Trust, Organizational Controls, Knowledge Acquisition from the Foreign Parents, and Performance in Vietnamese International Joint Ventures

Abstract

Successful adaptation in strategic alliances "calls for a delicate balance between the twin virtues of reliability and flexibility" [Parkhe 1998]. On one hand, the joint venture must be flexible enough to respond to the uncertainties of competitive business environments because it is not feasible to plan for every possible contingency. Yet, on the other hand, unfettered flexibility invites dysfunctional behavior, such as opportunism and complacency. This delicate balance accompanies a parallel balance between trust and control of the joint venture. The primary goal of this study is to empirically examine this relationship in the context of Vietnamese international joint ventures (IJVs) by building on the model of knowledge acquisition and performance in IJVs established by Lyles and Salk [1996]. This study makes three major contributions to the literature. First it confirms several findings of the original Lyles and Salk study [1996]. Second, we strengthen Lyles and Salk's original model by incorporating multiple measures of both interorganizational trust and control as independent variables. Finally, this study represents one of the first in-depth examinations of business in the emerging Vietnamese economy.