Managing inter-partner relationships and its impact on international joint venture performance : - A multiple case study from a Swedish partner firms perspective

International joint ventures (IJV) are frequently stated to be increasingly popular but with significant managerial dissatisfactions in their operations. Severe failure rates of IJVs is distinguished in previous literature, between 30-70 percent eventually end up in failure. Prior research suggests that the management aspect of inter-partner relationships is limited. There is also limits in research regarding the factors impacting how to manage inter-partner relationship and how it relates to IJV performance. The theory used for this study is an integrated framework of social exchange theory (SET) and transaction cost economics (TCE). These theories acquire two sets of mechanisms on how to manage inter-partner relationship and its impact on IJV performance: (1) social mechanisms of trust, communication, and cultural adaptation, and (2) structural mechanisms of ownership control, contract, balanced asset specificity and resource complementarity. The framework is tested empirically using interviews as data collection from five Swedish companies involved in an IJV with partners headquartered in Europe, Asia, and Africa. The outcome of this study suggests that a majority of the mechanisms impact on how to manage an inter-partner relationship and also provide to enhance IJV performance. The most influencing factors on inter-partner management and IJV performance are trust, communication, contract and resource complementarity. We also identified interesting results regarding the interaction between the social and structural mechanisms in relation to management and IJV performance.