Management control in international joint ventures as self organising systems

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The need for more dynamic views on international joint ventures' control research has recently become a growing concern. Changes in the complexity of relationships between organisations and their environments have led to an increase in control problems and to a need to investigate a suitable framework of management control. The concept of self-organising systems that has emerged with the science of complexity produces some useful and interesting new ways to examine the behaviour of complex systems. Therefore, extending the recent development in self-organising systems into international joint ventures' control research is an opportunity to explore new insights into the development of joint ventures. This study takes an integrative approach by focusing on the integration of management control and self-organising properties of international joint ventures. The purpose of this study is to investigate the roles of management control systems in affecting international joint ventures' performance, from the perspective of alliance complexity constraints. A model of management control in international joint ventures as self-organising systems, representing a complexity-control-outcomes framework, is developed and tested empirically using the partial least square (FLS) approach, a distinctive structural equation modeling (SEM) based technique. The primary results of this study show that formal control mechanisms and control extent have significant direct effects on management automony and the international joint ventures' performance. Management autonomy as an intervening endogenous construct has a significant direct effect on the international joint ventures performance. Significant direct effects of organisational complexity on the formal control mechanisms and control extent are found, and a significant indirect effect of organisational complexity on the management autonomy is found. The overall results suggest a sound link between the complexity-control framework with the control-outcome framework, and the achievement of fit between these two frameworks is important for superior international joint ventures' performance.
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