The case of the Thai joint venture with a Japanese construction contractor

Literary Review

21st century business is increasingly shifting across borders. International partnerships become standard practice as product life cycles are shortened and immediate distribution is essential. As the business world is growing, federations of multinational companies are becoming increasingly popular. Cooperation between international companies can take many forms, such as cross-border licensing of patented technologies, sharing of production facilities, co-financing of research projects and the marketing of each other's products through the use of existing distribution networks (Griffin and Pustay, 2005). Such forms of cooperation are called strategic alliances, business agreements, by which two or more companies choose to cooperate for mutual benefit. A joint venture is a special and more formal type of strategic alliance.

2.1 Definition of an International Joint Undertaking

An International Joint Venture (IJV) A type of strategic alliance where two or more companies from different countries are joining new, A legally distinct and separate business from the parents. Joint ventures are generally established as companies and are owned by founding parents in whatever proportion they negotiate. Although unequal ownership is common, many are actually owned by founding companies (Berger, 1999).

Here is a definition based on Shenkar and Zeira (1987):

A separate legal department and wholly one of its parent;

2 is jointly controlled by the parent company;

3 these parents are legally independent;

4 at least one parent's seat is located outside the territory of the IJV country.

As some IJVs claim on equity, more flexible agreements may depend on contractual cooperation, without legal commitments of equity. Some IJVs may have more than two parents. In general, the more parents there are, the greater the administrative complexity, the greater the problem of project management. Sometimes both parents (or all) are outside the IJV country. For example, Coca Cola (Vietnam) started as an IJV between Coca Cola (USA) and Singapore's bottler; Originally, he did not hire Vietnamese leaders, so the company needed to deal with cultural differences (Beamish, 1985).

For the construction sector, the joint venture's tool is E and emphasizes how it helps to create synergy and maximize the resources of the participants (Barlow et al., 1997).

The Construction Industry Institute defines the long-term commitment of joint ventures between two or more organizations to achieve individual business goals by maximizing the efficiency of each participant's resources. This necessitates changing traditional relationships to a common culture, regardless of organizational boundaries. The relationship is based on the understanding of trust, commitment to common goals, and individual expectations and values ​​of each other (Barlow et al., 1997). To date, the joint venture is understood as a series of collaborative processes that emphasize the importance of common goals. The joint venture is based on a high level of inter-organizational trust and the presence of mutually beneficial goals. The joint venture is a management process that helps strategic planning to increase business efficiency and forms a common group (Barlow et al., 1997). Participants in the project can improve performance with a full range of cost, time, quality, building ability, aptitude goals and other criteria if they employ more collaborative working methods (Bresnen and Marshall 2000). Barlow et al. (1997) mentions six success factors for the joint venture: trust building, team building, the need for top-level commitment, the importance of individuals, the strategic movement of key personnel, and the need for open and flexible communication. The same authors cite the common benefits of a joint venture: reducing costs, shortening delivery times, improving quality of construction, better working atmosphere and organizational learning. Joint corporate classification focuses on the duration of cooperation between partners. The dissertation will be used as a case study to assess the extent and abilities of these benefits in practice.

There are two main types of joint venture in the literature: project joint venture and strategic joint venture or long-term joint venture. The project is a joint venture between cooperative organizations during a given project (Barlow et al., 1997). At the end of the project, the connection is terminated and another joint venture can start on the next project (Kumaraswamy and Matthews 2000). Welling and Kamann (2001) argue that if these companies do not meet again in another project, the learning impact achieved on a particular project will cease to exist. A strategic joint venture is a relationship with a high level of cooperation between partners (Barlow et al., 1997), which uses a long-term joint venture of two or more companies to carry out more than one construction project (Kumaraswamy and Matthews 2000). In this kind of joint venture, learning in a given project is more likely to be used in future projects. In a strategic joint venture, it becomes a management philosophy that is expected to continue to work for each project and team members have more expectations than a project joint venture (Cheng and Li 2001). The TNC JV type is a strategic joint venture, where Thai and Japanese partners focus on long-term goals.

Joint ventures are sometimes regarded as secondary (or even third) as the best solution for supplying the foreign market, only when it comes to outsourcing , If state law (eg Ownership and Export Controls, royalty payment restrictions, etc.) prevents full ownership of subsidiaries, exports or permits. Indeed, major problems arise in the design, negotiation and management of international joint ventures. Despite such difficulties, the literature has widely recognized that successful joint venture agreements have important strategic and competitive advantages, and in some cases this co-operation may be the first option (Kenichi Ohmae, 1985). Connolly (1984) argued, for example, that a developed country is a multinational corporation (capital, foreign exchange, technology, management and marketing skills, etc.) and developing country companies (lower costs, Stb.) Complement each other and these assets are shared Combination of mutual benefits. This is visible for the TNC. Likewise, the Entrepreneur (1984) argued that the loss of control and the sharing of jointly owned shares more than offsets the local expertise and capital investment; Relations with Government Officials; Faster access to the market; And risk reduction. Harrigan (1984, 1985) argued that joint ventures should not be concealed or regarded as weakness. Moreover, if properly organized, joint ventures can be a source of competitive advantage to protect existing strategic positions against forces that are too strong to resist a company or to leverage changes in strategic positions (eg joint ventures All in all, Harrigan (1984, 1985) has come to the conclusion that joint ventures are an important strategic weapon in response to the challenges of global competition, and they have the potential to diversify their resources into specialized areas. 2.3 The reasons for the design of the IJV

The partners (Thai and Japanese) may have common interests in the development of IJV, providing both opportunities

(Bell, 1996)

6 reduce the risk by sharing costs (investment and production costs are divided);

7 Food Aid Savings;

8 co-operate and avoid competition, which may result in higher costs than the cost of contributing to IJV (IJV is an alliance that limits your own capacity to act but limits your partner); (Contractor & Lorange, 1988).

Generally, however, most IJVs offer different options for parents from different environments. A project can offer foreign parent access to the local market and local parental access to the international market. According to, in 1997 two securities companies, Thailand's Premier Group and SBC Warburg formed a joint venture to provide Warburg with local expertise and a Prime Minister with international access.

Parent must comply with the business requirements of the host government in the country (in this case the Thai Government). For example, a foreign company can only be allowed to work in the country if ownership is shared with a local company. IJV provides foreign parents with the opportunity to learn about local marketing conditions and access to local resources, including production facilities, workforce and materials. This is the local parent's opportunity to generate upstream and downstream industries. For example, developing an IJV pulp mill encourages local entrepreneurs to increase logging facilities and invest in paper production. Local governments enjoy the opportunities of encouraging foreign investment. In addition, a foreign parent may only benefit from minority ownership and must comply with local employment, technology transfer, local procurement, and so on. Related Matters [Chowdhury1992] 2.4 Factors Affecting IJV Success and Failure

The more strategic the company is, the more strategic it is, the more it invests in the success of the alliance. For TNCJV, this means that you have to invest in finding the ideal partner. Finding an ideal partner requires time and energy, and the more importance the company attaches to the selection process, the greater the chance of success (Geringer 1991). Hung (1992) study at Canadian companies, Southeast Asia, found that "the most commonly mentioned difficulty is to get the right partner company that has compatible objectives and is reliable". Trust is therefore one of the most important parts of IJV. Reviewing Confidence Factors:

2.4.1 Relationship between Parents

The project is more likely to succeed if every parent trusts that the other is truly committed to the project, And will do their utmost to comply with all the agreements (Demirbag & Mirza, 2000).

If more partners trust each other, the easier it is to reach an agreement on internal agreements:

1 applying the same strategic priorities for planning;

2 driving styles and systems;

3 systems for communication between parents, IJV and parents; Inside the IJV; And the environment

4 factors related to business interests, goals, size, scheduling

5 ratings on IJV's success and failures: project evaluation, both in process and at completion.

(Demirbag & Mirza, 2000)

2.4.2. The environment

Distrust comes from inadequate planning;

14 communication problems between parents (Thai and Japanese in this case)

15 There is a big difference in parents' national and organizational culture;

16 One parent changed his attitude towards the project in accordance with his own internal changes – eg. New strategy, new CEO;

17 One parent changed his attitude to the project in response to changes in the business environment.

To get the ultimate point, both parents work in their own, bizarre business environment. Their local markets and their competition are different. They are exposed to various local political, social and economic pressures. These environmental differences are, by their very nature, unstable in relation to the alliance (Geringer, 1988). Mikro Kunisawa, a representative of Nishimatsu Construction (Japan's headquarters), said the TNC received a complete order book with a huge workload and visibility Many new projects in the 2005-2006 period. However, the year-end situation differs somewhat from expectations, especially compared to Nishimatsu Bangkok Office, and the TNC is now challenging to maintain the business level of the previous years (2006). The primary factor affecting business confidence is continued general political instability in Thailand, including a non-decisive general election and deferral of government decisions related to infrastructure and development projects ( In the face of this uncertain situation, the Thai economic growth forecast has been downward. The private sector's business confidence was further affected, reducing planned investments in the industrial and real estate sector ( This situation can then create uncertainty between the parent company and the environment.

These factors of environmental insecurity may be due to focus only on the short-term alliance and have very specific goals. Partners can use an initial limited alliance to test greater engagement and confidence building skills (Harrigan, 1985). This also affects communication. Each partner must communicate information about their own environment and develop their knowledge.

2.4.3 Trust in the project

A project is successful when the project staff trusts each other. It creates synergistic relationships between the two parents. Before commencing project operations, a common project culture is promoted by linking staff to parenting groups where they work together in project design. Non-critical technology and business data are exchanged (Harrigan, 1985)

Lack of trust arises when

18 associates join the project, parent;

19 local staff are threatened by a stronger foreign parent;

20 the conflict arises from the human resources and technology transfer policies (one of the parents can not provide the skills they are committed to);

21 exploiting cultural differences.

2.4.4. Relationship between project co-workers and parents

The project is successful if the staff member trusts the head office to be confident. Mistrust occurs when the promised support is not realized or employees feel that they have long-term career prospects at the company's risk. A project is also undermined when senior management is unable to effectively communicate its purpose within the organization. Subordinate levels would regard them as draining their resources and paying attention (Kachara & Hebert, 1999).

2.4.5 Similar business interests

Potential partners are more likely to work effectively together when they are in touch with each other. Successful IJVs have parents with similar interests and belong to similar or complementary sectors. When both contribute and learn from each other, fruitful cooperation is possible. Companies in the same industry form alliances when they hope to benefit from differences in technology, systems and markets (Kogut, 1988). By 1993, a joint venture of Swiss food company Nestle in Switzerland included Coca Cola (canned coffee and tea drinks), general mill (cereals) and two companies operating in the People's Republic of China (coffee and cream factory, Infant formula and milk powder plant)

2.4.6 Size Compatibility

The incompatibility of the size of parents is important if you use more resources to control the project in your own interests. However, business development in the internet and other electronic media means that business can be expanded (and contractually) in a very short time, and the amount of staff additions and physical resources is no more accurate guidance on the financial and know-how of the business (Kachra & Hebert , 1999). Investing in foreign direct investment in Japan revealed that the behavior of Japanese bureaucracy is influenced by factors such as the care of the investor's relationship with the government, the profitability of profitability, IJV's commitment, timing and location of the foreign parent, and technology transfer issues. However, "the size of the investor does not seem significant" (Thawley, 1996).

2.4.7 Compatibility of the time limit

Parents need to split the deadline. Let's say both parents A and B are willing to invest in five years of development costs. The project is fair. But controversy occurs when A parent intends to recoup profits in the original period, while parent B is quick to reimburse his investments (Li, 1995).

2.5 IJV's culture of success and failure

2.5.1 The cultural dimension of Hofstede

The impact of cultural distance between partners on the performance of IJV has so far been the most frequently examined variable. The distance was mostly expressed in several dimensions (Hofstedé (1980), four cultural dimensions and Kogut and Singh (1988)). Cultural similarity reduces the problems caused by cultural issues (such as behavioral and behavioral behavioral norms, measurement and performance goals) and facilitates trust and cooperation between partners. Barkema and Vermeulen (1997) have tried to analyze the impact of culture on IJV's performance more in detail. Hofstede's five different cultural dimensions – distance of power, insecurity, individualism, masculinity, and long-term orientation – the authors expect differences in the effects of different dimensions. Differences in the avoidance of insecurity are difficult to cope as they differentiate how people perceive the potential and threat of their environment (Schneider & Meyer, 1991). In order to avoid high uncertainty, organizations in the country respond to insecurity by forming a high formalization and hierarchical system. In order to avoid a low degree of insecurity, people are more attracted to flexible ad hoc structures that allow greater room for improvisation and negotiation. Differences in avoidance of uncertainty result in how partners perceive and respond to events in the context of the IJV that are likely to cause disagreements and disputes between partners and have an adverse effect on IJV's performance. Distance and individualism directly bear the issues of internal integration and affect staff relationships, such as the choice of regulatory forms, reward systems. Staff management is usually one of the first activities that should be left to the local partner. There is also evidence that the MNC does not transmit the cultural values ​​of power distance and individualism to their foreign affiliates (Soeters & Schreuder, 1988). In this way, avoiding tensions between partners along these dimensions. Shenkar and Zeira suggest (1992) that contacts both the "female" and "masculine" cultures could be beneficial for the IJV. The aggressive attitude of a partner and the orientation of the other relationship can complement each other, rather than collide. The above discussion suggests that the difference in avoidance of uncertainty is more important than the other three dimensions. The empirical results of Barkema and Vermeulen (1997) supported the expectations: avoidance of insecurity and long-term orientation had a greater negative negative impact on IJV survival than masculinity, while the other two dimensions (the distance between individualism and power) effect. As far as the Asian context is concerned, it can be said that all possible Asian cultures are of a rather similar cultural nature. This profile has quite a few decision-making, greater risk assumptions, greater group emphasis and greater relationship to relationships (Swierczek & Hirsch, 1994). This can be applied to the TNC, where Thai and Japanese cultures exhibit some similarities.

One culture can influence how willing to trust a possible joint venture. From the point of view of culture, the Japanese tend to turn in some way inward. They generally do not accept outsiders. When conducting business with the Japanese, it is important to note that the relationship and loyalty to the group is critical to success.


According to Hofsted Cultural Dimension Scores, Japan is distinctly different from other Asian countries. Japan's masculinity is the highest characteristic: the lowest ranking factor is individualism, which coincides with the avoidance of insecurity. Japan is a collectivist culture that avoids risks and gives little value to personal liberty

In contrast, Thailand's lowest dimension of individualism (IDV). Low scores like Thailand indicate that society is collectivist rather than individualistic, this score is even lower than Japanese. It can be said that this close long-term commitment to the group is obvious: family, extended family or extensive relationship. Compared to the Japanese dimension to the diverse categories of masculinity, which is the lowest among the Asian countries. This lower level indicates a less uncertain and competitive society, against which these values ​​are important and significant. This situation reinforces more traditional male and female roles among the population as well.

2.5.2 Compatibility between national cultures

Culture also affects the perceived environmental factors discussed above; Whether your business interests are similar (or conflicting), whether goals are complementary, size differences are important, what time period should be applied. In theory, partners are more likely to accept these points when cultures are compatible. This means that joint ventures created by parents of similar cultures are more likely to succeed than the different cultures (Wille, 1988).

2.5.3 Different organizational cultures

If the organizational culture of the two parents varies widely, a successful alliance is not possible. However, this is not always possible. The TNC position of the parent organization's culture can be beneficial, as the national culture understanding of the impact on performance as well. When it was planned to form a strategic alliance between the Japanese Mitsubishi and German Daimler-Benz The following report was made:

"Analysts say the game has been stretched from the very beginning because companies have basically different structures." Daimler-Benz, A much smaller company than Mitsubishi, has traditionally been closely linked with a management structure that has set clear strategic goals and advanced. Mitsubishi, the amorphous conglomerate of several large companies, has taken far more cautious steps with internal fractions that often disagree with wider policy. "(Yamawaki, 1995)

Companies were unable to overcome differences between strategies, structures and organizational cultures.

When their organizational culture is similar. This does not mean that they must be the same – this is an impossible condition. They should rather have a sense of how others are doing business, co-operation and learning willingness, and the need for shared solutions (Fedor & Werther, 1997).

2.5.4 How IJV Works Affect Parent Organic Cultures

The birth of the IJV project can affect the culture of the parent company's headquarters with the new spirit of "internationalism". This is ADVANTAGOUS when staff from the center receive new influences of ideas and technologies and develop new knowledge about opportunities for the environment.

IS NOT HAZARDOUS when staff outflow into IJV (and inflow of substitutes) Rests on internal cohesion. A positive culture is weakened if the staff feels they are faced with tasks that have no qualifications or experience. Project promoters are isolated. The design and operation of IJV affects the organization culture of the parent company. In order to answer problems and opportunities arising from the birth of a project, the headquarters will transform and transform their structures (Siddall et al., 1992).

2.6 Motivational Perspectives in Thai and Japanese

One of the motives is one of the determining factors of one's behavior. If the company can understand the employee's motivation, it can affect his employee's behavior. Motivating others is one of the most important leadership tasks. This includes the ability to understand what motivates people, communicates, engages, challenges, encourages, sets up, develops and educates, receives feedback and provides a fair reward. According to Ref Ref: "Motivation is about preserving human capital, and the challenge is not the work itself but the creator and manager of the working environment." However, motivating people of different cultures may be difficult if the level of motivation is not the same. The Reference describes how different cultures can be perceived differently. Scandinavian cultures (Sweden, Norway, Finland and Denmark) attach great importance to quality of life and social needs. European and English-American cultures are a great asset for productivity, efficiency and individual self-realization. A kínai kultúra a kollektivizmust és a közösségi aktivitást magasabbra emeli az individualizmussal szemben (Same Ref). Maslow igényeinek hierarchiája szerint elmélete szerint az emberek egymást követő szükségletei vannak, és mivel minden alsó réteg elégedett, akkor a személy Továbblép a következő rétegbe. Az alábbi diagram megmagyarázza, hogyan működik a modell: (Maslow Maslow igénybevételi modellje, Maslow, 1943)

A legalacsonyabb réteg az élettani szükséglet. Szükség van enni, aludni, melegen maradni, használni a fürdőszobát stb. A második réteg a biztonság (a fizikai és pszichológiai biztonság szükségessége, például a törvény jelenléte és a munka megtartása). A harmadik réteg a szeretet és a tartozás (a család, a csoport vagy a banda része). Vannak, akik azt mondják, hogy ez a harmadik réteg nagyon japán domain, ahol úgy tűnik, hogy egy csoporthoz tartozás elsőbbséget élvez a magasabb rétegek elérésénél. A japán referencia szerint felvetette a kérdést: "Hányszor látta, hogy a japánok nagyon képesek, mint a japánok, tagadják maguktól egy teljes körű pályafutást, mivel vágyakoznak egy kisebb céggel való tartózkodásra azzal az alapon, hogy ez a" családjuk "? "A japánok mindig a legfontosabb prioritást élvezik a vállalatuknak. A negyedik réteg az önbecsülés és a státusz. Itt élnek a nagy teljesítményűek, és kereskedelmi és szakmai megkülönböztetést tudnak tenni. Az ötödik réteg "Aktualizálás". A szerint a következő leírás (kivonat) a következőket tartalmazza: "Az önmegvalósított emberek a világ tényeit és valóságait ölelik fel, nem pedig tagadják vagy elkerülik õket, hanem spontán gondolataikban és cselekedeteikben, kreatívak, érdekesek A problémák megoldásában, amelyek gyakran magukban hordozzák mások problémáit. "Az érdekes kérdés, hogy vajon a thaiföldi és a japánok ugyanolyan szinten vannak-e a Maslow szükségleteiben, mint a hierarchiában."

A TNC-ben a különböző szintű igények interaktív helyzetekben hozhatják a konfliktust, például a japán munkáltató és a thai alkalmazott között, a modellt különböző kultúrák közötti alkalmazásokban kell elfogadni. Annak ellenére, hogy Thaiföld és Japán kultúrája hasonló lehet, nem jelenti azt, hogy ugyanolyan vágy vagy várakozás volna.

Az irodalmi áttekintés alapján az IJV meghatározása és a JV kialak ításának okai Illusztrálták. Megmagyarázták a thai és a japán kulturális különbségeket, valamint a különböző motivációs perspektívákat. Ugyanakkor elengedhetetlen és létfontosságú annak feltárása, hogy ezek a tényezők hogyan befolyásolják a TNC alkalmazottait az észlelésük alapján. A 4. fejezetben megvizsgáljuk az interjú eredményeit és elemzését

Source by Farhan Tai

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