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Chapter 20: International Joint Venture System Complexity and Human Resource Management
Randall Schuler and Ibraiz Tarique An increasing number of organizations are entering new global markets as they seek to develop and sustain a competitive advantage in today’s highly competitive global environment (Taylor, 2004; Ernst & Halevy, 2004). To accomplish this international expansion, organizations can and do use many diﬀerent market entry strategies (Narula & Duysters, 2004; Briscoe & Schuler, 2004; Beamish & Kachra, 2004; Newburry & Zeira, 1997; Child & Faulkner 1998). Prior research has shown that cross-border alliances, particularly international joint ventures (IJVs) are perhaps the most popular means of international expansion (Ernst & Halevy, 2004; Briscoe & Schuler, 2004; Schuler, Jackson & Luo, 2004). Despite their popularity, however, IJVs are diﬃcult to develop, organize and manage. Research has shown that a majority of IJVs fall short of their stated goals, leading to costly failures (Schuler et al., 2004; Luo, 2000; Evans, Pucik & Barsoux, 2002). While external environmental forces like the legal system, political system and state of the economy, and organizational forces like partner diﬀerences and contract terms contribute to failures, a large proportion of IJV failure can be attributed to ineﬃcient management of human resources (Arino & Reuer, 2004; Beamish & Kachra, 2004). Human resource problems stem from, among many things, the fact that IJVs involve managing the goals of two or more partner organizations, while simultaneously maintaining a competitive strength in multiple global markets (Arino & Reuer, 2004; Bouchet, Soellner & Lim, 2004). Despite their diﬃculties, however, IJVs have the potential to produce great beneﬁts for companies (Bouchet et al., 2004; Schuler et...
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