Academy of Entrepreneurship Journal (Print ISSN: 1087-9595; Online ISSN: 1528-2686)

Research Article: 2020 Vol: 26 Issue: 2S

Which National and Organizational Cultural Dimensions Affect the Performance of Ijv's through the Sustainability Development

Ambili Sunil, University of Fujairah

Munther Talal Momany, University of Fujairah

Joseph George Mulama Lutta, University of Fujairah

Abstract

International Joint ventures are the key to bringing the organization at the international level. This is the process of sharing national and organizational cultures. Since the international joint ventures been affected by different national and organizational culture. The cultural differences are considered the most affecting factor for the performance of the international joint ventures. Cultural differences between the organizations from different nationals and cultures may cause the low performance of the international joint ventures. The Aims and objective of this research paper are to examine the dimensions of national and cultural effects the performance of International Joint Ventures through sustainability. To examine those, self-structured research questionnaire has been designed and distributed amongst the targeted population to get their responses. One hundred fifty responses have been gathered through simple random sampling techniques. Since the research is a quantitative approach based, where fresh data been used, no previously used data is used. Data has been analyzed on defined statistical tools where the outcomes have shown the remarkable relationship between the variables. It has shown in the findings that, the performance of international joint ventures is affected thoroughly with the organizational and national culture through sustainability

Keywords

International Joint Venture, Cultural factor, Organizational factor, Cultural issue performance, Sustainability Development.

Introduction

International joint ventures are the process of taking the organization to the international market. Where organizations are recommended to be open while working with other international organization. Currently, international joint ventures are being affected by different factors (Ramus & Steger, 2000). These factors affect organizational performance and make it harder for them to survive. International joint ventures are growing in the global market due to the invention of the latest technologies. The role of international joint ventures is important in bringing opportunities in international markets (Uzkurt et al., 2013). One of the major factors is affecting international joint ventures is getting indulge with international culture. The scope of cross-national joint ventures has been increasing due to the growth in the global markets which support by innovative technologies (Baird et al., 2018). This structure of organizational growth leads to an increase in the scope of international joint ventures all over the world. Currently, the world has become the global competitive market where no business is successful without having a detailed understanding of their interaction with the global economy (Demirbag, 2000).

Sustainability development is a crucial element in affecting the IJV's with national and organizational cultures. Currently, the role of organizations around the world is critical for making their business sustainable based on the dependency of the private sector which considered as the main generator of the economy and made the greater integration of the global market (Dubey et al. 2017). The scope of the research paper is used to examine the impact of the national and organizational cultural dimensions on the survival of international joint ventures through sustainability development.

Objective of the Study

1. To examine the dimensions of national and cultural effects, the performance of International Joint Ventures through sustainability.

2. To examine those, self-structured research questionnaire has been designed and distributed amongst the targeted population to get their responses.

Research Question

1. How do the dimensions of national and organizational cultural effect IJV's through sustainability?

2. How the dimensions of national and cultural affects the performance of International Joint Ventures through sustainability?

Problem Statement

The International Joint Undertaking (IJV) is considered to be the largest military alliance. Multinational corporations (MNCs) are making major expansions to expand existing companies into foreign markets to achieve economies of scale. It is a strategic alliance and different companies from different backgrounds work together to take advantage of each other's opportunities, resources and opportunities (Lim & Tsutsui, 2012). Sometimes cultural differences are very large, which can lead to the breakdown of a particular company. For many authors and practitioners, this is the main reason for the failure of international joint projects. This problem arose due to the cultural conflicts involved. This difference has been seen and analyzed in two situations (national and institutional) (Hartmann & Uhlenbruck, 2015).In order to have a clear understanding of this particular phenomenon, the following research questions are proposed in order to lay the foundations for cultural differences and their impact on the effectiveness of transnational joint projects (JJVs).

The continued growth of the international market and technology has led to the rapid growth of cross-border joint ventures, albeit the most risky forms of military alliance (Deephouse et al., 2016). It is estimated that around 37-70% of joint projects have problems with success due to cultural differences, which can lead to costly errors for some joint ventures (Renwick, Redman & Maguire, 2013). In general, cultural differences between partners in participating in a joint project are considered to be the main factors that can lead to the failure or malfunctioning of the joint venture (Swanson & Orlitzky, 2018).

Literature Gap

International joint ventures face huge challenges in making global strategies by involving cross-border trading. International joint ventures are the main strategy for the development of the international market (Abdul-Rahman, 2014). The main factor that is leading to the failure in international joint ventures is considering the conflicts in between the parent company and their partners, which includes the disproportionate, inter partner distrust and governance structures. Literature gap supporting the idea of working together and expanding the local organization to an international level (Bansal & Song, 2017). The major gap in the literature suggested that this study would be covered with all sector in the business world. It should include the AMOS analyzation in order to identify the impact of a mediating role in measuring the performance of international joint venture through sustainability.

This report uses a cultural discrimination approach to examine the following facts: Cultural performance at two levels (state and institution) affects the performance of transnational joint ventures. This study is conducted in two ways. The first is based on Harrigan's (1988) argument that previous research has focused on examining the impact of ethnic cultural differences on YJI performance, rather than ignoring the impact (impact) of cultural organizational change on IJV performance (Boiral, & Paillé, 2012).

In short, therefore, the main aim of this report is to examine the impact of cultural differences at two levels (state and institution) on the success of joint projects (Khwaja, 2012). The scope of our research is limited to the cultural scope of international joint ventures. The type of joint project chosen is a joint venture and both parties have an equal share of cooperation (Helfat, 2014). This allows us to accurately measure the cultural differences between the parent companies and gives us an accurate picture of the culture of the entire joint venture. To further narrow the research, we have only looked at the institutional and national culture built into the headquarters of the joint project (Bertels et al., 2010).

In our research, we were able to draw the opinions of many writers and researchers on the impact of culture on international joint projects (Zollo, 2002). However, we believe that, following the cooperation of the partners, further research is needed to assess the entrepreneurial culture created in the joint ventures. (Barney, 2001) In his article 'Managing cultural differences', he carried out extensive research on cultural differences in international trade unions. He believes that the failure of many alliances is due to the increasing complexity at organizational and cultural level, which has external implications for the success of cross-border cooperation (Nason, and Wiklund, 2015).Based on his experience, he has found that differences in national culture do not always jeopardize the cooperation of the League of Nations, but if they are managed effectively, they can actually be successful (Barney, 1991).

Sánchez-Triana, (2014), carried out extensive research on cross-border alliances. In his book "International Business Cooperation", he focused on joint ventures and got acquainted with various associations in the service sector. He drew attention to various areas of international cooperation and tried to emphasize that the distinction between entrepreneurial culture and national culture plays an important role in the management of joint projects. According to him, cross-border or international cooperation must know the cultural context of the parties involved, and cultural resilience can easily lead to the failure of the Alliance (Belassi et al., 2007). Known for its extensive research into its country and organizational culture. To conduct a detailed study of national culture, they conducted extensive research in 50 IBM countries. According to his research, he was able to identify five main aspects of national culture (Denison, 1996). These dimensions are a distance from power, avoiding insecurity, individualism and solidarity, masculinity and femininity, and long- and short-term policy-making. This Hofstede study has been the starting point for many other researchers and is of great value (Fey, 2003). He later also explored organizational culture, examining 20 questions in the Netherlands and Denmark, proposing six interesting dimensions that can be used to measure differences between organizational groups in different companies (Denison et al., 2006).

Impact of National and Organizational Culture differences on IJV’s Performance

Organizations from different cultures and backgrounds come together to work in collaboration for exploiting the competencies in gaining a sustainable competitive advantage. Organizations get in joint ventures that must adopt the organizational and national culture either side (Hofstede, 2005). Currently, the world has known as the global market where international joint ventures have become the general phenomena for a different multinational corporation. It is known for managing and gaining significant growth with the support of joint ventures (Eker & Eker, 2009). There have been found the rapid change in the global market where the concept of international joint ventures has been incorporated with the business world, and currently, it has been considered the main tool for the rapid growth in sustainability in the market (Jofreh & Masoumi, 2013). International Joint ventures have helped many organizations in the international market to get access to inaccessible markets where the facilitation development of the new ideas has paid towards the changing in the conventional structure and methods which prevailed in the international industry (O’Reilly et al., 2014).

National Culture affecting international joint venture performance

International Joint venture has a strategic position in making the expansion of the business in the international market. This has been affected by the various internal and external factors, including organizational cultural factors (Stare, 2011). These factors directly affect the performance of international joint ventures. National cultural factors directly affect the performance of International Joint Ventures. National cultural factors play their important role in affiliating with large scale multinational ventures (Mujeeb et al., 2011). This factor considered crucial as the culture of two distinct organizations come together and make a new culture. Communication factor has a strong influence on the national culture. The cultural distance has been receiving a great deal of their attention in the international market through the nature of the business where cultural difference is deeply rooted in the influence on their cultural, behavioural element (Hartnell et al., 2011). Different cultures have a different model of management, and their nature of managing the organization is different. That is the reason cultural difference has considered the key factor in exploring international market attractiveness (Abdul-Rahman, 2014). Hence, the strategic positioning of international joint ventures has a strong impact on the success of multinationals in the international market. Where the partners are fit in the strategic goals and behaviors by adopting the organizational and national cultures through sustainability and innovation, this process will lead them towards the success of the joint ventures (Russo & Fouts 1997).

It has been suggested that the correspondence of the International Joint Ventures partner's goals with their experience at the host nation will qualify for the human resource and their customer relation. In the last decade, there is a great change found in the international market (Balzarova et al., 2006). Where the nature of doing business is also affected by different internal and external factors. The major reason for this change is due to multinational enterprises. This is the cooperative operation which considered the essential part of the strategic business environment through sustainable development (Emilsson & Hjelm, 2007). The international joint venture has directly affected the cultural differences. Cultural difference is the major factor affecting the performance of international joint ventures as it allows one business from different cultures, which has a direct impact on the performance of the strategic alliance (Welford, 2016).

Organizational Culture Differences affecting the performance of IJV’s

The difference in organizational culture is one of the major factors which affect the performance of International Joint Ventures. The progress and success of International Joint Ventures are purely based on the efficiency and effectiveness of organizational operations. The success of the international joint venture is limited because of the economic, commercial and strategic factors (Molnar & Mulvihill, 2003). Whereas, the majority of factors are encountered by cultural differences. Organizational culture is positively affecting the integration for the sense of the organizational members and motivate by the partners to deal with the conflicts. Therefore, international joint ventures with similar cultures may have higher chances of success (Maletič et al., 2014). Though the cultural differences have the highest potential for conflict and their cost of cooperation amongst the International Joint ventures (Ozorhon, 2008). Organizational culture has enabled the integration of international joint ventures has considered the most critical factor. The impact of the organizational culture defines the impact of the operational and risk management of the organization. International joint ventures are the result of two-parent cultures (Linnenluecke & Griffiths, 2010). It is important because it is used to make an affiliate with the parent organization. The difference in culture may create the issues in making the relationship between the partner of international joint ventures which further lead to the dissolution of the venture (Štok et al., 2010). Therefore, knowledge transfer could play a critical role in making both the organizations close to each other to work for venture vision and mission (Kerr et al., 2015).

Theoretical Framework

The importance of environmental practices in a company's culture shows that environmental values exist throughout the company, which are defined as factors of business and environmental excellence (Cameron & Quinn, 2005). If the emphasis is on environmental policy, it must be integrated into the company's day-to-day culture and working methods (Naor et al., 2014). Focusing on supporting environmental practices helps CO to improve its performance and gain a competitive advantage. Improving industrial performance is important for production to be competitive in export markets such as the European Union. In the European Union, customers demand high environmental conditions from their suppliers and usually international standards, such as ISO 14001 certification. Pakistan is lagging behind its competitors in environmental management of the export market (Addison & Belfield, 2000).

According to researchers, the main reason for not implementing structural change plans was the lack of attention paid to OC. Many people believe that despite technological and systemic changes, the union's wage culture is the same (Whitfield et al., 2017). The cultural values of organizations that support environmental practices can help companies develop a culture that supports these practices. A proactive approach helps companies to support environmental practices and implement newly developed COs. Companies that fail to develop sustainable values in their culture are doing poorly (Poutsma et al., 2017). Therefore, the initiative can help organizations implement environmental plans. This requires a high level of employee involvement, adaptability, consistency and a clear role in guiding employee behavior. Companies with an environmental aid culture can perform better and apply environmental CO values to improve their environmental performance (Schein, 2010). In general, sustainability methods based on RBV theory are used to study the relationship between the CO and environmental performance of Pakistan's manufacturing industry, which is an important factor in reducing CO2 emissions. the company's environmental impact. - Researched so far. Figure 1 describes the relationship experienced in this study. The rest of this chapter explains the development of the hypothesis (Schein, 2017).

Figure 1 Study of Experienced Relationship

Hypothesis

H1: There is a significant relationship among national culture and performance of IJV through sustainability.

H2: There is a significant relationship among organizational culture and performance of IJV through sustainability.

H3: There is a significant relationship among impact of organizational and national culture and performance of IJV through sustainability.

Methodology

Introduction

This section is highlighted as the most important and significant part of the study as it introduces the researcher to the detailed research methods and techniques (Schein, 2010). This section is also important because all the methodologies in this study are based on this section. In addition, this chapter contains a number of subheadings, and these are "research philosophy, research method, research design, method of data collection, sampling size and technique, search strategy, a method for analysing the data, ethical considerations and criteria for including and excluding different things in this research study" (Saffold, 1988). In addition, researchers used a "Quantitative approach" in this study because all the data was collected with the help of a questionnaire by conducting a survey (Chatman et al., 2014).

Design Questionnaires

Self-structured Research Questionnaire design in order to get the feedback from the targeted population. Research questionnaire is based on 2 sections initial section comprises of personal information and second section is based on different constructs of all four variables defined in research framework (Giorgi et al., 2015).

Distribution of Questionnaire

150 questionnaires have been distributed amongst the targeted population. from those 140 been selected and rest 10 has been discarded due to invalid and improper information.

Data Collection

Data collection has been from general audience. who are aware with the international joint ventures as well as national and organizational cultural factors.

Sample Size

150 from different employees from multinational organizations.

Data Analysis

Data analysis has been done with the support of SPSS. Tools used for Data analyzations i.e. Reliability analysis tools, ANOVA, AHP, Correlation and T-test tools. Data analysis is describing the methods used in the research from designing of questionnaire till result and findings. The self-structured research questionnaire has been made, defining all four variables used in the research model (Schneider et al., 2017). Questionnaires have distributed amongst the employees of a different multinational organization, who are familiar with the international joint ventures and understand the factors affecting their performance. Data collected through simple random sampling techniques. The sample size is comprised of 150. All gathered data been further analyzed in different statistical tool with the support of SPSS. Tools used for data analyzation is a Reliability analysis tool, AHP, ANOVA, Correlation and T-test analysis tool (Bryson, 2011). The results and findings have shared below. The particular research is quantitatively based. Where all gathered data is collected for the first time, not previous or recorded data has been used in this research paper. Fresh data has been used for analyzation. Data has collected through random sampling technique (Bhutta et al., 2008).

Sample Size

One hundred fifty responses have been gathered through simple random sampling techniques. Since the research is a quantitative approach based, where fresh data been used, no previously used data is used (Denison, 1995). Data has been analyzed on defined statistical tools where the outcomes have shown the remarkable relationship between the variables. It has shown in the findings that, the performance of international joint ventures is affected thoroughly with the organizational and national culture through sustainability (Sekaran & Bougie, 2016).

Inclusion and Exclusion Criteria

Data from this study was collected through questionnaires, so scientists firmly believe that all the data in this study is true, as it is completely dependent on opinions, opinions, and ideas. In addition, this study also uses phenomenological research methods to illuminate people's reactions to reality (Hair, 2009). Because this study focused on answers based on people's actual experiences, the survey only answered questions based on questionnaires. In addition, the survey only includes responses from people collected in English to exclude all responses recorded in another language, with English being the only language that everyone else understands (Clement et al., 2015).

Ethical Considerations

Data from this study was collected through questionnaires, so scientists firmly believe that all the data in this study is true, as it is completely dependent on opinions, opinions, and ideas (Hair, 2016). In addition, these studies follow a strong moral line to ensure the validity, acceptability and credibility of the studies being conducted. However, the significance and validation of this study depends largely and completely on data collection and emphasizes that all data obtained are true (Clinton et al., 2001).

Discussion and Interpretation of the Result

Reliability Analysis Tools

The reliability analysis Table 1 shows the tools have been used in the research work, to find out the reliability of all variables used in the research model (Kumar et al., 1993). The reliability analysis tool used to examine the reliability of the variables. If the variable is reliable enough, then it can be used in further tools for analyzation, and a conclusion will be made based on their outcomes (Henri, 2010). All variables used in the research model for the research model have shown that they are reliable and consistent for further analysis. Hence, this is ideal that all dependent and independent variables are consistent and reliable for further analysis (Hair, 2013).

Table 1 Reliability Analysis
Variable Measuring Variable Cronbach Alpha
Performance of Joint Venture Importance of Object
Fulfilment of Object
Importance of Satisfaction
Importance of fulfilment
0.88
0.93
0.86
0.89
National Culture Attitude in practice
Ideal acculturation attitude
0.78
0.83
Organizational Culture Organizational Culture
Host nation organizational Culture
0.98
0.89

The findings of reliability analysis tools have shown that constructs used in all four variables are reliable and consistent as their value of Cronbach alpha is higher than 0.7 though the result has shown that all variables are reliable and consistent for making further analysis. Though all variables are further used to define tools (Barroso et al., 2010) shows in Table 2.

Table 2 Correlation Analysis
    Organizational Culture National
Culture
Negative relation of national and organizational culture
Organizational
Culture
Pearson Corr. 1    
Sig. (2-tailed)      
N 17    
National Culture Pearson Corr. 0.354** 1  
Sig. (2-tailed) 0.001    
N 17 17  
Negative relation of national and organizational culture Pearson Corr. 0.245** 0.321** 1
Sig. (2-tailed) 0.001 0.005  
N 17 17 17
  Sig. (2-tailed) 0.078 0.015 0.001

Correlation analysis tool used to find out the relationship of all variables. This finding has shown that all variables have a positive relationship with each other. All variables have a positive influence on other variables and plays an important role in national and organizational cultural dimension affecting the performance of International Joint Ventures through sustainable development (Sarstedt & Ringle, 2014).

Analytical Hierarchy Process AHP

The above Table 3 has also shown that the variables have been ranked according to the relative weights which have been extracted after applying the AHP tool to variables used in the research model. AHP has been used to identify the most crucial and supporting variables for particular research work. The application of the AHP in the research model is based on identifying the top crucial variable for the research model. According to the outcome of the relative weights, it has been showing that the organizational culture which is ranked higher in the examining the “The major difference in national and organizational cultural dimension affecting the performance of International Joint Ventures through the sustainable development” (Lim & d Tsutsui, 2012).

Table 3 Relative Weights of Performance of International Joint Ventures
Rank Item Relative Weight
1 Organizational Culture 0.44537
2 National Culture 0.43578
4 Impact of organizational and national culture 0.39876

Analysis of Variance ANOVA

Table 4 & 5 shows the analysis of variance applied to the data to examine the significance of all variables used in the research work. After analyzing it is showing that variable used in the research framework is significance to each other, as they have strong influence and positive impact. This has proven the hypothesis drawn in the research model (Lim & Tsutsui, 2012).

Table 4 Analysis of Variance Anova
    Sum ofSquares df Mean Square F Sig.
Organizational
Culture
Between Groups 3.754 3 3.325 2.031 0.001
Within Groups 405.067 352 1.854    
Total 314.967 385      
National Culture Between Groups 4.659 3 1.553 1.697 0.004
Within Groups 229.511 236 0.973    
Total 234.170 239      
Negative relation of national and organizational culture Between Groups 0.930 3 0.310 0.374 0.005
Within Groups 196.019 236 0.831    
Total 196.949 239      
Table 5 Anova
Organizational Culture      
  Sum of Squares Df Mean Square F Sig.
Between Groups 44.124 3 12.254 8.845 0.002
Within Groups 447.310 294 1.458    
Total 514.358 298      

Sample T-Test Analysis tools

Table 6 shows the outcome of the applies statistical tool of T-Test has shown that all variables have a positive impact on different gender. Whereas, the result has showing that males are affected more in comparison to females (Gollnhofer, 2015).

Table 6 Group Statistics
  Gender N Mean Std. Dev Std. Er
Organizational Culture Male 40 2.4778 0.7376 0.06436
Female 40 2.4321 0.93698 0.08005
National Culture Male 40 2.8058 0.97904 0.07668
Female 40 3.2145 1.16685 0.09969
Negative relation of national and organizational culture Male 40 3.2110 0.80388 0.06296
Female 40 2.1457 1.02922 0.08793

Conclusion

Since the scope of the international joint venture is increasing globally, international markets are also changing with time through sustainable development and strategic competitiveness in the global market. Currently, international joint ventures are increasing in their numbers by covering cultural and national dimensions which affecting the performance of international joint ventures. Results have stated that all variables have a positive and significant impact on the independent variable. They have a strong relationship which hence proves the hypothesis. The increment in the strategic importance in the international market the concept of international joint ventures has also been increasing. In modern times, the activities of international joint ventures increasing and been major changes found in the international market of the business world. International joint ventures are becoming a popular tool for multinational organizations. Currently, the IJV's are increasing based on the international and intercultural variables. Organizational culture and national culture are the most important factors which influence the performance of International Joint Ventures. Factors affecting the performance of international joint ventures through sustainability are adopting the management of IJV's, which contracting the strategies in practice and has been taken as future implementations (Kagioglou, 2001). The world has become the global village where all business around the world is taking to the international level. Therefore, the major factor affecting them is host nation culture and norms.

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