Partner Conflicts in International Joint Ventures: A Minority Owner Perspective

Abstract

Partnering through international joint ventures (IJVs) is heralded as a key for smaller firms to gain access to resources and knowledge and expand into new geographic markets. Although it is well-known that IJVs rarely survive over an extended time, little attention has been given to partner conflicts as a source of IJVs terminating. The present article approaches partner conflicts in IJVs with unequal equity ratio and argues that being a minority partner in an IJV requires certain precautions. The authors report on a longitudinal case study of how conflicts emerged, grew, and exploded in an IJV that operated from 2005 until 2014 by identifying ten critical events that occurred and conditions that exacerbated the partners' conflicts and the IJV's demise. The authors conclude by discussing how companies entering an IJV as a minority owner can proactively use the insights gained and by providing suggestions for future IJV research.