The Impact of National Culture, Business Scope, and Geographic Location on Joint Venture Operations in China

Abstract

This study describes operational experiences in 73 equity joint ventures (EJVs) in China. Key difficulties are identified in the areas of local sourcing, recruitment of skilled Chinese managers, and the clarity of laws and regulations. Although interesting and meaningful differences are identified across ventures, the analyses indicate that these three operational aspects are serious and problematic irrespective of geographic location of the EJV in China, its business scope, and the national culture of the foreign partner. Neither location, nor industry, nor ethnic relation among partners shields the EJV against the most problematic operational concerns. Given their structural and cultural origins, these operational difficulties are likely to remain a headache for foreign managers operating in China in the near future.

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