. This satisfaction should also be extended to the joint venture's
employees, to establish good interpersonal relationships. A successful venture also
provides a good basis for promoting an essential training ground for their senior
managers in which to gain valuable experience, especially with regard to the specific
environment produced by the ventures. Such knowledge and experience would
enhance a good relationship amongst the joint venture team.
The last indicator provided, and it is essential for the progression of joint ventures with
the same sponsor companies, is that with the achievement of the venture's initial
objectives there is the feeling that all the partners are fully satisfied.
These indicators arose for a number of reasons. With a continual number of successes,
it can lead to the building up of their knowledge and experience from project to
project, especially in a number of cases where contractors had no experience of failure
which provides the "typical joint venture vehicle" for them. Success can also be
attributed to the selection of the partner(s), if this led to a failure, it would simply
94
result in the choice of another sponsor company, all their experiences whether good or
bad, would be transferred from one project to another. The contractor would then
improve their abilities by understanding their partners and so build up trust.
It was noted that those inexperienced contractors considered the success indicators
were tied to the need for offering direct expertise to a client, which could lead to both
negotiations and advantages over the opposition/competitors. To the smaller
companies, it involved the correct balance of financial input and risk in joint venturing,
enabling them an increased project workload.
To mirror the success indicators, the responding contractors were asked what they
considered were the perceived determinants of failure in their experience. The term
perceived refers to the contractors beliefs of what they consider failure to be,
irrespective of either direct experience offailure, or their partners determinants of
failure. Essentially, they were the direct opposites of success, negative cash-flow and
the reduction or loss of profit. Client dissatisfaction was also a concern, which
encompasses a poor quality project, not completed on time or on the agreed budget.
Failure may also arise out of difficulties from different attitudes of different
nationalities causing friction and resulting in major problems, and leads also to the
dissatisfaction of the partners.
One factor, raised solely by the large and experienced contractors was the seeking of
power by individuals within the joint venture, a negative team building produce. On
the opposite side of the contractor classes (four), failure was attributed to incompatible
personnel and a badly drawn up joint venture agreement.
When asked, as a result of a failed joint venture, would they (the contractors) consider
venturing again, all twelve responding contractors agreed that they would, referring to
the need to learn from one's mistakes and treating each venture separate from each
other.
95
From this chapter, it has been established that the main motivation for contractors to
pursue the joint venture is to share and so spread risk. The more experienced
contractor, who is more aggressive in their standpoint considers it the strategic need to
protect their own market, thereby consolidating their field of operations. Whilst their
inexperienced counterpart is primarily interested in the retrieval of key knowledge and
information necessary for consolidating their company's position. As experience grows
so did the contractors perceptions with the realisation of the problems in sharing
control, as identified in the previous chapter, and the control of information.
Having identified the main and most valued aspects of the advantages and
disadvantages, the final areas of organisational culture and the associated power within
the organisation ofthe joint venture are discussed in the next chapter. The need to
understand one's partner, their beliefs, perceptions and attitudes is a matter of great
regard when considering the mutuality oftheir aims and objectives and the merging of
corporate management styles and structures. The subsequent distribution of power
amongst the venturers management personnel and their motivation are of importance
to the companies. This is particularly so with regard to the use of performance goals
and shared power through the ventures project manager.
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CHAPTER SIX
6.1 Culture ofthe Organisation
The culture of a joint venture is an important aspect when considering criteria for
success, and according to general thoughts in organisational behaviour (OB), an
organisations culture (Baron and Greenberg, 1990) it can be a powerful force in
determining how it operates and performs i.e. that there are various subcultures, and
these can so be developed from the organisation's experiences with the external
environment. This can be coupled to the need to maintain effective working
relationships among the organisation Goint venture) members. Now, cultural
differences may pose a potential barrier between different people, and subsequently this
uniqueness is mirrored in the organisation (venture).
This component of a joint venture was briefly investigated with the respondent
contractors by way of the questionnaire. A number of statements were broached with
the companies and their responses with explanations duly noted.
It was stated to the contractors that each company organisation is unique since they
are composed of different people, which in turn means different beliefs, attitudes and
perceptions, thereby manifesting into a specific organisational culture. Contractors
were asked, from their experiences, how they managed to assess the fundamental
differences between the cultures of the companies.
Those experienced in joint ventures, expressed their view that it was necessary to fully
understand all differences, such as in priorities, attitudes towards staff and labour,
accounting, procurement and other associated procedures. This could be achieved by
personal contact and knowledge of their partners organisation, whether from previous
contact or not. It is also necessary with their partners, especially with foreign
nationals, to comprehend the varying degrees of importance placed upon different
97
factors to that of themselves, and to assess whether all partners wish to achieve the
same common objectives.
One comment raised by an experienced small contractor, was that they operated a
'profit' culture, and companies who had any other type of culture, (and if grouped as
one), did not prove to be compatible partners.
The inexperienced contractors, believed that it was useful to utilise a number of
preliminary meetings to which they could get to know each other on both a personal
and company level. This was very important on a personal level, since education of
key people to the various ways of the partners and the harmonising 'chemistry' of the
individuals to one another led to a fuller comprehension of one another.
The merging of the individual organisational cultures led to problems in certain cases.
Nationality, with the different attitudes, did lead to problems and it was stated that
from a contractors point of view, these national cultures were never completely
merged on a joint venture project. Conflict arose over agreeing a compromise and a
meeting of minds on operational matters. Poorer levels (quality) of staff were
allocated to projects, which resulted in diminished efficiencies from the lack of
understanding. The inexperienced contractors intimated problems in the difference of
personalities, especially in the high tiers of their partners management structure, with
their attitude towards the work force (lower tiers), for example, who controlled by
autocratic rule as opposed to a more democratic approach.
To overcome problems of this nature, contractors cited as their tools for solution, the
use of team building techniques, reasonable discussion with negotiation and subsequent
agreements. Preparation, in depth and of sufficient content commensurate to the
project will mitigate cultural concerns, and ensure a basic understanding and familiarity
of the other partner (sponsor companies). Selection of the right people can also make
a difference, the type of person sought out needs to be adaptable to a culturally volatile
culture and also ensure that individual points of contact are of equivalent stature and
are mutually respectful to one another. Interestingly, the small and experienced
contractor group suggested not to try to overcome cultural problems, but to accept
that such situations will occur, whereas the small and inexperienced group indicated
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the allocation oftime and trust as the important factors to overcoming such cultural
clashes.
Even when considering and overcoming these cultural complications there were
advantages to be gained from differing cultures, as agreed to by over half of the
respondent contractors (see Table 6.1.1).
These were specifically:
Learning of new beneficial methods of operation;
Use of another's expertise to improve one's performance.
Over two thirds of the respondent contractors believed there to be also disadvantages
associated with differing organisational cultures (Table 6.1.2). Disadvantages
highlighted were:
Nationality and differing attitudes;
Delays and misunderstanding;
Aspects of team building;
Incompatible goals;
Commitment to completion.
These disadvantages could be broken down to also range from needs and emphasis
with respect to the project client's to the procedures for payment to creditors. Clearly
the advantages and disadvantages revolve around the basic variable of understanding
the joint venture and it's culture and it's varying levels of attainment.
Over two-thirds of these contractors considered that the organisation's outline had also
been a powerful force in determining the ventures operations and subsequent
performance. This was due to the high level of management and expertise available.
To fully utilise this aspect, it was advocated by the large inexperienced contractor
class, that it was necessary to assume control, thereby knowing how the joint venture
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was operated and managed, control and manipulation of the pertormance was
achieved. (see Table 6.1.4)
Referring to the power of culture, the contractors were asked whether they believed
that an organisation's culture was a powerful force in determining how an organisation
operated and performed. Over three quarters of the contractors agreed to this premise
( Table 6.1.4), and this majority was reflected in both the large and the experienced
sub-group contractor classes. This powerful cultural force, as discussed at the
beginning ofthis chapter can be developed from the organisation's experiences with the
external environment. It was thought that in certain instances, external activities and
events, such as market conditions, new conditions and changing government policies,
can necessitate adaptation of the organisations (joint venture) operation and so in turn
it's internal culture. Contractors were asked if such occurrences had been found in
their joint venture experiences (see Table 6.1.5). Over half disagreed with this premise
surprisingly, with only five (42%) agreeing to such occurrences.
Those contractors who agreed to experiencing such cultures and events stated that
they were as a result of not being flexible and so adapting to the external market
conditions. Such required flexibility could be brought about by reviewing the
development policies of the venture so as to suit the market needs.
Whilst identifYing the internal culture of the venture as an area warranting care and
attention, the personalities of the personnel was a factor for consideration. Looking
towards the average ages of the joint venture personnel, contractors were found to
utilise, in the majority, the 35-50 year age group. Their reasons for such a choice came
from (Table 6.1.6) the thought that this range (50% of contractors) was the age of
optimum experiences, and it offered selection of the best managers, who also tended to
be from the Board and senior management levels. The next age range of importance
was the younger group of20 - 35 years (33% of contractors), selection here was
attributed to the availability and suitability of personnel for the appropriate position,
which was considered to be the normal "project age profile". In this case, management
tended to be of a junior and senior level. Interestingly, one contractor (class two)
stated that there was no one older than 35 years within their company.
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Both the experienced and large contractors intimated the use of both of these age
groups, (approximately two thirds of the respondents). Only one contractor (class
four) had utilised staff with an average age greater than 50 years.
When the joint venture is formed, the new organisation with its newly formed
personnel structure will experience a period of "organisational social reaction" where
these newcomers to the venture become converted into members who came to share
it's major values and so understand the policies and procedures. Half of the respondent
(50%) contractors (Table 6.1.7) agreed to such a situation with nearly all the remaining
(42%) failing to identify the socialisation period. This was also reflected in the large
and experienced sub-group classes. This organisational socialisation period was found
to in the main, (see Table 6.1.8) (58%) to occur over a short period of time (less than
a third the life span of a joint venture). It should be pointed out that with this
particular survey question, four contractors (33%) failed to make any response
whatsoever.
When considering the cultural and organisational factors and the merging of dissimilar
venture personnel, the aspect of ethics and codes can appear. The respondent
contractors were asked whether they had experienced any problems with ethical codes
within their joint ventures (see Table 6.1.9). Three quarters ofthe contractors had no
such concerns towards ethics. Of those that did, the large and experienced contractors
indicated that in certain cases their ethics appeared to be higher than that of their
partner(s) and as such needed clarifying to the extent ofa mutual understanding and
agreement of standards. In one case, union codes were a cause for concern towards
the joint venture partners.
Section 6.2 Power and Motivation
Power and motivation are two important factors to be considered when involved in a
joint venture, since the two components integral to this organisational strategy with the
abilities to influence the course of the venture and motivate the differing company
personnel. For definitions of terms used in this chapter refer to the Appendix B.
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Common control and shared ownership are two joint venture components,
that attract one another, as earlier established in chapter two, and the aspect of
majority equity as a controlling factor is not a prime consideration. In order to obtain
a cross-correlation of their (the respondent contractors) thoughts, they were asked to
interpret the term "power" when used in the context of the management of the joint
venture. (A glossary of terms is in Appendix 8).
The prime respondent contractors, of both a large size and experience, considered
power as the ability to override decisions, as per the glossary definition of I the
capacity to change the behaviour or attitudes of another in the desired manner'. Power
was stated as being fed through the project manager, who in turn was responsible for
the key decision making.
The remaining sub-group classes, all concurred that power was necessary for greater
control and authority over the other partner( s), and that the one with the greater
amount of control had the most power.
Interestingly, the small and inexperienced sub-group class (four) added the point, the
amount of control being determined by the joint venture agreement classes.
Examining power and motivation further, the contractors were asked whether or not
they considered power to be an essential element of organisational success (refer to
table 6.2.1). Ten out of twelve (group) contractors (83%) did consider it necessary,
and this was further broken down into agreement by all of the prime sub-group class,
and two thirds of the large, but inexperienced contractors. This clear and
overwhelming response was translated to all sub-groups whether based on size or
experience.
Of the two contractors who disagreed, one was experienced and one was
inexperienced. Expanding their reasons, they respectively considered that co-operation
and trust were the most important elements, and that in a joint venture the attitude of
"power" over another was not a true consideration.
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From their previous experiences, and acquired joint venture knowledge, the
contractors were asked whether they thought that the "distribution of power" was
unequal or equal. Half of main group (50%) stated that it was 'equal' and five (42%)
thought it 'unequal', one (8%) abstained. Refer to table 6.2.2. When focusing upon
the experience of the contractor, less than half the experienced contractors agreed, and
a third of the large contractors. It was here that the small and inexperienced
contractor, in their majority utilised unequal power distribution.
The reasons produced in support of use of equal power distribution were simply that
authority was equal in a joint venture, and as a subsequence, key decisions and
problems were jointly discussed and resolved. With each partner contributing an equal
share, it supported the need for equal effort. Simplistically stated by a small
inexperienced contractor, equal distribution is the only way for a successful joint
venture to work.
In contrast, according to the larger contractor elements the need for use of unequal
power arose from a number of reasons, namely that individuals with differing
personalities dominate or wish to be lead. Their needs and abilities differ, and this can
affect the balance of power and control. As previously stated, since the venture can
invest it's power in the project manager, it can also be said that the one who makes the
decision has the most power. These two aspects are people-oriented, thus it can be
said that it is the people within the venture who manifest the need for unequal power.
This leads on to the need to influence the joint venture personnel, and so orientate the
performance and subsequent success of the venture. Contractors were next asked
whether they believed that the "motivation of joint venture personnel was directly
related to it's performance". Refer to table 6.2.3.
Of the group on contractors, eleven (92%) out of twelve overwhelmingly agreed that
motivation and performance were directly linked. Only the remaining contractor, from
the large and the experienced sub-groups failed to offer any response.
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In their experience, this relation existed generally whether the project was a joint
venture or not, motivation and performance existed in any organisation. Incentives
were considered a necessity, and as such should be also coupled to the act of self
motivation and the need to further one's career.
In order to motivate personnel, whether they be the project manager or staff,
incentives of some form could be used, the contractors were asked to specify the use
of one or more motivation tools.
The first tool, was by way of "assigning specific goals". All twelve contractors (see
Table 6.2.4) agreed to it's use to achieve motivation of personnel.
The second tool was by "assigning difficult, but acceptable performance goals". Here
seven (58%) contractors agreed, four disagreed (33%) and one (8%)did not respond.
Detailing further, of the four sub-group classes, based upon size or experience, all but
the experienced contractors (class five) in the majority agreed to it's use, in this latter
case only three of eight agreed. Refer to Table 6.2.5.
The third tool was to 'provide feedback concerning goal attainment', ten contractors
(83%) agreed to it's use, with one disagreement and one unknown response. As can be
further observed in table 6.2.6, this also represented three quarters (75%) and 88% of
the experienced and large contractors respectively. All the inexperienced contractors
agreed.
The fourth and final tool, was to "utilise job designs to increase efficiency". In this
particular case, only four contractors (33%) agreed, with seven disagreeing (58%) and
one unknown response. Again, as can be further observed in table 6.2.7, three
quarters of the experienced contractors and just under half (44%) of the large
contractors disagreed with the statement. Surprisingly, the inexperienced sub-group in
their majority (three off our) did agree.
Use of job designs, in the opinion of the contractors, especially the large and
experienced ones, did not appear to be of use or need.
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The joint venture's culture is considered to be a valuable component for success, and
coupled to the aspects of power and motivation so detailed will provide a strong and
cohesive platform with which to operate the venture. the survey's analysis and findings
are now encompassed within the final chapter, and summarises this research
programme.
Organisational culture is a facet of a joint venture that can influence the mannerisms
and behaviour of the personnel within the venture. Such a component for success
addresses the aspects of management that are evident with the interfacing of different
companies styles and structures. Closely coupled to the culture is the need for power
and motivation. Both these issues are discussed in this chapter.
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CHAPTER SEVEN
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7.0 Summary, Conclusions and Recommendations
From the preceding chapters, the research survey analysis and subsequent findings
have detailed the true joint venture in the UK construction industry. The research
highlighted the concepts of the joint venture, it's needs, the reasons for it's pursuit,
advantages and disadvantages and the factors of success. A summary of the findings
and conclusions of the research with recommendations are presented in this chapter.
7.1 The Contractors Survey - A Summary
The questionnaire survey to the construction contractors was used to essentially test
both the data from the literature review, and as subsequent the hypotheses stated
within section 3.1, namely within:
Common control and shared ownership.
Mutuality of aims and objectives.
Autonomy from the sponsor-parents.
Co-operation and collaboration.
Compatibility of partner size and experience.
Flexibility; and
Organisational culture.
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7.1.1 The Management Board
The freedom and autonomy of the joint venture, from it's sponsor-parents was
important to the contractors in general, however, it was interesting to note that the
experienced contractors stated that it was not a fundamental necessity, since they still
considered it necessary to maintain their own personal interests (of the parents). Over
half of the contractors (58.3%) actually considered autonomy of the joint venture to be
either very or extremely useful for success. This factor of autonomy was necessary for
the venture to be treated as a totally separate company with all it's own managers and
associated personnel, and so dependent upon what was appropriate for the particular
venture.
Autonomy was clearly a highly important factor both in the literature review and to the
joint venturing contractor community, and greatly valued.
The joint venture board was considered to be the driving force behind the venture,
utilising comprehensive control via use of regular reporting systems, good
communication and monthly board meetings.
Other aspects of the management board identified highly by the contractor group was
that the creation of a full-time management team was not considered a major problem,
but was worthy as a point of concern from the viewpoint of the large and experienced
contractor, in contrast to the quoted literature.
As previously identified in the literature review, the problems resulting from a lack of
team history and subsequent evolvement, could not truly be established by the
respondent contractors, with no overwhelming thoughts on this matter. The joint
venture personnel in their opinion were drawn together in the pursuit of a common set
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of goals and needs. The respondent contractors deemed it necessary to have an
understanding of both their partner's and personnel's attitudes and perceptions, with all
the partners and personnel acting "in-simpatico".
There were potential weaknesses however within the venture management board
structure identified through the survey:
Unfamiliarity with one another, both at parent and personnel level.
Dual allegiances between the venture personnel.
Virtual overnight existence of the board.
This latter weakness was highly rated by the large and experienced contractor (but not
by any other class).
7.1.2 Co-operation, Control mad Ownership
Control of the joint venture was an important issue to the respondent contractors, and
that whilst important it was not directly linked with the need for majority equity and
ownership, in agreement with the researchers. Since this control could be established
by use of their (parent) expertise and technological skills, utilising them for leverage
over their partner. It was achievable by either a majority or minority partner, due to
their particular contribution to the venture, and subsequently their partner's value or
importance attached to it. It was dependent upon the functional abilities ofthe
company.
This could be clearly seen and identified when comparing the levels of ownership from
the contractors joint ventures:
Less than 114 (23.4%) of the joint ventures were based on majority ownership.
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Nearly 2/3 (63.8%) of the joint ventures were based on equal ownership.
Under half(48.6%) of the joint ventures were based on majority control.
However, from the respondent contractors there was an 90% success rate in the joint
ventures engaged. It can be seen that levels of ownership and control in contrast to the
literature survey, were not directly linked, and that from the data received there was
no clear indication that majority control produced success. Since control was balanced
between two variants, and yet success was very high in the joint venture group in
general.
In contrast it was noted however that 3/4 (75%) of the contractors did think that the
equity a sponsor companies had in a joint venture was determined by the amount of
control they wished to have i.e. majority control meant majority ownership. Clearly
with this aspect of control, in order to identifY any clear relationship it could be
recommended for further in-depth research.
Whilst the balance of control and power was not necessarily symmetrical in certain
situations the contractors can be also willing for lesser control in order to achieve their
own goals (or hidden objectives). Such reasons for lesser control encompassed the
need for a specific contractual task, client satisfaction to utilise another's skills,
knowledge or to learn from another.
It was also clear, particularly from the experienced and large contractor, that they
preferred dominance and power, with the dominance of one partner over another. The
rise of team building techniques could with a small like-minded management team
monitor control, and overcome any associated problems (especially culturally).
Additionally, the experienced contractors, particularly amongst the other classes,
considered the following forms of management controls:
Use of a strong project manager.
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Equality in board direction.
Strong lines of management.
Regular board meetings and updates.
Use of a high calibre of human resources.
To further support the need for control and autonomy, an overwhelming 92% of the
contractors agreed that there needed to be a correct balance of management controls
and autonomy for the successful management of a joint venture.
It is evident that there is a need for control amongst a joint venture partner, particularly
those experienced in joint venture, with dominance of one another, a facet of the
conceptual joint venture. A strong management team, coupled to strong and regular
lines of communication can lead to a successful joint venture.
Trust, a valuable by-product of co-operation and collaboration amongst the partners
was a component for success that all twelve (100%) of the contractors unequivocally
agreed to. It was undoubtedly necessary to achieve trust among the differing partners
and their personnel so as to create a unified venture team.
7.1.3 Advantages of a Joint Venture
Of the general class of contractors, as evidenced in section 5.0, the most important and
overriding advantage was the need to spread risk with the lowest being the defence of
a parents current posture.
The experienced contractors highly valued the need to:
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Defend a parent's current posture.
Use of potential competitors as collaborators,
which in turn were the least valued advantage needs of the inexperienced contractors.
The inexperienced class highly valued the need to:
Permit technology transfer.
Use local knowledge.
Learn from their experienced partner.
Their first need contrasted the least valued needs of the experienced contractors.
The large class contractors valued the need to:
Permit technology transfer.
Use oflocal knowledge.
Participation in specialised contracts.
This first need contrasted the least valued need of the small contractors.
With the small class contractors, they valued the need to:
Overcome nationalistic barriers.
Use of potential competitors as collaborators.
which in turn were opposite to the large contractors valuing of the advantages.
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Therefore, when looking for apparent indicators of concern between these sub-group
classes, it is evident that with joint venture experience comes the strategic needs of
essentially protecting one's own market. This appears to be achieved by the
consolidation of their field work with their competitor, thereby attempting to control
their competitors expansion.
However, the inexperienced contractor does not have the same view of these
advantages, rather they are more interested in information and the acquiring of
knowledge, be this in technology, local contacts or a particular specialism.
Interestingly, these same views, with respect to a highly valued set of advantages are
also held by the large class of contractors. This indicates that the search for
knowledge and information is led by experience in the joint venture strategy, with more
experience comes more knowledge, thereby leading to it's lessening as a valued
advantage.
The small class of contractors appeared to value the need to break into markets,
otherwise unattainable to them and so use their competitors to both learn from and
protect their own market place.
7.1.4 Disadvantages of a Joint Venture
When considering the disadvantage, it has already been stated that the general class of
contractors highly rated the fact that joint ventures were both time consuming and that
this divided the loyalties of joint venture managers. Looking to their sub-group
classes:
The experienced contractors highly rated the disadvantages of:
Sharing of control.
Time consuming information transfer.
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Reduction in management fluidity.
An innate fear of losing control over proprietary information.
The aspects of sharing of control and information transfer were in contrast to the low
values of the inexperienced contractors.
The large class contractors valued the disadvantages of :
After effects offailure
Reduction in fluidity of management control.
Creation of a full-time management team.
With the latter disadvantage, reflected a contrast to the lower values of the small
contractor.
The small class of contractor highly valued the disadvantage of:
Innate fear oflosing control over proprietary information.
Reduction in the fluidity of management.
Lack of trust.
This latter disadvantage, reflected a contrast to the lower values of the large class of
contractor.
It is therefore evident that with joint venture experience, a contractor will come to
realise and understand the potential problems in the sharing of control, management
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and information. These are not the views of the inexperienced who appear to be wary
of their partners influence upon the venture, especially with regard to the formation of
management and the overall benefits finally achieved.
The large contractor, from their importance given to those disadvantages appeared to
have concerns with the joint venture management, suggesting that their management
structure had difficulties interfacing with their partners and subsequently to the joint
venture itself. The small contractor appeared to be wary of their partner, and
concerned with trust and loss of information and management, suggesting a tendency
for intimidation and concern towards control.
7.1.5 Success and Failure
It was established from both the literature review and the contractors survey that the
success and failure of the joint venture are defined by 3 factors (as with any project or
industry):
Cost
Quality
Time
The act of success, essentially by definition meant either achieving or excelling the
given objective, for example to given profit to a financially acceptable outcome. There
was a need, in the opinion of the contractors, to obtain:
Client satisfaction
A high standard of quality
To establish good, interpersonal relationships within the joint venture.
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The subsequent achievement of the joint venture's initial objectives lead to the feeling
of satisfaction for all of the
joint venturing partners. Interestingly, in the opinion of the contractors, the selection
of the right partner could also contribute to the success of the joint venture.
To contrast the act of success, the perceived failure in the joint venture mirrored the
acceptable outcomes, namely that there was:
Client dissatisfaction
Loss of profit
Poor quality
Overrun on project duration.
Even with failure the contractors would progress again with joint venturing,
considering it necessary to learn from their mistakes and so actively pursue this
strategy.
When looking towards the determinants of success, the main groups identified the
following as most important:
Trust was essential
There must be mutuality of aims and objectives
Clearly defined rights and obligations
Good and clear lines of communication.
The components of trust and mutuality of aims were two facets of joint venture •
success that were considered very highly by the researchers.
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However, when broken down into the sub-group classes, patterns emerging can be
seen. The experienced contractors identity closely with the conceptual joint venture
and it's perceived success determinants. Their highest valued determinants were:
Compatibility of size and experience
An accurate assessment of their partners willingness to contribute resources
Mutuality of aims and objectives
A commitment for success
The sharing of power
Compatible culture.
The aspects of objectives, culture, power and willingness to contribute contrasted with
the inexperienced contractors least thought of determinants.
The inexperienced contractors however, felt there should be:
True need for others
Compatible control systems
Use of spiders web joint ventures.
Their determinants, in return were the lowest determinants in the opinion of the
experienced contractors.
Clearly, when investigating the success determinants of a contractors joint venture
experience, it can be seen that as the contractor gains experience, the initial need for
control is replaced by a sense of compatibility and unity required for success amongst
the team. The novice or inexperienced contractors appeared not the be aware of the
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true merits of the joint venture, and the need to share power, objectives and control,
rather they are more attached to the limitation of their partners within the venture.
The large class of contractors thought that the most valued determinants were:
Good communication
Use of middle management knowledge
Assessment of their partners strengths and weaknesses.
They in turn contrasted with the small contractors who deemed them of low
importance, the small contractors however indicated their importance for the need to:
Management of organisational information transference
To minimise investment
Use compatible culture
Understanding joint venture etiquette.
These were, true to the above patterns of low importance to the large contractors.
So, in the case of the contractors size, the larger contractors appeared to need an
understanding of their partner( s), to provide feedback through communication and
managerial knowledge. This in turn can be interpreted to be representative of their
large managerial size and structure, thereby not requiring the financial informational
needs of their smaller contractors. The smaller contractors additionally, warranted the
need to ensure a smoothly operating culture and understanding of the venture
syndrome necessary for a small organisational unit.
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To summarise the detenninants of success it can be confinued that with joint venture
experience there is a clear preference for similarities and comparative aims between the
partners, with a sharing of goals and power. The contractors size indicates their
concerns towards the need to share power, costs and organisational culture
differences.
7.1.6 A Joint Venture's Organisational Culture
The main points raised from the respondent contractors, stemmed primarily from the
experienced and inexperienced contractors. In both of the cases the contractors
deemed it necessary to fully understand all the differences between the partners, such
as their attitudes towards staff, procurement, procedures and associated priorities. It is
necessary to comprehend their varying degrees of importance placed upon values and
so accurately assess their partners commitments and objectives.
Problems were commonly identified by the contractors in the differences of
personalities, especially in the higher management tiers. To overcome such problems
of the personalities, they advocated the use of team building techniques and discussion
amongst the personnel in order to provide:
A need for mutual involvement
The sharing of infonuation with free access to all
which thereby built up confidence and trust between the partners.
Interestingly, the smaller inexperienced contractors had earlier stated the need for
compatible cultures, and that where differences existed, that they embraced and
accepted them.
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It was established by the contractors that advantages and disadvantages for differing
cultures existed. In the former case, it enabled the partners to both learn from new
beneficial methods of operation, and to use their partners to improve their
performance. In the latter case, there are the needs to overcome:
Differing attitudes and nationalities
Delays and misunderstandings
Incompatible goals.
With regard to the organisational outline and it's culture, they were, in the opinion of
the contractors, powerful forces used to determine the joint ventures operations and
performance to a successful and satisfactory manner.
Other organisational influences included components of the external environment, such
external activities as market conditions and changing government policies, which in
turn can necessitate the adaptation of an organisations operations and subsequently the
internal culture. Whilst the contractors did identify these influences, only half (50%) of
the contractors had experienced an adaptation to the venture by the external
environment.
Although the organisation itself was prone to outside forces, internally the joint
venture's culture to the agreement of half the contractors, did experience a period of
organisational socialisation. This socialisation was essentially a period in which the
differing personnel of the venture partners began to interact and act in unison to the
sole benefit of the joint venture company. It tended to occur over a short period of
time, specifically the first third of the venture's life span.
The choice of joint venture manager (project manager) and personnel was a valuable
factor for success. It was important that the partners did not select them purely on
reasons of availability or treated the venture as a dumping ground for inexperienced or
unwanted managers and staff. The personnel when selected, were in general, ordered
or willing volunteered for the joint venture.
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Interestingly, at no point did any of the contractors suggest the need to select a project
manager or venture personnel from outside of the venture partner companies, which
could have provided independent choices free from any bias of dual allegiance.
The average age of venture personnel, tended to fall within the age range of 3 5 to 50
years, which in their opinion represented the optimum age group for experience at
board and senior management levels.
The ethics of a venture partner as being different to one another was an aspect that
was not readily identified by the contractors, and yet in situations where they did
occur, one partners ethical codes were higher than the other. For example in the
treatment of personnel and their social behavioural needs. This area should be
identified for further clarification and understanding.
The next, essential element for organisational success, according to the contractors is
that of power.
7.1.7 A Partner's Power through the Joint Venture
Power and motivation are important factors within a joint venture, and as already
established, power in the form of common control and shared ownership are attracted
to one another.
For control of a joint venture, the respondent contractors have already established that
fact of majority equity or ownership not being of prime consideration.
From this, it can be further taken, and is supported by the larger and experienced
contractors especially, that the joint venture definition of power is essentially the ability
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to override decisions, which in turn is fed through the venture's project manager. In
addition, the contractors in general felt that such power over decisions is necessary for
greater control and authority over the other partners, and essentially the one with the
most control had the most power. Such power was normally invested in the project
manager. The inexperienced and small contractors also felt the preference for unequal
power distribution in their favour. Obviously stating an innate fear of being controlled
by their partner whether larger or more experienced.
The larger contractors also felt that the unequal distribution of power could also arise
out of the need of different individuals and personalities wishing to dominate the
venture. Therefore people within the venture can also manifest the need for power.
In situations of an equal distribution of power, it enabled the contractors equal
authority, thereby ensuring joint discussion and key decision making to be realised. It
ensured unanimity amongst the partners providing a successful and harmonious
venture team.
As with any organisation, the joint ventures performance and self-motivation are
directly linked, according to the (92%) majority of the contractors. They considered
the main factors of motivation arose predominantly out of a need to provide:
Specific goals which are difficult, but acceptable performance goals.
Feedback through goal attainment.
Job designs were not readily accepted by the contractors.
It is therefore evident, that with the clear advocation of the contractors for good and
strong management lines, it is necessary to motivate the venture personnel through the
project manager with use of specific goals and regular communication.
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7.2 Conclusions
From the hypotheses detailed in section three, and the subsequent research analysis, the
results provided the following:
(1) Shared ownership between the sponsor companies is a pre-requisite of the
joint venture, but with common control being the secondary motivator to that of
majority control. This was not proven;
(2) For success in a joint venture, the prospective joint venturers must have
similar goals and objectives to one another. This was proven;
(3) Autonomy of the joint venture company is a necessary component for success,
in order to mitigate any loss of fluidity in it's management action and reaction.
This was proven;
(4) For success, the venture partners must co-operate with one another. Such co
operation and collaboration must be based upon trust. This was proven;
(5) Prospective partners should look for partners of equal size and equal joint
venture experience. This was proven;
(6) A joint venture must be a flexible instrument with which to control any
unanticipated events. This was proven;
(7) It is essential to understand the cultural differences between the differing
company organisations so as to accommodate the differences and mitigate any
barriers and conflicts for the success of the joint venture. This was proven.
The above points, generated the need for an understanding of the reasons of whether
to joint venture or not and subsequently produced and assessment of the criteria for
success.
The findings in relation to these hypotheses are discussed in the following sections:
122
-----------------------____________ --.J
7.2.1 Shared Ownership and the Dominant Partner
Ownership and subsequently control, are two attributes of a joint venture that are
entwined with one another. Correlation's between the two, exist in two forms:
the equity within a venture is dependent upon control, a fact that is supported
by over three quarters of the contractors, clearly in contrast to Groves (1970)
and Young & Bradford (1977).
Majority control can be further achieved by use of the company's own
specialised skills and resources, particularly in the case of an experienced
venturer.
The conceptual incorporation of common control within a joint venture, cannot be
truly established as the sole component for success, since nearly half of the joint
ventures were managed under a dominant partner and with a 90% success rate
irrespective of the control status.
Deadlock based upon a fifty-fifty control policy carmot be considered as an assured
route to termination of the joint, since of the venturers surveyed, non had experienced
such a situation.
7.2.2 Mutuality of Aims and Co-operation Between Partners
The need for trust, amongst the partners, and the venture personnel, was considered a
necessity for success, with all the partners co-operating with one another in totality.
There needs to be complete mutuality of aims and objectives amongst the partners,
with the partners having an understanding of one another's motive's and needs.
123
- -- ----------------------------------
The process of co-operation and collaboration originally envisaged the willingness to
pass both information and resources. However, it was found that with experience in
joint venture and when coupled to a larger organisation, there came concerns
attributable to loss of proprietary information and the wish to control their partners.
7.2.3 Autonomy
Independence and autonomy of it's actions is an important facet of the joint venture.
For a successful joint venture, particularly when coupled to the higher levels of joint
venture experience, there is a need for a balancing of management control and
autonomy. This necessitates strong and clear lines of management, use of accurate and
regular reporting systems, with a high calibre of human resources leading to an active
and successful role in the decision-making process, primarily led by the venture board
through the project manager. Generally, the need for freedom and autonomy from the
parent companies was a highly valued component and contributor to success, with
over half the contracting sample considering it useful. The experienced contractors,
particularly enhanced this aspect of freedom, by broadening it's definition to intimate
that whilst useful it was not a fundamental issue. Since in certain circumstances, the
parent may personally wish a tighter rein and control over their investment in order to
maintain their own strategic interests.
However, irrespective of such occurrences, it is confirmed by the majority of the
respondent sample of contractors, that the need to treat the joint venture as a totally
separate company was highly valued.
124
-------------------------------------
7.2.4 The Need to Joint Venture
When concerned with the premise of the joint venture, there are obviously both
advantages and disadvantages with the strategy vehicle. The main and therefore prime
motivator arose out of the specific need for others, essentially to spread risk.
It was evident that the more experienced contractors tended to closely align themselves
a more aggressive standpoint, with a strategic need to protect their own market,
consolidating their base field of operations by working with their competitors. The
less experienced or novice contractor was primarily invested in the retrieval of
information.
On the other side, generally the joint venture was considered a slow vehicle for
operation that divided the loyalties of the venture management and personnel. As
experience increased, so the contractors began to realise the problems in sharing
control, management and information.
7.2.5 Size and Experience of Partners
In the conceptual eyes of the joint venture, partners of equal size and venture
experience would allow companies to integrate more readily and with more success.
The compatibility amongst the partners is a factor that is sought out by the contractors,
especially as their joint venture experience increases. The compatibility between these
partners can be expanded to include both their control systems and cultures. This
therefore can be summarised to indicate a clear preference for similarity and
comparable aims and needs amongst the partners.
It is interesting to take benefit from the joint venture matrix, shown on Table 3.1,
where it can be seen with a 90% success rate in joint ventures, the respondent
contractors had the following joint venture partner sizes:
18 joint ventures with larger partners (36%)
125
14 joint ventures with smaller partners (28%)
16 joint ventures with equally sized partners (32%)
(note - 6 joint ventures unidentified by contractors (12%)
This clearly indicates that the size of the partner irrespective of their thoughts, does
appear to make a small impact upon the success of the joint venture, with the larger
partner benefiting a success more regularly than the smaller.
7.2.6 Comparative Cultures within the Joint Venture Organisation
Organisational culture, within the joint venture does exist, and in order to overcome
any associated problems between the differing partners, it is necessary to fully
understand all their (partner) differences. Such differences encompass their attitudes,
perceptions and priorities and the subsequent understanding of them enables the
partner to comprehend the varying levels of importance and values. When the differing
personalities come together from the various partners, there is a socialisation period in
which these joint venture members integrate with one another. Thereby overcoming
problems concerned with the differing attitudes, misunderstandings and objectives of
both the partner companies and their respective personnel.
So, to enhance both the performance and cope with the differing cultures between the
personnel, ideally there needs to be a strong project manager, chosen for his functional
rather than availability merits. The associated venture personnel, provided by the
partners, then need to be of the optimum age for experience, with an ideal age range
between 35 and 50 years of age.
One aspect that has not been readily identified by the contractors, was the potential to
utilise personnel or managers that are independent from the joint venture partners.
That is to say that they are independent people, free of bias or divided loyalties to any
one partner, thereby obviating any element of distrust between partners.
126
7.2.7 Success Determinants
As the contractor's experience grew, the need for compatible control systems and
dependency upon others transformed into the need for:
A compatibility among the team
A mutuality of aims and objectives
A joint commitment for continual success
A compatibility of partner cultures.
The contractor's size also made an impact upon the determinants for success. The
large contractor needed to understand their partner's communications and management
knowledge, and the smaller needed a smoothly running and operating culture with a
clear and deep understanding of the joint venture.
It is therefore clear the more experienced and larger contractors when involved with a
joint venture, tended to align themselves more readily with the conceptual joint venture
as laid down by the researchers. This is further shown when comparing the
determinants produced by both Sanvido and by the Coming Glass Works guidelines.
7.2.8 Structure, Organisation and the Team of the Joint Venture
To finalise the research findings into a format that is compatible to parallel research
programmes, it is prudent to collate the conclusions into three broad categories, the
structure, organisation and team aspects of the joint venture.
7.2.8.1 Structure A joint venture is produced when two or more companies come together with a
combining
127
of skills and resources in which to achieve a common goal or set of goals. The
respective partners, who unilaterally cannot forge the particular venture alone, must
therefore contend with the aspect of shared ownership. This shared ownership can
range in terms of percentage equity, but in are general based upon a equal or 50:50
equity within the legally separate entity. Majority equity joint ventures do however
exist, and this is suggested within the research, and found to be in the aegis of the
more experienced contractor, who has the additional need of wishing to obtain
managing control.
It has been established that this need for control can be achieved through the extent of
equity within the joint venture, or by use of a partners particular specialist skills.
Control by management must be carefully balanced by the level of autonomy in the
joint venture. Autonomy, is a integral component for success, and is necessary for the
joint venture "child" to gain its own identity and so consolidate its position within the
particular niche in their "parents" marketplace. Initially the joint venture will be
dependent upon the parent companies for the necessary injection of resources, contacts
and support required to grow within their newly found environment. However such
dependence will wain as the joint venture strengthens its own resources, line
management, and so understand the necessary benefits of unilateral support.
7.2.8.2 Organisation
The more experience a contractor obtains through use of the joint venture strategy, the
more aggressive their standpoint with their partner becomes, in that they desire or
become dominant in the control of the joint venture. It has already been stated that
majority control can be sought through equity ownership or specialised assets of one
partner over another, and such use can be said to be premeditated by the need of a
contractor to fulfil their strategic aims to protect or consolidate their business.
For the enhancement of success within the joint venture, the partners will require a
strong controls system, which utilises strong and clear lines of management,
communication and feedback. This is necessary for the fluidity of its operations and
to ensure good decision making roles for all the partners. Compatibility of respective
controls systems between partners will readily accommodate their immediate needs.
Therefore the provision of a responsive management team, with a clear understanding
of each partners aims and objectives is essential. It is important to note that the
necessity to share information, management and subsequently control is a feature not
readily
128
offered by the larger or more experienced contractor, suggesting a wish to maintain
security and authority over their partner
7.2.8.3 The Team
The managers and personnel within the joint venture need to support the co-operation
and collaboration laid down by the partners. To achieve such a desire is the need to
implicitly trust both one another and their respective partners. Dual allegiances whilst
only appreciably identified by the small and inexperienced joint venturers is still a
factor for consideration by all parties involved, and the aspect of trust can be used to
negate any undue worries or concerns within the venture.
An understanding of the partners within the venture is warranted as measure with
which to comprehend one another, to attempt to seek a compatibility and mutuality in
goals, personnel and subsequently organisational culture. The aspect of organisational
culture is clearly identified as important, and essentially will require a cognisance of
their fellow joint ventures perceptions, beliefs and attitudes in order to produce a
comparable joint venture culture. Initially when the differing members of the joint
venture partners come together, there will be a period of organisational socialisation,
where the personnel acclimatise to one another and so begin to meld and think as one,
with the success of the joint venture as their sole and primary objective.
The joint venture team in addition must include the provision of a strong project
manager, with a comprehensive selection process for the managers and personnel alike
that is based upon their functional abilities and not their availability for assigmnent. In
practice, it is apparent that this may be the preferred option, and that there is the wish
to use a high calibre of human resources, but it is invariably led by the demands of the
industry. The optimum age for the correct level of experience and necessary
adaptability for a joint venture is ranged amongst the age group 005-50 years of age.
The management team is generally drawn from the pool of resources available to the
group of partners, but a point not raised that should be considered as important is the
option to recruit from outside the joint venturers, thereby hurdling any possible
objections to the selection of key personnel or the problem of divided loyalties to the
partners or joint venture.
7.3 Limitations & Recommendations
It should be noted that during the course of the research, the information and data, was
129
where possible taken from senior level managers with first hand knowledge ofjoint
venturing from each respondent contractor. This in turn has meant that, to a degree, a
level datum or benchmark of subjective consistency has been achieved. However, as
stated earlier in section 2.9.3, definitions of success are subjective and unique to each
joint venturer. This can be taken further to include the managers responsible for their
company's questionnaire response, and should therefore be noted as a possible source
of bias and personal interpretation.
In order to fully understand the needs of the industry's contractors, the joint venturing
contractor's partners should be surveyed and interviewed so that a more balanced
viewpoint may be achieved. Due to the scope and time related implications of this
research, it was not possible to do so at this stage.
The wealth of information concerned with the joint venture or strategic venture proved
very extensive, and the locus of such knowledge was certainly found to emanate from
the United States and also included industries other than the construction industry.
Such differences in the source and form of information detailed within the literature
review must be balanced against the survey results.
It is recommended that companies, when involved in the joint venture strategy, take
the following points into consideration for the enhancement of their success in a joint
venture:
Become familiar with their prospective partners, understanding their goals,
needs and so assess their willingness to contribute to the venture with respect
to a commitment for success and for resources.
Attempt to ensure a compatibility between the cultures of the differing
organisations.
Provide both shared ownership and joint control.
Provide a strong management board, with a strong project manager, utilising
regular meetings for purposes of control and feedback of information.
130
Give complete trust to the partner( s), with a sharing of information and
resources, with free access to the joint venturers.
Provide strong motivation for the joint ventures personnel, through the project
manager by use of specific attaimnent goals and regular updates and meetings
for feedback of control.
7.5 Further Research
The contractors surveyed within this research proved to be of a small sample size,
and as such the subsequent results have produced indicators for joint venture
success. A more complete set of data is therefore required encompassing a much
larger sample of contractors with which to progress the indicators of this survey.
The respondent contractors views and opinions as a direct result of their joint
venture experiences have been broached within the research, however the views
and opinions of their partners have not. It is therefore suggested that such
knowledge should be identified, and further coupled to the point of view of the end
user of the construction joint venture, the Client. Further research is therefore
needed into the views of all the members of the joint venture, whether they are
contractors, developers, investment banks or other clients.
It has already been acknowledged that the external factors of location, partner
nationality, business and size do not appear to affect the joint ventures success.
However, a factor not identified is that of the contractual forms of the construction
project, it's legal forms and fiduciary needs, and their contributions to success.
Since it has already been proven that success does require a strong management
team, further research into it's minutiae would prove valuable to the industry, and
131
so advise how best to select their future venture managers. There is a need to
further investigate the team aspects of the joint ventures, to look at the specific
skill requirements of the contract and management team.
132
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139
APPENDICES
A. Survey Questionnaire
B. Glossary of Terms
C. SPSS Data Analysis of Survey
D. Figures
E. Tables
APPENDIX A
Survey Questionnaire
JOIn vENIOaS ll.tT'iilEEli ux: COIl'IRACTORS
QUES'IIOIiHAIRE SURVEY BY
ADIUAN C. SHI'm B.S.c:. (Bons) POSTGRADUATE asEAll.CH StllDEN'I. DEJ.>AlttHENT OF CIVIL ENGUlEERIliG
LOUGHBOROUGH UliIVEitSI'IY OF 'IEClIlIOLOGY
--- ----------------------
1.
SEC'IION
ONE Company Details
TIlO Management Board
Co-operation and Collaboration
FOUII. Determinants of Success
FIVE Common Control and Shared Ownership
SIX Advantages and Disadvantages
SEVEN Success or Failure
EIGHT Autonomy from Sponsor-Parents
NINE Culture of the Organisation
TEN Poyer and Motivation
-;.;.-:~ , ... :.--..... :t"r.:n- ,. '-._''"c O•
2.
1.1 Name and Address (of Company)
1.2 Main nature of business :
SECTION OllE
COMPANY DE'tAILS
Civil Engineering
Building Construction ,=, Development ,=,
1.3 Is your Company part of a group? Yes
1.4 If 'yes', is your Company a :- 'District' Entity
'Regional' Entity (ie. North West Region)
'
-_'I
'Divisional' Entity ,=,
1.5 Name of Group (if applicable)
(ie. Civil Engineering division)
1.6 Approximate ~urnover £~ ______________________________________ __
for your Company (£ million(s»
1.7 Are you involved in any international joint ventures?
cont/ •••
", .-~.- -------------
, :, -
4.
SEC'lIOR TWO
THE HARAGEKENT BOARD
'< ~ - ;:
2.i._:·.n;;;-;'an~gem~rit~-Eth; joirit';~"nt~~~:-m'~~t be given ~~ri~iderable freedom by tbe ,.cc sponsor-parents.,
_ .• Do you agree? Yes .. ~I ~.
No I_I
, '
2.2 ,If your answer was 'no', please state why.
2.3 Creation of a full-time management team and staff is a major problem.
Is this correct? Yes
No 1'""1 -2.4 If you agree to the 'above, outline how, from your experience, the joint
venture team is put together (given that it is of critical importance).
cont/ •••
. ',-:; ".,'"
5.
2.5 How is 'accountability and control' set up (established) by you as the sponsor-parent? (as one of tlie Partners).
~".' . . " •
-~ - . . ', . . ..... >-;;.-.,' •• ,:';;",,0 '--___ ,..;;...--e.:_~' ''-----,, __ -!..;;;...-::-_--'--__ -_
2.6 How regularly do you expect the joint venture management board to meet with the sponsor-parents? (please tick)
weekly 1=1 bi-weekly 1=1 monthly 1=1 quarterly 1=1 every 6 months 1=1
" -other I~
, ,
2.7 Who is responsible for the formation and building of the ventures managemen team?
Board of Directors (of the joint venture) 1=1 Sponsor-parents 1=1 General Manager 1=1
,"
Other .-
- .' cant/ •••
---_.- --------------------------
6.
2.8 At what stage of the joint ventures life do you begin to look at the re-allocation of staff?
2.9 How are the staff selected? ie. 'ordered' or 'volunteered'.
2.10 In figure one, an outline joint venture structure is shown, how does this compare with your ventures structure?
cont! •••
. ,-~.
7.
If different, please illustrate a typical structure from one of your joint ventures. (space below)
2.11 In a Joint Venture, with a number of partners, the Direc:ors and other managerial personnel are not as likely to act as a cohesive team because of previous lack of evolvement as a team.
Do you agree or not? and why?
cont/ •••
8.
2.12 In a single one-o:f Joint Venture, the Joint Venture Board is fundamentally veak for the following reasons:-
2.13
1. Unfamiliarity vith one another.
2. Virtual 'overnight' existence.
3. Lack of 'memberShip' control, they are told vhom to have.
4. 'Parents' when selecting their representatives are unlikely to consider the balance of functions of the board. Selection is not necessarily the best for the group.
Are there any oth.er f .. ..1eaknesses' in your .. , O?lnlOr..
If 'yes', please s:ate them.
True Fa:se
Cl i-I '-'
1=1 Cl Cl :-1
1=1 i=1
...
9.
3.1
SECTION THlU':E
CO-OPERATION AND COLLABORATION
For the success of a joint operate with one another. based upon trust.
venture, the partners involved must coSuch co-operation and collaboration is
Do you agree with this statement?
Please give your reasons.
3.2 With t~e advent 0: problematic scenarios, each partner's tolerance towards one another must be judged and tested in order to a~hieve solutions and subsequently results.
What were the most COmmon problems associated with the joint ventures operation? Please list them.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
cont/ •••
10.
3.2.1 How were they subsequently overcome? (please list again respectively)
l. 2. 3. 4. 5. 6. 7. 8. 9. 10. ____________________________________________ __
3.3 In the advent of a prolongation of the decision-making process, ~as a deadlock situation ever found during the course of any of your joint ventures?
Yes
No I-I 1_,
If you answered 'yes', what ~as t~a solu~ion (if a~y) for suc~ deadlock.
3.4 Did such a deadlock situation lead to the termination of the joint Venture?
Yes
No
cont/ •••
, !
11.
3.4.1 If 'yes', vhat vas the number of 'terminated' joint ventures against those actually i~itiated. (please enter figures)
joint ventures terminated (number)
joint ventures initiated
12.
SECTION YOUR
DETERHIIWITS ay SUCCESS
4.1 '~at makes a joint venture successful, that is the underlying question of an optimistic would-be venturer. Projected objectives and ai~s at the start can be compared with the final status of a joint venture.
Below are a list of components for success. experiences, how important are they to you? the most important, and 5 is the least)
1. Trust is essential.
2. Mutuality of aims and objectives.
3. Compatibility of size and experience.
4. Autonomy from 'sponsor-parent'.
5. A true need :or others.
6. Co-operation ~~d collaboration.
i. Shared power.
8. Co:mon contt'::.
9. Neither paren~ should enter the joint venture out 0: a position of weakness.
From your previous (please tick, where 1 is
1 2 3 4 5
1=1 1=1 Cl 1=1 1=1 1=1 1=1 1-' 1=1 1=1 1=1 1=1 I-I
'-' I=! I-I
Cl 1=1 Cl 1=1 i=1 '-I ,-, 1-1 I-j :-, 1- I_! '-' ' ' -' '-' ,-' ,-, ,-' 1-' ,-, J 1 !-
, , '-' ,_,
'-I ,_, ,-' , ,
'-' ,_,
'-I i-' -' '-
1=1 '-I 1-' 1-: !=i 1_. ,_, -'
10. Flexibility to cope with the transient 1=1 1=1 I=i 1=1 1=1 nature of external forces.
11. Good communication. 1=1 1=1 1=1 1=1 1=1 12. An ability to share 1=1 1=1 Cl 1=1 1=1 13. Good management skills. 1=1 1=1 1=1 1=1 1=1 14. Compatible values. 1=1 1=1 1=1 1=1 1=1 15. Compatible cultures. 1=1 1=1 1=1 1=1 1=1 16. Understanding of joint venture 1=1 1=1 1=1 1=1 1=1
"etiquet~e".
cont! •••
13.
18. Deliberation and attention in setting up the joint venture agreement.
19. Anticipation of risk.
20. Knowledge of the partner(s).
21. Middle management involvement.
22. Important to decide (if needed) which member of a large group of Companies should become the shareholder in the JV.
23. Ensuring that each partner's rights could be enforced, especially if a government body is involved.
1=1 1=1 1=1 1=1 I=! 1=1 1=1 1=1 1=1 1=1 1=1 1=1 1=1 1=1 i=1 1=1 1=1 1=1 1=1 1=1
24. c!anagement of organisational informati~n 1=1 1=1 1=1 1=1 transference. .
I-I
1_'
25. Creation of a number of narrow purpose 1=1 :=1 I=i i=i joint ventures (ie. spiders .eh joint ventures) •
26. ~inirnise inve5tcent and ensure ~Jbil~:y of assets.
27. Monitoring of risk.
28. Rights end obligations of the members 'inter se' must be absolutely clear.
29. Realistic assessment of strengths and weaknesses.
:-, ,-, , -'
,-, !-, '-'
1=1 1=1 I=i 1=1 i=i 1=1 1=1 Cl 1=1 I=!
30. Assess the partnerCs) commitments to the 1=1 1=1 1=1 1=1 1=1 JV success.
31. Accurate assessment of the parent's 1=1 1=1 1=1 1=1 1=1 willingness to contribute resources.
32. Obtaining your prospective partner's 1=1 1=1 1=1 1=1 1=1 credit standing.
33. Previous JV experience. 1=1 1=1 1=1 1=1 !=I 34. Other. 1=1 1=1 1=1 1=1 1=1
cont/ •••
14.
Do you ha~e any further criteria for success? If so, please list them below.
15.
SEC'IIOIl FIVE
COHHOII CONTROL AND SllARED OIfflERSRIP
S.l "!1ajority equity is important for ~c.e controlling :a:tor".
Is this a valid statement in your opini~n?
Please give your reasons.
j.2 ';..llat ~u:ober of p!:-tners cid you ha.~~·e in e3.c::' ? :.:: :':'..::=.r ~.-; _ .. ·:~:::u=-e .,)'-_ ....
(as ?:evio:.!sly 1~5:ed i:! question ~ .·3) •
1. O:l.e -,
:,-~ ,-,
Three , ,):he!" ._,
i I_I '-' ,_. Z. One 1=1 :· ... ·0 1=1 Three I=i Other :-1 ,-3. One 1=1 :"'"0 1=1 Three 1=1 Other 1=1 4. Ooe 1=1 Two 1=1 Three 1=1 Other Cl 5. One 1=1 -:W"o 1=1 Three 1=1 Other 1=1 6. One 1=1 T ...... o 1=1 Three 1=1 Other Cl 7. One 1=1 TilO 1=1 Three 1=1 Other 1=1 B. One 1=1 T.,.o 1=1 Three 1=1 Other Cl 9. One 1=1 T ... o 1=1 Three 1=1 Other 1=1 10. Ooe 1=1 :~O 1=1 Three I-I Other 1=1
cont/ ...
16.
5.3 w~ich of these joint ventures .ere on an equally shared basis ie. symmetrical equity venture (SO ; SO).
Yes No
1. 1=1 1=1 If 'no r !)lease enter Eercenta~e s!)lit
2. 1=1 1=1 3. 1=1 1=1 4. 1=1 1=1 5. 1=1 1=1 6. 1=1 1=1 7. 1=1 1=1 8. 1=1 1=1 9. !-I
1_ I-I ,_I
10. 1=, i-I
5.~ \~"":1ich of :llesa j:Jint vent'.::-es "'·2:e :J:::=.J::ly :c::t::·:l:2j; ::--:at:'5:: say ~~era each ?artner ~a~ an ec~al =~gh~ ~c je:e:=i~e ::-:2 ~ay .~
which the venture was o?eratsd a~d ran.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
cont/ ..•
I~
17.
5.5 If any of these joint ventures were not co~only controlled, in each case, who was the 'managing partner'? (refer to list in 1.3)
5.6
l. 2. 3. 4. 5. 6. 7. 8. 9. 10. ____________________________________________ __
In which situations were you as the ?artner, whether ma~aging O~ successful in the joint venture?
, .. . -. 3.
~.
5.
6.
7.
8.
9.
10. ____________ __
" . ~.ana31n£
Partner
Yes
I-I I_I
1=1 1=1 I-I
1=1 1=1 1=1
,.0
:-.
I-! -'
1=1 1=1 1=1 1=1 1=1 1=1
Joint Vant'..l=~
Success
Yes ~o
,-:
-, ;
i-I '-:-1 1_,
1=1 i=1 1=1 1=1 1=1 1=1 1=1 1=1 1=1 1=1 1=1 1=1
cont/ .••
--- ----- -----------------
18.
.f.1f<t 5.7 The equity ~ a parent has in a joint venture is determi~ed by the
amount of control they wish to have.
Do you agree?
If not, please state your reasons.
5.8 In the pursuit o~ a successful joint ve~ture, a good cc~:=ols syste~ is essential. ~OW' from your previous ax;>eriences · ... -0'.11: ::JU ra~e th~
folloW'ing contr·,l elements (please tic;':). (~ne i3 the :::'g;'est, five the lowest)
L 2 3 - ,
1- r·.)p ie. dire::or ,-'
man.=ge:Je~: J g:':J::; -leve 1.
2. High l~';a 1 0: :=?~~~ecta:ion :e:.:..·e~:,. ,-the partners.
3. Regular upda~es concerning the I=! 1-; 1-: i-I i-' -' '-' I_!
results (projected) to date.
4. Fixed responsibilities of partners. 1-[ _I I=! 1-:
-' [-I I- 1=1
S. Fixed authorities of partners. 1=1 1=1 1=1 1=1 1=1 6. Calibre of h~an resources available I-I 1-( 1-: -' 1=1 1-:
-' to the partner.
7. Management consensus. 1=1 1=1 1=1 1=1 1=1 8. Linkage of financial strategies. 1=1 1=1 1=1 1=1 1=1
con t I . .•
19.
5.9 Most sponsor-companies and their respective managers prefer to have "majority (asytmletrical) equity control". HOil r.!any 0: you: ventu:es were 'majority equity ventures'. (please tick)
4- 7 Cl
5.9.1 How many were symmetrical ventures? (please tick)
4 - 7 Cl
5.10 The balance of power agreed upon is not necessarily s:::!lr.1etrical. A partner may be willing for lesser control in order to achieve another objective(s).
Do you agree? Yes I=! No I-I _I
5.10.1 If 'yes', please give your reasons a~d exa~?le 'abjac:~ve51.
Objectives:-
1. Z. 3. 4. 5. 6. 7. S. 9. 10.
cont/ •••
20.
5.10.2 If '00', vhat vould be reasooa~le?
5.11 10 order to eosure control over the 'joint venture child', it is normal to ensure strict avenues of purpose and direction. As such, this can necessitate the use of rspide~s ~eb of join: vant~re5t ~ith a partner at t~e cantre of a nu~~er of ventures.
Has this situat:on occurrec for you?
;.'.; 1.
2. Cl I-I '-I :-1 -' 1_, '-'
3. '=1 Cl Cl i=1 4. I-I Cl 1=1 1=1 5. 1=1 1=1 1=1 1=1 6. Cl Cl 1=1 1=1 7. 1=1 Cl 1=1 1=1 8. 1=1 1=1 1=1 1=1 9. Cl 1=1 1=1 1=1 10. !=I 1=1 1=1 1=1
cont! •••
21.
5.11.2 Were they between internal or external partner companies. (please tick)
Internal External
JVl. 1=1 1=1 2. 1=1 1=1 3. 1=1 1=1 4. 1=1 1=1 5. 1=1 1=1 6. 1=1 1=1 7. 1=1 1=1 8. Cl 1=1 9. i=1 1=1 10. :-1 I-j
'- '-'
5.12 ~~nat were ?our reasons fo r
cont/ •••
22.
5.13 Were there any other o~ganisational fo~~s 0: joint venture in your experience?
Yes I-I i_I
No Cl If 'yes', ?lease elaborate.
5.14 The corre=t balance of managerial :,c~=01s a~d auto~omy :3 e5sa~~ia: for ~he e~~ective manageme~: of ~~e J~:~: ven:~re.
5.15
Correc t ·-1 -' -, ,
~- ... ,.... : .
wnat for:l 0: ma:lage~ent controls d·:l you favour in an ideal situation.
23.
SEC'IIOII SIX
ADVANTAGES AND DISADVANTAGES
6.1 Advantages
.aat do you consider are the advantages of a joint venture? (please rate their priorities. 1 being the highest and 5 ~eing the lo~est)
Small companies can participate in large construction projects.
Less experienced companies can team up with more ex?e=ie~ced partners and laarn from them.
S?reading of r:sk.
Permit tech~ol::>gy transfer.
Allowing Con::ac:o:s to partici?ate i~ a:eas othe~ :~a~ ~~eir s?ecia~:satio~.
, ,
Sationalisti: ~a=:!er5 \ a=e ,')';ar:J;:!s".
!a~ilia=::y ~~:~ juildi~g ;o~es a~~
c=dna~ces) :,:al~:y.
~ithin a domestic ~arket, prospective partners are pote~tial competitors. but in another ie. overseas, they can be collaborators.
It offers a means of leveraging a firm's strengths over others.
It can defend a parents current strategic posture.
It offers an increase in market share.
Other (please specififyl
cont/ •.•
1
,-' 1_'
!=I ,-, , !-
2 3
,-: ,-, :-1 ,-~ ._! '-' '-I 1-' i-I ,- ,_I
=i ,-I 0_.
:-1 '-' :-1 '-I
'- '-
5
,-, ' ' ,_I I-I '-' ,-,
I
'-I 1_,
24.
6.2 Disadvantages
~ith advantaggs t~ere ar~ also disa~va~tag~s, ~e:~~ a:e a list o~ suc~ pitfalls, ~~ich of the~ a:e :osC relevant to you in ?a=tic~la=?
l. Divide:! loyalties ~et~een t!'ie ~a~age~s of the venture.
0 Divided loyalties bet .. een the personnel .. of the venture.
3. Detrimental influence of the parent cocpanies.
~.
;.
9.
Lack of trust.
'Hollo~ingt out of t~e I~o~esti: economy' J ie. over-use by 'J:':1ers Cfneig:J).
Divisio~ 0: ?rofit.
;'ecuct!:~ :':1 :~e ':1'.::"::":::' --
With j?:'nt liability :or :~e jOl~t venture (not the company) the partner is also responsible for t~e other partner's responsibilities
10. Joint Ventures are time consuming in their preparation.
11. Slol< mO'ling.
12. Disputes may arise more rapidly and frequently.
13. After affects of failure (affecting future business).
14. Joint decision making.
cont/ •••
1 2 3 4 ;
1=' 1=1 1=1 ,-, I-I !_I ,-
1=1 1=1 '=1 '=1 '-I 1-
1=' '=1 '=1 '=1 I-I '-
1=: ,-, ,-; :-, :-1 '-' '-' '-'
1=' ,-, -I ,-,
1_: _I ,
1-' , -, ,-r -, , '- '-' -' '-'
,-, i_
,-' -, _i ._1 i-r
'-' i_I
1=1 1=1 1=1 1=1 Cl ,-' I-I ,-' I-I 1-' 1_1 __ , , __ I
25.
15. ~anagers may have troubl~ overco~ing their innate fear of losing a~solute control of propriety information.
16. Information transfer can be ti~e consuming.
17. Political risk.
18. The ventures 'severable personality' ie. multiple managers.
19. No inherent tradition.
:0. ~agnitude a~d integral coo?lexi~y c: the JV.
21. Unequal benefits (ie. p~ofit 5~a==) engender dissatisfaction.
:2. C:eation of a ~ull t~~9 ca~age~e~: :e~=
~~C sta:f :a~ J~ t::~~:es~~a.
1 : 3 4 5
;-! 1-' ,-, ,-, '-I , '- '-
1=1 1=1 '=1 1=1 1=1 I-I I-I I-I I-I '-I _, - - - 1-
I-I I-I 1=1 ,-, '-I
'-' '-' '-
,-! '-1 ,-, ,-, '-! , ' ! ' -'
[-I i-I '-'
,-, ;
-'
,-,
------------------------------------
26.
SECTION SEVEN
SUCCESS OR FAILURE
7.1 Of your venture experience to date, h~~ many ~ere successful for you, fulfilling your expectations?
7.2 How many of the joint ventures were failures?
7.3 How do you deter~ine w~at is a succe5s~~1 jo~~: ve~:u~a?
7.4 As a result of a failure of a joint venture, would you still consider joint venturing again?
cont/ •••
27.
Please give your reasons.
i.S Of your joint ventu:es to date, in you= oplnlon, ho~ ma~y ventures ~~re considered successful by your p.rtner(s)?
28.
SECTION EIGHT
AUTONOMY FROM SPONSOR-PARENTS
8.1 From previous experiences, ~~ether successful or ~ot, ho~ iu?ortant is the aspect of the ventures autonomy from it's parents. (p19ase tick)
Extremely important
Useful
No direct bearing upon joint venture management
Detrimental and harmful to joint venture success
1-' _,
Please expand further your a5sess~e~t.
8.2 Have your partner(s). in your opinion, the same beliefs ~ith regard to autonomy?
29.
SECTIOII II1RE
CULTURE OF THE ORGANISATION
9.1 Each company organisation is unique since they are each cooposed 0: different people. This in turn means different beliefs, attitudes and perceptions, thereby manifesting into 'organisational cultu=e'. ::om your previous experiences, ho~ did you assess the fundamental differences bet~een cultures?
9.2 ~;"at were the problems in t~e ':nargi:1g' 0: t:1a ct:!~'.lres?
9.3 How ~ere they overcome?
cont/ •••
30.
9.4 Were there any advantages to be gained froe the diffe=ing cultures?
Yes 1=' No 1=1 Please give your reasons.
9.5 Would you conclude that t~e organisa:ions ' outli~~ had been a pove=ful force in determining it's (join: ven:~re) J?eratiJns and subsequent performan~e?
Yes i=1 ,0 i-!
con t I . ..
31.
9.6 Are there any disadvantages to a differing organisational culture from that of your partner(s)?
If 'yes', please s~ate what they a=e.
9.7 An organisation's culture is a poW"e!"ful :'J:."ce cete!":ni:1i~g 2.J",; it operates and ~ow :: pe=for~s.
Do you agree ~it~ :~e above 3:ate~e~t;
Yes I-I
'-' i-I '-
If not, please ex?and further.
cant/ •••
-----------------------------------
32.
9.8 External activities and events such as changing market conditions, ne~ competition, changing government policies may necessitate adaptation of the orga~isations (venture) operation and so it's internal culture.
Has this occurred in your previous ex?er:~nces?
If 'yes', how so?
9.9 Within your joint venture organisations, ~ere your personnel predominately younger or older in age.
20 - 3S
35 - 50 1-' -'
>50
lmat was you: reasoning for t:-te aJove.
9.10 Was there a period of "organisational socialisation" where the 'newcomers' to the joint venture became converted into members who shared it's (venture) major values and understood pOlicies and procedures?
Yes 1=1 No I=i
cont/ •••
33.
9.10.1 Was this developed over a short or long period of time?
Long (>~rd the ventures li fe) 1=[
Short «~rd the ventures life) I=!
9.11 waere your partners predocinately la~ger o~ sma1lar than you in company size?
JVIl 1-
2.
3.
4.
5.
6.
i.
S.
9.
10.
Larger
1=1 Cl 1=1 1=1 1=1 C: 1-: 1-
'-C 1=1
Scaller
1=1 !=I '=1 ;=1
'=1 '-I
-I , -'
-j -'
9.12 Did you experience any problems with 'ethical codes'?
If 'yes', please explain further.
34. SECTIOII 'I'EII
POWER AND !lOT IV A TIOII
10.1 Hoy do you interpret the te~~ 'po_er' ~~en used in the context 0: joint venture management.
10.2 'Pover is an essential element of organisational success', do you agree?
If 'no', please ex?and further.
10.3 Within your venture experience, would you say that the distribution of 'power' is either equal or unequal?
Equal 1=1 Unequal 1=1 Why?
cont/, ••
35.
10.4 The motivation of personnel and their perfor~ance are directly linked in a joint venture.
Do you agree with this statement? Yes I-_!
No 1-_1 Please give your reasons for this response.
10.5 To motivate y~ur personnel, be it the joi~t vantu:a ma~ager O~ his managenent staff, do you:-
1. assign spe:i:lc g~als?
2. assign dif~icultt but a~:epta~le pa=~?:~!~ce goals?
3. provide feedback concerning goal attainment?
4. utilise 'job designs' to increase efficiency?
'-'
10.6 Within the control of a joint venture, hoy do you rate the folloYing forms of 'poyer' in Yhich to exert influence upon your partners. (1 is the highest, 5 the loyest)
1 2 3 4 5
1. Reyard poyer. 1=1 1=1 1=1 1=1 1=1 2. Coercive poyer. 1=1 1=1 1=1 1=1 1=1 3. Legitimate poyer. 1=1 1=1 1=1 1=1 1=1 4. Referent poyer. 1=1 1=1 1=1 1=1 1=1 5. Expert poyer. 1=1 1=1 1=1 1=1 1=1 (please refer to glossary at the end of the questionnaire).
36.
Name of person completing questionnaire.
Posi t ion.
Date.
Do you have any cocments to make concerning the format or lining of the questions "ithin this questionnaire. If so, ple.ase list them belo".
--_._----------------
APPENDIXB
Glossaryof Terms
Irganisational Culture
rganisation
b Enlargement
b Enrichment
ower
ontrol
eward Power
oercive Power
egitimate Power
GLOSSARY
The beliefs, values, attitudes and expectations shared by most organisation members.
An organisation is any social structure or system, consisting of 2 or more people who are somehow interdependent and who work together in a co-ordinated manner to attain common goals.
Expanding the content of the job by increasing the number and variety of tasks performed at the same level.
Giving the employees the opportunity to have greater responsibility and to take greater control over how to do their jobs.
Is the capacity to change the behaviour or attitudes of another in a desired manner.
The management function that aims to keep activities directed in such a way that desired results are achieved.
Monitoring of performance is the starting point of all control. In case performance deviates from what is expected, corrective action must be taken. (Drucker).
The controlling of valued resources. Individuals with the capacity to control the rewards workers will receive, are said to have reward power over them. Rewards can be tangible or intangible.
The controlling of punishments of others. This may be in the form of:-
(i) demotion, formal reprimands. (ii) pay cuts, undesirable work assignments.
Recognised organisational authority. The right of the individual to exercise authority over others because of their position within the organisational hierarchy.
eferent Power
xpert Power
Individuals who are liked and respected by others can get them to alter their actions in accord with their directives. Essentially, control based on admiration.
Control based upon skill and knowledge, the subordinate recognises a superiors advanced skill or knowledge and follows his orders because he realises that the superior knows best.
APPENDIXC
SPSS Data Analysis of Survey
a:\adrianjv.sav
class expert size company mainbus group if yes turnover intjv corpjvl partl duratnl
1 lARGEIEX Experience Large 1 Civil Engine yes Divisional E 85 Yes Corporate 2 2
2 lARGEIIN Inexperienc Large 2 Commercia yes Divisional E 185 No Corporate 2 3
3 lARGElEX Experience Large 3 Civil Engine yes Divisional E 200 Yes Corporate 2 4
4 lARGEIEX Experience Large 4 Civil Engine yes Divisional E 110 No Corporate 3 N/A
5 SMAlLlEX Experience SmaU 5 Multiple yes Divisional E 10 No Corporate 2 N/A . 6 SMALLnNE Inexperienc Small 6 Multiple no 0 75 No Corporate 2 5
7 SMALUEX Experience Small 7 Multiple yes Regional E 40 No Corporate 2 1
8 lARGElEX Experience Large 8 Multiple no 0 100 No Corporate 1 10
9 lARGElEX Experience Large 9 Multiple yes Divisional E 114 Yes Corporate 2 3
10 lARGElEX Experience Large 10 Civil Engine yes Divisional E 180 Yes Corporate 2 3
11 lARGEIIN Inexperienc Large 11 Multiple yes Divisional E 250 No Corporate 1 1
12 lARGEIIN Inexperienc Large 12 Multiple no Regional E 165 Yes Corporate 1 1
1-1
a:\adrianjv.sav
doml corpjv2 part2 duratn2 dom2 corpjv3 part3 duratn3 dom3 corpjv4 part4 duratn4
1 Domestic Corporate 2 4 Intemationa Corporate 2 3 Intemationa Corporate 2 3
2 Domestic N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
3 Domestic Corporate 2 5 Domestic Corporate 2 3 Domestic Corporate 2 1
4 Domestic Corporate 2 N/A Domestic Corporate 3 NlA Domestic Corporate 9 N/A
5 Domestic Corporate 2 N/A Domestic Corporate 2 N/A Domestic N/A N/A N/A
6 Domestic N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
7 Domestic Corporate 2 1 Domestic Corporate 2 1 Domestic Corporate 2 1
8 Domestic Corporate 1 1 Domestic Corporate 1 2 Domestic Corporate 1 2
9 Domestic Corporate 2 2 Domestic Corporate 3 3 Domestic Corporate 2 1
10 Domestic Corporate 5 4 Inlernationa Corporate 2 4 Domestic Corporate 10 7
11 Domestic Corporate 1 1 Domestic N/A N/A N/A N/A N/A N/A N/A
12 Domestic Non Equity 1 1 Domestic N/A N/A N/A NlA N/A N/A N/A
1-2
a:\adrianjv.sav
dom4 corpjv5 part5 duratn5 dom5 corpjv6 part6 duratn6 dom6 corpjv7 part7 duratn7
1 Domestic Corporate 3 2 Domestic Corporate 8 5 Intemationa Corporate 3 3
2 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
3 Domestic Corporate 5 6 Domestic Corporate 2 6 Internationa N/A N/A N/A
4 Domestic Corporate 3 N/A Domestic N/A N/A N/A N/A N/A N/A N/A
5 N/A N/A N/A NlA N/A N/A N/A N/A N/A N/A N/A N/A
6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
7 Domestic N/A N/A N/A NlA NlA NlA NlA N/A N/A NlA N/A
8 Domestic N/A N/A N/A N/A N/A N/A N/A N/A N/A NlA N/A
9 Domestic Corporate 2 5 Domestic Corporate 2 2 Intemationa NlA N/A N/A
10 Intemationa Corporate 2 2 Domestic N/A NlA N/A N/A NlA NlA N/A
11 N/A N/A N/A NlA N/A N/A N/A N/A NlA N/A N/A N/A
12 N/A NlA N/A NlA N/A N/A NlA N/A NlA N/A N/A N/A
1-3
a:\adrianjv.sav
dom7 corpjvS partS duratnS domS marvnt create regular format cohesiv weakl weak2
1 Intemationa N/A N/A N1A N/A Yes Yes Monthly JV Board of Yes False False
2 N/A N/A N/A N/A N/A Yes No Monthly JV Board of Yes True True
3 N/A N/A N/A N/A N/A Yes No OIher General Ma Yes True True
4 N/A N/A N/A N/A N/A Yes No Monthly General Ma No False False
5 N1A N/A N/A N/A N/A No No Monthly JV Board of Yes True 5
6 N/A N/A N/A N/A N/A Yes No Bi-Monthly JV Board of Yes False False
7 N/A N/A N/A N/A N/A Yes No Monthly Sponsor Pa Yes True True
8 N/A N/A N/A N/A N/A No No Monthly JV Board & No False False
9 N1A N/A N/A N/A N/A Yes Yes Monthly JV Board & No True False
10 N/A N/A N/A N/A N/A Yes No Monthly JV Board of No True True
11 N/A N/A N/A N/A N/A Yes No Monthly General Ma No False False
12 N/A N/A N/A N/A N/A Yes No Monthly JV Board of No True True
1-4
a:\adrianjv.sav
weak3 weak4 weak5 coop deadlock termin vrl vr2 vr3 vr4 vr5 vr1l
1 False False No Yes No No 7 7 5 4 6 6
2 False False No Yes No NlA 6 7 3 3 5 7
3 False False 0 Yes No No 6 7 3 7 6 6
4 False False No Yes Yes No 7 7 5 2 6 7
5 False False Yes Yes No N/A 6 7 5 4 1 3
6 False False 0 Yes Yes No 6 2 2 4 7 6
7 True True Yes Yes Yes N/A 7 7 3 3 5 7
8 False False Yes Yes No No 7 7 4 2 0 7
9 False False Yes Yes No No 6 7 7 4 5 6
10 False False Yes Yes No N/A 7 7 5 5 3 6
11 False False No Yes No N/A 7 7 4 4 4 7
12 False True Yes Yes No N/A 7 5 2 6 7 6
1-5
vr7 vrS vr9 vr10 vr11 vr12 vr13 vr14 vr15 vr16 vr17 vr18
1 4 7 7 4 7 5 6 6 4 6 3 5
2 3 7 7 7 5 7 7 4 4 5 3 7
3 5 6 5 5 6 6 6 4 6 5 3 4
4 4 4 6 7 7 7 7 4 7 7 3 7
5 4 4 2 3 5 5 6 6 6 4 2 6 ~
6 5 5 6 6 6 6 5 4 3 6 5 4
7 7 7 7. 7 6 5 7 3 6 6 3 7
8 4 7 7 7 7 7 7 7 4 2 3 7
9 1 1 6 4 7 0 7 7 0 0 3 7
10 4 2 1 6 7 5 6 4 3 6 2 4
11 2 7 5 5 7 1 7 5 1 4 1 7
12 2 2 3 1 7 4 7 4 5 4 6 6
1-6
a:\adrianjv.sav
vr19 vr20 vr21 vr22 vr23 vr24 vr25 vr26 vr27 vr28 vr29 vr30
1 6 6 5 4 7 4 4 5 4 6 5 7
2 6 4 5 4 4 5 3 5 4 5 7 7
3 4 5 5 3 4 4 3 4 6 6 4 6
4 7 7 6 1 5 6 0 4 6 7 6 7
5 5 6 4 0 0 4 1 5 5 5 5 6
6 6 6 4 2 4 6 0 5 6 6 5 6
7 7 6 3 3 7 6 0 7 7 7 5 7
8 7 7 4 7 7 4 0 4 7 7 7 7
9 7 5 6 2 7 0 0 7 7 T 7 7
10 4 5 4 5 5 5 2 2 3 6 6 5
11 7 7 1 3 4 3 1 1 5 7 5 3
12 6 6 5 7 7 0 4 5 7 7 6 6
1-7
vr31 vr32 vr33 vr34 equity jvsl jvs2 jvs3 jvs4 jvs5 jvs6 jvs7
1 7 7 6 0 no Equal share ES ES ES ES ES ES
2 5 7 7 7 no Equal share N/A N/A N/A N/A NlA NlA
3 5 4 4 0 NIC Equal share ES ES ES ES ES N/A
.4 6 4 5 0 no Equal share MN MJ MN MN N/A N/A
5 5 2 2 0 no Equal share MJ MJ N/A NlA N/A N/A
6 6 6 5 0 no Equal share N/A N/A N/A N/A NlA N/A
7 7 7 5 0 no Equal share ES ES ES N/A N/A N/A
8 7 7 2 0 no Equal share MN MN MN N/A N/A N/A
9 6 7 7 0 yes majoritysh MJ MJ MJ MJ MJ N/A
10 6 2 4 0 no Equal share ES ES ES ES N/A N/A
11 3 6 1 0 yes Equal share ES N/A NlA N/A N/A NlA
12 5 7 3 0 yes majority sh MJ N/A N/A N/A N/A N/A
1-8
jvs8 mpl jvsuccl mp2 jvsucc2 mp3 jvsucc3 mp4 jvsucc4 mp5 jvsucc5 mp6
1 ES YES YES YES NO YES Yes Yes Yes NfA NfA NfA
2 NfA NO YES NIC NIC NIC NfA NfA NfA NfA NI A NfA
3 NfA NIC NIC NIC NIC NIC NfA NfA NfA NfA NfA NfA
4 NfA NO YES NO YES NO Yes No Yes No Yes NfA
5 NfA NO YES YES YES YES No NfA NfA NfA NfA NI A
6 NI A NO YES NIC NIC NIC NfA NfA NI A NfA NfA NfA
7 NfA NO NO NO YES NO Yes No No NfA NfA NfA
8 NfA YES YES YES YES YES Yes Yes Yes NfA NfA NfA
9 NfA YES YES YES YES YES Yes Yes Yes Yes Yes Yes
10 NfA NO YES NO YES NO Yes No Yes No Yes NfA
11 NfA NO YES NO YES NIC NfA NfA NfA NfA NfA NfA
12 NfA YES YES YES YES NIC NI A NfA NI A NfA NfA NfA
1-9
a:\adrianjv.sav
jvsucc6 mp7 jvsucc7 mp8 jvsucc8 control controll control2 control3 control4 controlS control6 1 N/A N/A N/A NlA N/A Yes 5 6 7 6 3 7 2 N/A N/A N/A N/A N/A No 3 7 7 5 5 7 3 NlA N/A N/A N/A N/A Yes 5 6 6 6 6 7 4 N/A N/A N/A N/A N/A Yes 7 7 7 7 7 7 5 N/A N/A N/A NlA N/A Yes 6 5 7 4 4 6 6 N/A N/A N/A NlA N/A Yes 6 3 7 3 3 3 7 N/A N/A N/A N/A N/A N/A 7 4 5 7 7 5 8 NlA N/A N/A N/A N/A No 7 7 7 4 4 4 9 Yes N/A N/A N/A N/A Yes 7 6 6 7 7 6 10 N/A N/A N/A N/A N/A No 2 5 5 6 5 7 11 N/A N/A N/A N/A N/A Yes 7 3 7 7 7. 7 12 N/A N/A N/A N/A N/A Yes 4 5 7 7 6 6
1-10
control7 controlS mjv sjv balance spider auton jvforms advl adv2 adv3 adv4
1 6 6 0 0 N/A No Correct NO 4 5 6 3
2 7 5 0 1 NO No Correct NO 4 5 6 6
3 6 6 0 6 NO No Correct N/c 3 3 6 5
4 7 6 3 2 NO No Correct NO 4 1 7 6
5 .6 4 2 1 YES Yes Correct NO 1 3 6 1
6 3 3 0 1 YES No Correct N/C 5 5 5 5
7 6 7 0 4 NO No Correct YES 7 3 7 1
8 4 7 3 1 YES Yes Correct YES 7 2 5 5
9 4 7 6 0 YES No Incorrect NO 7 6 7 2
10 5 3 0 5 YES No Correct NO 4 6 7 5
11 3 1 0 2 YES No Correct YES 1 2 7 7
12 5 6 2 0 YES No Correct NO 5 5 5 6
1-11
,
adv5 adv6 adv7 adv8 adv9 advl0 advll disl dis2 dis3 dis4 dis5
1 5 5 6 5 3 4 5 4 4 3 3 3
2 5 6 5 6 3 3 5 4 3 3 2 4
3 5 6 5 4 5 5 5 4 5 6 4
4 6 3 3 5 1 1 5 5 5 2 1 2
5 2 9 4 9 1 4 1 3 1 2 5 1
6 2 1 2 2 4 0 4 7 7 7 7 1
7 5 9 3 9 5 5 6 5 5 2 3 0
8 5 7 7 4 4 4 7 4 4 4 2 0
9 4 7 4 5 7 6 7 0 0 5 0 0
10 4 4 2 5 5 9 4 4 2 1 4 0
11 3 4 7 3 5 4 4 1 1 3 3 1
12 7 5 6 3 1 1 1 7 7 3 6 0
1-12
dis6 dis7 dis8 dis9 disl0 disll dis12 dis13 dis14 dis15 dis16 dis17
1 4 3 5 4 3 3 3 5 4 3 4 2
2 2 3 2 2 3 2 2 2 2 3 4 4
3 4 4 3 3 3 2 3 2 4 3 3 3
4 1 1 1 4 3 2 1 9 2 3 4 1
5 6 6 3 1 6 4 3 1 2 4 3 1
6 3 2 2 4 2 1 1 4 3 4 3 3
7 3 6 3 4 7 3 3 2 6 3 5 0
8 2 4 4 4 6 4 2 4 2 4 4 4
9 4 1 1 3 4 0 1 4 1 4 4 5
10 2 4 3 4 3 2 5 4 4 4 3 0
11 1 3 1 1 7 6 1 7 1 3 2 7
12 5 3 2 6 4 3 4 0 3 1 3 0
1-13
dis18 dis19 dis20 dis21 dis22 nrjvl nrjv2 jvagain jvpart automy befief cuttl
1 3 3 3 3 5 7 0 Yes Not known/ Useful Yes Yes
2 3 2 3 5 3 1 0 Yes 1 Useful Yes No
3 2 3 3 0 1 4 2 Yes 4 Extremelyi Yes Yes
4 1 1 1 1 1 5 0 Yes 5 No direcl b Don"tknow No
5 5 3 2 6 1 3 0 Yes 3 Extremely; Yes No
6 3 3 3 3 3 0 1 Yes 0 Nod;rectb Yes Yes
7 3 0 3 1 0 2 2 Yes 4 Don"tknow Don"tknow Yes
8 6 4 4 2 4 4 0 Yes 4 No direct b Yes Yes
9 1 1 1 3 0 4 2 Yes 0 Extremely; Yes No
10 5 3 4 4 2 5 0 Yes 2 Extremely; Yes Yes
11 7 7 7 7 3 2 0 Yes 2 No direct b Yes Yes
12 2 1 1 3 3 2 0 Yes 1 Extremely; Don"tknow No
1-14
a.cawiJiijO.sao
organ 1 cu1t2 cutt3 cutt4 organ2 organ3 organ4 sizel size2 size3 size4 size5
1 Yes Yes Yes No 35-50 year No NlA N/A NlA N/A N/A N/A
2 N/A N/A No No 35-50 year No Shor1 Smaller N/A N/A N/A N/A
3 Yes Yes Yes Yes 20-35 year Yes Long Larger Larger Equal Larger Larger
4 Yes Yes Yes No 35-50 year Yes Shor1 Larger Equal Larger Larger Equal
5 Yes Yes Yes No 35-50 year N/A N/A Larger Smaner Smaller NlA N/A
6 No Yes Yes Yes >50 years Yes Short Smaller N/A N/A N/A N/A
7 Yes No Yes No no specific No N/A SmaUer Smaller Smaller Smaller N/A
8 NlA No Yes Yes 20-35 year Yes Short Larger Smaller Smaller Smaller N/A
9 Yes No No Yes 35-50 year Yes Short Larger Smaller Smaller Smaller Smaller
10 Yes Yes Yes No 20-35 year Yes Short Equal Equal Smaller Equal Smaller
11 Yes No Yes Yes 35-50 year No Short Larger Larger N/A N/A N/A
12 Yes Yes Yes No 20-35 year No N/A Smaller Smaller N/A N/A N/A
1-15
a. "CD lal gv.sav
size6 size7 sizeS codes powerl power2 power3 power4 power5 powerS power7 powerS
1 N/A N/A N/A No Yes NlA N/A Yes N/A N/A N/A NlA
2 NlA NlA N/A No Yes Equal Yes Yes Yes Yes Yes 4
3 Smaller NlA N/A No Yes Unequal Yes Yes Yes Yes No 3
4 N/A N/A NlA Yes Yes Unequal Yes Yes No Yes No 4
5 NlA N/A NlA No No Equal Yes Yes Yes Yes No 2
6 NlA NlA NlA No Yes Equal Yes Yes Yes Yes No 3
7 NlA N/A N/A No Yes Equal Yes Yes No No No 5
S NlA NlA N/A Yes Yes Unequal Yes Yes No Yes Yes 5
9 Smaner N/A N/A Yes Yes Unequal Yes Yes Yes Yes No 2
10 N/A N/A N/A No Yes Equal Yes Yes No Yes No 1
11 NlA N/A NlA No No Equal Yes Yes Yes Yes Yes 5
12 N/A NlA NlA No Yes Unequal Yes Yes Yes Yes No 2
1-16
power9 . power10 power11 power12 direclex corpcoun
1 NlA N/A N/A N/A Yes 8
2 5 2 2 2 Yes 8
3 3 3 3 3 Yes 8
4 4 5 4 4 Yes 8
5 4 4 4 2 Yes
6 3 1 2 2 Yes
7 5 1 1 1 Yes
8 4 3 22 5 Yes 8
9 2 1 3 1 Yes 8
10 3 3 2 2 Yes 8
11 1 3 3 4 Yes 8
12 5 4 4 2 Yes 8
1-17
APPENDIX E
Tables
I Table 3.2.1IFreedom of Joint Venture Management
Class Yes % No %
One 5.00 0.42 1.00 0.08 Two 3.00 0.25 0.00 0.00
Th ree 1 .00 008 100 o .08 Four 1.00 0.08 0.00 0.00
10.00 0.83 2.00 0.17
Five 6.00 0.50 2.00 0.17 Six 4.00 0.33 0.00 0.00
10.00 2.00
Seven 8.00 0.67 1.00 0.08 Eight 2.00 0.17 1.00 0.08
10.00 2.00
I Table 3.2.2ICreation of Mana~ment Team & Staff I
Class Yes % No %
One 2.00 0.17 4.00 0.33 Two 0.00 0.00 3.00 0.25
Three 0.00 0.00 2.00 0.17 Four 0.00 0.00 1.00 0.08
2.00 0.17 10.00 0.83
Five 2.00 0.17 6.00 0.50 Six 0.00 0.00 4.00 0.33
Seven 2.00 0.17 6.00 0.50 Eight 0.00 0.00 4.00 0.33
-
I Table 3.2.31 Regulari!}, of Meetings between JV Board and Sponsor-Comeanies I
Class Monthly % Bi-Monthly % Other
One 5.00 0.42 0.00 0.00 1.00 Two 3.00 0.25 0.00 0.00 0.00
Three 2.00 . 0.17 0.00 0.00 0.00 Four 0.00 0.00 1.00 . 0.08 0.00
10.00 0.83 1.00 0.08 1.00
Five 7.00 0.58 0.00 0.00 Six 3.00 0.25 1.00 0.08
Seven 8.00 0.67 0.00 0.00 Eight 2.00 0.17 1.00 0.08
[ffie3.2.4 I Reponsibility for the Formation of the Joint Venture
Class JV Board 0 % Sponsor % Project % JV Board & % Directors Compan Manager PM
One 3.00 0.25 0.00 0.00 0.00 0.00 2.00 0.17 Two 2.00 0.17 0.00 0.00 2.00 0.17 0.00 0.00
Three 1.00 0.08 1.00 0.08 0.00 0.00 0.00 0.00 Four 1.00 0.08 0.00 0.00 0.00 0.00 0.00 0.00
7.00 0.58 1.00 0.08 2.00 0.17 2.00 0.17
Five 3.00 0.25 1.00 0.08 2.00 0.17 2.00 0.17 Six 3.00 0.25 0.00 0.00 1.00 0.08 0.00 0.00
6.00 1.00 3.00 2.00
Seven 4.00 0.33 0.00 0.00 3.00 0.25 2.00 0.17 Eight 2.00 0.17 1.00 0.08 ' 0.00 0.00 0.00 0.00
6.00 1.00 3.00 2.00
Table 3.2.5 ILack of Team Evolvement & Cohesiveness
i Class Yes % No %
One 2.00 0.171 4.00 0.33 I Two 1.00 0.08 2.00 0.17
Three 2.00, 0.17 0.00 0.00 Four 1.00 0.08 0.00 0.00
6.00 0.50 6.00 0.50
Five 4.00 0.33 4.00 0.33 Six 2.00 0.17 2.00 0.17
6.00 6.00
Seven 3.00 0.25 6.00 0.50 EiQht 3.00 0.25 0.00 0.00
6.00 6.00
I Fundamental Weaknesses of a Joint Venture
I Table 3.2.6a I(a) Unfamiliarity with one another I
Class True % False %
One 3.00 0.25 3.00 0.25 Two 2.00 0.17 1.00 0.08
Three 2.00 0.17 0.00 0.00 Four 0.00 0.00 1.00 0.08
7.00 0.58 5.00 0.42
Five 5.00 0.42 3.00 0.251 Six 2.00 0.17 2.00 0.17
7.00 5.00
Seven 5.00 0.42 4.00 0.33 Eight 2.00 0.17 1.00 0.08
7.00 5.00
I Table 3.2.6b I(b) Virtual overnight existence
Class True % False %
One 2.00 0.17 4.00 0.33 Two 2.00 0.17 1.00 0.08
Three 2.00 0.17 0.00 0.00 Four 0.00 0.00 1.00 0.08
6.00 0.50 6.00 0.50
Five 4.00 0.33 4.00 0.33 Six 2.00 0.17 2.00 0.17
6.00 6.00
Seven 4.00 0.33 4.00 0.33 Eight 2.00 0.17 2.00 0.17
6.00 6.00
I Table 3.2.6c i(cl Lack of membershi~ control
Class True % False %
One 0.00 0.00 6.00 0.50 Two 0.00 0.00 3.00 0.25
Three 1.00 0.08 1.00 0.08 Four 0.00 0.00 0.00 0.00
1.00 0.08 10.00 0.83
Five 1.00 0.08 7.00 0.58 Six 0.00 0.00 4.00 0.33
1.00 11.00
Sevenl 0.00 0.00 9.00 0.75 Eight 1.00 0.08 2.00 0.17
1.00 11.00
I Table 3.2.6d ! (9) Parental Selection I
Class True % False %
One 0.001 0.00 6.00 0.50 Two 1.00 0.08 2.00 0.17
Three 1.00 0.08 1.00 0.08 Four 0.00 0.00 1.00 0.08
2.00 0.17 10.00 0.83
Five 1.00 0.08 7.00 0.58 Six 1.00 0.08 3.00 0.25
2.00, 10.00
Seven 1.00 0.08 7.00 0.58 Eightl 1.00 0.08 3.00 0.25
I 2.00 10.00 I
I Table 4.1.1 The Occurrence of a Deadlock Situation
Class Yes .% No .% .
One 1.00 0.08 5.00 0.42 Two 0.00 0.00 3.00 0.25
Three 1.00 0.08 1.00 0.08 Four 1.00 0.08 0.00 0.00
3.00 0.25 9.00 0.75
Five 2.00 0.17 6.00 0.50 Six 1.00 0.08 3.00 0.25
3.00 9.00
Seven 1.00 0.08 8.00 0.67 Eight 2.00 0.17 1.00 0.08
3.00 9.00
Table 4.2 Importance of Determinants for the ~roup
Determinant Mean Rank Class 1
VR1 26.7100 VR10 19.1700 VR11 25.5400
I VR12 18.1700 VR13 26.0800 VR14 15.6700 VR15 13.6300 VR16 16.7100 VR17 7.5000 VR18 21.6300 VR19 22.3800 VR2 25.9600
VR20 21.2500 VR21 12.8300 VR22 10.6700 VR23 17.9200 VR24 12.6700 VR25 4.0000 VR26 14.3800 VR27 20.3300 .
VR28 25.2900 VR29 1.7900 VR3 11.8800
VR30 24.9200 . VR31 20.8300
VR32 20.4600 VR33 13.5000 VR34 3.7900 VR4 12.5400 VR5 16.6700 VR6 23.8300 VR7 11.3800 VR8 18.2900 VR9 18.6700
ISignificance for Grpup 0.08 I Utilising Fri$dman Two Way Anova I
Table 4.2.1 Importance of Determinants of Success by Size & Experience
Oeterminant Two Tailed (P) Class 1 Class 2 Class 3 Class 4 Significance
VR1 0.6659 7.0000 7.0000 6.0000 3.0000 VR10 . 0.9577 6.8300 5.6700 6.2500 7.5000 VR11 0.1725 8.1700 6.5000 2.7500 4.0000 VR12 0.8050 7.0800 5.3300 5.5000 8.5000 VR13 0.1755 6.2500 9.0000 6.2500 1.0000 VR14 0.6742 7.6700 5.6700 5.2500 . 4.5000 VR15 0.3934 6.4200 5.3300 10.0000 3.5000 VR16 0.6944 6.7500 4.8300 6.7500 9.5000 VR17 .. 0.4614 6.2500 6.6700 4.7500 11.0000 VR18 0.4189 6.0800 8.1700 7.5000 2.0000 VR19 0.9846 6.4200 7.0000 6.5000 5.5000 VR2 0.0620 7.5000 5.6700 7.5000 1.0000 VR20 0.9935 6.3300 6.3300 7.0000 7.0000 VR21 0.3167 8.1700 6.0000 3.2500 4.5000 VR22 0.3446 6.9200 8.6700 3.5000 3.5000 VR23 . 0.5855 7.7500 5.6700 5.5000 3.5000 VR24 0.3439 6.2500 4.3300 8.2500 11.0000 VR25 0.3427 6.3300 9.1700 4.7500 3.0000 VR26 0.4626 5.5800 5.6700 9.7500 8.0000 VR27 0.9609 6.4200 5.8300 7.5000 7.0000 VR28 0.8689 7.0000 6.8300 5.5000 4.5000 VR29 0.5370 7.1700 7.6700 4.0000 4.0000 VR3 0.1368 8.5000 4.0000 6.7500 1.5000 VR30 , .0.6852 7.4200 5.0000 7.0000 4.5000 VR31 0.1708 8.0000 2.6700 7.2500 7.5000 VR32 0.7856 6.1700 8.1700 5.5000 5.5000 VR33 0.8325 7.1700 5.5000 5.2500 8.0000 VR34 0.3916 6.0000 8.0000 6.0000 6.0000 VR4 0.9418 6.5000 7.1700 5.2500 7.0000 VR5 0.3710 6.1700 7.1700 4.0000 11.5000 VR6 0.7100 6.3300 8.1700 5.5000 4.5000 VR7 0.1166 6.5800 3.0000 9.0000 10.5000 VR8 0.8944 5.8300 7.5000 7.2500 6.0000 VR9 0.9891 6.7500 6.0000 6.2500 7.0000
IUtilising Kruskal-Wallis One Way Anova I
Table 4.2.2 Im ortance of Determinants of Success b Ex erience
Rank Class 5
[Utilising Mann-Whitney U-Wilcoxon Rank Sum W Test
Table 4.2.3 jlmportance of Determinants by Size
Mean 7 Class 8
IUtilising Mann-Whitney U-Wilcoxon Rank Sum W Test
/Table 4.2.4 Correlations Between the Determinants of Success
I Utilising the Spearman Correlation Coefficient I
/ Table 4.2.5 ICorrelations Between the Determinants of Su@ss
Utilising the Spearman Correlation Coefficient
Table 4.2.6 I Correlations Betweeij the Determinants of Success
i I
. i
. i
I Utilising the Spearman Correlation Coefficient I
I Table 4.2.7 ICorrelations Between the Determinants of Success
I Utilising the Spearman Correlation Coefficient I
I Table 4.2.9 Correlations Between the Detenninants of Success
I Utilising the Spearman Correlation Coefficient
ITable 4.2.10!Correlations Between the Detenninants of Success
! Utilising the Spearman Correlation Coefficient
I Table 4.2.111 Correlations Between the Determinants of Success
I Utilising the Spearman Correlation Coefficient
I Table 4.2.121 Correlations Between the Determinants of Success
lutilising the Spearman Correlation Coefficient
I Table 4.2.131 Correlations Between the Determinants of Success
VR9 Coefficient 0.1059 0.1045 0.1364 0.4165 0.2957 -0.2472 2-t Significance 0.7430 0.7470 0.6730 0.1780 0.3510 0.4390
VR20 VR21 VR22 VR23 VR24 VR25
I Utilising the Speannan Correlation Coefficient
ITable 4.2.14ICorrelations Between the Determinants of Success
. I Utilising the Speannan Correlation Coefficient
ITable 4.2.15ICorrelations Between the Determinants of Success
1 Utilising the Speannan Correlation Coefficient
I Table 4.2.16ICorrelations Between the Detenninants of Success
VR32 Coefficient 0.3609 2-t Significance 0.2490
VR33 Coefficient 0.3643 0.4000 2-t SiQnificance 0.2440 0.1940
VR34 Coefficient .Q.2738 0.2814 .4422 2-t SiQnificance 0.3890 0.3760 0.1500
VR4 Coefficient .Q.4525 .Q.3048 .Q.1990 .Q.2727 2-t Significance 0.1400 0.3350 0.5350 0.3910
VR31 VR32 VR33 VR34
I Utilising the Speannan Correlation Coefficient
I Table 4.2.17ICorrelations Between the Detenninants of Success
IUtilising the Speannan Correlation Coefficient
I Table 4.2.18\Correlations Between the Detenninants of Success
I Utilising the Speannan Correlation CoeffiCient
I Table 4.3.1 I Importance of Majority Equity for Control
Class Yes % No %
One 1.00 0.08 5.00 0.42 Two 2.00 0.17 1.00 0.08 Three 0.00 0.00 2.00 0.17 Four 0.00 0.00 1.00 0.08
3.00 Five 1.00 0.08 7.00 0.58 Six 2.00 0.17 2.00 0.17
3.00 Seven 3.00 0.25 6.00 0.50 Eight 0.00 0.00 3.00 0.25
3.00
ITable 4.3.3IExtent of Equity Ownership Within the Joint Ventures
Class Equal % Majority % Minority % Share Share Share
One 21.00 0.45 7.00 0.15 6.00 0.13 Two 3.00 0.06 2.00 0.04 0.00 0.00 Three 5.00 0.11 2.00 0.04 0.00 0.00 Four 1.00 0.02 0.00 0.00 0.00 0.00
30.00 Five 26.00 0.55 9.00 0.19 6.00 0.13 Six 4.00 0.09 3.00 0.06 0.00 0.00
30.00 Seven 24.00 0.51 9.00 0.19 6.00 0.13 Eight 6.00 0.13 2.00 0.04 0.00 0.00
30.00
I Table 4.3.4 IComparison of Managing Partners to Joint Venture suCCElSSj
iClass
Yes % % jb It:lrn"n\ Yes % ., I~ No % %
lOne. 14.000 0.583 0.378 10.000 0.417 0.270· 23.000 0958 l.622 1.000 i:042 0.02 ~'TW~0~---+--~2~.CO~00--~0~.40~OO~~0~.OM~-~3.oo~0--~CO~.6CO~0---~0.CO~81r-~5~ .. 0~oa----~0~cOO~~U35~--~0~.COO~00~~tooo~. r--O~' .. IOC~
1 000 1.486 11 3<1.0Q( ;rr--,O~~'n-_~OC~O+-_~ (~'8rr--_~.~1C08~ ,Five l' 000 0.516 1.432 15.000 0.484 ?nfl(l( 0.784 00 (!1 .108
,Three 2.000 0.286 0:054 '.QC 0.714 4.0Q( 571 1.108 3.000 1.429 0.08 I Four ~ 0.000 ctcoo~0r-~.~OO~~1~.OO~00~-~~+--7.~OC~~--~c~~~00~-~0'~~-~~OC~O~-~0.ooo~-~~~
ISix 2.000 0.333 O.OM 4.000 0.667 0.108 4.000 1.000 0.108 0.000 ( 0.000 ~--~~1~8.0~O--=~r-~~~-·1~.OC~OO~0r-~==~-~~r--31.000 4.000
~ls~~en~_~~~a-_~01 .. ~5~+-_~Ol~ ... 43~2_~1.0~C~_~CO~.448a-_~U~l~~1~~2~I.O~OOr-~_~CO~~~0~:.7~57r-~I.~~COOOC~O~~O~I..034~r-_~~ I~Eiq~~_-+~~~ __ 0=' .. 250~+-_.~01~ .. OM~~~.QC~+-_~CO~ .. 7~W_~0~ .. 1~~r-~~'.OOO~r-__ ~OO~+-~0~ .. 1~~~~1.00a-~O=I .. :~~5+-_~~0~.'~ I . 19.00 3 1.000 1.0 0
Note: Only 37 joint ventures were referred to by respondent contreactors in this sub-section of the analysis, and not the OIIerall number of 47 this was as a result of incomplete replies
Table 4.3.6 Control Mechanisms used within the Joint Venture Mean Rank for Grou
Mechanism
Top management High level of Implementation between Sponsor Companies Regular updates Fixed responsibilities of Sponsor Companies Fixed authorities of Sponsor Companies High calibre of human resources Manageme,nt consensus A linkage of financial strategies
Table 4.3.7 Control Mechanisms used within the Joint Venture Mean Rank b Contractor Size
Top High level of.lml
Fixed ,01 Flxad, I I ,01
ioh calib,e )1 hUman
A linkaga 01'
Table 4.3.8 Control Mechanisms used within the Joint Venture Mean Rank b Contractor Ex erience
of implementation between Sponsor Companies I ""9u"a, update.
responsibilities of Sponsor Companies authorities of Sponsor Companies
calibre of human resources consensus
IUtilislng Mann-Whitney U-Wilcoxon Rank Sum W Test
Mean Rank
4.130 4.000 5.790 4.880 4.170 5.290 3.920 3.830
IMean Rank ,Mean Rank I Cia •• 5 Clas. 6
-6.110 7.670 7.610 3.170 6.610 6.170 7.170 4:500 6.940 5.170 7.670 3.000 6.610 6.170 6.720 5.830
i i
0.500 0.058 0.825 0.245 0.448 0.036 0.850 0.704
/Table 4.3.9 IThe Balance of Power and lesser Control
Class Ye. % INo % N/A % lOne 3.000
~ 00
~~ 1.000 .O.OR
ITwo 2.000 00 O.OO,! .0.000 IThree I.OC 083 00 0.083 0.000 0.000 IFour 1.000 ).083 100 0.000 0.000 0.000
7.000 0.583 4.000 0.333 I Five 4.000 0.333 _~OO 0.250 1.000 0.083 I Six 3.000 0.250 1.000 0.083 0.000 0.000
7.000 4.000
~ IS~ 5.000 0.417 3.000
~ U)<!<!
IEight 2.000 Jl,167. LODe 0.000 7.000 4.000
!Table 4.3.11 )Balance of Managerial Controls & Autonomy
!Table 4.3.10 ! ExperiencelOf Spiders Web Joint Venture.
ITable 4.4.1 IThe Importance of Autonomy
ICI •••
One ITwo IThree IFour
I Five ISix
ISeven I Eight .
'" % iU.eful % INo % I~o
3.000 0.250 1.000 0.083 2.000 0.167 0.000 1.000 0.083 1.000 0.083 1.000 0.083 0.000
..!.:QQQ~-;0;:.;1 .. 0~83_-;0;:.;' .. 0~00_-;0;:.;, .. 0~eoo~-----,0",,1 .. 0~00_~0~.00O~_~ 11.~000 0.000 0.000 0.000 0.000 1.000 0.083 0.000 5.000 0.417 2.000 0.167 4.000 0.333 1.000 4.000 0.333 1.00e 0.083 2.000 0.167 1.000 1.000 0.083 1.000 0.083 2.000 O~67 0.000 5.000 2.000 4.000 1.00e 4.000 0.333 2.000 0.167 3.000 0.250 0.000 1.000 0.083 0.000 0.000 1.000 0.083 -1.000 5.000 2.000 4.000 1.000
/Table 4.4.2 !Partner beliefs towards Autonomy
ICla.. Ve. Don't % IKnow %
10ne_ .000 O. 1.000 0.083 ~ITW~0~-4 __ -;3~' •• 0~00 __ -;~~.~ __ ~~00 0.000 IThree .000 O. 1:000 0.083 IFour 1.000 0.083 0.000 0.000
10~ 0.833 2.000 0.167 IFlve,6_.000 0.500 2.000 0.167 I Six 4.000 0.333 0.000 0.000
10.000 2.000 I Sev",,- 8.000 0.667 1.000 0.083 ,Eight 2 000 '.167 1.000 0.083
10.000 2.000
Table 5.1 I Importance of the Advantages (Group)
Advantage
ADV1
ADV10
ADV11
ADV2 ,
ADV3
ADV4
ADV5
ADV6
ADV7
ADV8
ADV9
IS' 'f' tI\iiiilI"'liBID Ignl Icance dikdGW;:C:C
Mean Rank
5.3300
4.5400
6.0400
4.8300
9.1700
6.1300
5.7500
7.4200
6.1300
6.1300
4.5400
I Utilising Friedman Two Way Anova
I Table 5.1.1. I Importance of the Advantages by E?cperience & Size I
IUtilising Kruskal-Wallis One Way Anova
·,
I Table 5.1.2 I Importance of the Advantages by Experience (Classes 5 & 6)
Advantage Two Tailed(P) Mean Rank Si nficance Class 6 Class 7 .. ".
ADV1 0.7266 6.7500 6.0000 ADV10 0.0373 8.0000 3.5000 ADV11 0.1157 7.6300 4.2500 ADV2 0.7266 6.2500 7.0000 ADV3 0.2360 7.3100 4.8800 ADV4 0.0220 4.9400 9.6300 ADV5 0.7090 6.6900 6.1300 ADV6 0.1453 7.5600 4.3800 ADV7 0.4923 6.0000 7.5000 ADV8 0.0821 7.7500 4.0000 ADV9 0.5407 6.9400 5.6300
IUtilising Mann-Whitney U-Wilcoxon Sum W Test I
I Table 5.1.3 I Importance of the Advantages b~ Size (Classes 7 & 8j
Advantage Two Tailed(P) Mean Rank Signficance Class? Class 8
ADV1 0.7753 6.3300 7.0000 ADV10 0.6367 6.7800 5.6700 ADV11 . 0.4465 6.9400 5.1700 ADV2 0.8491 6.6100 6.1700 ADV3 0.6936 6.7200 5.8300 ADV4 0.0575 7.6100 3.1700 ADV5 0.1019 7.4400 3.6700 ADV6 0.4012 6.0000 8.0000 ADV7 0.0926 7.5000 3.5000 ADV8 0.3944 6.0000 8.0000 ADV9 0.7753 6.6700 6.0000
IUtilising Mann-Whitne~ U-Wilcoxon Sum W Test I
!Table 52 tlmportance of the Disadvantages (GrouP)
,.~
. I.5()JO :S 9.1400
51 11.CXXXl DIS1 132700 DI:;1 14.3200
1.18OC 8
~~ __ ··r-_____ · __ +-~9~.~OO~ DiS3 11.9500 DIS4 11.18
~ 1~:: DIS7 DISB LJI::;lI
15ignificance for Group: 0.0873 Utilising Friedman Two W?N Arova
9. 00
t Table 52.1 t Importance of the Disadvantages by Experience & Si*e
Class ~2 ~ CiaSS ~~ I..D"'I:;":;--1--+--==::;5='-7"'5C00AAf-~ 6.5000 6; JO ""11.50 [J(J 0.41 ! ILJI::ilU 5 5001 7.~ JO U.11 "'"
~~~.-~ ____ ~5~~.i 8.1m 2&O~~2~! .. I[J(J~OOO~~0~2~~ 12 6.5801 6.= :sooo 2.5000 0.5718 13 8.0800 5.3300 3.0000 7.5000 U.<lOO!l ~ i.7500 4.5000 82500 7.;000 ;19 5 '.2500 3.3:lUU 7.2500 150
~~~9==+===~~00~~~~~uoo~00~!~~OC~~~~11~~~~~~ ~8J---t---F' 100 '.0000 5.5000 .~ ~~ " ::92Oc
OOO 9.5000 6.7500 :.~
iA20 8~.5OOO 2.7500 ,.~ 00 1.( ()( 1: !.()()()
)1S4 5.1" JCOO '.f ()( 12.0000 C 33ii )155 t.17( 5.( 10( 7.0000 0:9153 )156 _ ~.l8OO ;.5IX 9; ;00 (=
)1 v.m ;.501. 11. XXl 0 XI ~.OOOO 8. XXl Xl )9 7.17.QQ §.!i(J(J() 5.0000 8.5000 .7406
.
jUtilising Kruskal-WaIhs One Wa?i P-rova
I Table 5.2.2 I Importance of the Disadvantages by Experience (Classes 5 & 6)
I~ 1::-,_"" C~=~ C:K6 g ~ ~~ 7.7500
0 11 1.93C ;'4400
~ ~ '.0600 5.3800 l.81 00 5.8800
01514 0.3821 -z. 300 5.25()0 DI515 7. 500 5.0000 DIS16 014:'!: is 4'i DIS ~ IDI5 DIS ~ '.7227 i.g500 XXlO
~ g~ .3600 7.1300 i.2500 7.UUUU
~ O. 1100 ~~ IJ§CJO O. 62ll 8.5000 0.: 1372 5.11100 '.8800
DIS4 1.303 5.7, ()( 1.0000
~ 0.656" 6.11 ()( '.1300
~ 6.8 ()(
ti DIS7 7. 00 DISB (.1' 7.t 00 DIS9 1.8556 6.t 100
IUtilising Mann-lNhitney U-Wilcoxoo Sum W Test
I Table 5.2.3 I Importance of the DiSiIdVai1tlijeS by Size (Classes 7 & 8)
I~I' .,. , C=7 ~k8
115 = 6.' 0000 8.0000 liS 0 6. 2200 7.3300 11::; 1 1.8493 :100 6.8300 11512 ~ 5000 6.5000 11513 .1700 4.5UUU 11514 0.391l1. 6.1 XXXl 8.()()()O 515 0.3036 5.! l4W a1700 S16
~~ 6.' ..wo 6.6700
51~ 7. Xl ,.6700 1151: 6.1 Xl .5000 11::;1 ! 1.6291 6 Xl ,.6700
i= 4709 5
~ 7.1700
7716 6 6.()()()(; 9241 6 '100
~ g~ 100 6 i700 6.OC
JIS4 1.1611 5.67(0 ~ DISS 6.7800 DISH ci~ ~ J~ JIg; JIS! 0.6330 ;'220 JI& O~ 6.6100 6.1700
IUtilising Mann-lNhitney U-Wilcoxoo sum W Test
~~5.2.
~
~
DIS4
12_'
'_I
'-' -I
~Slnglhe
i i
11 1
11
llhe
7S4 0.3810
ISO
-:0 75
~
1II
I. I
0.1
-I
.1 S! :n ~ ~
~ 19
-I CAI31
'''IIC
,
.
-
,
ITable 6.2.6 To motivate personnel, whether the joint venture manager or the management staff, do you consider it necessary to, I provide feed back concerninQ Qoal attainment ?'
Class Yes % No % Unknown Response
One 5.00 0.42 0.00 0.00 1.00 Two 3.00 0.25 0.00 0.00 0.00 Three 1.00 0.08 1.00 0.08 0.00 Four 1.00 0.08 0.00 0.00 0.00
10.00 0.83 0.00 0.00 1.00 Five 6.00 0.50 1.00 0.08 1.00 Six 4.00 0.33 0.00 0.00 0.00
10.00 1.00 Seven 8.00 0.67 0.00 0.00 1.00 Eight 2.00 0.17 1.00 0.08 0.00
10.00 1.00
ITable 6.2.7 To motivate personnel, whether the joint venture manager or the management staff, do you consider it necessary to, utilise job designs to increase efficiency_
Class Yes % No % Unknown Response
One 1.00 0.08 4.00 0.33 1.00 Two 3.00 0.25 0.00 0.00 0.00 Three 0.00 0.00 2.00 0.17 0.00 Four 0.00 0.00 1.00 0.08 0.00
4.00 0.33 7.00 0.58 1.00 Five 1.00 0.08 6.00 0.50 1.00 Six 3.00 0.25 1.00 0.08 0.00
4.00 7.00 Seven 4.00 0.33 4:00 0.33 1.00 Eight 0.00 0.00 3.00 0.25 0.00
4.00 7.00
%
0.08 0.00 0.00 0.00 0.08 0.08 0.00
0.08 0.00
%
0.08 0.00 0.00 0.00 0.08 0.08 0.00
0.08 0.00
,
.
[Table 6.1.1 [Advantages to be gained from the differing Cultures
Class Yes % No % One 4.00 0.33 2.00 0.17 Two 0.00 0.00 1.00 0.08 Three 2.00 0.17 2.00 0.17 Four 1.00 0.08 0.00 0.00
7.00 0.58 5.00 0.42 Five 5.00 0.42 3.00 0.25 Six 2.00 0.17 2.00 0.17
7.00 5.00 l:;even 5.00 0.42 4.00 0.33 IEi(lht 2.00 0.17 1.00 0.08 I 7.00 5.00
tTable 6.1.2 [Disadvantages attributed from differing Cultures[
Class % No % No I. Yes , Response
One 4.00 0.33 2.00 0.17 0.00 Two 1.00 0.08 1.00 0.08 0.00 Three 0.00 0.00 1.00 . 0.08 1.00 Four 1.00 0.08 0.00 0.00 1.00
·6.00 0.50 4.00 0.33 2.00 Five 4.00 0.33 3.00 0.25 1.00 Six 2.00 0.17 1.00 0.08 1.00
6.00 4.00 2.00 Seven 5.00 0.42 3.00 0.25 1.00 EiQht 1.00 0.08 1.00 0.08 1.00
6.00 4.00 2.00
able 6.1.3 An organization's outline is a powerful force in determining the Venture 0 ration and rformance
- -Class Yes % No % No
. c, nse
One 5.00 0.42 0.00 0.00 1.00 Two 2.00 0.17 0.00 0.00 1.00 Three 1.00 0.08 0.00 0.00 1.00 Four 0.00 0.00 1.00 0.08 0.00
8.00 0.67 1.00 0.08 3.00 Five 6.00 0.50 0.00 0.00 2.00 Six 2.00 0.17 1.00 0.08 1.00
.8.00 1.00 3.00 Seven 7.00 0.58 0.00 0.00 2.00 Eight 1.00 0.08 1.00 0.08 1.00
8.00 1.00 3.00
%
0.00 0.00 0.08 0.08 0.17 0.08 0.08
0.08 0.08
.
%
0.08 0.08 0.08 0.00 0.25 0.17 0.08
0.17 0.08
Class Yes % No % One 5.00 0.42 1.00 0.08 Two 2.00 0.17 1.00 0.08 lllree 2.00 0.17 0.00 0.00 Four " 1.00 0.08 0.00 0.00
10.00 0.83 2.00 0.17 Five 7.00 0.58 1.00 0.08 Six 3.00 0.25 1.00 0.08
10.00 2.00 Seven 7.00 0.58 2.00 0.17 Eight 3.00 0.25 0.00 0.00
10.00 2.00
[able 6.1.5\OCCUrrences of Venture @Ption to external foroes
Class Yes % No % One 3.00 0.25 3.00 0.25 Two 1.00 0.08 2.00 0.17 Three 0.00 0.00 2.00 0.17 Four 1.00 " 0.08 0.00 0.00
5.00 0.42 7.00 0.58 Five 3.00 0.25 5.00 0.42 Six 2.00 0.17 2.00 0.17
5.00 7.00 Seven 4.00 0.33 5.00 0.42 Eight 1.00 0.08 2.00 0.17
5.00 7.00
\Table 6.1.6\Age of Joint Venture Personnel
Class 2O$Yrs % 35-SOYrs %" > SOYrs % No ISpecifics
%
One 3.00 0.25 3.00 0.25 0.00 0.00 0.00 0.00 Two 1.00 0.08 2.00 0.17 0.00 0.00 " 0.00 " 0.00 Three 0.00 0.00 1.00 0.08 0.00 0.00 1.00 0.08 Four 0.00 0.00 0.00 0.00 1.00 0.08 0.00 0.00
4.00 0.33 6.00 O.SO 1.00 0.08 .1.00 0.08 Five 4.00 0.33 4.00 0.33 0.00 0.00 1.00 0.08 Six 0.00 0.00 2.00 0.17 1.00 0.08 0.00 0.00
4.00 6.00 1.00 1.00 Seven 4.00 0.33 5.00 0.42 0.00 0.00 0.00 0.00 EiQht 0.00 0.00 1.00 0.08 1.00 0.08 1.00 0.08
4.00 6.00 1.00 1.00
/Table 6.1.7/0rganisational Socialisation
Class Yes % No % No % Response
One 5.00 0.42 1.00 0.08 0.00 0.00 wo 0.00 0.00 1.00 0.08 0.00 0.00
Three 0.00 0.00 3.00 0.25 1.00 0.08 Four 1.00 0.08 0.00 0.00 0.00 0.00
6.00 0.50 5.00 0.42 1.00 0.08 Five 5.00 0.42 2.00 0.17 1.00 0.08 Six 1.00 0.08 3.00 0.25 0.00 0.00
6.00 5.00 1.00 Seven 5.00 0.42 4.00 0.33 0.00 0.00 EiQht 1.00 0.08 1.00 0.08 1.00 0.08
6.00 5.00 1.00
/Table 6.1.S/Development periOd of Organisational SOClalisation
Class Yes % No % No % Response
One 1.00 0.08 4.00 0.33 1.00 0.08 !Two . 0.00 0.00 1.00 0.08 0.00 0.00 IThree 0.00 0.00 1.00 0.08 3.00 0.25 Four 0.00 0.00 1.00 0.08 0.00 0.00
1.00 0.08 7.00 0.58 4.00 0.33 Five 1.00 0.08 4.00 . 0.33 3.00 0.25 Six 0.00 0.00 3.00 0.25 1.00 0.08
1.00 7.00 4.00 Seven 1.00 0.08 6.00 0.50 1.00 0.08 EiQht 0.00 0.00 1.00 0.08 3.00 0.25
1.00 7.00 4.00
/Table 6.1.9/Problems with Ethical Codes
vlass Yes % No % One 3.00 0.25 3.00 0.25 Two 0.00 0.00 3.00 0.25 Ilhree 0.00 0.00 2.00 0.17 Four ·0.00 0.00 1.00 0.08
3.00 . 0.25 9.00 0.75 Five 3.00 0.25 5.00 0.42 Six 0.00 0.00 4.00 0.33
3.00 9.00 Seven 3.00 0.25 6.00 0.50 EiQht 0.00 0.00 3.00 0.25
3.00 9.00
ITable 6.2.1 Power is an essential element of organisational success ?,
Class Agreed % Disagreed %
One 6.00 0.50 0.00 0.00 Two 2.00 0.17 1.00 0.08 Three 1.00 0.08 1.00 0.08 Four 1.00 0.08 0.00 0.00
10.00 0.83 2.00 0.17 Five 7.00 0.58 1.00 0.08 Six 3.00 0.25 1.00 0.08
10.00 2.00 Seven 8.00 0.67 2.00 0.17 Eight 2.00 0.17 0.00 0.00
10.00 2.00
Class Equal % Unequal % Unknown Response
One 1.00 0.08 4.00 0.33 1.00 Two 2.00 0.17 1.00 0.08 0.00 Three. 2.00 0.17 0.00 0.00 0.00 Four 1.00 0.08 0.00 0.00 0.00
6.00 0.50 5.00 0.42 Five 3.00 0.25 4.00 0.33 1.00 Six 3.00 0.25 1.00 0.08 0.00
.6.00 5.00 Seven 3.00 0.25 5.00 0.42 1.00 Eight 3.00 0.25 0.00 0.00 0.00
6.00 5.00
Table 6.2.3 The motivation of personnel and their performance is directl related in a 'oint venture ?,
Class Agreed % Disagreed % Unknown % . Response
One 5.00 0.42 0.00 0.00 1.00 0.08 Two 3.00 0.25 0.00 0.00 0.00 0.00 Three 2.00 0.17 0.00 0.00 0.00 0.00 Four 1.00 0.08 0.00 0.00 0.00 0.00
11.00 0.92 0.00 0.00 . 0.00 Five I 7.00 0.58 0.00 0.00 I 1.00/ 0.08 Six I 4.00 0.33 0.00 0.00 0.00 0.00
11.00 0.00 Seven I 8.00 0.67 0.00 0.00 1.00 0.08 Eight I 3.001 0.25 0.00 0.00 0.00 0.00
11.00 0.00
ITable 6.2.4 To motivate personnel, whether the joint venture manager or the management staff, do you consider it necessary to, assiQn specofic Qoals
Class Yes % No % Unknown Response
One 6.00 0.50 0.00 0.00 0.00 Two 3.00 0.25 0.00 0.00 0.00 Three 2.00 0.17 0.00 0.00 0.00 Four 1.00 0.08 0.00 0.00 0.00
12.00 1.00 0.00 0.00 0.00 Five 8.00 0.67 0.00 0.00 0.00 Six 4.00 0.33 0.00 0.00 0.00
12.00 0.00 Seven 9.00 0.75 0.00 0.00 0.00 Eight 3.00 0.25 0.00 0.00 0.00
12.00 0.00
ITable 6.2.5 To motivate personnel, whether the joint venture manager or the management staff, do you consider it necessary to, assign difficult, but acceptable performance goals?
Class Yes % No % Unknown Response
One 2.00 0.17 3.00 . 0.25 1.00 Two 3.00 0.25 0.00 0.00 0.00 Three 1.00 0.08 1.00 0.08 0.00 Four 1.00 0.08 0.00 0.00 0.00
7.00 0.58 4.00 0.33 1.00 Five 3.00 0.25 4.00 0.33 1.00 Six 4.00 0.33 0.00 0.00 0.00
7.00 4.00 Seven 5.00 0.42 3.00 0.25 1.00 Eight 2.00 0.17 1.00 0.08 0.00
7.00 . 4.00
%
0.00 0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00
%
0.08 0.00 0.00 0.00 0.08 0.08 0.00
0.08 0.00
APPENDIXD
Figures
1 Sponsor-Parent A ISponsor-Parent B
-----------------... _--_ .. - --_ ..• -._--_ .. _------ .. _ ..... __ .... _ .. _ .. _----'
IJoint venture Company I
IJV Board of Directors I
IChainnan/Director/Director I
1 Personnel Personnel
1 FigurEf1iO,···:··:::····· .. ·················:··\::\:1
L
Advantages: ~.1ain Group M c,,5 .,.-----, '---r------,
" n
f '.' I':":::::':~
ADV3
~--.-----,
ADV4 ADV5 ADV6 ADV7 ADV8 ADV9
FIGURE 5.1.1 Advantages for the Main Group
------------_ .. __ ._------ .. _._ .. _-_._-------- ----
Advantages : Class 1
Large & Experienced Contractors M 8.5------------------------
e a n
7.5
FIGURE 5.1.2
.<' .. .... . ... . £
, c"w. r:-::"'~,'.'
• I
I I . '.' . '>C'.' I . .. '"' '." I, ••..•. '" .... I"'. .. '. 'L"" I .•.. .,... ... I :.i . I ....• It •• • .
Advantages for the Class 1 Contractors
M e a n
12
10
._-_._-------
Advantages: Class 2
Large & Inexperienced Contractors ---------------------------------------------------
, ,
I
I
, ,
I I
I ,
I ,
~,,",,',.
",' '
I ,
:~;:.". k
,
-------_._-------_.-
FIGURE 5.1.3 Advantages for the Class 2 Contractors
M e a n
.... _.-----.~-~----~.--.---.. -----.-~~- --------.. -------~~----. ----
Advantages: Class 3
Small & Experienced Contractors ---------------
'12 .,-----,----, -~--,___--T-----_,-----,
, 1:: " :
10----~--~-~-----------_f,
..... ,; .... ' ',' I j '.-........... ,.: .• , •. , I
I -------I
\~,.~::,~
:~.,'"'."", ....
:.~''" " :;-." " ,
~:.;"'" . -:-,'~., , ,::-""."., .. f"'- --'
I "~ ...... -:;: .. ".:. ~,~,:",,~ , "~,",,~,. :'-:;''', .... "
~': .. ,~''','" ... ~ ................ ,"~
! .,',-.', .\ s,"
FIGURE 5.1.4 Advantages for the Class 3 Contractors
M
a n
Advantages: Class 4
Small & Inexperienced Contractors 10~~~~~------------~----------------------------------------------
,------.
't"'::';'\""I! :k,":';'~'\.'" jj
'·''-,''':-.'''11 l",:--,'.':,,",~I ,~",""""~'11 I,.,....~I ,~
; ,.:,."",:,',41 I ,,,,,,,,, .. ,,;i 10-"""":-:~! If',,," '~'-" 6 I::' ,\,,~,"'li--·-···-··--r--·----'~"''''''''':~-------7~'';\''<;~'';~-------..,..- -----it'~w:..:" .. ·1
(,,,,,,,:~,:-~, ,~\':,,~>,-::-\,i, ,~",,,'<'<~l 1\-">·>"';-,,,1 ~","""">'~! i~\"'",\\~i I~~~·~".,.,.,~,.jj ~1':~:\''':'''1 ,.~".,.·:.:...,,;.,..jl ;;"'",_,,',,:,q "-_''-','",,':':1 I~:--',~,::-~"i
I""'<"'~I '~\.~'\~:\''';i ,~,:~.~,,;,~l '~""":--:"'1 I t';.\~:::"'~1 '''''~~~~~~;ij :r"' .. ,~", .. il i~:,~\~\'~\"l
4 ~'''':-~'~Y-:! ifs'- (:;: "'''ilt~'''' -'-;";·11 h"""':-..''' .. "'-------r-------~------,------~,!.\.,,<\::-~,~j---! I :--'''':''''''il 't."":-:""i1t"',,:",,·,:ij I~~,<~,('''~i 11'-'>"'''' 1
~""\":"~ ;"·,>."."·,,il~,,.,· ...... ,~:jj ,t-."~\'~,,\,~ ... ii 'c... ..... ,""" ..... -l ;~~,\,,~,::~j If'..""'''-''.·'',,~''l
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2 --'.""; ,:('s,·!f-------~· ,', ,,;,:-.:"'~~"'>:".:.." .... --~-","'t-:,:v':,'.".I!--------~--------------------..,.{ "' ",v.','. t--I t _"','",,'-11 't-.."" :,.~,'" ·il~ """"'~I~'> ,·,'':'.'''·1i~:-..~' ';.":"If_______ 11:-"-""".'1
I~' ", 'S,' :-1i/-. '-'.' v. "x.! i~' ""',,. '" ~ i!\,"" '> .. " 'Jlt-' '>8','-.,','11 ,"'-, \', "':-' "\Ii it--:-.\ ~,~<":- j .... ".' .'" ~I~'''''':'''''''' 'Iif~'':'~'" ",~ilf. "",,·:-~,'~if:::'\~·""'c.ilt"\":'0"'II~'~','" ";,"";I~'''''''''~ ,,,,, j
,.'~ "'.""" "~j~: ...... ".,,.' 'iI~' ,,> ,:,,'.::i'~"""""'~ii~~'\~''';iiG ~>;'~'''''':~~!~~<\'~''' ,;;i-: ... ~':'" -,-.':' 1i~' .,~,,, -',. , ... ~It-'~'::.-",' ~~' ...... , .. " .. ~ .. -s ." ...... ~IC:-::->"-" '1it0 .... ", "l!k'~"''';,,~i~>''' ",,~ . ..jI""""'~Ii--.,-:"~:.-...'''':-..j! '~ .... , ' _" ~ ~ji~;.:~,,,,,,'~!~:"'\":;';."~if'-\\'· -,",'1
Q --"-+.....,;.......,.~~~>=t~"""4-"""""~~9~' hl' ~-"·iL· . """'p" ."",. "". .""",.,.... "-,'",,''''''',,,,'''-'l-'
FIGURE 5.1. 5 Advantages for the Class 4 Contractors
Advantages : Class 5
Experienced Contractors
8~--4=~---+---+---+--~--~---r--~--+----i
7 o!----JI
5
FIGURE 5.1. 6 Advantages for the Class 5 Contractors
e a n
Advantages : Class 6
Inexperienced Contractors 10~-------------------------------------------'
8~------------------~
8
FIGURE 5.1.7 Advantages for the Class 6 Contractors
Advantages : Class 7
Large Contractors
7.5 -I--+-+--+--1---f:
7.0 -1--+-+--1--1--
6.5~--t::
6.0
5.5
FIGURE 5.1.8 Advantages for the Class 7 Contractors
S SIr
M 9
e
Advantages : Class 8
Small Contractors
a n 8~--~--~--+---r-~r--t---t
7
FIGURE 5.1.9 Advantages for the Class 8 Contractors
gOne' Ors 8 s sIr
Disadvantages: Main Group o~---~ '-;~~--,-~-~---,--~-~- ,.·--'-----T--·- -:----,--.--r--:-~-~~-~---~
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o ~-,.',"r'~~S'_'_'·.Jl'C','_~JLf'."_"_'~'_\'.'_'.l.:Sc~'_'.'.lL"c:---t0_'JL~C'_'"'JL<":;r"_·.L'''_''_·' .... _'"'r'_··IL.'''_''''''''..,''_'~'"~"_'_" .... '":','.'JL~,">C~_\..JL'_'T"..JJ"'''·'_·_''L~'T'''..JL'~""-'-'JL;_'r'_'L'""C·' .... :..·'"·'e'_'L~ 0lS1 0lS10 0lS12 0lS14 0lS16 0lS18 0lS2 0lS21 0lS3 0lS5 0lS7 0lS9
Disadvantages of the JV
FIGURE 5.2.1 Disadvantages for the Main Group
--------------------- ----
._-----_.,--",_.,-, ---". __ ._, .. _-"_._ .... ,-_._--_._.,,,. ,._,_.,.- . --""-" , .. _"-",.,'-,--"_._,--,-_._- .
Disadvantages :Class 1
Large & Experienced Contractors M ~ -,--~-'---------'
e a n
e.
r-,"".0, r-,',\" ~"" r-' ". \~'" - ::-:-,~ >:"'"
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FIGURE 5.2.2 Disadvantages for the Class 1 Contractors
M e :l n
10
-------_ ... _---- ._---_ .. _-------_._---_. __ .... - .... __ ._---
Disadvantages: Class 2
Large & Inexperienced Contractors
, .... ;",,
',,,'-.v
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0lS11 0lS13 01515 OIS17 01519 01520 01522
~~'\' fr,.-,,.,-., \.",~ ;-\'" .. ~,,:\.
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0156 0158
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FIGURE 5.2.3 Disadvantages for the Class 2 Contractors
M e J 11
Disadvantages: Class 3
Small & Experienced Contractors '4 ------------------------------.
12 -'----.
-'0 "-----" ------.----.------------------
,.', .. '"
. ," r-- r-.""'" \,>,,-:. ' .• ',,,-.'.
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, ~,~, ,~~,~~, ~"" .''::::''< ~~,\.:-, ~':"" "'" r;;:-~~.::"'-, \",'", ','",' :',. <., .•... 6 .J-~ ti~'.;, ~~\~, ~\~, .-- ::0:--'" ~'':-'' ~~"':' ,~"''''' --------- "".',' ------ ,~,.;,. -- ~",.\, ::;..,>",
I ~::'" ~"\'~, ~'\\;.,> ~"" '~'" t~::::- ~"'" "',' r-",c-..,.,,!"-";·'· .s·:·:, .".": ;"'-':0-' ~,,\ ~~~- ~~,- '0 ~~= - ~~,~ --~~' ~~- .~ 0~~ ~=~~~= ':-"'-..' l~'~" .~,,;. :-"',,: :~; ~:,-" ,~>~. "':" ~ "". ,'~:" ~.'v., '".," ::::'" .~·.':v. r:-:"'" " ... "
4 -'- '."" ::-.:---., >-:"" '::~~::, .~::S' ~~""'" ft'" --- ~~~:~' :>':..\~' ~~': R~~" 'v" ---- ~"" :~" ~"" ~~:" ~\.." ,~~~~ .~~~. ~~~~~~ -~~ .. ~~ 0'~~~~~_~~~*'~_~ __ ~_*-~' .',\,,' :,,:','-" ~"~ ~'~" l~:,".:' ~::<' <.::',.,<.:" ,", "',:'. "'" ~",..:,'. ~:~,~,,: ~';"" t",.,.,: '..;,,'.....-.~ :-"'..;,-, :;':'--'" '",,--,', ,:~>,-,. "'\.', ,',".V
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_,', .. y .. ,,'< .... ~~>' ~":~ .. ~/' ~s\.-.. ,<: .. ,,, ~"'> ~~~,\ ~"..,:, .. ?",~ .... 'v", ,:-"",- <:':,- ,v •.. " .... ',V., .,', .... "V,- ",~, .... v.
,';.,": E~'\"-,' ~Y":-"l\~?' ,~, ~'\'\' -",:- ~~'::' '~~\ ~,\> .. ~:-~: ~,~.~ ~::~', :!>~' .~-.::", ~ ... :. ,.,,-,, 'c:-":'" ,,,' ',""" ':-.'- ,', :-:>'-''-' 18?:'" ~~:-:. ~" $:.'\< ?-:':-' ~::.;....:...> ~'~'" ,\'-">- ':~,,~, ::"''-'.:- ~~'y- :::-"'- \'-\,~ ~; .... ",," -- ~,,~,> ~:-':''''~ ~"" 'Y-~'· .~~~:-~ -;.:,v,.
'.",','>,',' ;~~,_:>", ~'..:....\"" r::~,~'" ~\~,. ;~ .. ~~' >~~" ':~"'" :;"~". ~,~.:, .... ~, .... ~ ~,-,,, ~,-,,-:, \:~'" "'" "~~" ~'-'" .v' .... :--w,' ,,"~, ,".,
-: , , :.:.: , '<"- '.' ~ .. l',"" +""',",,"=, ""¥""'="-''''-;r-''''''''"'''''''i'''-'''''''"'-'--' o 0lS1 0lS11 0lS13 0lS15 OIS17 0lS19 0lS20 0lS22 0lS4 0lS6 0lS8
FIGURE 5.2.4 Disadvantages for the Class 3 Contractors
!VI '= a n
Disadvantages : Class 4
Small & Inexperienced Contractors '4 ----------
-'-----''-----'-_'---'-_-'-_~--:---.-'- _'--_,._ ..... ---;,_-'-.. ---'-_-'-_-'-__ .J "',.. :"''",:
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o ~ 0lS1 0lS11
FIGURE 5.2.5
"",' ':-''': "',,, ~"" ",-> -"-"" :"-". ::-.>,-,
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Disadvantages for the Class 4 Contractors
I
r"""
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M e a n
Disadvantages: Class 5
Experienced Contractors 8.0 ---------
"" Ir--I :~ :;:~'.
7.0 ---~-{ ," r--'" t~.'. """.'l-~-----------'----1 f"'\' ,,\,,' -'" f'~'v. ~ ~'\'" ':'\',-" ~:"'" r.~:-~' ~~':.'; ,',,:." ~,\." ~":"" ::-,~,",,- ~,,\,.
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5.0 "-~""cc'";";C'c·~,"~","··"'Jl'f~kc'"'.·Jl"t~~~Jt"i.J[,",Jl",""I'""""~"r~""~Jl"+.Jl.~Jl~.Jt.'-'Jl",~iC~"~CC"'"~--' :"-""
DIS1 DIS11 DIS13 DIS15 DISH DIS19 0lS20 DIS22 0lS4 DIS6 DIS8
FIGURE 5.2.6 Disadvantages for the Class 5 Contractors
M e ;J
n
Disadvantages: Class 6
Inexperienced Contractors ~ 0 -------.----------------------------
\',-" '"" -:'-.,,:,,- -,',,',
">;0;'
4 .l-___ .,',',-,,:
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3 -'-_l""'-'1""'.l.',,--,,"..Jl'~",,-"-·.JL~,,'.'.-J·l·i.'«,'"'"· [""·""''''·"-''''~?''4''~·.-lL·~"~.'"'-.L:~~'.""'JI.:~::.·',,~· ... 'J~L':,:."~.~'.-JL~'">.'-'..l"'~;.:'''.,';.''Jlt;;;~--~;~:-.'.:I''';;'~:,,·'"'"· JL'''',,'.'Jk~·'''t'_-J' b·""···.'>":·..tf'~·",',, .. ..l·,,',,'."J··l',,'>;'.·,,·IL",,·',,·;.l-DIS1 0lS11 0lS13 0lS15 OIS17 0lS19 0lS20 0lS22 0lS4 0lS6 0lS8
FIGURE 5.2.7 Disadvantages for the Class 6 Contractors
Disadvantages : Class 7
Large Contractors
7.0 ~-+--l-~-
6.5 ~-+--l--J,.
6.0
5.5
5.0
FIGURE 5.2.8 Disadvantages for the Class 7 Contractors
10
Disadvantages : Class 8
Small Contractors
FIGURE 5.2.9 Disadvantages for the Class 8 Contractors
Relationship between Advantages
Market Share & Large Project Participation I 8 .L a r
7 0 0
6
5 0 0
4 0
3 o
2
o o
O+------T------~----~------~------r_----_r------r_----~ o 2 3 4 5 6 7 8
Offers an increase in market share
FIGURE 5.3.1 Relationship Between Market Share & Large Projects
._-- - -----------------------
Relationship between Advantages
Spread Risk & Defend Current Posture 7.5~--------------------------------------------------,
7.0 o o o o o
6.5
6.0 o o
5.5
5.0 o o o
4.5+--------r-------.r-------,-------~--------r_------, -2 0 2 6 10
Defend a Parents current posture
FIGURE 5.3.2 Relationship Between Risk & Posture
c o m p e t i t o r s
, I,'
Relationship Between Advantages
Competitor Collaboration & Technology 10.---------------------------------------------________ -.
o
8
6 o
o o
4
2 o
O+-----,-----_r----~----~r_----~----~----_r----~ o 1 2 3 4 5 6 7 8
Permit technology transfer
FIGURE 5.3.3 Relationship Between Competitive Collaboration
and Technology Transfer
Relationship between Advantages:
Technology Transfer and Nationalistic Barriers B 10~-----r------.------.-----'~----.------.------.-----~ a r r i e r s ~~
6~---4-----+----4~--~=+----~----~---4----~ "~ ~
4+------+------~----~~----_r------~----_+~~--+_----~
~~ 2+------+------~----~~----_r------r_----_+------+_----~
O+------+------4-----~~----~------~----_+------+_----~ o 1 2 3 5 6 7 8
Permit technology transfer
FIGURE 5.3.4 Relationship Between Technology Transfer
and Overcoming Nationalistic Barriers
B a r r i
Ketauonsnrp-oelween AOvantages
Nationalistic Barriers & Competitors 1 0
0
8
0 0
6 0 0
0 0
4 0 0
0
2
0
0 0 2 4 6 8
Use of competitors as collaborators
FIGURE 5.3.5 relationship Between Overcoming Nationalistic
Barriers and Use of Competitors
1 0
Relationship Between Disadvantages
Divided Loyalties of Both Managers & Personnel I
8 L
V 0 y a I 6 t /-i e s
/' 4
/ b t 0 w
/ n 2
/. m a
/ n a 9 0
V e r s
-2 -2 0 2 4 6 8
Divided loyalties btwn personnel of the JV
FIGURE 5.4.1 Relationship Between Divided Loyalties of Managers
and Personnel of the Joint Venture
Relationship Between Disadvantages
Divided Loyalties between Managers & Joint Liability
J 7
0 i r 6 t
I 5 / i
~ ~ ~ 4 ~
I ~ i ~ t 3
1/ ~ ~ 2
V ~ 1
~ 0
-2 0 2 4 6 8
Divided loyalties btwn managers of the JV
FIGURE 5.4.2 Relationship Between the JV Managers
Divided Loyalties and Joint Liability
Relationship Between Disadvantages
Joint Decision Making & Disputes 7
J 0 6 0
n t
5 d e c " s i
0 3 0 0
n
m 2 0 0
a k • I
0 n 9
0 0 2 3 " 5 6
Disputes may arise more rapidly & frequently
FIGURE 5.4.3 Relationship Between Joint Decision Making
and the Frequency of Disputes in a Joint Venture
p 0 I i t
C a I
r i s k
Relationship Between Disadvantages
Political Risk & Rapidly Arising Disputes 8
0
6
0
0
0 0
2
0 0
0 0 0 0
-2+-------~------~--------r_------,_------_.------~ o 2 3 4 5
Disputes may arise more rapidly & frequently
FIGURE 5.4.4 Relationship Between Political Risk and the
Frequency of Disputes in a Joint Venture
6
E f f e c t s
o f
f a i I u r e
Relationship Between Disadvantages
Division of Profit & After Effects of Failure 20~------------------------------------------------------,
o
<:000 o
-20
o
-40
-60
o o
-80
o
-100+-________ ~----------,_--------_,~0--------_r-------O--~ -80 -60 -40 -20 o
Division of profit
FIGURE 5.4.5 Relationship Between the Division of Profit and
the After Effects of Failure
20
p 0 I i t
C
a I
r i s k
Relationship Between Disadvantages
Political Risk & After Effects of Failure 8
0
6
0
4 0
0 0
2 0
0
0 0 0 0
-2+-------r-------r-------r-------r-------r-------r-----~ o 2 3 4 5
Joint decision making
FIGURE 5.4.6 Relationship Between Political Risk and the
After effects of Failure
6 7
:> 8 Ij
6
2
o
-2
Relationship Between Advantages
and Disadvantages
Divided Loyalties & Parent Posture
0
----- '" ~ I-------
0
~ ~
-------
-2 o 2 6 8
Defend a Parents current posture
FIGURE 5.5.1 Relationship Between Divided Loyalties of Managers
and the Defence of a Parents Posture in Industry
10
6
5
3
2
o
Relationship Between Advantages
and Disadvantages
Team Creation & Spreading Risk
~ r--------r---------- I----.. --r--------- I--- --
-1 4.5 5.0 5.5 6.0 6.5 7.0 7.5
Spreading of Risk
FIGURE 5.5.2 Relationship Between Difficulties in Team creation
and the Spreading of Risk
------- -------------------------
Relationship Between Advantages
and Disadvantages
Lack of Trust & Increase Market 8~----~----~------~-----.-----.------.------.-----.
61----
O~----~-----+------~----~-----+------r-----~-----i
-2~ ____ ~ ____ ~ ______ ~ ____ ~ ____ -+ ______ ~ ____ 4-____ ~ o 2 3 5 6 7 8
Offers an increase in market share
FIGURE 5.5.3 Relationship Between a Lack of Trust amongst the
Partners and a Increase in Market Share
Relationship Between Advantages
and Disadvantages
Joint Liability & Large Projects
J 7
0 i
6 n t
5 I ~ i
~ a b 4- ~ i
~ I ---i 3 r------t ~ Y --2
~ 1
0 0 1 2 3 4- 5 6 7 8
Small companies can participate in large projects ,
FIGURE 5.5.4 Relationship Between the Joint Liability of Partners
and the Ability to Participate in Large Projects
- -----
T i m e
c 0 n s u m i n 9
8
7
6
5
4
3
2
1
Relationship Between Advantages
and Disadvantages
Time Consuming & National Barriers
~ ~
~ V
~ V
V
o 2 4 6
Nationalistic barriers are overcome
~
~-~~
8 10
FIGURE 5.5.5 Relationship Between the Overcoming of Nationalistic
Barriers and the Time Consuming element of Joint Ventures
Relationship Between Advantages
and Disadvantages
Divided Loyalties & Parents Posture D a
~ 0 i v i I ~ ;6 ~ o y a I t i e s
o
4~-----+------+~--~--+------+------+-----~ .~~
2~~~--~~~--~~~
O~------~------~-----4------~-------+--~~,,~
-2~ ______ ~~ ______ -+ ________ -b ________ +-______ ~~ ______ ~ -2 o 2 6 8
Defend a Parents current posture
FIGURE 5.5.6 Relationship Between the Divided Loyalties of JV
Personnel and the need to Defend a Parents Current
Posture
10
Relationship Between Advantages
and Disadvantages
Information Transfer & Large Projects
I 5.5
n f 5.0 0 r m H
------a ----t u i -----0 ----n 3.5 -----I--'
t -r 3.0
----a -----n s 2.5 ~ f
e 2.0 r
1.5 0 1 2 3 4 5 6 7 8
Small companies can participate in large projects
FIGURE 5.5.7 Relationship Between Information Transfer and the
Ability to Participate in Large Projects
Relationship Between Advantages
and Disadvantages
Information Transfer & Increase Market Share
I 5.5
n f 5.0 0 r m 4.5 a -----t --i 4.0
~ -----0 n 3.5 --------- I--"""
----3.0 f--""" ---------2.5 --2.0
1.5 0 1 2 3 .. 5 6 7 8
Offers an increase in market share
FIGURE 5.5.8 Relationship Between Information Transfer and the
need to Increase the Market Share of a Parent
~~-
Relationship Between Advantages
and Disadvantages
Slow Moving & Local Knowledge
s 7
I 0 6
,
W
m 5 0 -------v i -4
~ n ------g 3
~ ----2
~ ----1 V
0
-1 1 2 3 -4 5 6 7 8
I
Local knowledge ,
I
FIGURE 5.5.9 Relationship Between the Use of Local Knowledge
and the Slow Movements of the Joint Venture
APPENDIX E
Tables
i Table 3.2.1iFreedom of Joint Venture Management
Class Yes %1 No % i 1 i One 5.00 0.421 1.00 0.08 i Two 3.00 0.251 0.00 0.00
Threel 1.00 0.081 1.00 0.08 Four! 1.00 0.081 0.00 0.001
i 10.00 0.831 2.00 0.17 ! 1 Fivel 6.00 0.50 2.00 0.17 i Six 4.001 0.33 0.00 0.00 I 10.00 2.00
1 1 Sevenl 8.00 0.671 1.00 0.08 I EiQhtl 2.00 0.171 1.00 0.08
1 I 10.00 2.00
I Table 3.2.2ICreation of Management Team & Staff
Classl Yes! % No % ! I
One 2.001 0.17 4.00 0.33 Two 0.00 0.00 3.00 0.25
Three 0.00 0.00 2.00 0.17 Four 0.00 0.00 1.00 0.08
2.00 0.17 10.00 0.83
Five 2.00 0.17 6.00 0.50 Six 0.00 0.00 4.00 0.33
Sevenl 2.00 0.17 6.00 0.50 EiQhtI 0.00 0.00 4.00 0.33
I Table 3.2.3IRegularity of Meetings between JV Board and Sponsor-Companies
Class MonthlYI % Bi-Monthly % Other! I
One 5.001 0.42 0.00 0.00 1.001 Two 3.00 0.25 0.00 0.00 0.001
Three 2.001 0.17 0.00 0.00 0.00 Four 0.001 0.00 1.00 0.08 0.00
10.001 0.83 1.00 0.08 1.00
Five 7.001 0.58 0.00 0.00 Six 3.00 0.25 1.00 0.08
Seven 8.00 0.67 0.00 0.00 EiQht 2.001 0.17 1.00 0.08
~ ---------------------- - ----
tra~!e 3.2.4 I Reponsibility for the Formation of the Joint Venture
Class JV Board 0 % Sponsor % Project % JV Board & % Directors Compan Manager PM
One 3.00 0.25 0.00 0.00 0.00 0.00 2.00 0.1'1 --, Two 2.00 0.17 0.00 0.00 2.00 0.17 0.00 0.00 ._--- --{DO I---Three 1.00 0.08 0.08 0.00 0.00 0.00 0.00 Four 1.00 0.08 0.00 0.00 0.00 0.00 0.00 0.00
7.00 0.58 1.00 0.08 2.00 0.17 2.00 0.17
-- Five 3.00 0.25 1.00 0.08 2.00 0.17 2.00 0.17 Six 3.00 0.25 0.00 0.00 1.00 0.08 0.00 0.00
6.00 _J"QQ, 3.00 2.00 _,,___ •• e ___ ·_ .,---
Seven 4.00 0.33 0.00 0.00 3.00 0.25 2.00 0.17 Eight 2.00 0.17 1.00 0.08 ,0.00 0.00 0.00 0.00
6.00 1.00 . 3.00 2.00
-------------------------------~-----------'
1 Table 3.2.5 I Lack ofTeam Evolvement & Cohesiveness
Class, Yes %! No %
Onel 2.00: 0.171 4.001 0.331 Twol 1.001 0.081 2.001 0.17'
Threel 2.001 0.171 0.001 0.001 Four' 1.001 0.08: 0.001 0.001
6.001 O.SOI 6.001 O.SOi 1
Fivel 4.001 0.331 4.001 0.331 Sixl 2.001 0.171 2.001 0.17'
6.001 6.001
Sevenl 3.001 0.251 6.001 O.SOI Eightl 3.001 0.251 0.001 0.001
6.001 6.001
Fundamental Weaknesses of a Joint Venture
I Table 3.2.6a ! (a) Unfamiliarity with one another!
Class: True %1 False , % , I I I
Onel 3.001 0.251 3.00 0.251 , Twoi 2.001 0.17' 1.00 0.081 ,
Threel 2.001 0.171 0.00 0.001 Foun 0.001 0.001 1.001 0.081
7.001 O.SSI 5.001 0.421 1 I 1 I
Five 5.001 0.421 3.001 0.251 Six 2.001 0.171 2.001 0.171
I 7.00: i 5.001 1
Sevenl 5.00: 0.421 4.001 0.331 Eight: 2.001 0.171 1.001 0.081
7.00, 5.001
I Table 3.2.6b i (b) Virtual overnight existence
Classl True %1 False I o/c 0
I I : I One I 2.001 0.17 4.00 0.33 I Twol 2.001 0.17 1.00 0.08
I Threel 2.00 I 0.17 0.001 0.001 Foun 0.00: 0.001 1.001 0.081
I 6.00i O.SOI 6.001 O.SOI I I I !
Fivei 4.001 0.331 4.001 0.331 sixl 2.00:
0.17
1
2.001 0.171 6.00: 6.001
I I Seven, 4.00, 0.331 4.001 0.331 Eightl 2.00i 0.171 2.001 0.17 1
I 6.00: 6.001
· Table 3.2.6c ,(c) Lack of membershi~ control
Classl True %1 False % i
Onel 0.001 0.001 6.001 0.50 Twol 0.001 0.001 3.001 0.25
Three I 1.00 I 0.081 1.001 0.08 Foun 0,001 0.001 0,001 0,00
1,001 0.081 10,001 0.83 I
Fivei 1.001 0.081 7,001 0.58 Sixl 0.001 0,001 4.001 0.33
1.001 11.00 I I i I
Sevenl 0.001 0.001 9.001 0.751 Eight! 1.001 0.081 2.001 0.171
I 1.001 11.001
i Table 3.2.6d i (9) Parental Selection I
Classl True %1 False %
Onel 0.001 0.001 6.00 0.501 TWOI 1.001 0.081 2.00 0.17:
Threel 1.001 0.081 1.00 0.081 Foun 0.001 0.001 1.00 O.08i
! 2.001 0.171 10.00 0.83
F ! 1.001 lVel 0.08 7.001 0.58 Sixl 1.001 0.08 3.001 0.25
2.001 10.001
1.001 I
Sevenl 0.08 7.001 0.58 Eightl 1.001 0.08 3.001 0.25
1 2.001 1 10.001 1 1
I Table 4.1.1 The Occurrence of a Deadlock Situation
Class Yes i % No %
One 1.00 0.08 5.00 0.42 Two 0.00 0.00 3.00 0.25
Threel 1.001 0.08 1.00 I 0.081 Four 1.001 0.081 0.001 0.00·
3.001 0.25 9.00 0.75
Five 2.001 0.17 6.001 0.50 Six 1.00 0.08 3.00 0.25
3.00 9.00
Seven 1.00 0.08 8.00 0.67 Eight 2.00 0.17 1.001 0.08
3.00 9.001
Table 4.2 Importance of Determinants for the ~roup
~ Determinant Mean Ranki ! I i Class 1 i I
1 I
VR1 26.7100 VR10 19.17001 VR11 25.54001 I
I VR12 18.17001 1 1 , VR13 26.08001 i i VR14 15.6700 I 1 1 VR15 13.6300 I 1 VR16 16.7100 VR17 7.5000
1 VR18 21.63001 VR19 22.3800 VR2 25.9600 VR20 21.2500 VR21 12.8300 VR22 10.6700 VR23 17.92001 VR24 12.67001 I VR25 4.0000 VR26 14.3800 VR27 20.33001
,
VR28 25.2900 VR29 1.7900 VR3 11.8800 VR30 24.9200 VR31 20.8300 VR32 20.4600 VR33 13.5000 i
! VR34 3.7900 VR4 12.5400 VR5 16.67001
i
VR6 23.8300 VR7 11.3800 VR8 18.2900 VR9 18.6700
ISignificance for Grpup 0.08 I Utilising Friedman Two Way' Anova I
I
I
I Table 4.2.1 :Ime0rtance of Determinants of Success b~ Size & Experience I
Determinant iTWO Tailed (P) Class 1 Class 2 ! Class 3 Class 4 Significance
1 .
VR1 0.6659 7.0000 7.00001 6.00001 3.0000 VR10 0.9577 6.8300 5.6700 6.25001 7.5000 VR11 0.1725 8.1700 6.5000 2.7500 4.0000 VR12 0.8050 7.0800 5.3300 5.5000 8.5000 VR13 0.1755 6.2500 9.00001 6.2500 1.0000 VR14 0.6742 7.6700 5.67001 5.2500 4.50001 VR15 , 0.3934 6.4200 5.3300 10.0000 3.5000 I 1 I VR16 I 0.69441 6.7500 4.83001 6.75001 9.50001 , VR17 0.4614 6.2500 6.67001 4.75001 11.0000 VR18 0.4189 6.0800 8.17001 7.5000 2.0000 VR19 0.98461 6.4200 7.00001 6.5000 5.50001 . VR2 0.0620 7.5000 5.67001 7.5000 1.0000 VR20 0.9935 6.3300 6.33001 7.0000 7.0000 VR21 0.3167 8.1700 6.0000 3.2500 4.5000 VR22 0.3446 6.9200 8.67001 3.5000 3.5000 VR23 0.5855 7.7500 5.6700 5.5000 3.5000 VR24 0.3439 6.2500 4.33001 8.2500 11.0000 VR25 0.3427 6.3300 9.1700 4.7500 3.0000 VR26 0.4626 5.5800 5.6700 9.7500 8.0000 VR27 0.9609 6.4200 5.83001 7.5000 7.0000 VR28 1 0.86891 7.0000 I 6.83001 5.5000 4.5000 I
VR29 0.5370 7.1700 7.6700 4.0000 4.00001 I
VR3 0.1368 8.5000 4.0000 6.7500 1.5000 I
VR30 I 0.6852 7.4200 5.00001 7.0000 4.5000 I
VR31 1 0.1708 8.0000 2.6700 7.2500 7.5000 VR32 I 0.7856 6.1700 8.1700 5.5000 5.5000 VR33 0.8325 7.1700 5.5000 5.2500 8.0000 VR34 0.3916 6.0000 8.0000 6.0000 6.0000 VR4 0.9418 6.5000 7.1700 I 5.2500 7.0000 VR5 0.3710 6.1700 7.1700 4.0000 11.5000 I
VR6 I 0.7100 6.3300 8.17001 5.5000 4.5000 I
0.1166 6.5800 3.0000 I
VR7 9.0000 10.5000 ,
VR8 0.8944 5.83001 7.50001 7.2500 6.0000 VR9 0.9891 6.7500 6.00001 6.2500 7.0000
jUtilising Kruskal-Wallis One Way Anova I ,
I
,
I
I
I
I
Table 4.2.21Im ortance of Determinants of Success b Experience
Tailed (P) Mean Class 5 Class 6
IUtilising Mann-Whitney U-Wilcoxon Rank Sum W Test
Table 4.2.3 I Importance of Determ~nants by Size
Determinant Rank Class
IUtilising Mann-Whitney U-Wilcoxon Rank Sum W Test
ITable 4.2.4 Correlations Between the Determinants of Success
IUtilising the Speannan Correlation Coefficient I
I Table 4.2.5 ICorrelations Between the Determinants of Su§CEiss
Utilising the Speannan Correlation Coefficient
Table 4.2.6 lCorrelations Between the Determinants of Success
I Utilising the Speannan Correlation Coefficient I
I Table 4.2.7 ICorrelations Between the Determinants of Success
VFfl . Coefficient 1 -0.0255 0.4116 -0.43081 0.48231 -0.5166 -0.43401 2-t Sionificance ~ 0.9370 0.1840 0.16201 0.1120 0.0850 0.10301
VAS Coefficient 0.2039 0.4656 -0.23591 0.3730 0.1245 -0.0507 2-1 Siqnificance 0.5250 0.1270 0.46001 0.2310 0.7000 0.8760
VR9 Coefficient 0.0755 0.5515 -0.0709 0.4114 0.3276 0.0616 2-1 Significance 0.8160 0.06301 0.8270 0.1840 1 0.2990 0.84901
VR1 VR10 1 VR11 VR12 1 VR13 VR14 1
I Utilising the Speannan Correlation Coefficient I
I Table 4.2.9 Correlations Between the Determinants of Success
I Utilising the Spearman Correlation Coefficient
I Table 4.2.10 ICorrelations Between the Determinants of Success
I Utilising the Spearman Correlation Coefficient
i Table 4.2. 111 Correlations Between the Delenninants of Success
VR21
VR22
VR23
VH<!4
12-1
12-1
12-1
~ ~~;c;::;oo~ftiicient
~-I Si VR26
2-1 VR27
VR3 2-t:
2-t:
~~1~~ ____ +-____ +-____ +1 ____ -+ ____ ~ ~ -0.1140 .7820
0.1404 0.7240 02327 0A670
-0.1682 IHlO10 O!;?!;f 1
0.IL~99~L-~~_-O~.07 ,,,14n ll -0.37711 = '.1100 ~ 0.:>270
~ '.2205 ~sz:~! ~0.~0057~-O-=-I:.l~336
S--~4~2O--~C491OO:;IOC+-~ 14( I 0.6790 084 • '.0091 &a:: I ~
0.3640 Q.737O 0.5626 -O~OOOO O.OS: 000
1748
~ 0.3740
VI 0 VR21
If.1~391:, ...... , .. . ... .
I :10 ~I
O~ ~I VR22 VR23
-0.1: 170 O.!> ;10
VR2'
I Utilising the Spearman Correlation Coefficient
I Table 4.2.12ICorrelations Between the Detenninants of Success
iUtilising the Spearman Correlation Coefficient
ITable 4.2.13ICorrelations Between the Determinants of Success
VR9 Coefficient 0.1059 0.10451 0.13641 0.41651 0.29571 -0.24721 2-t Significance 0.7430 0.74701 . 0.67301 0.17801 0.35101 0.43901
VR20 VR21 I VR22 1 VR23 VR24 I VR25 ,
I Utilising the Spearman Correlation Coefficient
ITable 4.2.14ICorrelations Between the Determinants of Success
IUtilising the Spearman Correlation Coefficient
! Table 4.2.151 Correlations Between the Determinants of Success
i Utilising the Spearman Correlation Coefficient
· Table 4.2.16ICorrelations Between tile Determinants of Success
i Utilising tile Spearman Correlation Coefficient
1 Table 4.2.171 Correlations Between tile Determinants of Success
1 Utilising the Spearman Correlation Coefficient
1 Table 4.2.1SICorrelations Between tile Determinants of Success
1 Utilising tile Spearman Correlation Coefficient
I Table 4.3.1 I Importance of Majority Eguity for Control
Class Yes % , No ! % , , I
One 1.00 0.081 5.00 0.421 Two 2.00 0.171 1.00 0.081 Three 0.00 0.00 2.00 0.17 Four 0.00 0.00 1.00 0.081
3.00 Five 1.00 0.081 7.00 0.58 Six 2.00 0.17 2.00 0.17
3.00 Seven 3.00 0.25 6.00 0.50 Eight 0.00 0.00 3.00 0.25
3.00
I Table 4.3.3!Extent of Eguity OwnerShip Within the Joint Ventures
Class Equal % Majority % Minority % Share Share Share
One 21.00 0.45 7.00 0.15 6.00 0.13 Two 3.00 0.061 2.00 0.04 0.00 0.00 Three 5.00 0.11 I 2.00 0.04 0.00 0.00 Four 1.00 0.021 0.00 0.00 0.00 0.00
30.00 Five 26.00 0.55 9.00 0.19 6.00 0.13 Six 4.00 0.09 3.00 0.06 0.00 0.00
30.001 Seven 24.001 0.511 9.00 0.19 6.00 0.13 Eight 6.001 0.131 2.001 0.04 0.00 0.00
30.001 I I
Managing artner Ye s %(C!<I~t ~~IouPt No ~I~) % (Groupl. _ ... __ .... _.-
.000
.~ .000
One ._- --- ... . .. 14 TwiJ---- ---2 Three --2 Four ---0 --------18 Five - ----16 Six---- ----- 2 ------ --18
Seven 16
:000 .000 .000 .000 :000 .000
Eig~_~--2. 000 18 .000
---0.583 :--.-'-'--
0.400 0.286 0.000 --_. 0.516
--0:333
0.552 0.250
----0.378 ---10:000 --0:417 0.054 --:HjOO 0.600 0.054 __ E'poO 0.714 0.000 ----.~.poo 1.000 0.486 19.000 0.432 15.000 0.484 0.054 4.000 0.667
19.000 0.432 13.000 0.448 0.054 6.000 0.750
19.000
!-Note:-----
Only 37 joint ventures were referred to by respondent contreactors in this sub-section of the analysis, and not the overall number of 47 this was as a result of Incom lete re lies
0:270 0:081 0.135 0.027 0.514 0.405 0.108
0.351 0.162
------JV Success
Yes % (CIa,ssL % (Group) No ._ %(Classl f~JGroupt --"---23.000 - 0:958 I--p.6gg I--~ooo
--_._-------0.042 0.027 5:000 1:000 0.000 0.000 0.135 0.000 4.000 0.571 0.108 3.000 0.429 0.081 1.000 1.000 1-~,027 0.000 0.000 O.m.
33.000 0.892 4.000 0.108 0.892 O'J~ 29.000 0.879 0.784 4.000 0.121 0.108 4.000 1.000 0.108 0.000 0.000 0.000
33.000 4.000 28.000 0.966 0.757 1.000 0.034 0.027
5.000 0.625 0.135 3.000 0.375 0.081 33.000 4.000
I'Table 4.3.6 Control Mechanisms used within the Joint Venture Mean Rank for Grou
Mechanism
Top management High level of implementation between Sponsor Companies
IRegular update.
\Fixed responsibilities of Sponsor Companies I Fixed authorities of Sponsor Companies .High calibre of human resources Management consensus A linkage of financial strategies
Table 4.3.7 Control Mechanisms used within the Joint Venture Mean Rank b Contractor Size
Table 4.3.8 Control Mechanisms used within the Joint Venture Mean Rank b Contractor Ex erience
ment level of implementation between Sponsor Companies
Regular update. Fixed responsibilities of Sponsor Companies Fixed authorities of Sponsor Companies
calibre of human resources Malnagem"nt consensus
!Utilising Mann-Whitney U-Wilcoxon Rank Sum W Test
Mean Rank I 4.130 1 4.0001 5.790\ 4.880 4.,70\ 5.290 3.920i
3.8301
i i
ITable 4.3.9 IThe Balance of Power and lesser Control
Cia •• iVe. One
'Four
iFive iSix
ISeven 'Eight
3.00e 2.000 J.OOO 1.00e 7.000 4.000 3.00e 7.000 5.000 2.000 7.000
% INo % 0.250 2.000 0.167 1.000 0.1)83 1.000 0.0831 0.000 0.583 4.000 0.:)33 3.000 0.25e 1.000
4.00C 0.417 3.000 0.167 1.000
4.000
0.167 0.083
-0.083
0.3: I 0.2 I 0.083
0.250 0.083
ITable 4.3.11 IBalance of Managerial Controls & Autonomy
ITable 4.3.tO I Experience IOf Spider. Web Joint Venture.
N/A : % 1.000 0.000 0.000 0.000
1.000 0.000
1.000 0.000
0.083 0.000 0.000
0.083 o.ooe
0.083 0:000
!Tabl.4.4.1 !Thelmportance of Aulonomy
Class
IOn. Two Thr •• Four
Five
!Sev.n Eight
I, % 3.0QCl O. 250 1.000 0.~083
1.000 0.l83 O.llQ(l 0.000 5.000 0.417 4.000 0.333 1.000 0.083 5.000 4.000 0.33: 1.000 0.083 5.000
0.000 ~O.OOO 0.000 0.000 1.000 0.000 0.000 1.000 0.083 0.0001 2.000 0.167 4.000 0.333 1.001 1.000 0.083 2.000 0.167 1.001 1.00e 0.083 2.000 0.167 0.00 2.000 4.000 1.00e 2.000 0 167 3.000 0.2501 0.001
. o.ooe 0.000 1.000 0.0831 1.001 2.000 4.000 I 1.001
ITable 4.4.2 ! Partner beliefs towards Autonomy
Table 5.1 ! Importance of the Advantages (Group)
Advantage I Mean I Rank
ADV1 5.3300
ADV10 4.5400
ADV11 6.0400
ADV2 4.S300
ADV3 9.1700
ADV4 6.1300
ADV5 5.7500
ADV6 7.4200
ADV7 6.1300
ADVS 6.1300
ADV9 4.5400
IUtilising Friedman Two Way Anova
! Table 5.1.1 !Importance of the Advantages by Experience & Size I
!Utilising Kruskal-Wallis One Way Anova
I Table 5.1.2 Ilmportance of the Advantages by Experience (Classes 5 & 6)
Advantage Two Tailed(P) Mean Rank I Signficance Class 6 Class7 '
ADV1 0.7266 6.7500 6.00001 ADV10 0.0373 8.0000 3.5000 ADV11 0.1157 7.6300 4.2500 ADV2 0.7266 6.2500 7.0000 ADV3 I 0.2360 7.3100 4.88001 ADV4 0.0220 4.9400 9.6300 ADV5 0.7090 6.6900 6.1300 ADV6 0.1453 7.5600 4.3800 ADV7 0.4923 6.0000 7.5000 ADV8 0.0821 7.7500 4.0000 ADV9 0.5407 6.9400 5.6300
I Utilising Mann-Whitney U-Wilcoxon Sum W Test
I Table 5.1.3 I Importance of the Advantages by Size (Classes 7 & 8)
Advantage Two Tailed(P) Mean Rank Signficance Class 7 Class 8
ADV1 0.n53 6.3300 7.0000 ADV10 0.6367 6.7800 5.6700 ADV11 0.4465 6.9400 5.1700 ADV2 0.8491 6.6100 6.1700 ADV3 0.6936 6.7200 5.8300 ADV4 0.0575 7.6100 3.1700 ADV5 0.1019 7.4400 3.6700 ADV6 0.4012 6.0000 8.0000 ADV7 0.0926 7.5000 3.5000 ADV8 0.3944 6.0000 8.0000 ADV9 0.n53 6.6700 6.0000
I Utilising Mann-Whitney U-Wilcoxon Sum W Test
!Table52
0lS1 DIS10 0lS1' DIS1: .olS13 0lS14 DIS15 IOIS16
17 IB 19
10152,
.. ...",. Ilmponance of the Oisadvantages (GrouPj
9.5000 9.1400
11.0000 132700
9.1600
DIS20 1 .JU 01521
~~--+--------+-'1~1.~~OO~ ~ 12.4100 5iS9 9.5000
ISignificance tor Group: 0.0873 Utilising Friedman Two Way Prova
! Table 52.1 !Importance of the Oisadvantages by EXPerience & S@e
!Utilising Kruskal-WaIlis One Way Prova
I Table 522 !Importance of the DiSadVaIltaQeS by Experience (Classes 5 & 6)
DISi 05 5.4400 5.630( DISt~-+-__ "'D.4272~O. '.0600 52iiiO DiSf: "'0:6633 5.81 QC ,,~ DiSt 0.3821 7.130:: I 5~
~S 256B '2500 I ,,~ ~ __ ~ ____ ~~I '.0000
OIS19 0--:t'iZi ~ 7.COOC I 'I i! "~
IUtilising Mann-Whitney U-Wilcoxon Sum W Test
I Table 5.2.3 I Importance of the DiS3d\iaI1tlijeS by Size (Classes 7 & 8)
IUtilising Mann-Whitney U-Wilcoxon sum WTest
Table5.2.41QC~~~~~~5]~!Ni~~~:Q[~~~~=r-------------------------------1
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.( 140 'c 170
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n!lllRCl I n7AAC'
-0.1630 0.4375 0.613C
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-O.19· 0.55, 0.11: 0.7280 .n.~
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-0.1074 0.7400 0.1190 0.7130
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0.9850 0.1607 0.6160
-0.0207 0.9<100
4160 0.2855 0.36801
0.2710 ~.4716 0.1220 1
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0.2370 -0.3014 0.3410
-0.1521
ITable 6.2.6 To motivate personnel, whether the joint venture manager or the management staff, do you consider it necessary to, !provide feed back concerning goal attainment ?'
Class Yes % No % Unknown I . Response
One 5.00 0.42 0.00 0.00 1.00 Two 3.00 0.25 0.00 0.00 0.00 Three 1.00 0.08 1.00 0.08 0.001 Four 1.00 0.08 0.00 0.00 0.00 I
10.00 0.83 0.00 0.00 1.00 I Five 6.00 0.50 1.00 0.08 1.00 Six 4.00 0.33 0.00 0.00 0.00
10.00 1.00 Seven 8.00 0.67 0.00 0.00 1.00 Eight 2.00 0.17 1.00 0.08 0.00
10.00 1.00
ITable 6.2.7 To motivate personnel, whether the joint venture manager or the management staff, do you consider it necessary to, utilise job designs to increase efficiency
Class Yes % No % Unknown Response
One 1.00 0.08 4.00 0.33 1.00 Two 3.00 0.25 0.00 0.00 0.00 Three 0.00 0.00 2.00 0.17 0.00 Four 0.00 0.00 1.00 0.08 0.00
4.00 0.33 7.00 0.58 1.00 Five 1.00 0.08 6.00 0.50 1.00 Six 3.00 0.25 1.00 0.08 0.00
4.00 7.00 Seven 4.00 0.33 4.00 0.33 1.00 Eight 0.00 0.00 3.00 0.25 0.00
4.00 7.00
%
0.08 0.00 0.00 0.00 0.08 0.08 0.00
0.08 0.00
,
%
0.08 0.00 0.00 0.00 0.08 0.08 0.00
0.08 0.00
ITable 6.1.1 IAdvantages to be gained from the differing Cultures
Yes 0/0 No 0/0 4.00 0.33 2.00 0.17 0.00 0.00 1.00 0.08
1111 200 017 200 017 Four 1.00 0.08 0.00 0.00
7.00 0.58 5.00 0.42 Five 5.00 0.42 3.00 0.25 Six 2.00 0.17 2.00 0.17
7.00 5.00 Seven 5.00 0.42 4.00 0.33 Eight. 2.00 0.17 1.00 0.08
7.00 5.00
I!able 6.12IDisadvanta!les attributed from differing Culturesj
,Class Yes % No % No % IResponse
One 4.00 0.33 2.00 0.17 0.00 0.00 Irwo 1.00 0.08 1.00 0.08 0.00 0.00 Three 0.00 0.00 1.00 0.08 1.00 0.08 Four 1.00 0.08 0.00 0.00 1.00 0.08
6.00 0.50 4.00 0.33 2.00 0.17 Five 4.00 0.33 3.00 0.25 1.00 0.08 Il:;ix 2.00 0.17 1.00 0.08 1.00 0.08
6.00 4.00 2.00 Seven 5.00 0.42 3.00 025 1.00 0.08 EiQt1t 1.00 0.08 1.00 0.08 1.00 0.08
6.00 4.00 2.00
[Table 6.1.3JAn organization's outline is a powerful force in determining . Ithe Venture operation and performance
. -Class Yes % No % ~ % ..
nse One 5.00 0.42 0.00 0.00 1.00 0.08 wo 2.00 0.17 0.00 0.00 1.00 0.08
rnree 1.00 0.08 0.00 0.00 1.00 0.08 our 0.00 0.00 1.00 0.08 0.00 0.00
8.00 0.67 1.00 0.08 3.00 025 Five 6.00 0.50 0.00 0.00 2.00 0.17 Six 2.00 0.17 1.00 0.08 1.00 0.08
8.00 1.00 3.00 Seven 7.00 0.58 0.00 0.00 2.00 0.17 Eight 1.00 0.08 1.00 0.08 1.00 0.08
8.00 1.00 3.00
,
Class Yes %. No % One 5.00 0.42 1.00 0.08 Two 2.00 0.17 1.00 0.08 Three 2.00 0.17 0.00 0.00 Four 1.00 0.08 0.00 0.00
10.00 0.83 2.00 0.17 Five 7.00 0.58 1.00 0.08 Six 3.00 0.25 1.00 0.08
10.00 2.00 Seven 7.00 0.58 2.00 0.17 Eight 3.00 0.25 0.00 0.00
10.00 2.00
iTable 6.1.5iOccurrences of Venture adaption to external forces
Class Yes % No % 1 One 3.00 0.25 3.00 0.251 [Two 1.00 0.08 2.00 0.17 Three 0.00 0.00 2.00 0.17 Four 1.00 0.08 0.00 0.00
5.00 0.42 7.00 0.58 Five 3.00 0.25 5.00 0.42 Six 2.00 0.17 2.00 0.17
5.00 7.00 Seven 4.00 0.33 5.00 0.42 ElQht 1.00 0.08 2.00 0.17
5.00 7.00
!Table 6.1.6iAge of Joint Venture Personnel
Class 20-35 Yrs % 35-SOYrs % > SOYrs % I~i % ifics
One 3.001 0.25 3.00 0.25 0.00 0.00 0.00 0.00 Two 1.00 0.08 2.00 0.17 0.00 0.00 0.00 0.001 Three 0.00 0.00 1.00 0.08 0.00 0.00 1.00 0.08 Four 0.00 0.00 0.00 0.00 1.00 0.08 0.00 0.00
4.00 0.33 6.00 O.SO 1.00 0.08 .1.00 0.08 Five 4.00 0.33 4.00 0.33 0.00 0.00 1.00 0.081 Six 0.00 0.00 2.00 0.17 1.00 0.08 0.00 0.00
4.00 6.00 1.00 1.00 Seven 4.00 0.33 5.00 0.42 0.00 0.00 0.00 0.00 Eight 0.00 0.00 1.00 0.08 1.00 0.08 1.00 0.08
4.00 6.00 1.00 1.00
..
ITable 6.1.710rganisalional Socialisalion
Class
One wo
lhree Four
FIW Six
Seven:,,-ht,--EiQt
Yes % No
500 042 0.00 0.00 0.00 0.00 1.00 0.08 6.00 0.50 5.00 0.42 1.00 0.08 6.00 5.00 0.42 1.00 0.08 6.00
100 1.00 3.00 0.00 5.00 2.00 3.00 5.00 4.00 1.00 5.00
% nse I %
0081 000 000 0.08 0.00 0.00 0.25 1.00 0.08 0.00 0.00 0.00 0.42 1.00 0.08 0.17 1.00 0.081 0.251 0.00 0.001
I 1.00 I 0.331 0.00 0.001 0.081 1.00 0.081
I 1.00 1
[Tab) e6. 1.aloevelopment period of OrganisatiOnal Socialisation I C lass
One Two Tl1r Fou
ree,,r
Five Six
Seven ht E"lQt
Yes % No
1.00 0.08 ·0.00 0.00 0.00 0.00 0.00 0.00 1.00 0.08 1.00 0.08 0.00 0.00 1.00 1.00 0.08 0.00 0.00 1.00
[abl e6 .1.9Iproblems with Ethical Codes
1'" lass=-One [wo
ree mu Fou r
Five Six
Seven ht IEigt
Yes % No 3.00 0.25 0.00 0.00 0.00 0.00 0.00 0.00 3.00 0.25 3.00 0.25 0.00 0.00 3.00 3.00 0.25 0.00 0.00 3.00
% I~!.v,nse %
4.00 0.33 1.00 0.081 1.00 0.081 0.00 0.001 1.00 0.08 3.00 0.251 1.00 0.08 0.00 0.001 7.00 0.58 4.00 0.331 4.00 0.33 3.00 0.251 3.00 0.25 1.00 0.081 7.00 4.00 1 6.00 0.50 1.00 0.081 1.00 0.08 3.00 0.251 7.00 4.00 1 .
I
% 3.00 0.25 3.00 0.25 2.00 0.17 1.00 0.08 9.00 0.75 5.00 0.42 4.00 0.33 9.00 6.00 0.50 3.00 0.25 9.00
jTable 6.2.1 Power is an essential element of organisational success ?'
Class Agreed % Disagreed %
One 6.00 0.50 0.00 0.00 Two 2.00 0.17 1.00 0.081 Three 1.00 0.08 1.00 0.081 Four 1.00 0.08 0.00 0.00
10.00 0.83 2.00 0.17 Five 7.00 0.58 1.00 0.08 Six 3.00 0.25 1.00 0.08
10.00 2.00 Seven 8.00 0.67 2.00 0.17 Eight 2.00 0.17 0.00 0.00
10.00 2.00
Class Equal % Unequal % Unknown Response
One 1.00 0.08 4.00 0.33 1.00 Two 2.00 0.17 1.00 0.08 0.00 Three 2.00 0.17 0.00 0.00 0.00 Four 1.00 0.08 0.00 ·0.00 0.00
6.00 0.50 5.00 0.42 Five 3.00 0.25 4.00 0.33 1.00 Six 3.00 0.25 1.00 0.08 0.00
6.00 5.00 Seven 3.00 0.25 5.00 0.42 1.00 Eight 3.00 0.25 0.00 0.00 0.00
6.00 5.00
Table 6.2.3 The motivation of personnel and their performance is directl related in a 'oint venture ?'
Class Agreed % Disagreed % Unknown % Response
One 5.00 0.42 0.00 0.00 1.00 0.08 Two 3.00 0.25 0.00 0.00 0.00 0.00 Three 2.00 0.17 0.00 0.00 0.00 0.00 Four 1.00 0.08 0.00 0.00 0.00 0.00
11.00 0.92 0.00 0.00 0.00 Five 7.001 0.58 0.001 0.00 1.00 0.08 Six 4.001 0.331 0.001 0.00 0.00 0.00
11.00 0.00 Seven 8.00 L 0.67 0.001 0.001 1.00 0.08 Eight 3.001 0.25 0.001 0.001 0.001 0.00
11.00 0.00
Table 6.2.4 To motivate personnel, whether the joint venture manager I or the management staff, do you consider it necessary to, assi n s ecofic oals
Class Yes % No % Unknown I % Response I
One 6.00 0.50 0.00 0.00 0.00 I 0.00 Two 3.00 0.251 0.00 0.00 O.OO! 0.00 Three 2.00 0.17 0.00 0.00 0.00 I 0.00 Four 1.00 0.08 0.00 0.00 0.001
12.00 1.00 0.00 0.00 0.001 Five 8.00 0.67 0.00 0.00 0.001 Six 4.00 0.33 0.00 0.00 0.001
12.00 0.00 I Seven 9.00 0.75 0.00 0.00 0.001 Eight 3.00 0.25 0.00 0.00 0.001
12.00 0.00 I
Table 6.2.5 To motivate personnel, whether the joint venture manager or the management staff, do you consider it necessary to, assi n difficult, but acce table erformance oals?
Class Yes % No % Unknown Response
One 2.00 0.17 3.00 0.25 1.00 Two 3.00 0.25 0.00 0.00 0.001 Three 1.00 0.08 1.00 0.08 0.001 Four 1.00 0.08 0.00 0.00 0.001
7.00 0.58 4.00 0.33 1.00 Five 3.00 0.25 4.00 0.33 1.00 Six 4.00 0.33 0.00 0.00 0.00
7.00 4.00 Seven 5.00 0.42 3.00 0.25 1.00 Eight 2.00 0.17 1.00 0.08 0.001
7.00 4.00
0.00 0.00 0.00 0.00
0.00 0.00
%
0.08 0.00 0.00 0.00 0.08 0.08 0.00
0.08 0.00
APPENDIX E
Tables
I Table 3.2.1IFreedom of Joint Venture Mana~ment I
Class Yes % No %1 I
One 5.00 0.42 1.00 0.081 Two 3.00 0.25 0.00 0.001
Three 1.00 0.08 1.00 0.081 Four 1.00 O.OB 0.00 0.00
10.00 0.83 2.00 0.17
Five 6.00 0.50 2.00 0.171 Six 4.00 0.33 0.00 0.00
10.00 2.00
Sevenl B.OO 0.67 1.00 0.081 Eight 2.00 0.17 1.00 0.081
10.00 2.00 1
I Table 3.2.2ICreation of ManaQement Team & Staff I
Class Yes % No %
One 2.00 0.17 4.00 0.33 Two 0.00 0.00 3.00 0.25
Three 0.00 0.00 2.00 0.17 Four 0.00 0.00 1.00 0.08
2.00 0.17 10.00 0.83
Five 2.00 0.17 6.00 0.50 Six 0.00 0.00 4.00 0.33
Seven 2.00 0.17 6.00 0.50 Eight 0.00 0.00 4.00 0.33
I
,
I ,
I Table 3.2.3IRegulari!y of Meetings between JV Board and Sponsor-Com~anies I
Class Monthl % BI-Monthl % Other
One 5.00 0.42 0.00 0.00 1.00 Two 3.00 0.25 0.00 0.00 0.00
Three 2.00 0.17 0.00 0.00 0.00 Four 0.001 0.00 1.00 0.08 0.00
10.00 0.83 1.00 0.08 1.00
Five 7.00 0.58 0.00 0.00 Six 3.00 0.25 1.00 0.08
Seven B.OO 0.67 0.00 0.00 Ei t 2.00 0.17 1.00 0.08
-._-----_._--_. --------------------
It~l¥ 3.~._4 _____ .LIR,:..:e£9nsi~ility for the Formation of the Join~ Venture
'-cia-ss'J\Ts;:;:'o-a-r"7d --o' _-_-_-____ -_;:;%--,~c;<----o-!.n-s-or--,--o:-;Yo-'T---;- Pr~ect % JV Board & %
"- ---- -_--:::--D::..:.ir:...::e-'=~F::..::0o=rs+-------. _ COlT!flan Mana.9'----e-cr:====~o-~-=+-~P...:.:M-',-""o_f___---~ = ~_--~--Qjj~ · __ ~3.0::;,0:;;--t----- 0.25 0.00 0,.0",0::;,+-_-------,;0=.,0:,,0:: + __ --c0;o:.07.0=+--_--------::2~.0~~0~------:::0~.1.~
T:.:w.-'-0::I---_-=2 . .:::-00::+--_---'0:-., 1:-=7 _().QO _.'7'0.'70=0+---__ ::2=.~0,-=0 1 __ ""'0::,.10 =7 0.00 0.00 ~_-_f.'-::h;;:--re-=..:eol-_------;1~.0,::0+ __ --::-0.08 1.00 0.08 0.00 0.00 --0:00 0.00
Four 1.00 0.08 0.00 0.00 0.00 0.00 0.00 0.00 7.00"+---_ ___"'0.58 1.00 0.08 2.00 0.17 2.QQ.f-_QJ.Z.
Five 3.00 0.25 1.00 0.08 2.00 0.17 2.00 0.17 Six 3.00 0.25 0.00 0.00 1.00 0.08 0.00 0.00 ._----_.
6.00 1 ___ 1.-, ._0::0::+-____ f-__ ....:3:'-".00~1 __ _ _+_--'2"".00---+--___ _
Seven 4.00 0.33 0.00 0.00 3.00 0.25 2.00 0.17 Eight 2.00 0.17 1.00 0.08 . 0.00 0.00 0.00 0.00
6.00 1.00 3.00 2.00
Table 3.2.5 :Lack of Team Evolvement & Cohesiveness
Class: Yes %: No %
Onel 2.001 0.171 4.001 0.33: Two: 1.001 0.081 2.001 0.17
Three: 2.00: 0.171 0.001 0.00' Four! 1.001 0.081 0.001 0.00.
6.001 O.50i 6.001 0.50, , : 1
Fivel 4.001 0.331 4.001 0.33: Sixl 2.001 0.171 2.001 0.17
6.001 6.001 I I I
Seven: 3.001 0.251 6.001 0.50: Eightl 3.001 0.251 0.001 0.001
6.001 6.001
: Fundamental Weaknesses of a Joint Venture
I Table 3.2.6a i (a) Unfamiliarity with one another:
Classl True I %1 False % i ! I
Onel 3.001 0.251 3.00 0.25 Twol 2.001 0.171 1.00 0.08
Threel 2.00 0.171 0.00 0.001 Fourl 0.00 0.001 1.00 0.081
I 7.00 0.581 5.001 0.421 I 1 I
Five! 5.00 0.421 3.001 0.251 Sixl 2.00 0.171 2.001 0.171
1 7.00 I 5.00 I 1 I ,
Seven: 5.001 0.421 4.001 0.33: Eightl 1.001 0.081 2.001 0.17:
5.001 7.00 I
I Table 3.2.6b : (b) Virtual overnight existence
Classl True %1 False , % , 1 L I I
Onel 2.001 0.171 4.00 0.331 Twol 2.001 0.171 1.00 0.081
Three: 2.00L 0.171 0.00 0.001 Four: 0.00, 0.001 1.00 0.081 , 6.001 6.001 0.50, 0.501
Fivel 4.001 0.33 4.00 0.33 Six 2.001 0.171 2.00 0.17
6.001
Seven: 4.001 0.171 2.00 I 0.17 0.331 4.001 0.33
Eightl 2.00 6.001 6.001
Table 3.2.6c ,(cl Lack of membershiQ control
Classl True %[ False %
Onel 0.001 0.001 6.001 0.501 TWOI 0.001 O.OO~ 3.001 0.251
Threel 1.001 0.081 1.001 0.081 Faun 0.001 0.001 0.001 0.001
1.001 0.081 10.00 I 0.831 i
Fivei 1.00 I 0.081 7.001 0.581 Six I 0.001 0.001 4.001 0.331
1.001 11.00 I ,
I I
Sevenl 0.001 0.001 9.001 0.751 Eight: 1.001 0.081 2.001 0.171
1.001 11.00 I
, Table 3.2.6d i(d) Parental Selection I
Classl True %1 False %
One I 0.001 0.001 6.001 0.501 Twol 1.001 0.081 2.00 I 0. 17 i
Threel 1.00 I 0.081 1.00 I 0.08 Faun 0.001 0.001 1.00, 0.081
F' ! 2.001 0.171 10.001
0.83
1 I I I wel 1.001 0.081 7.001 0.58 Sixl 1.001 0.08i 3.001 0.251
I 2.001 i 10.001 I
I ! I 0.581 Sevent 1.001 0.081 7.001
Eightt 1.001 0.081 3.001 0.251 ! 2.001 ! 10.00 I
I !
--- --------------------____ --.J
I Table 4.1.1 The Occurrence of a Deadlock Situation
Class Yes % No %
One 1.00 0.08 5.00 0.42 Two 0.001 0.00 3.00 0.25
Threel 1.00 0.08 1.001 0.081 Four 1.00 0.081 0.001 0.00
3.00 0.25 9.00 0.75
Five 2.00 0.17 6.001 0.50 Six 1.00 0.08 3.00 0.25
3.00 9.00
Seven 1.00 0.08 8.00 0.67 Eiaht 2.00 0.17 1.00 0.08
3.00 9.001
I Table 42 Importance of Determinants for the ~roup
[Determinant iMean Rank I
I I
i Class 1 I
; I , 1 i I i
VR1 26.7100 I i 1 VR10 19.1700
! VR11 I 25.54001 ! I VR12 18.1700 I i I I
VR13 26.0800 I 1 VR14 15.67001 I
VR15 13.6300 I VR16 16.71001
1 VR17 7.5000 I I 1 VR18 21.6300 I 1
VR19 22.3800 1 VR2 25.96001 VR20 21.2500 VR21 12.8300 VR22 10.67001
1 VR23 17.92001 I VR24 12.67001 i
VR25 4.0000 1 VR26 14.3800 VR27 20.33001 VR28 25.2900 VR29 1.7900 VR3 11.8800 VR30 24.92001 VR31 20.8300 VR32 20.4600 VR33 13.5000 VR34 3.7900 VR4 12.5400 VR5 16.67001 VR6 23.8300
I VR7 11.38001 VR8 18.2900 VR9 18.6700
ISignificance for Grpup 0.08 ; Utilising Friedman Two Way Anova !
-~- •
Table 4.2.1 !Imcortance of Determinants of Success bv Size & Experience ,
Determinant jTWO Tailed (P) Class 1 Class 2 Class 3 Class 4 , , Significance I 1
VR1 1 0.6659 7.0000 7.00001 6.0000 3.00001 VR10 0.9577 6.8300 5.6700 6.2500 7.5000 VR11 l 0.1725 8.1700 6.5000 2.7500 4.0000 VR12 0.8050 7.0800 5.3300 5.5000 8.5000 VR13 0.1755 6.2500 9.0000 6.2500 1.0000 VR14 0.6742 7.6700 5.6700 5.2500 4.5000 VR15 : 0.3934 6.4200 5.3300 I 10.0000 3.50001 VR16 ! 0.69441 6.7500 4.8300 I 6.7500 9.5000 I VR17 i . 0.4614 6.2500 6.67001 4.7500 11.0000 I VR18 i 0.4189 6.0800 8.17001 7.5000 2.0000' VR19 0.9846 6.4200 7.0000 I 6.5000 5.5000
.. VR2 0.0620 7.5000 5.6700 7.5000 1.0000 VR20 0.9935 6.3300 6.3300 7.0000 7.0000 VR21 0.3167 8.1700 6.0000 3.2500 4.5000 VR22 0.3446 6.9200 8.6700 3.5000 3.5000 VR23 0.5855 7.7500 5.6700 5.5000 3.5000 VR24 0.3439 6.2500 4.3300 8.2500 11.0000 I VR25 0.3427 6.3300 9.1700 4.7500 3.00001 VR26 0.4626 5.5800 5.6700 9.7500 8.00001 VR27 0.9609 6.4200 5.8300 7.5000 7.00001 VR28 0.86891 7.0000 6.83001 5.5000 4.50001 VR29 i 0.5370 7.1700 7.6700 4.0000 4.0000 VR3 0.1368 8.5000 4.0000 6.7500 1.5000
VR30 1 0.6852 7.4200 5.0000 7.0000 4.5000 VR31 0.1708 8.0000 2.6700 7.2500 7.5000 VR32 1 0.7856 6.1700 8.1700 5.5000 5.5000 VR33 0.8325 7.1700 5.5000 5.2500 8.00001 VR34 0.3916 6.0000 8.0000 6.0000 6.00001 VR4 0.9418 6.5000 7.1700 5.2500 7.00001 VR5 0.3710 6.1700 7.1700 4.0000 11.5000 I VR6 1 0.7100 6.3300 8.1700 5.5000 4.50001 VR7 0.1166 6.5800 3.0000 9.0000 10.50001 VR8 I 0.8944 5.8300 7.50001 7.2500 6.0000 I VR9 0.9891 6.7500 6.00001 6.2500 7.0000
iUtilising Kruskal-Wallis One Way Anova I
- -
·able 4.2.2itmportance of Determinants of Success by Experience
Ctass5
IUtilising Mann-Whitney U-Wilcoxon Rank Sum W Test
Table 4.2.3 I Importance of Determ!nants by Size
Class 7 8
IUtilising Mann-Whitney U-Wilcoxon Rank Sum W Test
ITable 4.2.4 Correlations Between the Determinants of Success
I Utilising the Spearman Correlation Coefficient I
I Table 4.2.5 ICorrelations Between the Determinants of Su§CEiss
Utilising the Spearman Correlation Coefficient
-- --------
Table 4.2.6 I Correlations Between the Determinants of Success
. i
I Utilising the Spearman Correlation Coefficient I
I Table 4.2.7 ICorrelations Between the Determinants of Success
'Utilising the Spearman Correlation Coefficient I
: Table 4.2.9 Correlations Between the Determinants of Success
I Utilising the Spearman Correlation Coefficient
I Table 4.2.10 ICorrelations Between the Determinants of Success
I Utilising the Spearman Correlation Coefficient
I Table 4.2.11ICorrelations Between the Determinants of Success
I Utilising the Spearman Correlation Coefficient
I Table 4.2.12ICorrelations Between the Determinants of Success
I Utilising the Spearman Correlation Coefficient
ITable 4.2.13IConelations Between the Detenninants of Success
VR9 : Coefficient 0.10591 0.10451 0.13641 0.41651 0.29571 .0.24721 12-t Significance 0.74301 0.74701 0.67301 0.17801 0.35101 0.4390 I 1 I VA20 1 VR21 VR22 VR23 VR24 VR25
I Utilising the Speannan Conelation Coefficient
!Table 4.2.14IConelations Between the Detenninants of Success
IUtilising the Speannan Conelation Coefficient
I Table 4.2.1S)Conelations Between the Detenninants of Success
I Utilising the Speannan Conelation Coefficient
: Table 4.2.16ICorrelations Between the Determinants of Success
VR32 tCoefficient 0.36091 i 2-t Sianificance 0.2490 1
VA33 Coefficient 0.3643 0.40301 2-t Significance 0.2440 0.19401
VR34 ! Coefficient .{).2738 0.28141 .4422 , 2-t Significance 0.38901 0.37601 0.15001 , VR4 i Coefficient .{).4525 .{).30481 '{).1990 1 .{).2727 1
12-t Significance 0.1400 0.33501 0.53501 0.39101 i VR31 VR32 VA33 VR34
I Utilising the Spearman Correlation Coefficient
I Table 4.2.17ICorrelations Between the Determinants of Success
IUtilising the Spearman Correlation Coefficient
ITable 4.2.18ICorrelations Between the Determinants of Success
[Utilising the Spearman Correlation CoeffiCient
I Table 4.3.1 I Importance of Majority Eguity for Control
Class Yes % , No % ,
I I
'One 1.00 0.081 5.001 0.421 Two 2.00 0.171 1.00 0.081 Three 0.001 0.001 2.00 0.17' Four 0.001 0.001 1.00 0.081
3.001 I Five 1.00 I 0.081 7.00 0.58 Six 2.00 0.17 2.00 0.17
3.00 Seven 3.00 0.25 6.00 0.50 Eiaht 0.00 0.00 3.00 0.25
3.00
I Table 4.3.3! Extent of Eguity Ownership Within the Joint Ventures
Class Equal % Majority % Minority % Share Share Share
One 21.00 0.45 7.00 0.15 6.00 0.13 Two 3.00 0.06 2.00 0.04 0.00 0.00 Three 5.00 0.111 2.00 0.04 0.00 0.00 Four 1.00 0.02 0.00 0.00 0.00 0.00
30.001 Five 26.001 0.551 9.00 0.191 6.00 0.13 Six 4.00 0.09 3.00 0.061 0.001 0.00
30.001 Seven 24.001 0.51 9.00 0.191 6.00 0.13 Eight 6.001 0.131 2.00 0.041 0.00 0.00
30.001 I
[Table 4.3.4'ICom.E<!rison of Managing Partners to Joint Venture Succ8SS(
IClass
ITwo 2.000 0.400 0.054 3,00 ~llnCr=-OO~---'-+-'-;2C.c;rn'~----O~:'200 0.054 5.00 IFour 0:000 O.ooe'1:oo
1 0.486 19.000 1 FiVe 0.516 0.432 15,0 ISix 2,000 0.333 0.054 4.
1 ISeven 16.0< 0.552 0.432 '1 00 I Ei!Jht 2.rn 0.250' M54 1.000
18.0< 'l!I.OOO
Note:
0.417 D,S(
0.71 .()(
0,484 0.667
0.448 0.750
Only 37 joint ventures were referred to by respondent contreactors in this sub-section of the analysis, and not the overall number of 47 this was as a result of Incom lete re lies
0.270 o.m! 0.135 0.027 0.514 ()-1Q§ 0.108
0.351 0.162
% I~ IGro .. n \ No %
0.958 0.622 -Umi: -0.-042 0.027 ;,000 1.000 0.135 0.000 O:O()(J O.om 1.000 1----'; 0)i' .. 5"7~rl:;:-t---·0"' .. -i 11' 0~8-'~ 3.0"'01(0~1---ii'01 . .4~29 t----ii' 0.;0~81 1.000 1.000 0.027 0:000 O.OOC O.om
0.892 0.892 - 4:ljOC -o-:TIlll 0.108
?A. nor 0.966 (J.757 '1]jOC 0.027 5.000 0.625 0.135 -3.00( 0.081
4])00
;Table 4.3.5 Control Mechanisms used within the Joint Venture Mean Rank for Grou
I Mechanism
Top management High level of implementation between Sponsor Companies
1 Regular update. 1 Fixed responsibilities of Sponsor Companies iFixed authorities of Sponsor Companies 'High calibre of human resources iManagement consensus lA linkage of financial strategies
Table 4.3.7 Control Mechanisms used within the Joint Venture Mean Rank b Contractor Size
Mechanism
iTo mana e ent IHigh level of m lementa on between! Sponsor C mpanies Regular upd tes Fixed res on ibilities of onsor Co anies Fixed authori ies of S on$or Com an es Hi h calibre f hUman re ources Mana emen consensus A linka e of f nancial stra e ies
Table 4.3.8 Control Mechanisms used within the Joint Venture Mean Rank b Contractor Ex erience
management High level of implementation between Sponsor Companies Regular updates Fixed responsibilities of Sponsor Companies
authorities of Sponsor Companies calibre of human resources
Ma,nagement consensus I
IUtilising Mann·Whitney U·Wilcoxon Rank Sum W Test
\Mean Rank
4.130 I 4.000 5.7901 4.880 [ 4.1701 5.290 [ 3.920 1
3.830
Mean Rank Mean Rank iSi Class 5 'Class 5
6.110 7.6701 7.610 3.170 6.610 6.170 7.170 4.500 6.9401 5.170 I 7.670 3.000 6.610 6.170 6.720 5.830
nificance
0.5001 0.0581 0.8251 0.2451 0.4481 0.036 0.850 0.704
/Table 4.3.9 IThe Balance of Power and lesser Control
lTable 4.3.11 I Balance of Managerial Controls & Autonomy
ITable 4.3.10 IExperience bf Spiders Web Joint Venture.
ITabl.4.4.1 !Th. Importanc. of Autonomy
Cl ••• .. , % iUseful % INo % ~o
'On. 3.000 0.250 1.000 0.083 2.000 0.167 0.000 ITwo 1.000 0.083 1.000 0.083 1.00e 0.083 0.000 'Thr.e 1.000 0.083 0.000 '0.000 o.ooe 0.000 1.000' IFour
I Five 5.000 0.417 2.~ 0.167 ~ 0.333 1.0001
,Six 1.000 0.083 1 000 0.083 2.000 0.167 ).000 I
ISe\lO" Eigh1
5.000 2.000 4.000 I 1.0001
ITable 4.4.2 jPartner beliefs towards Autonomy
Table 5.1 I Importance of the Advantages (Group)
Advantage Mean Rank
.
ADV1 5.3300
ADV10 4.5400
ADV11 6.0400
ADV2 4.8300 ,
ADV3 9.1700
ADV4 6.1300
ADVS 5.7S00
ADV6 7.4200
ADV7 6.1300
ADV8 6.1300
ADV9 4.5400
IUtilising Friedman Two Way Anova
I Table 5.1.1. Ilmportance of the Advantages by Experience & Size I
IUtilising Kruskal-Wallis One Way Anova
-~~----------------------________ --.J
j Table 5.1.2 jlmportance of the Advantages by Experience (Classes 5 & 6)
Advantage Two Tailed(P) Mean Rank Signficance Class 6 Class 7
ADV1 0.7266 6.7500 6.0000 ADV10 0.0373 8.0000 3.5000 ADV11 0.1157 7.6300 4.25001 ADV2 0.7266 6.2500 7.00001 ADV3 0.2360 7.3100 4.8800 ADV4 0.0220 4.94001 9.6300 ADV5 0.70901 6.6900 6.13001 ADV6 0.1453 7.5600 4.3800 ADV7 0.4923 6.0000 7.5000 ADV8 0.0821 7.7500 4.0000 ADV9 0.5407 6.9400 5.6300
jUtilising Mann-Whitney U-Wilcoxon Sum WTest
j Table 5.1.3 jlmportance of the Advantages by Size (Classes 7 & 8)
Advantage Two Tailed(P) Mean Rank Signficance Class 7 Class 8
ADV1 0.7753 6.3300 7.0000 ADV10 0.6367 6.7800 5.6700 ADV11 0.4465 6.9400 5.1700 ADV2 0.8491 6.6100 6.1700 ADV3 0.6936 6.7200 5.8300 ADV4 0.0575 7.6100 3.1700 ADV5 0.1019 7.4400 3.6700 ADV6 0.4012 6.0000 8.0000 ADV7 0.0926 7.5000 3.5000 ADV8 0.3944 6.0000 8.0000 ADV9 0.7753 6.6700 6.0000
IUtilising Mann-Whitney U-Wilcoxon Sum W Test
ITable 5.2 I Importance of tl1e Disadvantages (Groupj
""'\:I'
~~I~~ __ ~ ____ , __ ~_~11:5~; . .4~~IU~ ,)18 1400 DI8
11.0000
DI816 DIS17 00 ~DI~81~8-4 ______ -r_l~~ ~ )ISI9 . _ w JI52 DIS20 11.0000 DI521 DIS22 9.
DIS6 . DIS7 DISB DIS9
9.5000 13.1400
I Table 52.1 I Importance of tl1e DiSadVai1Iii98S by EXPerience & S@e
b,.--_t--=~1 ClaSS 2 ClaSS 3 CliiSS~ ISl 5.7500 6.5000 ti.25UU ~5OOO 0.4983 IS1U 5.500( '.6700 1.0000 U.IUIL ISll ~~~ __ F·.;;;II7l~;i<00:itt-~I~.2.5(00~---:2,".Coo~OOO~ __ ~0.257:~rT.;.J
J-:58()( j.~ 1.5000 2.5000 0.5718 8.0800 5.:~ .3.0000 7.5000 0.3069
~~~t===~====~~.7&~OO~~=~4~.~~00~;==~~~00~-~7"'~roOC~oo~~0~.OO~I~
5.17OC 6.6700 7.5000 0.3369 6.5800 7.1700 5.0000 JOOO 0.911
5. 000 92500 5UlJU U.b7f
IUtilising Kruskal-Wallis One Wc:{ Aoova
I Table 522 I Importance of the Disadvantages by Experience (Classes 5 & 6)
IUtilising Mann-Whitney U-Wilcoxon Sum W Test
I Table 5.2.3 (Importance of the Disadvantages by Size (Classes 7 & 8)
01: ;1 0.3865 0.0000 8.0000 01: ;10 u.12Jtj 62200
~IS~14 __ ~ ____ ~~~18~1~~OOW 8.0000 1515 i:3iXl6 a 1700 1516 00 . 6.6700 151 00 1.6700 151: 1.5702 00 '.5000
I~DIS2 fl! j7lJ() ;.0000
1400 ;.6700 ~J~IS22~ __ r-___ ~0~~r-~ll~OO~_~4k~.670OC~ JIS3 0 7757 ilOO 6.000c
JI570 !161 ~<i<0t--~I.~67C'OO~ DISB 0 wo ;'2200 f.33OCl UISlI 0 1429 6.1ll 00 .17UU
IUtilising Mann-Whitney U-Wilcoxon Sum W Test
~---------------------------
Table5.2.4~~~~~~~I~lhe:§~~~;oQ!]f~~~=JI--------------------------1
I\UV IU
'ADV2
iADV3
IADV4
IADV5
12-1
2-1
2-1
2-1
:2-1
,2-1
'2-1 ~IA=-D)'V:,-,-n __ EIC::.o~e ficienl
'2-1 ~ IADV8
12-1 ,,' 1r
12-1
,Ihe ,I-
nn",nR
~Jilit.~--~~~:~~~~~R5~C--n_01'.'9~BI~'lCud------4----4----+----+----+---,-+----~ n i 1Iln n "'RRn
-0.1591 0,6210 -O.~
0.279( nAAnn 0.2215 0,1690
-0,1362 n, 'RRn
-0.0405 . Q,901Q
nn5RO 40'
1.10' I?O~
~ 0.1260
_n nO!'!Q
0.7720
0.2160
0.4670 1.2711
1.9150 , '"'''' 1 ?nr , ,,"'?/'
~ 0.2667 -0.2126 -O~
n 4R?n ::'- '-~ (0~.130~0~~I.4{~D~20_~0,.C!!1127~(I--~ 0'~,.507~0~n-!:'.' ?R~?n~_~0' .. ~6730~_..Q.Z~@~60-l---,O'!.:.' .. I'-!77~60
IADV1 ,DV11 IADV2 IADV3 DV7 IA~
I I- 1
12-1
~-I
2-1 i
1-1
I I - i
~~ick ,,' '12-1 i i
~ 30
,40S0 n5
--' ,A,
II
1
,
Table 6.2.6 ITa motivate personnel, whether the joint venture manager ' or the management staff, do you consider it necessary to,
rovide feed back concernin oal attainment ?'
Class Yes % No % Unknown i
Response I
One 5.001 0.42 0.00 0.00 1.001 Two 3.00 0.25 0.00 0.00 0.001 Three 1.00 0.081 1.00 0.08 0.001 Four 1.00 0.08 0.00 I 0.00 0.001
10.00 I 0.83 0.00 0.00 I 1.00 I Five 6.001 0.501 1.00 0.08 1.00 I Six 4.001 0.331 0.00 0.00 0.001
10.00 I 1 1.00 I i Seven 8.001 0.671 0.00 0.00 1.00 I EiQht 2.001 0.171 1.00 0.08 0.001
10.00 I I 1.00 I
Table 6.2.7 To motivate personnel, whether the joint venture manager or the management staff, do you consider it necessary to, utilise 'ob desi ns to increase efficienc
Class Yes % No % Unknown ' Resp_onse !
One 1.00 0.08 4.00 0.33 1.00 Two 3.00 0.25 0.00 0.00 0.00 Three 0.00 0.00 2.00 0.17 0.00 Four 0.00 0.00 1.00 0.08 0.00
4.00 0.33 7.00 0.58 1.00 Five 1.00 0.08 6.00 0.50 1.00 Six 3.00 0.25 1.00 0.08 0.00
4.001 7.00 Seven 4.00 0.33 4.00 0.33 1.00 Eight 0.00 0.00 3.00 0.25 0.00
4.00 7.00
%
0.08 0.00 0.00 0.00 0.08 0.08 0.00
0.08 0.00
%
0.08 0.00 0.00 0.00 0.08 0.08 0.00
0.08 0.00
[able 6.1.1 IAdvantageS to be gained from the differing Cultures
'Class Yes % No % One 4.00 0.33 2.00 0.17 Two 0.00 0.00 1.00 0.08 Three 2.00 0.17 2.00 0.17 Four 1.00 0.08 0.00 0.00
7.00 0.58 5.00 0.421 Five 5.00 0.42 3.001 0.251 Six 2.00 0.17 2.00 0.17
7.00 5.00 Seven ! 5.00 0.42 4.00 0.33 Eight 1 2.00 0.171 1.00 0.08
1 7.00 5.00
[able 6.1.2IDisadvantages attributed from differing Cultures I
Class Yes % No % No % Response
One 4.00 0.33 2.00 0.17 0.00 0.00 /Two 1.00 0.08 1.00 0.08 0.00 0.00 Three 0.00 0.00 1.00 0.081 1.00 0.08 Four 1.00 0.08 0.00 0.00 1.00 0.08
6.00 0.50 4.00 0.331 2.00 0.17 Five 4.00 0.33 3.00 0.251 1.00 0.08 Six 2.00 0.17 1.00 0.081 1.00 0.08
6.00 4.00 2.00 Seven 5.00 0.42 3.00 0.25 1.00 0.08 Eight 1.00 0.08 1.00 0.08 1.00 0.08
6.00 4.00 2.00
-Class Yes % No % No %
Response One 5.00 0.421 0.00 0.00 1.00 0.08 Two 2.00 0.17 0.00 0.00 1.00 0.08 Three 1.00 0.08 0.00 0.00 1.00 0.08 Four 0.00 0.00 1.00 0.08 0.00 0.00
8.00 0.67 1.00 0.08 3.00 0.25 Five 6.00 0.50 0.00 0.00 2.00 0.17 Six 2.00 0.17 1.00 0.08 1.00 0.08
8.00 1.00 3.00 Seven 7.00 0.58 0.00 0.00 2.00 0.17 Eight 1.00 0.08 1.00 0.08 1.00 0.08
8.00 1.00 3.00
Class Yes % No % One 5.00 0.42 1.00 0.08 j1"wo 2.00 0.17 1.00 0.08 Three 2.00 0.17 0.00 0.00 Four 1.00 0.08 0.00 0.00
10.00 0.83 2.00 0.17 Five 7.00 0.58 1.00 0.08 Six 3.00 0.25 1.00 0.08
10.00 2.00 Seven 7.00 0.58 2.00 0.17 Eight 3.00 0.25 0.00 0.00
10.00 2.00
[able 6.1.5 iOa:urrences of Venture adaption to external forces
Class Yes % 1 No % One 3.00 0.251 3.00 0.25 Two 1.00 0.081 2.00 0.17 Three 0.00 0.00 2.00 0.17 Four 1.00 0.08 0.00 0.00
5.00 0.42 7.00 0.58 Five 3.00 0.25 5.00 0.42 Six 2.00 0.17 2.00 0.17
5.00 7.00 Seven 4.00 0.33 5.00 0.42 eIght 1.00 0.08 2.00 0.17
5.00 7.00
[able 6.1.6!Age of Joint Venture Personnel
.class !20-35Yrs % I3S-SOYrs % > 50Yrs % No %
One 3.' 0; 1.00 0.: o.e o. X) 0.00 rr~ 1. 0..1 Wo. D. 0.0. O. X) 0.00 111ree 0.1 DJ 1.00 0.( 0.0
I 1. X) 0.081
:lIlr X) 0. X) 0.00 0.00 0..00 0..00 Xl U. 13 6.00 D.SO .1.
Five Xl 0 13 :gwl 1.001 1. Six 0. 0..00 01 D~ 0 ()(
10 0' X)
,seven 10 0.33 0..42 0. 0.00 jQ 0.00 IEight 0.00 0..00 0.081 1.001 0.081 1.00 0.081 1 4.00 1.001 1.00
ITable 6.1.7)OrganisatiOnal Socialisation
Class Yes 0/0 No 0/0 No I
0/0 Resoonse
One 5.00 0.42 1.00 0.08 0.00 0.00 rrwo 0.00 0.00 1.00 0.08 0.00 0.00 Three 0.00 0.00 3.00 0.25 1.00 0.08 Four 1.00 0.08 0.00 0.001 0.00 0.00
6.001 0.50 5.001 0.421 1.00 0.08 Five 5.00 0.421 2.001 0.171 1.00 0.08 Six 1.00 0.08 3.001 0.251 0.00 0.00
I 6.00 5.001 I 1.00 Seven 5.00 0.42 4.001 0.331 0.001 0.00 EiQht 1.00 0.08 1.00 0.081 1.001 0.08
6.00 5.001 I 1.001
)Table 6.1.a)Oevelopment periOd of Organisational SOCialisation
Class Yes 0/0 No 0/0 No 0/0 Response
One 1.00 0.08 4.00 0.331 1.001 0.08 Two 0.00 0.00 1.00 0.081 0.00 0.001 rmree 0.00 0.00 1.00 0.081 3.00 0.25 Four 0.00 0.00 1.00 0.081 0.00 0.00
1.00 0.08 7.00 0.581 4.00 0.33 Five 1.00 0.08 4.00 0.331 3.00 0.25 Six 0.00 0.00 3.00 0.25 1.00 0.08
1.00 7.00 4.00 Seven 1.00 0.08 6.00 0.50 1.00 0.08 Eight 0.00 0.00 1.00 0.08 3.00 0.25
1.00 7.00 4.00
[able 6.1.9)Problems with Ethical Codes
"lass Yes 0/0 No 0/0 One 3.00 0.25 3.00 0.25 Two 0.00 0.00 3.00 0.25 mree 0.00 0.00 2.00 0.17 Four 0.00 0.00 1.00 0.08
3.00 0.25 9.00 0.75 Five 3.00 025 5.00 0.42 Six 0.00 0.00 4.00 0.33
3.00 9.00 Seven 3.00 0.25 6.00 0.50 EiQht 0.00 0.00 3.00 0.25
3.00 9.00
ITable 6.2.1 Power is an essential element of organisational success ?'
Class Agreed % Disagreed %
One 6.00 0.50 0.00 0.00 Two 2.00 0.17 1.00 0.081 Three 1.00 0.08 1.00 0.08 Four 1.00 0.08 0.00 0.00
10.00 0.83 2.00 0.17 Five 7.00 0.58 1.00 0.08 Six 3.00 0.25 1.00 0.08
10.00 2.00 Seven 8.00 0.67 2.00 0.17 Eight 2.00 0.17 0.00 0.00
10.00 2.00
Class Equal % Unequal % Unknown Response
One 1.00 0.08 4.00 0.33 1.00 Two 2.00 0.17 1.00 0.08 0.00 Three 2.00 0.17 0.00 0.00 0.00 Four 1.00 0.08 0.00 0.00 0.00
6.00 0.50 5.00 0.42 Five 3.00 0.25 4.00 0.33 1.00 Six 3.00 0.25 1.00 0.08 0.00
6.00 5.00 Seven 3.00 0.25 5.00 0.42 1.00 Eight 3.00 0.25 0.00 0.00 0.00
6.00 5.00
Table 6.2.3 The motivation of personnel and their performance is directl related in a 'oint venture ?'
Class Agreed % Disagreed % Unknown % Response
One 5.00 0.42 0.00 0.00 1.00 0.08 Two 3.00 0.25 0.00 0.00 0.00 0.00 Three 2.00 0.17 0.00 0.00 0.00 0.00 Four 1.00 0.08 0.00 0.00 0.00 0.00
11.00 0.92 0.00 0.00 0.00 Five I 7.00 I 0.58 0.001 0.00 1.00 0.08 Six . I 4.001. 0.33 0.001 0.001 0.00 0.00
11.00 0.00 Seven I 8.001 0.67 0.00 0.001 1.00 0.08 Eight I 3.00 I 0.25 0.001 0.001 0.00 0.00
11.00 0.00
Table 6.2.4 To motivate personnel. whether the joint venture manager I I
or the management staff. do you consider it necessary to. I assign specofic goals . i
Class Yes % No % Unknown I % Response I
One 6.00 0.50 0.00 0.00 0.001 0.00 Two 3.00 0.25 0.00 0.00 0.001 0.00 Three 2.00 0.17 0.00 0.00 0.001 0.00 Four 1.00 0.08 0.00 0.00 0.001 0.00
12.00 1.00 0.00 0.00 0.001 0.00 Five 8.00 0.67 0.00 0.00 0.001 0.00 Six 4.00 0.33 0.00 0.00 0.001 0.00
12.00 0.00 Seven 9.00 0.75 0.00 0.00 0.001 0.00 Eight 3.00 0.25 0.00 0.00 0.00 0.00
12.00 0.00
!Table 6.2.5 To motivate personnel. whether the joint venture manager I or the management staff. do you consider it necessary to. I assign difficult, but acceptable performance Qoals ?
Class Yes % No % Unknown % Response
One 2.00 0.17 3.00 0.25 1.00 0.08 Two 3.00 0,25 0,00 0.00 0,00 0,00 Three 1.00 0.08 1.00 0.08 0.00 0.00 Four 1.00 0.08 0.00 0.00 0.00 0.00
7.00 0.58 4.00 0.33 1.00 0.08 Five 3.00 0.25 4.00 0,33 1.00 0.08 Six 4.00 0.33 0.00 0.00 0.00 0.00
7.00 4.00 Seven 5.00 0.42 3.00 0.25 1.00 0.08 Eight 2.00 0.17 1.00 0.08 0.00 0.00
7.00 4.00
