The effect of bargaining power on joint venture performance

This article reports the results of an empirical study focusing on the relationship between the relative bargaining power of partners in an IJV, the division of control between the partners, the level of trust, and the performance of the IJV. In this study, we combined the structural and the behavioural approaches towards IJV management and evaluated their respective effect on IJV performance. Survey research was used to collect data. Research evidence indicated that the division of control was, to a large extent, explained by the relative resource contributions of the partners and the stakes the partners have in the IJV. Trust was influenced by the availability of alternatives. The performance of the IJV was influenced more by trust than by control and its dimensions. This indicates that companies should not solely concentrate on control, but should focus more on trust and the relationship with the partner