Control and Performance in International Joint Ventures. A Model Based on Value Activities

The international joint venture (IJV) is a form of cooperation that can endow multinational companies with the capacity to exploit their knowledge in foreign markets. Control structure (dominant control, shared control or split control) has been identified as one of the crucial factors in their success. However, studies that analyze the relationship between control structure and the performance of IJVs have produced contradictory results. This study proposes a normative framework for selecting the control structure of an IJV based on two dimensions: the strategic nature of the value activities and the relative expertise of the partners in managing them. The results of a comparative case study provide evidence that none of the control structures is superior to the others in terms of influencing performance under any circumstances, but rather that each of them can improve performance when they are contingent in terms of the two variables considered in the model.