AI Insight
This study examines how conflict in international joint ventures operating in China affects organizational performance and stability through governance mechanisms. Using survey data from 199 professionals and structural equation modeling, researchers found that conflict does not directly improve performance but instead triggers trust-building and power recalibration, which in turn positively influence both performance and stability. The findings suggest conflict functions primarily as a governance mechanism rather than a direct performance driver in cross-border partnerships.
Why it matters
The research provides practical guidance for managing international joint ventures by demonstrating that conflict should be viewed as an opportunity to strengthen governance structures through trust and power dynamics rather than as purely detrimental. Understanding these indirect pathways helps organizations develop more effective strategies for maintaining stable and high-performing cross-border partnerships.
Understand the Science
Conflict is an inherent yet controversial aspect in international joint ventures, having two facets: being disadvantageous for collaborations as well as a fuel for learning and adaptation, making it a research interest to assess its performance and stability for researchers and business organizations. This research extends its understanding of conflict as a consequence of the discrepancy between organizational work and the goal set by the owner of the organization. Then, it explores whether conflict affects directly or indirectly, depending on the thing managed or governed. Herein, we test the direct and mediated relationships among conflict, conflict potential, trust, power dynamics, performance, and stability, using survey data from 199 professionals involved in international joint ventures in China and applying Partial Least Squares Structural Equation Modeling. The results suggest that conflict does not completely increase performance but substantially increases trust and power recalibration. Trust as well as power positively induce performance and stability, with power showing a principally strong effect on stability. Conflict potential strongly forecasts trust and exerts indirect effects on consequences through interactive pathways. Hence, conflict can be considered as a governance trigger rather than a direct performance driver. By incorporating the foundation on two well-established theories, i.e., Institutional Theory and Agency Theory, this study proceeds international business research by determining that the impact of conflict in international joint ventures is provisional upon effective relational and structural governance responses. The results in this research present theoretical clarification and practical guidance for managing cross-border partnerships in IJVs operating in China.
Source: Conflict, trust, and power in international joint ventures: a governance perspective