The antecedents to performance of an international joint venture in an indigenised legislative environment

Abstract

Multinational Enterprises (MNE s) are in a race to tap into the potential growth markets of developing countries. International joint ventures (IJV s) are popular strategic alliances which organisations engage in as a means to explore local trade and gain market penetration. IJV s provide benefits to both the parent companies and the host country governments. The IJV relationships are complex and the functioning of the new legal entity is exposed to many forces from within and externally in a way that differs from conventional businesses. Although the antecedents to performance of IJV s have been studied extensively, there is a need for a deeper understanding of IJV s in Emerging markets. This case study research investigates a single IJV in South Africa that came in existence due to indigenisation requirements and is based on a 50/50 shareholding. Data was collected through semi-structured interviews with 12 executives that had been involved in all the life stages of the IJV, with an equal representation from both sides. This data was correlated with company documents for validation. The case study findings firmly identified the relevancy of behavioural antecedents to performance as described in recent literature and provided some insight into the uniqueness of the environment, including the factors impacting behavioural antecedents to performance and how the behavioural constructs are influenced over the life stages of the IJV, in an indigenised environment.