Management Control Practices and Relative Bargaining Power – The Interrelationships and Dynamics

Abstract:     
This paper examines the characteristics of management controls exercised by parents and the ways such controls could be shaped by relative bargaining power of parents in international joint ventures (IJVs). Adopting an in-depth case study method in a large automotive IJV formed between a Chinese and Japanese partner, the study focuses on not just what but also how management controls have been exercised in the case company. The paper contributes to the literature on management controls and IJVs by providing systematic study of the interrelationships between the multiple dimensions of management controls, through which a shared but split control style was identified. In addition, it provides the first observation of the evolutionary changes in management controls due to the dynamics of relative bargaining power, and of the ways exercising relative bargaining power mediates the extent of control between the partners. The findings also have important implications concerning how to enhance the effectiveness of management controls over IJVs.

Number of Pages in PDF File: 31

Keywords: Management controls, Bargaining power, International joint venture, China, Automotive Industry

JEL Classification: C78, D23, F23, L62, M41

working papers series