Strategic staffing of international joint ventures (IJVs): an integrative perspective for future research

Jelena Petrovic University of Wolverhampton, Wolverhampton Business School, Wolverhampton, UK Nada K. Kakabadse Business and Management, University College Northampton, Northampton, UK

Keywords

International business, Joint ventures, Workforce, Control, Expatriates

Introduction
The rapid pace of technological advancements, increased drive for market globalisation, the emergence of new markets and the greater necessity for rapid market response, have all contributed to a considerable increase in the use of international joint ventures (IJVs) by organisations, as a means of pursuing their strategic intent within multinational contexts (Sparks, 1999; Schuler, 2001). Organisations can no longer expect to provide all the resources and skills required to achieve their strategic objectives from within their own structure nor afford to carry all costs and risks associated with increased size and complexity of their international activities. As a result IJVs have become a prevalent mode of entry into global markets and have been a dominant and often a ``forced'' entry mode in most emerging regions (Harrigan, 1986; Beamish, 1993). An IJV is defined as a separate legal entity representing the partial holdings of two or more parent firms, in which the headquarters of at least one is located outside the country of operation of the joint venture (Shenkar and Zeira, 1987). This new entity is subject to the joint control of its parent firms, each of which is economically and legally independent of the other (Shenkar and Zeira, 1987, p. 547). However, despite IJVs' increased popularity and strategic importance, there is a high record of failure of IJVs in terms of the strategic objectives of their parent firms, which is mainly related to the unique control and managerial requirements of such ventures (Albrecht et al., 1996). While it is recognised in the literature and praxis that IJVs are a complex form of enterprise that present particular challenges for all aspects
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Abstract

Drawing on the literature on international joint ventures (IJVs) and strategic international human resource management, the paper proposes a model for strategic staffing of IJVs based on an integrative (strategic intent and negotiations) perspective. Building on the results of previous studies that indicate, directly or indirectly, the importance of control in staffing, the paper proposes that strategic control may be a critical driver that underpins IJV staffing. In conclusion, the paper outlines an agenda for future research that can test the model and explore possible implications.

This manuscript has greatly benefited from the review comments made by Professor Andrew Kakabadse, Cranfield School of Management.

Management Decision 41/4 [2003] 394-406 # MCB UP Limited [ISSN 0025-1747] [DOI 10.108/00251740310472022

of management (Killing, 1983; Newburry and Zeira, 1997), the influence of staffing arrangements can be an extremely volatile issue, as the cultural mix of the partners creates a complex milieu in which competing understandings arise about the purpose and function of the new organisation. The complexity of the venture is caused by the presence of two or more parent organisations, usually of different cultures, which often simultaneously co-operate and compete and thus have different and conflicting objectives that may be manifested at both the board and the staff levels (Killing, 1983; Yan and Gray, 1994). Moreover, many companies initiate IJVs without fully recognising and addressing the major issues they are likely to confront (Shenkar and Zeira, 1987; Schuler, 2001). Research shows that several IJVs have failed because they have been inappropriately staffed (Lorange, 1996), which in turn may be related to the findings that a parent company's influence on staffing of an IJV's management positions may represent a crucial strategic control mechanism for an IJV parent (Schaan, 1988; Geringer and Hebert, 1989; Geringer and Frayne, 1990; Kumar and Seth, 1998). Control is one of the most difficult issues that companies confront in creating and managing IJVs, yet it has been considered a critical factor for their successful management and performance (Geringer and Hebert, 1989). It plays an important role in determining a company's ability to achieve its strategic objectives, as it affects its ability to monitor, co-ordinate, and integrate the activities of its various business operations (Geringer, 1993, p. 206). On the other hand, strategic staffing of IJVs has not been the primary focus of studies in the international HRM field. Staffing of multinational companies'
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subsidiaries has been the focus of the research in the field. It has been considered a major strategic international HRM practice that multinational enterprises (MNEs) have used to co-ordinate and control their global operations (Schuler et al., 1993). Here, staffing has been viewed largely from a strategic intent perspective where it has been seen as an issue related to a particular approach ethnocentric, polycentric, regio-centric, and geocentric (Perlmutter, 1969), each implying different patterns of control over the overseas activities. In view of that, it has been argued that the roles of international assignments depend on the MNE's international strategy, and that control and co-ordination of operations (management function), transfer of skills and knowledge and managerial development represent the main expatriate strategic roles in corporate internationalisation (Edstrom and Galbraith, 1977; Black et al., 1992). However, in the case of IJVs, this strategic choice (strategy-structure fit) perspective, according to which structure of control is largely dependent on the multinational's firm strategic intent (Geringer and Hebert, 1989), neglects the inter-firm nature of IJVs and oversimplifies the more complex and dynamic interaction between the partners jointly owning the IJV (Yan and Luo, 2001). Accordingly, it has been argued (Albrecht et al., 1996) that the models for HRM developed so far are limited to dealing with the complexity of an environment within an IJV. In addition, it has been found (Newburry and Zeira, 1997) that even those MNEs that successfully manage their subsidiaries (i.e. wholly owned enterprises) have failed to manage their operations under the multiple ownership of IJVs. Indeed, management practices that do not differentiate joint ventures from wholly owned business units can lead to serious business as well as managerial problems (Yan and Luo, 2001, p. 107). Moreover, there are specific differences between the management of IJVs and other business types, such as international acquisitions that stem from the fact that IJVs have multiple owners (Newburry and Zeira, 1997). Because IJVs involve independent organisations, the identification of individual IJV managers and reporting relationships associated with inter-firm trust and control are more apparent than within other forms of alliances (Pucik, 1988; Newburry and Zeira, 1997). For example, in comparison with non-equity IJVs, the governance structure of equity IJVs is well defined and standardised (Park and Ungson, 1997). The examination of HRM issues and

practices in IJVs, such as staffing, thus requires a depth of analysis not necessary for other types of alliances (Cyr, 1995; Lorange, 1996; Schuler, 2001; Yan and Luo, 2001). Clearly, because of the unique features of IJVs as an inter-firm co-operative arrangement, strategic staffing of IJVs deserves special and separate attention. Owing to the fact that it has been considered an important control mechanism yet the strategic international HRM literature on staffing might be only partly applicable to IJVs, our understanding of strategic staffing of IJVs is incomplete. In particular, it is not clear what the drivers behind decisions about staffing in IJVs are, whether organisations are selecting IJV managers for the purpose of IJV control and, if so, how it is manifested. Drawing on the literature on IJVs and strategic international HRM, the paper explores strategic staffing from two perspectives, the strategic intent and the negotiations perspective, with the objective of addressing these issues and contributing to understanding of the phenomenon. In conclusion, a model for strategic staffing of IJVs based on an integrative perspective is proposed as a way forward and as an agenda for future research.

Strategic staffing of IJVs: compromise between ``wants'' and ``cans''?

In an IJV, because of the shared-ownership and decision making, each partner must relinquish some control over its activities (Geringer, 1993). The implication is that a partner does not have complete control over staffing decisions, and this could mean that what one partner wants with regard to staffing cannot always be achieved. It could, therefore, be concluded that staffing of IJVs represents a compromise between ``wants'' and ``cans''. Accordingly, in approaching staffing of IJVs, two main questions are raised: 1 How much control does the partner want to have over staffing and why? 2 Can the partner exercise the level of wanted control over staffing? The answer to the first question obviously depends on what the partner wants to achieve through staffing, which refers to its strategic choice, whereas the second relates to the partner's capacity to exercise control over staffing. This further implies that staffing of an IJV is tightly related to the IJV parent control structure. The structure of parent control is defined as the relative pattern in which the parents divide power in managing and

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governing the IJV (Yan and Gray, 1994), and represents a compromise between two sets of factors: first, what the partner wants, which is related to its strategic intent; and second, what the partner can obtain, which is essentially linked to its bargaining power (Yan and Luo, 2001, p. 107). This suggests that, in considering the strategic staffing of IJVs, an integrative perspective that includes both strategic intent and negotiation perspectives should also be used. Before considering the strategic staffing of IJVs from each of these perspectives, it is necessary to note that, for the purposes of this research, staffing has been defined as the HRM activity of planning, selecting and attracting the best candidates for management positions in an IJV. Exercising control over staffing means influence over staffing decisions and, consequently, over the appointed managers.

A strategic intent perspective: how much control does the partner want to have over staffing and why?
Having control (influence) over staffing does not necessarily imply that staffing is used for IJV control purposes. Yet, a number of authors (e.g. Schaan, 1988; Geringer and Hebert, 1989; Geringer and Frayne, 1990; Kumar and Seth, 1998) suggest that influencing the staffing of an IJV's management positions may represent a crucial strategic control mechanism for an IJV parent, implying that IJV control may be the main driver behind the decisions concerning the strategic staffing of IJVs. As control allows the parent to integrate the venture's activities with the overall strategy and activities of the parent (Gullander, 1976), having control over an IJV means that it is more likely that an individual partner's objectives for the IJV will be met (Groot and Merchant, 2000). IJV control has been defined as ``the mechanisms and process in which the foreign and local sponsoring organisations, as well as the venture management, influence the venture's strategic and operational decisions and regulate its business activities in order to meet the parents' strategic expectations'' (Yan and Luo, 2001, p. 89). This is often carried out through exercise of management control of an IJV operation (e.g. through staffing). IJV partners exercise their control over behavioural aspects of the IJV, as opposed to outcome control, which is almost impossible in IJVs due to the fact that payoffs from IJVs are frequently deferred for several years and the venture's operation is subject

to unpredictable contingencies (Yan and Luo, 2001). The partners' desire and competition for management control over the IJV originate in the partners' general fear of uncertainty with respect to whether their expectations will be fulfilled (Yan and Luo, 2001, p. 90). Indeed, whenever possible, the self-interests of the partners motivate them to achieve benefits from collaboration beyond the level mutually agreed on or in the areas where the IJV's contract is incomplete (Pearce, 1997). This further leads to the following questions: Are organisations selecting IJV managers for the purpose of IJV control? If so, how is it manifested? What are the drivers behind decisions about staffing in IJVs? From a strategic intent perspective, the company must first pay attention to defining the strategic role of the assignment and then to assessing the factors required to accomplish this role successfully (Bonache and Fernandez, 1999, p. 176). Bonache and Fernandez (1999) argue that the type of MNE subsidiary partly determines the strategic role of international assignment. A similar approach could be applied with regard, specifically, to staffing of IJVs. The literature on IJVs and the strategic international HRM literature lead to certain propositions with regard to what the strategic role of assignments to IJVs is, by looking at the number of people assigned to the IJV by the partner, the selection criteria used, the partner's decisions about whom to assign and where, and how to attract the candidates, as the factors required to accomplish this role successfully. The use of expatriates and an ethnocentric staffing approach in the early stages of internationalisation are common practice (Welch et al., 1994). For example, it has been argued (Wang et al., 1998) that expatriate managers should be brought in to the IJV to implement HRM policies in the initial stage. On the other hand, a number of studies considered, directly or indirectly, the importance of being committed to polycentric HRM in IJVs (e.g. Zeira and Shenkar, 1990; Lane and Beamish, 1990; Wang et al., 1999; Li et al., 1999). Wang et al. (1999) suggest that IJVs should recruit and train good local managers to take up higher positions, in order to avoid difficulty in attracting candidates for expatriate assignments and thus reduce the high cost of these assignments. The promotion of local middle managers to senior positions is an important step towards the localisation of a

Whom to assign and where?

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company's operations (Bjorkman and Lu, 1999). Walsh et al. (1999) suggest that a particular mix of foreign and local managers may comprise a more effective management team than some other configurations and that staffing, therefore, may be of particular importance. Meschi (1997) suggests that, to facilitate the process of cultural integration, new employees should be hired (rather than transferring large numbers of expatriate or local employees from the existing operations of the respective partners), as new recruits will be less rooted in a given organisational culture than local or foreign transferees. However, in their study of Sino-foreign IJVs, Bjorkman and Lu (1999) found that the localisation of top management positions is an issue that is not necessarily determined by the development of competent local managers home country nationals (HCNs), but could be affected by a power struggle among parent companies. The high need to control an important IJV may motivate a partner company to use more expatriates than HCNs or third-country nationals (TCNs) (Lorange, 1986). Indeed, Martinez and Ricks (1989) found that a higher percentage of expatriates in IJV top management positions is related to a higher level of IJV importance. Here, it is necessary to note that the IJV may be of a different strategic importance to the various partners as, for some, it may represent an integral factor in the implementation of its overall strategy, while, for other partners, it may play a relatively minimal strategic role (Lorange, 1996). Accordingly, the level of control that a partner wants to exercise over an IJV is positively related to the extent to which the IJV is important to that partner (Daniels and Magill, 1993). Further, studies in international HRM literature (e.g. Mayrhofer and Brewster, 1996; Scullion, 1994) suggest that the majority of MNEs rely almost exclusively on internal recruitment for foreign management positions. Bonache and Fernandez (1999) argue that reliance on expatriates depends on the type of subsidiary. For example, in both globally integrated and autonomous business units, the strategic purpose of an assignment is usually the co-ordination and control of operations and thus reliance on expatriates is justified. The control function of expatriates in autonomous subsidiaries requires the assignment of trustworthy people, with an established track record and proven loyalty to the company to guarantee that the interests of headquarters are well represented (Bonache and Fernandez, 1999). In addition, it has also been argued (Hailey, 1999) that a real issue facing multinationals

as to whether they localise their international management is not about the availability of management skills but is more a matter of trust in the abilities and integrity of local managers. In IJVs, expatriates indeed play a special role in serving as a mechanism parent companies can use to exercise control (Prahalad and Doz, 1981; Martinez and Ricks, 1989), and it would appear ``reasonable to assume that multinational parents were likely to influence decisions concerning their selection, compensation and training more so than for host country nationals'' (Martinez and Ricks, 1989, p. 469). Expatriation has long been identified as a co-ordination and control mechanism used by MNEs (Martinez and Jarillo, 1991), since such employees are likely to act in ways that are acceptable to their parent firms (Killing, 1983). The foreign parent company has full control over the selection of expatriates, who are key personnel in a joint venture (Tsang, 1994). As the staffing mechanism provides control by putting individuals with an allegiance to the parent in positions of decision-making authority (Kumar and Seth, 1998, p. 582), the issues here refer to the degree of influence the partners actually have over a given manager. Obviously, the position to which a person is appointed is also very important, since ``just one expatriate in a key post can assure that the interests of the headquarters are well represented in the subsidiary'' (Bonache and Fernandez, 1999). That is why IJV top management usually consists of managers drawn from the two parent companies, often with strong allegiance to their respective parents (Li et al., 1999). Li et al. (1999) recommend localisation of management staffing in the long term, as a way to overcome the issue of the large pay differences between expatriate and local managers that often leads to considerable resentment among local managers in IJVs. In addition, they claim that, besides the issue of compensation disparity among IJV top managers, another issue is whether incentives are linked to the parent firm performance, the IJV's performance, or the manager's performance. When the incentive system is structured to reward managers for meeting the parent firms' goals, the focus of IJV top managers should be on achieving those goals, which can lead to political behaviour between the parent subgroups within the IJV top team (Li et al., 1999). However, it has been found that the rewards for IJV top managers are usually not tied to the IJV's performance (Beamish and Banks, 1987). In many IJVs, the compensation system instead aligns the managers' interests

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with those of their parent firm, which may not align with those of the other parent or the IJV itself (Shenkar and Zeira, 1987). The implication is that, in this way, the parent can maintain its influence over its given managers. Based on the above considerations, as well as the fact that keeping the managers' incentives linked to a parent's performance may implicitly show the parent's interest in having and maintaining its influence over the chosen managers, the following has been proposed: P1. The ratio of the number of expatriates versus HCNs and TCNs assigned by a parent company to an IJV, as well as strategic importance of their function (position) in the IJV, is positively related to the level of importance of staffing as a control mechanism to that parent.

Selection criteria

The selection of general managers and the management team is crucial to the success of IJVs (Satow and Wang, 1994; Schuler, 2001). The composition of the IJV management team in terms of their demographic characteristics and national cultural background has important implications for IJV performance because these managers bring their individual experiences, biases, and their parent firms' perspectives to the IJV management team (Newman, 1995). Coupled with that, the presence of two or more parent organisations, cultural differences, divergent sets of expectations, goals and desired performance outcomes provide major challenges to IJV managers (Geringer and Frayne, 1993; Shenkar and Zeira, 1992). An IJV general manager must accommodate the interests of the parents, each with different expectations; and find a balance between the parents' priorities and a compromise between their different sets of objectives (Hoon-Halbauer, 1999). Li et al. (1999) argue that parent companies need to consider how the characteristics of the managers they send to an IJV will affect the venture's success. Thus the most important requirements for the IJV general manager are his/her ability to express vision, values, and expectations, being diplomatic and skilled in cross-cultural understanding and communications. IJV managers will have to develop special liaison skills to cope with the mixed loyalties and conflicting goals that characterise shared ownership and shared decision making (Harrigan, 1986; Pucik, 1988; Cyr, 1995). Schuler (2001, p. 31) maintains that the selection of the IJV top management team

needs to be based on systematic selection methods associated with a wide variety of job- and organisation-related criteria. On the other hand, many managers are too competitive for their own good, unable or unwilling to break out of an ``us versus them'' mindset (Parkhe, 1998). Factionalism, reflected by the subgroup members' sense of ``us'' versus ``them'', is akin to ethnocentrism and determines the level of political influence activity within the IJV top management team (Pearce, 1997). In comparison with a traditional hierarchy, the IJV top management is expected to exhibit higher degrees of factionalism due to the presence of subgroups that form around parental differences in power, goals, decisionmaking philosophy and reward systems (Pearce, 1997). In addition, Newburry and Zeira (1997) suggest that to guard against potentially harmful hidden agendas (in other words to exercise control) may involve training personnel about what information they are free to divulge and what information should be hidden from IJV employees appointed by a different partner. Parkhe (1998) has found that some companies even play the ``power game'', preferring their managers not to develop personal relationships with their counterparts, in a fear that such ties will weaken the managers' decision to ``push hard'' for the best possible deal. The issue of whether or not a parent organisation is actually willing to transfer critical human resources to the IJV could be related to the fact that these managers would normally be assigned to the IJV for a long period of time, perhaps for their entire remaining working career (Lorange, 1996), and the partners want to keep their best people in their own organisations. On the other hand, putting the partner's best people into an alliance tells everyone, including another partner, that the alliance is important to that partner (Byrne, 1993). It could be, therefore, concluded that the importance of an IJV to a partner has implications for staffing, related preassignment training, as well as the length of the assignment. Since control depends on the IJV's relative importance to the partners, it could be argued that the level of control partners want to exercise over the IJV is directly related to selection criteria and thus to the level of control each partner wants to have over staffing: P2. The quality of people assigned by a parent company to an IJV is positively related to the level of importance of staffing as a control mechanism to that parent.

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Overstaffing with foreign managers implicitly signals a lack of trust in local managers (Cyr and Schneider, 1996). On the other hand, it has been suggested (Nooteboom et al., 1997; Yan, 1998) that trust may become a substitute for control. Parkhe (1998) argues that trust building calls for close attention to staffing issues, including selecting the right type of people, putting them in appropriate positions in the IJV, and limiting their turnover. These considerations lead to the following proposition: P3. The number of managers assigned by a parent company to an IJV is positively related to the level of importance of staffing as a control mechanism to that parent. Tsang (1994) claims that finding the right people is not easy, but succeeding in having them transferred from their parent companies is even more difficult. Because IJVs are separate entities, it may be difficult to recruit people from the parent company to go to an IJV, as leaving a parent company to join the IJV is sometimes not a transfer but a termination (Lorange, 1996). As with any overseas assignment, re-location to a joint venture may make the manager's future career appear uncertain (Schuler, 2001). Parent organisations should offer career planning to counter the ambiguity and risks associated with an IJV assignment, and to limit the potential for unsatisfactory repatriation experiences (Brewster and Harris, 1999). On the other hand, a clear linkage between the assignment and an assignee's future career can give the manager a strong incentive to work towards the goals of the parent company rather than those of the IJV (Li et al., 1999). Therefore, it could be argued that the promotional opportunities of the managers are directly related to the partner's intention to have control over the managers. An additional issue here concerns the length of the assignment: if management positions are filled by the parent company's people, will they ever go back to the parent and, if so, when? On what does it depend? Newburry and Zeira (1997) suggest that one way to sustain trusting relationships between the partners is to avoid abrupt changes in personnel by one partner after the other partner has gained a familiarity with a given management team. On the other hand, the transferred human resource can have strategic value to the parent organisation as a result of its discretionary ``power'' to transfer it back (Lorange, 1996). It could,

How many people to assign?

therefore, be argued that the length of the assignment is related to the level of control the partner wants to exercise over staffing, which is, in turn, reflected in the choice of expatriates sent to the IJV versus hiring HCNs or TCNs.

Is IJV control the main driver behind decisions about strategic staffing in IJVs?

The above consideration of the literature shows that the level of importance of control over staffing actually represents the level of control a partner wants to exercise over the IJV through staffing. Consequently, the following has been proposed with regard to the strategic role of assignments to an IJV: P4. IJV control is the main driver behind strategic staffing of IJVs. Accordingly, a model showing the manifestations of the importance of control in strategic staffing of IJVs is proposed (Figure 1).

Attracting candidates

A negotiations (bargaining power) perspective: capacity to use staffing as a control mechanism

Wang et al. (1998) compared firms with and without the right to appoint personnel to key positions in the IJVs, and found that the parent firms with the right to do so felt that they had greater control over their IJVs and they were also more satisfied with their performance. For example, partners who had the right to appoint the HR manager of their IJVs perceived that they had more control over their IJVs, compared with those without the right to appoint to the position. Wang et al. (1998) found that lacking the right to appoint the HR manager could make it very difficult for the partner to develop and implement appropriate HR policies, and that it is, therefore, necessary to win the right to appoint the HR manager. In cases where the top managers who occupy critical positions in IJVs are considered by partners as a major control mechanism, each parent wants their own people to occupy the key positions, and heated debates over this issue often occur in IJV negotiations (Li et al., 1999). Indeed, Miller et al. (1997) found that one of the common problems in an IJV negotiation concerns division of management responsibility. Previous research has shown that the choice of people for managerial positions must usually be approved by the board of directors, where even the promotion of employees to relatively junior positions may be the source of disagreement (Bjorkman, 1995; Bjorkman and Lu, 1999).

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Satow and Wang (1994) studied the patterns of managerial behaviour in Sino-foreign IJVs and found that the board of directors of the IJV had the power to make decisions on all issues concerned with the selection of senior managers. Further, the right to appoint members to the IJV's board itself is typically associated with the level of equity holding. IJV equity ownership, in terms of percentage ownership by each parent company, can differ significantly from IJVs with equal ownership by all partners to ones with unbalanced ownership patterns. Wang et al. (1999) argue that the majority partner is usually in a better position to bargain for the right to appoint more members to the board and management positions of the IJV. They found that partners with larger ownership and/or more advanced management knowhow were more likely to win the right to appoint more members to the board of directors and more managers to the IJV, which, in turn, enabled them to exercise a greater degree of control over both the strategic and the operational aspects of their IJV. On the other hand, Schaan (1988) has suggested that, for a parent with minority ownership, the right to appoint key personnel can be used as a control mechanism. He

argues that, as both partners are essential to an IJV's success, even a partner with a minority ownership is in a position to exert much influence on the control of the IJV. Also, in most IJVs where one parent assigns the venture's general manager, the other parent has a veto power and can force the resignation of the IJV general manager (Schaan, 1988, p. 14). Indeed, agreements being negotiated often specify in some detail which parties are to have veto power over various aspects of managing the IJV. Miller et al. (1997) claim that foreign partners demand more veto power (control) as their ownership interests diminish. Bjorkman and Lu (1999) also suggest that the right to control the recruitment of people should be mentioned in the IJV contract. Further, Wang et al. (1999) found that, in cases where the foreign majority ownership is not allowed, companies with superior management, technological know-how and strong financial resources can demand the right to appoint key positions as a pre-condition for entering into IJV contracts. The appointed managers will then set up policies, procedures and auditing to help the parent companies achieve their control purpose. Killing (1983) also suggested that the parent with the managerial skills and knowledge required by the venture to be

Figure 1 How much influence a partner wants to have over staffing and why: manifestations (indicators) of the importance of IJV control as a driver behind staffing decisions

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successful should first assume control over the IJV. Yan and Gray (1994) provide clarification for these somewhat conflicting results. In perhaps the most systematic exploration of the concept of bargaining power in IJVs to date (Inkpen and Beamish, 1997), Yan and Gray (1994) presented an integrative model of management control in IJVs. According to the model, the relative amount of critical resources contributed by the partners (equity, management expertise, technology, global service support, local knowledge, product distribution, and material procurement), as well as the context in which the partner's negotiation occurs (alternatives available to negotiators and strategic importance of the IJV to overall business of the partner), constitute the key source of the partner's relative bargaining power, which is positively related to the IJV management control structure. Therefore, equity structure is not equivalent to management control, but is a type of resource committed by the partners that constitutes a source of bargaining power that contributes to management control (Yan and Gray, 1994). Also, it is clear that, for the partner for which the IJV is of greater strategic importance, the IJV involves greater dependence and, therefore, less bargaining power (Yan and Luo, 2001). According to this bargaining power (negotiations) perspective, management control exercised by an IJV partner is dependent on its bargaining power relative to the venture's other partner(s). This perspective draws on the literature on interorganisational relations and power dependence and resource dependence theories in particular (Yan and Luo, 2001). Power dependence theory (Emerson, 1962) argues that bargaining power rests on the exchange relationship between two actors (individuals or organisations), where one actor's power resides in another's dependency (Yan and Luo, 2001). Resource-dependence theory of inter-organisational power (Pfeffer and Salancik, 1978) suggests that the ability of a partner to exercise control over an IJV depends on its own ability to deliver resources needed for the IJV to succeed compared with that of its partners. Accordingly, Hyder and Ghauri (2000) found that an imbalance in the contribution of resources leads to increased need for control. Further, it has been found (Martinez and Ricks, 1989) that the partner with the greater bargaining power is the one more likely to shape the HRM activities of the IJV. Conner and Prahalad (1996) also claim that HR activities and processes are assumed to

reflect the distribution of power within a system. For instance, Bjorkman and Lu (1999) found that those expatriate managers in IJVs who did not have what they perceived as appropriate management control frequently bitterly complained about the problems they had in introducing Western HRM ideas. Finding a middle ground between the methods and practices used by the foreign partner, and the development of new policies to match the unique requirements of the IJV, represents a significant challenge (Cyr and Schneider, 1996). Ideally, HRM practices that are implemented on behalf of the IJV should be determined through negotiation and compromise among the IJV's key stakeholders (Geringer and Frayne, 1990). However, Hannon et al. (1995) found that dependence on parents' resources is associated with globally integrated international HR strategies, while dependence on local resources is related to locally responsive HR strategies. In strategic international HRM studies, standardisation of policies and practices is often seen as a way for headquarters to control foreign subsidiaries (e.g. Martinez and Jarillo, 1991). These studies use a standardisation-localisation framework, which is proposed for HRM policies and practices in MNEs as a response to conceptualisation of MNE strategy in terms of global integration versus local responsiveness (Schuler et al., 1993). However, in the case of IJVs, this issue does not seem to be as straightforward. In fact, it is much more complicated, because the literature review on IJVs points to the fact that bargaining power can shape HR activities, leading to the following proposition: P5. The partner's capacity to exercise control over staffing is determined by its relative bargaining power (Figure 2).

Strategic staffing of IJVs: an integrative approach

Albrecht et al. (1996) suggested that an IJV could be viewed as a strategic alternative for MNEs who do business internationally under the constraint of shared ownership, where the IJV is a tool to achieve the optimal goals of each partner. Accordingly, one could argue that the staffing of IJVs might be investigated on the basis of the research on strategic staffing in MNEs. On the other hand, this research might be just partly applicable with regard to IJVs, since staffing of IJVs requires a compromise between what a company wants and what it can do with regard to

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Jelena Petrovic and Nada K. Kakabadse Strategic staffing of international joint ventures (IJVs): an integrative perspective for future research Management Decision 41/4 [2003] 394-406

Figure 2 Can a partner use the staffing as a control mechanism? Antecedents to the partner's capacity to exercise control over staffing

staffing. Drawing on the above-considered approach to IJV control proposed by Yan and Luo (2001), this leads to the following proposition: P6. The level of importance of staffing as a control mechanism to a partner as well as the partner's bargaining power will shape staffing decisions. The model presented in Figure 3 shows drivers of decisions about strategic staffing in IJVs from an integrative (strategic intent and bargaining power) perspective.

Conclusion
A central theme of this paper is that control represents the main driver behind decisions

about strategic staffing of IJVs, since the results of various studies show that the level of importance of control over staffing actually represents the level of control a partner wants to exercise over the IJV through staffing. It has also been suggested that, in examining the strategic staffing of IJVs, a number of issues will need to be investigated and numerous mutually related questions answered, such as: . How much control does the partner want to have over an IJV? . How much control does the partner want to have over staffing itself and why? . What is the number of people assigned by the partner to the IJV? What is the ratio of expatriates, HCNs and TCNs in IJV management positions? How are they

Figure 3 Strategic staffing of IJVs: an integrative perspective

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Jelena Petrovic and Nada K. Kakabadse Strategic staffing of international joint ventures (IJVs): an integrative perspective for future research Management Decision 41/4 [2003] 394-406

selected? How is it linked to career development? What is the length of expatriate assignment? etc. How much control can the partner exercise over staffing itself?

While the last question looks at the partner's bargaining power, other questions essentially ask about the partner's strategic intent, showing the strategic importance of the IJV to the partner, drivers behind staffing decisions, and importance of control in staffing. Based on the review of the literature on staffing and control, and drawing heavily on the work on IJV control done by Yan and Luo (2001), the paper argues that it is necessary to understand and critically consider strategic staffing of IJVs from an integrative (strategic intent and negotiations) perspective. At a general level, this paper suggests that our understanding of strategic staffing of IJVs is incomplete because too little research attention has been given to the IJVs. Indeed, although HRM is critical to the successful implementation of IJVs, strategic HRM issues surrounding these ventures are not well understood (Lorange, 1996). Moreover, according to Cyr (1995), the amount of time spent on HRM issues in IJVs remains small. On the other hand, HRM issues in IJVs are very extensive (Child and Faulkner, 1998; Lu and Bjorkman, 1997). The lack of involvement in issues related to HRM in IJVs is not due to a lack of recognition of their importance, but rather because previous information from the studies related to the development and implementation of HRM practice in IJVs is very limited (Cyr, 1995; Pucik, 1988). Furthermore, Albrecht et al. (1996) argue that additional research is needed regarding the use of human resources as a control mechanism, since human resources are becoming an increasingly important factor in strategic implementation, particularly as organisations move more determinedly into global competition. As suggested by some authors (Ricks et al., 1990; Ferris et al., 1999), many areas in international HRM research have suffered from either neglect or oversight, including control patterns, and future researchers need to evaluate the value added of international HRM to the global, behavioural and financial competitiveness of organisations. Walsh et al. (1999) suggest that, until research results give some precise guidance, each IJV will need to experiment to find its appropriate staffing configuration. It has also been noted (Beamish, 1993) that, as previous studies have focused mainly on IJVs in a developing country (e.g. China), their results

might not be applicable for those between partners from developed countries. Beamish (1993) claims that an IJV set up by a partner from a developed country and a local partner from a developing country calls for the performance of a different type of task because of the distinct differences between the two countries' economical and industrial structures. Further, Barkema et al. (1997) argue that the effect of cultural distance is significant for IJVs in developing countries, but not for those in developed countries. In addition, in many developing countries, host country governments often place limitations on whether, and what percentage of, a business can be foreign-owned (Newburry and Zeira, 1997), as well as on the number of PCNs appointed to an IJV. Despite the fact that each IJV environment is unique and thus many factors could influence decisions about staffing of an IJV, including the culture of the country of IJV operation, its legal, political, economic and social environment, to note just a few of them, the generic model of strategic staffing of IJVs proposed in this paper offers a new and unexplored perspective on the important IJV phenomenon. A concluding consideration is that the usefulness and relevance of this paper rest on its ability to suggest the following practical implications of strategic staffing. Greater insight and understanding of strategic staffing of IJVs enhance dialogue between three sets of parties, namely; dialogue between IJV board members themselves, dialogue between IJV board members and parent companies, and dialogue between IJV parents themselves. Dialogue between IJV and parents can be enhanced by clarifying the strategic intention of each of the parent companies and also clarifying the degree of equity of relationship between the IJV and the parent companies. Dialogue between IJV parents could be enhanced by clarifying whose strategic agenda predominates and also clarifying the degree of shared ownership of the strategic agendas being pursued by the parents. Dialogue between IJV board members should focus on the criteria for the hiring of staff and management, their desired and required capabilities and the effective utilisation and development of staff and management.

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