Board involvement in International Joint Ventures

J.J. Reuer, E. Klijn, C.S. Lioukas

Abstract

The last two decades have witnessed substantial scholarly interest in corporate boards, yet little research has been devoted to boards of international joint ventures (IJVs). We combine the corporate governance and alliance governance literatures in order to study this important ex post governance mechanism for IJVs. We identify a fundamental tension inherent in IJVs, which arises from the unique features of this organizational form and influences the level of involvement by their boards. International joint ventures are hybrid organizational forms that can require administrative control to facilitate monitoring and coordinated adaptation in the presence of exchange hazards. At the same time, the fact that IJVs operate in different host countries can make it efficient to delegate authority to local management for certain collaborations. In investigating the determinants of IJV board involvement, we therefore examine characteristics of IJVs that reflect this underlying tension. We conclude that board involvement reflects efficiency considerations in individual ventures, and the administrative control provided by boards is an important dimension of IJV governance.
Original languageEnglish
Pages (from-to)1626-1644
JournalStrategic Management Journal
Volume35
Issue number11
DOIs
StatePublished - 2014

Cite this

Reuer, J.J.; Klijn, E.; Lioukas, C.S. / Board involvement in International Joint Ventures.

In: Strategic Management Journal, Vol. 35, No. 11, 2014, p. 1626-1644.

Research output: Scientific - peer-reviewArticle

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Reuer, JJ, Klijn, E & Lioukas, CS 2014, 'Board involvement in International Joint Ventures' Strategic Management Journal, vol 35, no. 11, pp. 1626-1644. DOI: 10.1002/smj.2173

Board involvement in International Joint Ventures. / Reuer, J.J.; Klijn, E.; Lioukas, C.S.

In: Strategic Management Journal, Vol. 35, No. 11, 2014, p. 1626-1644.

Research output: Scientific - peer-reviewArticle

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AB - The last two decades have witnessed substantial scholarly interest in corporate boards, yet little research has been devoted to boards of international joint ventures (IJVs). We combine the corporate governance and alliance governance literatures in order to study this important ex post governance mechanism for IJVs. We identify a fundamental tension inherent in IJVs, which arises from the unique features of this organizational form and influences the level of involvement by their boards. International joint ventures are hybrid organizational forms that can require administrative control to facilitate monitoring and coordinated adaptation in the presence of exchange hazards. At the same time, the fact that IJVs operate in different host countries can make it efficient to delegate authority to local management for certain collaborations. In investigating the determinants of IJV board involvement, we therefore examine characteristics of IJVs that reflect this underlying tension. We conclude that board involvement reflects efficiency considerations in individual ventures, and the administrative control provided by boards is an important dimension of IJV governance.

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Reuer JJ, Klijn E, Lioukas CS. Board involvement in International Joint Ventures. Strategic Management Journal. 2014;35(11):1626-1644. Available from, DOI: 10.1002/smj.2173