Implications of Culture in the Performance of International Construction Joint Ventures

Joint ventures have become popular because of their importance as a strategic alternative in global competition. One of the reasons why international joint ventures (IJVs) are difficult to manage is because the cultural distance between IN partners has significant impact on alliance performance. Since construction projects are highly sensitive to external risks, the effect of the culture in the location in which the IN operates is also significant. In this study, the effect of cultural similarity/difference relative to the national and organizational characteristics of partner companies on IN performance is examined through a questionnaire survey. The impact of the cultural similarity/difference between an IN partner and the host country is also assessed. The results of the study suggest that differences in organizational culture have a greater impact on IN performance than differences in national and host country culture. The findings also reveal that similarity between the national cultures of IN partners has a negative effect on IN performance. The analysis of the data failed to provide evidence that IN performance is affected by differences between the culture of the host country and the culture of an IN partner.