Tài liệu Factors influencing international joint ventures’ performance an investigation into the telecommunication industry in laos (sum)

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1 MINISTRY OF EDUCATION LAOS NATIONAL UNIVERSITY MINISTRY OF EDUCATION AND TRAINING NATIONAL ECONOMICS UNIVERSITY CHAPTER 1: INTRODUCTION 1.1 Thansamay KOMMASITH FACTORS INFLUENCING INTERNATIONAL JOINT VENTURES’ PERFORMANCE: AN INVESTIGATION INTO THE TELECOMMUNICATON INDUSTRY IN LAOS (Business Administration) Code: 62.34.01.02 Research Motivation Lao People Democratic Republic (Lao PDR) is a developing country that is located in the central part of the Indochina peninsula. The telecommunication industry plays a significant role in the national economic development of Laos. In 2008, the telecommunications sector accounted for approximately 1.6 percent of the total GDP and is considered one of the fastest growing sectors in Laos. There are some communication policy studies undertaken by scholars and media and political organization, but research on International Joint Ventures (IJVs) in Telecommunication industry in Laos has been limited. Especially, it seems that very modest attention has been given to investigate IJVs’ performance and factors influencing it in the industry in Laos. Thus, these issues are the focus of this dissertation. Factors influencing IJVs’ Performance in Telecommunication Industry in Laos A dissertation summary submitted to the National Economics University in fulfillment of requirements for the degree of Doctor of Philosophy in Economics Hanoi, 2014 Many scholars and practitioners have conducted research about what factors affecting the performance of IJVs. However, their research has mainly conducted in the context of the developed countries (Ren et al., 2009). Many previous studies (e.g., Hoang & Rothaermel, 2005; Isobe, Makino, & Montgomery, 2000; Luo, 2001; and Tong et al., 2008) have examined IJVs performance, which enhanced human beings’ knowledge about this attractive topic. However, the conceptualization of IJV performance and factors influencing it remains an often-debated issue in IJV research (Reus & Ritchie, 2004). In recent years, more research attention has been given to study IJVs performance and factors influencing IJVs performance in the context of developing countries (e.g. Phan & Ngo, 2009; Phan et al., 2006; Cao, 2012) but it seems that very modest research attention has been given to investigate the impact of these factors in the context of Laos, especially no 2 study has examined the issue in the Telecommunication industry in Laos. In other words, this attractive topic has not been investigated adequately in the context of Laos, especially in the telecommunication sector. For facilitating the sustainable development and ensure the success of IJVs in the important fields like the telecommunication industry in Laos, it is very essential to have better understanding of the current status of the IJVs’ performance and investigate the determinants of the IJVs’ success or failure. Research objectives and questions While focusing on the main objective of investigating the impact of several factors on performance of the IJVs in telecommunication industry in Laos, this study aims to answer the following questions: 1. What is the overall picture of business performance of IJVs in Lao’s telecommunication industry regarding different aspects of performance based on the theoretical framework? 2. What are the key factors influencing the performance of the IJVs in the telecommunication industry in Laos and what are the impacts of these factors on the IJVs’ performance? In terms of the research scope, the data collected for this study mainly from the three IJVs in the telecommunication industry in Laos.In terms of timing, the collected data mainly cover recent three years (from 2010 to date). The analyses focus on several aspects of IJV’s performance and the factors influencing it. The primary data mainly focus on the perspective from Lao’s partners in the IJVs. 1.2 Theoretical background This study employs the theoretical background regarding IJVs performance and factors influencing their performance (e.g., Cao, 2012, Ren et al., 2009, Bener & Glaister, 2010). On the basis of literature review, performance of IJVs has been assessed through some measurement variables, such as: survival, financial output, overall satisfaction, 3 achievement of individual or joint goals, and learning. Many previous studies have identified that IJVs performance has been influenced by many factors. These factors include control of parent firms, trust, autonomy, national culture differences, corporate culture differences (Bener & Glaister, 2010; cf., Ren et al., 2009), commitment, bargaining power, justice, conflict, effectiveness of conflict resolution, cooperation, and goal compatibility (cf., Ren et al., 2009). 1.3 Research methodology This study employed the case study method. Both secondary data and primary data were collected to develop the three case studies in order to reflect IJVs’ performance and the factors influencing their performance during the time of the research. As this study mainly aims to analyze factors influencing FDI companies’ performance in the selected cases, multiple data collection methods were used to increase credibility and validity. Specific data collection methods used in this study include desk research (for collecting secondary data), observation, interviews (both faceto-face and by telephone), and survey (for collecting primary data). 1.4 Contribution of the Study This study aims to examine several dimensions of the IJVs’ performance and to explore the impact of the key factors on the IJVs’ performance in the context of Lao’s telecommunication industry. The topic of this study is important and interesting that have attracted much attention from previous studies. This study contributes to the literature pertaining to IJVs’ performance and factors influencing them in the context of Laos, a developing country that has received very modest research attention up to date. The findings of this study help to enrich the knowledge about this important topic by investigating simultaneously the key dimensions of IJV performance. Specifically, all five performance dimensions were examined 4 in the context of the telecommunication industry in Laos, including Survival and Longevity of the IJV, Financial Performance/financial output measures, Overall Satisfaction, IJV’s Goal Achievement, and Learning. This study also explored the main factors influencing IJV performance and empirically tested the impact of these factors in four regression models. In addition, with the case study method used in this study, multiple data sources were employed including secondary data (i.e., data collected from internet, company reports, etc.) and primary data sources (i.e., data collected from observation, in-depth interviews, and survey). This method was useful and necessary to obtain better understanding the research issues. Some managerial implications are drawn from the findings of this study. Specifically, the findings provide IJVs’ managers with knowledge and insight that would help better understand and manage the determinants of IJV performance, and therefore help improve performance of IJVs. This study is expected to provide some implications for policy makers in an attempt to create a better business environment and to ensure the favorable conditions for IJVs to achieve better performance in Laos. For the benefit of Lao’s economy and society at large, the local government may want to work together with investors (both local and foreign partners) to jointly develop successful IJVs. 1.5 Organization of the Study This dissertation includes five main chapters as follows. Chapter 1: Introduction Chapter 2: Literature review and conceptual framework Chapter 3: Research methodology Chapter 4: Research findings Chapter 5: Conclusions and discussion 5 CHAPTER 2: LITERATURE REVIEW AND CONCEPTUAL FRAMEWORK This chapter reviews the literature on IJVs’ performance and the factors influencing it. In the first section of the chapter, the literature on the five common measures of IJV performance were reviewed, followed by the review of the key determinants of IJV performance. Finally, the proposed conceptual framework is presented. 2.1 Literature review on International Joint Ventures’ Performance Cao (2012, p.72) noted that although the term IJV has many different meanings, the most common definition of IJV is “a separately legal business venture that involves two or more entities with differentnationalities working together to achieve mutually agreed on business objectives” (Fogler & Reichert, 2002). IJV performance has been known as broad constructs with different dimensions. Ren et al. (2009) reviewed many previous studies on IJV performance and suggested five common IJV performance measures that have been employed in the literature, including Survival, Financial Output Measures, Overall Satisfaction, IJV’s goal achievement, and Learning. The five main measures of IJVs performance are used in this study and are presented in details in the dissertation. Survival and Longevity: refers to the number of years that partners have been working together in the IJV. In literature, many previous studies have used Survival or Longevity as one indicator of IJV performance (e.g., Dhanaraj & Beamish, 2004; Gaur & Lu, 2007; Lu & Xu, 2006; Meschi & Riccio, 2008; Steensma & Lyles, 2000). The reason for using this indicator of IJV performance is that the longer the IJV survives, the more successful it is. In this study, Survival or Longevity are used together with other measures to evaluate the IJVs’performance. 6 7 Financial Output Measures: Among many indicators of IJVs’ performance, in the literature the researchers’ interest in employing financial output measures such as profitability measures (e.g., ROI, ROA) and market performance measures (e.g., market share) have been increasing (e.g., Lu & Xu, 2006; Luo, 2002a, 2002b, 2005, 2007a, 2008; Robins et al., 2002; Zhang et al., 2007; see Ren et al. as well). In this study, the author decided to employ both objective and subjective measures of IJV performance. strategic match, communication styles, trust, commitment, and propensity to cooperate), and ‘Socio-Economic factors’ (e.g., opportunity costs, relative bargaining power, governance/control over JV, and perceived opportunism). Overall Satisfaction: Many previous studies have used managers’ subjective evaluations of the IJV’s overall performance (e.g., Boateng & Glaigster, 2002; Cao, 2012). Since overall satisfaction is a subjective measure, some previous studies have employed also other objective measures of performance such as financial outcomes (e.g., Cao, 2012). Goal Achievement: Achievement of individual and/or joint goals of an IJV has been used as a measure of the IJV performance (e.g., Phan et al., 2006; Lyles & Salk, 1996). Learning: Learning from partners in IJVs has received significant attention and has been considered as an important indicator for the success of an IJV (Phan et al., 2006; Lyles & Salk, 1996). 2.2 Literature Review on Factors Influencing IJVs’ Performance In the literature on IJVs, investigation into factors contributing to IJV performance have been received much interest from the scholars and practitioners (Cao, 2012; Rod, 2009). After reviewing past research in the field, Rod (2009) has summarized the factors that are treated as independent variables influencing IJV’s performance, and classified them into two main groups, each factor of which may have direct of indirect impact on joint venture performance. These factor groups refer to ‘partner compatibility’ (e.g., organizational culture, management/leadership style, In the context of developed countries, it has been suggested that the success of IJVs may be a function of a number of factors. Bener & Glaister (2010) suggested five main factors influencing IJV performance that have been given significant attention in the literature as determinants of joint venture performance. These factors include parent control (Killing, 1983; Lu & Hebert, 2005), JV autonomy (Hill & Hellriegel, 1994; Lyles & Reger, 1993; Newburry & Zeira, 1999; Zeira & Parker, 1995), trust between partners (Madhok, 1995), national culture differences (Brown et al., 1989; Hennart & Zeng, 2002; Shenkar & Zeira, 1992), and corporate culture differences (Pothukuchi et al., 2002; Sirmon & Lane, 2004; Weber et al., 1996). Besides, based on the review of 54 previous studies in IJV literature, Ren et al. (2009) showed the model of 10 determinants which affect IJVs performance in almost cases of developed and developing countries. Despite being investigated by numerous scholars with different approaches and models, in this study, the author is interested inexploring the impact of five main factors that have been consistently identified as being important determinants to IJV performance and they are also relevant to the context of Laos, namely Control of the IJV, Trust, Cooperation and Commitment, Culture differences, and Goal compatibility. Each factor are discussed in details in the dissertation. 2.3 Conceptual Framework On the basis of literature review and suggestions from the interviews with IJVs’ managers, five measures/dimensions of IJV performance and five factors are employed in the research model. 8 9 Figure 1: A Conceptual Model for Studying Factors influencing International Joint Ventures’ Performance IJV Performance Cooperation & committment Survival/longevity Trust Financial performance Cultural differences Control Goal compatibility Overall satisfaction IJV goal achievement Learning CHAPTER 3: RESEARCH METHODOLOGY The overall research objectives of this dissertation are to evaluate the current status of IJVs’ performance and to understand the factors and their impact on performance of the IJVs in the telecommunication industry in Laos. In order to achieve the set objectives, the case study method was employed. This research used both secondary data and primary data sources. Multiple data collection methods were employed, including interviews, field observation, and survey. In this study, three cases – three IJVs are investigated. This is the main source of information providing insight in Laos telecommunication industry’s IJVsperformance dimensions and the key factors influencing their performance. In this research, primary data for the case studies included both qualitative and quantitative data. For collecting qualitative data, observation and in-depth interviews methods were employed to explore the overall picture of the IJVs performance, especially from the IJVs managers’ perceptions. In addition, several key factors that may influence the IJVs performance were explored. The qualitative findings also help to confirm the theoretical framework that was tested using the survey data. Qualitative data collection Observation For each IJV in this study, the author visited the IJV’s office in Vientiane at least 3 to 4 times per year as business visits. In addition, sometimes the author visited selling stores of the IJVs in provinces in Laos. For LTC, the author attended the meetings with the IJV’s top and middle managers every 3 month. For Unitel and Beeline IJVs, the meetings were less frequent. During the visits and meetings, the author, based on observation, collected data including content of the observed activities and emotional reactions such as the sense of comfort, frustration, stress, or 10 happiness (Nguyen, 2005). The focus of the observation was on the cultural differences between the partners, trust between the partners, and cooperation. The expression of satisfaction of each partner in the IJVs was also observed. 11 • Cooperation and commitment: four items were developed based on suggestions from past research and the qualitative study; • Control mechanism:four items were adapted from Cao (2012); • Cultural differences: four items were adapted from Simonin (1999); • Goal compatibility: two items were adapted from Ren et al. (2009). In- depth interviews Sample For the interviews, all three IJVs operating in Telecom industry in Laos were selected for investigation. The author used one-to-one interviews, both face-to-face and telephone interview. The interviews were carried out in Laotian. Total of 10 interviews from three IJVs were conducted: 6 with LTC’s managers, 3with Unitel’s managers, and 1 with Beeline’s manager. Each interview average lasted for 30 minutesfor faceto-face interview and lasted for 10-15 minutes for interview via phone. A survey was conducted in three IJVs in the telecommunication industry in Laos. Total of more than 200 questionnaires were sent to top managers, middle managers and senior staff at three IJVs, and 87 completed and usable questionnaire were used for final analyses: 31 were from LTC IJV, 30 were from Beeline, and 26 were from Unitel. Survey data collection In order to test the hypothesized relationships in the research model we employed the survey data collected from 03 IJVs in the telecommunication industry in Laos. Measures and questionnaire development In the survey, the author employed the scales measuring IJV performance and the factors influencing it. These measures were adopted and modified from past research while taking into account the suggestions from the qualitative study. IJV performance: In addition to the question ‘How long have your IJVs been established?’ to measure longevity/survival dimension of performance, the scale items developed by Lyles and Salk (1996) and an item from Cao (2012) were adopted and modified to measure ‘financial performance’, ‘overall satisfaction’, ‘goal achievement’, and ‘learnings’. Factors influencing IJV’s performance: • Trust: four items were adopted from Nguyen (2005); Data Analysis For the survey data, in order to test the proposed relationships in the research model, several multiple regression analyses were employed. Dependent variables were different dimensions of IJV performance, including financial performance, overall satisfaction, goal achievement, and learning. The independent variables in all these regression analyses were the five factors that were proposed to have impact on performance. Before testing the hypothesized relationships, we performed exploratory factor analyses (EFA) and assessed the internal reliability of the scales used in this study, using coefficient alpha. While the focus of this study is to test the impact of several factors on IJVs’ performance, some descriptive analyses and comparisons among the three IJVs were also conducted. 12 CHAPTER 4: RESEARCH FINDINGS 4.1 The Current Status of IJVs’ Performance in the Telecommunication Industry in Laos 4.1.1 The Telecommunication Industry in Laos According to report of MPT (2011), Laos has five key providers namely: Lao Telecommunications Corporation (LTC), Enterprise of Telecommunications Lao (LTL), Beeline (Vimpelcom), Unitel (Star Telecom) and Sky Telecom (Laosky). BMI (2013) has projected that the performance of Telecom sector in Laos will increase slightly until 2017 4.1.2 Performance of the IJVs in the Telecoms Industry in Laos Currently there are five telecoms service providers in Laos, of which there are three IJVs. In the following section, performance of the IJVs are presented following some key performance dimensions. 4.1.2.1 Performance of LTC 13 In terms of turnover/revenue, LTC achieved more than 600bn LAK in 2011, more than 700bn in 2012, and more than 800bn in 2013. The annual growth rate was more than 15% in the period 2011-2013. From the perception of LTC’s managers and senior staff, the findings from the survey show relatively high level of performance in all dimensions (i.e. financial performance, overall satisfaction, goal achievement, and learning). The mean values ranged from 3.75 (for learning) to 4.35 (for goal achievement. 4.1.2.2 Performance of Star Telecom (Unitel) The IJV Star Telecom or Unitel was established in 2007 with 51% share of Laos’ governmentand 49% of Viettel Global from Vietnam. Together with LTC, Unitel currently are leaders in the telecoms market in terms of revenue and the number of subscribers. Unitel has more than 6 years of operation in the telecoms industry in Laos. Although it is still a relatively young IJV, Unitel has obtained significant achievements over the past few years and has set a solid foothold in Laos’ telecoms market. LTC was established in 1996 as an IJV with 51% share of Laos’ governmentand 49% of Thai investor. LTC is the IJV which has the longest operation time in the telecoms industry in Laos (nearly 20 years). LTC has been always the market leader, even in the highly competitive environment over the recent years. In the mobile phone market, only 3 months after officially launching the service, Unitel achieved market share of 19%, holding the 3rd position in Laos’ market. According to LTC’s data, Unitel accounted for 36.1% of the mobilephone market at the end 2012. In the fixed-line market, Unitel officially launched Unihome service in December 2009 and at first its market share was 4%. However, ony 7 months In terms of market share, LTC accounted for 44.2% of the mobile service market in 2012. In the fixed-line market, LTC has also accounted for the largest market share over the last few years. In the broadband internet market, LTC together with ETL are the two biggest service providers. later Unitel’s market share was 14%, holding the 2nd position in the market. In April 2010, Unitel also officially launched internet service in Laos and accounted for 14% of the market share, holding the 2nd position in the market (after LTC). On 15 October 2010, Unitel launched 3G service in 17/17 provinces (Nguyen, 2012). 14 15 In terms of turnover/revenue, Unitel achieved more than 400bn LAK in 2010, sharply increased to more than 800bn in 2011, and significantly increaded to more than 1tn in 2012 and 2013. The average annual growth rate was impressive especially in the period 2010- 2012 with great amount of net With regard to the perceptions of managers and senior staff on the IJV’s performance on several criteria, the survey findings seem to be more positive than the real status. All the mean values are a bit higher than the average score (mean values around 3.5). These findings are also discussed in the profit (almost twice every year in this period of time). Contrary to the data from the financial reports of Unitel, the perceptions of Unitel’s managers and senior staff (the findings from the survey) show dissertation. relatively low level of performance in all dimensions. The mean values ranged from 3.11 (for Financial performance) to 3.92 (for Learning). The survey findings are discussed in the discussion part of the dissertation. With regard to general evaluation of the performance of all three IJVs in Lao’s Telecommunication Industry, the survey findings showed that all performance dimensions were perceived to achieve at a bit higher than average level. The mean values ranged from 3.56 for financial performance to 3.78 for goal achievement. 4.1.2.3 Performance of Beeline In 2003, Millicom (Tigo) together with Laos’government established an IJV with 78% of share belongs to Millicom and 22% of share belongs to Laos’government. In Septemebr 2011,VimpelCom Ltd. (Beeline), a leading telecoms service provider in Russia officially announced to buy Millicom Laos Co., Ltd. VimpleCom currently holds 78% of share and Laos’ government holds 22% of share. The brand Beeline replaced the brand Tigo. Therefore, Beeline seems to be young in terms of number of operation years in Laos market. 4.2 Factors Influencing IJVs’ Performance in the Telecommunication Industry in Laos 4.2.1. Identification of Factors Influencing IJVs’Performance In this summary of dissertation, the author mainly reports the findings from the survey of 3 IJVs in telecommunication industry in Laos. Dominant Control of the IJV When examining the current situation of the control mechanism at the Beeline have been facing with difficulties in the competitive market. The number of mobile service subscribers had continuously reduced through out the year 2012. In the mobile phone sector, Beeline held 8.7% market share in October 2011. However, one year later in 11/2012 Beeline only held 5% market share. three IJVs, the survey findings showed that the control mechanism at LTC Regarding the performance dimension of learning, similar to the other two cases the qualitative findings confirmed that both partners in the IJV Trust, Commitment and Cooperation could learn from each other. was relatively high (mean = 3.96, the highest score among the three IJVs) the was highly evaluated (mean = 4.06), followed by Unitel (mean = 3.43) and Beeline (mean = 3.37). ANOVA analyses provided empirical evidence for significantly more appropriate control mechanism at LTC compared with it at Unitel and Beeline (p < .01). The survey findings showed that although the level of Trust at Unitel 16 17 Cooperation and Commitment between the partners at Unitel was only at the larger at Unitel and Beeline compared with it at LTC (p < .01). There was no modest level (mean = 3.33). There may be some reasons for this fact and this significant difference between Unitel and Beeline with regard to Cultural are discussed in the discussion section. Distance (p > .05). At Beeline IJV, both Trust and Cooperation and Commitment were perceived at the average levels (mean = 3.56 and 3.42, respectively). The 4.2.2 The Impact of Several Factors on IJVs’ Performance - Regression Findings results of ANOVA analyses showed thatthere was no significant difference 4.2.2.1 Measurement Properties among three IJVs regarding the levels of Trust (p > .05). However, the level of Cooperation and Commitment at LTC was found to besignificantly higherthan it at Beeline and Unitel (p < .05). There was no significant difference between Unitel and Beeline in terms of level of Cooperation and Commitment (p > .05). Measures of IJV’s performance (dependent variables) The multiple-item scales measuring different dimesions of IJV’s performance were first subjected to EFA (PCA using Varimax rotation with a criterion of eigenvalue greater than 1.0) to test the construct’ underlying Goal Compatibility The survey findings showed that both Unitel and LTC were perveived dimensions and to look for a more parsimonious set of variables for subsequent analysis. The reliability of each scale was assessed using Cronbach to have high levels of compatibility of goals (mean = 4.10 and 3.92, coefficient alpha. The results confirmed the reliability and initial validity of respectively). Beeline was perceived to have just a bit above average score of performance measures. goal compatibility (mean = 3.45). The results of ANOVA analyses showed Measures of factors influencing IJV’s performance (independent variables) that there was no significant difference between Unitel and LTC in terms of goal compatibility (p > .05). However, both Unitel and LTC showed To assess the perperties of the scales measuring IDVs, the author again significantly higher level of goal compatibility compared with Beeline’s (p < used Cronbach coefficient alpha and conducting EFA. First, all the items .05). measuring five factors were subjected to EFA and five factors were extracted as expected. The five-factor solution explained 75.59% of the total variance of Cultural Differences The survey findings showed that the Cultural Differences seemed to be which Factor 1 (Control Mechanism) items accounted for 20.1%, Factor 2 (Trust) items accounted for 19.4%, Factor 3 (Cooperation and Commitment) no problem at LTC (mean = 2.47). For Unitel and Beeline, Cultural Distance items accounted for 12.7%, Factor 4 (Cultural differences) items accounted for was perceived at average level (mean = 3.41 and 3.34, respectively). The 12.7%, and Factor 5 (Goal Compatibility) items accounted for 10.7%. All the results of ANOVA analyses showed that Cultural Distance was significantly alpha have the values ≥ .70 that confirm the reliability of the scales. 18 4.2.2.2 Regression Results 19 The regression model with Learnings as dependent variable was also To test the impact of the proposed factors on the IJVs’ performance, the found to be significant (F = 13.77, p < .01), accounting for 43% of the author ran four multiple regression models, in which dependent variables in variance in the data. In this model, the significant impacts of Trust, Cultural the four models were four dimensions of IJV performance. Differences, and Cooperation & Commitment on Learnings wereconfirmed: The results of multiple regression analysis with Financial Performance β=.49, p < .01; β= -.19, p < .05; and β = .27, p < .05, respectively. The data as dependent variable showed that IJV’s performance was explained did not support the relationships between Control Mechanism and Goal significantly by the factors. The regression model was found to be significant Compatibility with Learnings (p > .05). (F = 15.37, p < .01), accounting for 46% of the variance in the data. Specifically, the regression results confirmed the significant impact of Cultural Differences, Control Mechanism, and Cooperation & Commitment on IJV’s performance: β= -.26, p < .01; β= .31, p < .05; and β = .29, p < .05, respectively. However, Goal Compatibility and Trust were not found to be significant predictors of Financial Performance. The regression results with Overall Satisfaction as dependent variable showed that the regression model was found to be significant (F = 5.9, p < .01), accounting for 23% of the variance in the data. Among five factors, only Cultural Differences had significant negative impact on IJV’s performance: β= -.41, p < .01. Other factorswere notfound to be significant realted to Overall Satisfaction. The regression model with Goal Achievement as dependent variable was found to be significant (F = 15.05, p < .01), accounting for 45% of the variance in the data. Three out of five factors(i.e. Control Mechanism, Cultural Differences, and Cooperation & Commitment) were found to be significantlyrelated tothe performance dimension of Goal Achievement: β=.50, p < .01; β= -.23, p < .05; and β = .22, p < .10, respectively. Briefly, in all four regression models Cultural Differences consistently showed significant negative impact on IJV’s performance dimensions as expected, while Goal Compatibility was not found to be significant predictor in all the models. The significant positive impact of Cooperation & Commitment was found in three models, while the Control Mechanism showed its significant contribution in two models and Trust in only one model. 20 CHAPTER 5: CONCLUSIONS AND DISCUSION 5.1 Conclusions The main purpose of this study is to examine several dimensions of the IJVs’ performance and to explore the impact of the key factors on the IJVs’performance in the context of Lao’s telecommunication industry. Among the three IJVs, the performance of LTC, an IJV with the longest time of nearly 20 years operating in Laos market, were generally suggested at relatively high level in all the dimensions. Next, Unitel, the IJV with just over five years operating in Laos market, was considered to make some great success within a short period of time. However, due to some reasons, the performance of this IJV was perceived by the managers and senior staff at the IJV to be at just modest level in all dimesions (just around the average score). Meanwhile, Beeline is an IJV which has experienced the transformation of the ownership during the operating time in Laos market. The performance of this IJV seems not very positive in terms of financial output measures. However, the various performance dimensions of this IJV was perceived not really negative (still a bit above the average level). With respect to the factors influencing the IJVs’ performance, the qualitative findings suggested five main factors including Control Mechanism, Trust, Cooperation and Commitment, Cultural Differences, and Goal Compatibility. However, the survey findings did not support Goal Compatibility as a significant predictor of the IJVs’ performance. In the meantime, Cultural Differences consistently showed significant negative impact on all four IJV’s performance dimensions, while the rest factors (i.e., Cooperation & Commitment, Control Mechanism, and Trust) were confirmed as determinants for some performance dimensions. 5.2 Discussion and Implications The findings from different data sources seem to provide some inconsistent results regarding performance of the two IJVs: Unitel and Beeline. Several possible reasons are provided for explanations. In this 21 study, the factor of Goal Compatibility was not found to significantly contribute to IJV performance. This may be need further investigation in the future research. This study is expected to provide some implications as follows. Theoretical Implications This study contributes to the literature pertaining to IJVs’ performance and factors influencing them in Laos, a developing country that has received very modest research attention up to date. The findings help to enrich the knowledge about this important topic by investigating simultaneously the five key dimensions of IJV performance. This study also explored the five main factors influencing IJV performance and empirically tested the impact of these factors in four regression models. In addition, with the case study method, multiple data sources were employed including secondary data and primary data sources This method was useful and necessary to obtain better understanding the research issues. Implications for the IJVs The findings from this study regarding the current status of the industry and the IJVs’ performance suggest that Laos is still promising telecoms market for IJVs to explore. This research identified some key factors which have effects on IJVs’ performance in Laos. In some cases, there are some factors have stronger effect than the others. The research findings suggest that developing an appropriate control mechanism within the IJV can contribute to the better IJV’s performance. In addition, once foreign partners in IJVs deeply understand their invested market and culture differences, they can make clearer plan and avoid mistakes or misunderstanding, so they can gain greater success. Besides, managers in IJVs should learn how to build trust between 22 the partners. Good cooperation with and high commitment to the partner and the IJV’s objectives can contribute to better IJV’s performance. Better communication, consultation with partner and well formulated rules and operating practices can help avoid conflict. Implications for Policy Makers This study is expected to provide some implications for policy makers in an attempt to create a better business environment and to ensure the favorable conditions for IJVs to achieve better performance in Laos. For the benefit of Lao’s economy and society at large, the local government may want to work together with investors (both local and foreign partners) to jointly develop successful IJVs. For example, Cultural Differences were found to be an important barrier for the IJV’s success. Policy makers may need to do some activities to reduce the distance in terms of culture by helping the foreign investors to understand better the national culture and facilitate their better understandings of the corporate culture in the host country. 5.2.2 Limitations and Future Research Directions Limitations of the research • The scope of the study was limited to a single country –Laos, and in an industry – telecommunication industry. • The modest research sample size: All three IJVs in Laos telecommunication industry were surveyed for this research, with 87 respondents drawn from these IJVs. • Respondent bias: The top and middle managers and the senior staff of the IJVs were the key sources of information. The portion of senior staff in some sub-samples are more salient than other that may lead to some bias in the results. • The lack of experience of many respondents in participating in a survey. • Some scales used in this study include only one or two items. 23 Future Research Directions • A replication of the study in other developing countries contexts is suggested to provide a wider sample and increase generalizability of the findings. It would be also interesting to conduct a study in the context of more variety of the industries. • Future research with a larger sample would be necessary and useful for the analyses of the explanatory variables’ impact and for more meaningful comparison results. In addition, for more complete results, future research should include the representatives of both IJV’s partners and the parent companies in the research sample. • Using multiple item scales are always desirable. Future studies may want to develop and use more items to measure Goal Achievement and Goal compatibility. • Future research can be directed to include other factors as potential predictors of IJV performance such as conflict, Conflict Resolution, and justice. • A longitudinal study can be conducted to explore the relative strengths of the determinants of joint venture performance over an extended period of time.
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