Fit, misfit, and beyond fit: Relational metaphors and semantic ... - SSRN

Journal of International Business Studies (2015) 46, 830–849

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Fit, misfit, and beyond fit: Relational metaphors and semantic fit in international joint ventures Leigh Anne Liu1, Wendi L Adair2 and Daniel C Bello1 1 Robinson College of Business, Georgia State University, Atlanta, USA; 2Department of Psychology, University of Waterloo, Waterloo, Ontario, Canada

Correspondence: LA Liu, Robinson College of Business, Georgia State University, 35 Broad Street, Atlanta, GA 30302-3989, USA. Tel: +1 (404) 413-7288; Fax: +1 (404) 413-7276;

Abstract We propose that metaphorical descriptions of newly formed international joint ventures (IJVs) contain important, diagnostic information regarding the way these cross-border alliances are managed and perform. In three studies, we examine how relational metaphors reflect semantic fit, or the IJV partners’ cognitive match of managerial schemas and their capability to recontextualize communications regarding alliance operations. We find IJV partners that share relational metaphors achieve superior outcomes, reflecting aligned managerial approaches to controlling shared resources and joint activities. Further, formal ownership as equity share moderates the impact managerial schemas implied by metaphors have on subjective, time-lagged performance of IJVs. Our analysis of metaphorical language not only reveals the way newly formed IJVs are managed, but also highlights performance variations associated with complex patterns of IJV controls. Journal of International Business Studies (2015) 46, 830–849. doi:10.1057/jibs.2015.13 Keywords: language (language design, silent language, translation); semantic fit; metaphor; alliances and joint ventures; venture management and performance

INTRODUCTION “… the greatest thing by far is to be a master of metaphor by Aristotle, as cited in Leary (1995: 268)

Received: 8 November 2012 Revised: 20 February 2015 Accepted: 9 March 2015 Online publication date: 11 June 2015

Metaphorical language, often in the form of relational metaphors describing organizational relationships, is pervasively used especially in the context of international joint ventures (IJVs). For example, a manager states his joint venture is “a marriage made in heaven,” suggesting a smooth and cooperative relationship between the international partners (Crooks, 2011). In contrast, another manager describes the disputes between two IJV partners as, “The feud … resembles a particularly messy marriage breakdown,” conveying a rocky and competitive relationship (Guthrie, 2011: 14). Metaphorical language serves a symbolic role that reflects each partner’s understanding of the venture, and partners’ metaphors together can signal a collective understanding of their relationship (Brannen, 2004). When metaphors are shared, the symbolic language of metaphors represents a congruent view of the organizational processes and resources utilized by the partners during alliance operations (Brannen & Doz, 2012; Gibson & Zellmer-Bruhn, 2001). Brannen (2004) maintains that

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“semantic fit,” or the shared use and understanding of corporate language, is critical to navigating the foreignness among culturally distant partners and achieving performance outcomes. IJVs are a fragile organizational form since crossborder firms must coordinate shared resources and activities for the joint accomplishment of individual corporate goals (Luo, Shenkar, & Gurnani, 2008). These international partnerships are problematic because “cooperative behaviors maximize joint returns from complementary resources, but competitive actions maximize an individual firm’s share of returns” (Bello, Katsikeas, & Robson, 2010: 77). To reconcile these contradictory forces, controls are employed by the venture partners to coordinate activities necessary for value creation while safeguarding each partner’s ability to extract rents and dampen partner opportunism (Das & Teng, 2002; Yan & Zeng, 1999). However, previous IJV research tends to treat control as a singular construct, often using equity share as a proxy for partner control while ignoring socialization and other factors (Chen, Park, & Newburry, 2009). Although some recent IJV research acknowledges that venture control is not a simple aggregated construct, “many prior studies do not differentiate management control from ownership control” (Yan, 1998: 776). Our research advances the literature by conceptualizing the individual and joint effects of control types and by developing an innovative, metaphor-based approach to assessing managerial control in newly formed IJVs. Enhanced conceptualization and assessment of venture controls are necessary to advance our understanding of how IJV’s coordinate alliance resources and activities to achieve performance outcomes (Chen et al., 2009). Ownership control, a legal construction, bestows legitimate authority and formal decision rights such that “equity share is a way of influencing strategic control over the joint venture” (Mjoen & Tallman, 1997: 261). In contrast managerial control, a social construction, reflects informal influence and decision making over daily actions (Yan & Gray, 1994), meaning informal managerial “control over specific operational activities” (Mjoen & Tallman, 1997: 261). While equity share is a viable proxy for measuring ownership control, managerial control emerges informally as the alliance is formed and is much more difficult to assess since the informal, socially based nature of IJV management is not generally available in public records (Yan & Gray, 2001), even though such information is critical for a complete understanding of these cross-border alliances (Lin & Wang, 2008).

Since IJVs are a fragile form of organizing, characterized by incomplete contracts (Luo et al., 2008), accomplishing strategic goals and maintaining a high-quality relationship are serious challenges for international partners who may have culturally embedded, different orientations and approaches to managing the alliance (Bello et al., 2010). However, informal managerial control is difficult to convey directly because it is a social construction developed by the cross-border parties during the process of alliance formation and is only tacitly understood by the participants (Ring & Van de Ven, 1994). Unlike explicit ownership control, the social reality of managerial control is problematic since the intercultural context of IJVs means each partner brings unique ways of comprehending, thinking, and reasoning about alliance operations. Since emergent managerial control is difficult to articulate directly (Anand & Khanna , 2000), we rely on metaphor theory (Lakoff, 1993) to indirectly assess the socially construed, managerial schemas of newly formed IJVs through each partner’s metaphorical language that reveals its approach to alliance management. We ask the question, “What is the role of relational metaphors in shaping the subjective performance of IJVs?” Our research contributes to the international business literature by providing several, specific advances to our understanding of these complex, cross-border partnerships. First, by applying metaphor theory to readily available public information about new IJVs, we reveal hidden information about the complex, informal schemas employed by international partners to coordinate their collective endeavor. Although ownership control is apparent, informal managerial control of a new IJV is not since it is tacit and emerges from informal, sense-making processes during alliance formation (Ring & Van de Ven, 1994). Second, we link early metaphorical descriptions to future, subjective performance by specifying the consequences of semantic fit, the alignment or misalignment of partners’ metaphorical understanding of their shared alliance activities. Performance is challenged by the potential for mismatched understandings which is high in IJVs since international partners are embedded in different national cultures and contexts. We identify performance consequences of metaphorical descriptions expressed by the international partners, drawing linkages between the managerial schemas implied by each partner’s metaphors and the future productivity of the particular way partners interact. Third, we combine our new insights regarding managerial control with the established literature of ownership control for a holistic evaluation of IJV

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performance outcomes. Our contribution lies in using our novel application of metaphor theory to specify how the outcomes of managerial controls are enhanced or inhibited by the formal ownership control of newly formed international alliances. Below we first review current literature on the study of metaphors, semantic fit, and informal relationship management in international business, then present three empirical studies investigating how relational metaphors and equity ownership influence subjective outcomes in IJVs.

RELATIONAL METAPHORS AND SEMANTIC FIT IN IJVS A metaphor, from the Greek for “transference,” maps across conceptual domains and is a rhetorical trope used to make sense of the abstract or unfamiliar (e.g., informal IJV managerial schemas) by relating it to something familiar and concrete (e.g., marriage and family life) (Cornelissen & Kafouros, 2008; Lakoff & Johnson, 1980; Morgan, 2006). Metaphors provide a holistic view of an experience, convey meaning, and direct our interpretation and action. For example, the metaphor that a team is a family conveys a collaborative and supportive group setting, whereas a sports team metaphor suggests a competitive group approach, focused on winning (Gibson & ZellmerBruhn, 2001). These metaphors reflect team members’ understanding of team goals and processes, and therefore direct team members’ behaviors and affect team outcomes. It has been noted that metaphorical language, when used in corporate communication, reflects managerial thinking, enabling a firm “to make sense of its environment and to conceive, develop, and model strategic alternatives and scenarios effectively” (Brannen & Doz, 2012: 97). In this way, relational metaphors in corporate rhetoric are linguistic reflections of underlying schemas that provide guidelines for interpretation of situations and for the appropriateness of behaviors used to relate to others (Baldwin, 1992; Cantor, Mischel, & Schwartz, 1982; Fiske & Haslam, 1996). We propose that in an IJV, relational metaphors, as linguistic tools that convey meaning to internal and external audiences and stakeholders, reflect an implicit understanding or mental model about the informal way IJV operations are managed by the partners (Oswick, Keenoy, & Grant, 2002). Before we investigate the meaning and impact of IJV relational metaphors, we briefly discuss how such metaphors emerge in newly formed alliances. Alliances such as IJVs are characterized by incomplete contracts, meaning formal ownership stakes

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and decision rights are often supplemented by informal, socially based understandings that are represented by relational management schemas (Chen et al., 2009; Gilliland, Bello, & Gundlach, 2010; Yan & Gray, 2001). Apart from ownership shares, little is publicly known about the way a newly announced IJV will be managed, yet how the partners engage in controlling and organizing their joint work is crucial to the social and economic performance of their IJV (Bello et al., 2010). Heide (1994) theorizes that informal management consists of complex social constructions that define relational processes, shaping each partner’s understanding of the role of cooperation and competition (Luo et al., 2008). Thus compared with ownership control, relational management schemas are much more difficult to understand due to their informal, tacit nature (Yan & Gray, 2001). The emergence of informal schemas for managerial control is often a result of “social-psychological processes of sense making, or enactment” (Ring & Van de Ven, 1994: 97) that yield unwritten, non-verbalized sets of assumptions and beliefs about IJV relationships that are understood by parties as specifying each other’s responsibilities and prerogatives (Ring & Van de Ven, 1994). Socially constructed, relational schemas for managing an IJV define relationship interactions and social identities, providing each international partner with an implicit mental model or schema for controlling the alliance. Importantly, informal relationship management schemas are theorized to reflect one of two non-market governance forms: unilateral and bilateral schemas (Gilliland et al., 2010; Heide, 1994). A unilateral schema reflects relationships that are hierarchically organized by an authority structure that provides one partner with the ability to develop rules, give instructions, and impose decisions on the other. For Fiske (1992, 2004), a unilateral schema reflects authority ranking, an asymmetrical social relation where people perceive a linear ordering along some hierarchical social dimension, enabling an authority to dominate subordinates’ actions. In contrast, bilateral relationship schemas reflect egalitarian organization, joint development of policies, equality matching, and balanced social relations where actors value equality and fairness (Dyer & Singh, 1998; Fiske, 1992, 2004). Although unilateral and bilateral relational schemas are abstract, latent concepts (Heide, 1994), such informal understandings function as cognitive maps that direct IJV partners in their daily activities. One way to convey meaning and understanding about these tacit unilateral and bilateral relational schemas in IJVs is through the use of metaphor. We propose

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that international partners comprehend, think, and reason about their managerial schema for controlling IJV operations in metaphorical terms, mapping latent alliance (target) domains to the well-understood (source) domain of marriage and family relationships. In the family context, unilateral and bilateral schemas identify fundamental forms of this basic human social unit (Russon, 2003). In newly formed IJVs, viewing relational schemas as tacit and abstract is consistent with Gibson and Zellmer-Bruhn’s (2001) notion that “metaphors are a key mechanism through which we comprehend abstract concepts and perform abstract reasoning” (276). Discussing the “work-team as sport-team” metaphor, Gibson and Zellmer-Bruhn (2001) state metaphor “involves understanding one (target) domain of experience (work teams) in terms of a very different (source) domain of experience (sports teams)” (276) – their analysis of “team metaphors” is consistent with our notion that meaning about abstract informal IJV management (unilateral or bilateral) can be understood and conveyed in terms of concrete marriage and family experiences. We can generalize beyond teams to alliances such as IJVs since “Metaphors allow us to understand abstract subject matter in terms of more concrete, familiar terms … and metaphor is evoked whenever a pattern of inferences from one conceptual domain is used in another domain” (Gibson & Zellmer-Bruhn, 2001: 276). Thus based on extant theory, we contend that relational metaphors are a linguistic means of conveying meaning about how IJV partners understand their informal, managerial control of daily operations. Beyond the meaning conveyed by a relational metaphor, we propose that when IJV partners share the same relational metaphors, their cognition regarding venture operations reflects a degree of semantic fit. In international business partnerships, issues of language translation and cross-cultural understanding create challenges for shared understanding. For example, if teams in one IJV partner are like family and teams in the other IJV partner are like sports teams, each partner’s understanding and expectations around the language of “teamwork” will be quite different and can cause confusion and conflict across partner communication. Likewise, when IJV partners convey abstract meaning of managerial schemas through metaphors of a universally shared phenomenon – marriage and family, we can assess the degree to which partners’ share similar relational schemas for managing IJV operations, demonstrating semantic fit.

EMPIRICAL DESIGN To investigate our research question on the role of relational metaphorical language in IJVs, we conduct three studies with both qualitative and quantitative data and analyses. Study 1 presents a qualitative study to test and establish that relational metaphors used across languages, namely Chinese and English, are consistent in the context of IJV relationships. We then conducted Study 2 based on interviews of key informants from nine IJVs between Chinese and foreign partners, which revealed different types of relational metaphors and an orthogonal relationship between relational metaphors and equity structures. Based on these findings we develop propositions on relational metaphors, equity structure, and IJV outcomes. In Study 3 we test propositions derived from the qualitative study on a sample of 168 IJVs across two time periods (2002–2005 and 2007–2009) to assess the impact of shared metaphors on IJV outcomes. Media and publicly communicated information influence and shape cognition (Chen & Meindl, 1991; Katz, 1980; Roberts & Maccoby, 1985), transmit and reinforce existing beliefs (Alper & Leidy, 1973), and construct perceptions of social reality (Gerbner et al., 1978; Paisley, 1981). Therefore mass communication can be a critical conduit for assessing semantic fit between culturally different IJV partners. Previous research that used news reports (e.g., Chen & Meindl, 1991; Morris & Peng, 1994; Morris, Sheldon, Ames, & Young, 2007) or company reports (e.g., Chang, Most, & Brain, 1983; Meek, Roberts, & Gray, 1995) acknowledges that public reports may reflect some degree of impression management, and therefore may not be a perfect representation of reality. Nevertheless, prior researchers agree that imperfect as they are, reports in the mass media or from companies can provide useful information about organizational beliefs and perceptions, because they are intentional communications to the general public. Public reports reveal a conceptual system where metaphoric language manifests a cross-domain mapping of schemas from the well-understood domain of marriage to corresponding unilateral and bilateral schemas in the tacitly understood domain of informal, managerial control of alliances. Lakoff (1993) notes “Metaphor, as a phenomenon, involves both conceptual mappings and individual linguistic expressions” (209). My IJV is a modern marriage is one metaphor conceptualizing an IJV’s relational schema as a marriage that can be realized through many different linguistic expressions such

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as the variety of marriage- and family-related words in a company report. Lakoff (1993: 211) explains that lexical items in the source domain, for example, marriage, correspond, and map to lexical items in the target domain, for example, IJV relationship. For example, metaphorical words and phrases used to describe “teamwork” convey meaning about team members’ understanding of how teamwork is conceptualized: “They are similar to internalized behavior routines, or scripts, and the mental models the team members hold about team structure and process” (Gibson & Zellmer-Bruhn, 2001: 276). Therefore by extension, we use words and phrases in newspaper and company reports, supplemented by interviews, to examine the publicly communicated relational metaphors describing informal schemas for managing IJV operations. In other words, writers of corporate and public documents are treated as informants on the nature of the IJV relationship, as they report their observations and attributions regarding each firm’s relational approach to IJV operations, expressed through metaphoric, linguistic expression. The raw data for the three studies include interview transcripts (Study 2), company press releases, and media reports (Studies 1 and 3) on various IJVs. These qualitative data enable us to make better sense of complex concepts and mechanisms that we intend to uncover (Bansal & Corley, 2011). As a result, qualitative findings offer rich and deep insights to answer our research question. We conducted content analysis following Eisenhardt’s (1989) suggestions to compare the emergent themes, concepts, and variable relationships, based on which we search for theory development opportunities (Miles & Huberman, 1994). We adopted a multimethod approach, submitting all interview transcripts, news, and company reports in all studies to two content analysis procedures and identifying consistent results across the two coding methods. First, we used a text analysis software, Linguistic Inquiry Word Count (LIWC) (Pennebaker, Francis, & Booth, 2001; Pennebaker, Mehl, & Niederhoffer, 2003) to code linguistic categories reflected in the texts. The LIWC searches for 2300 words or phrases and classifies them into 70 linguistic dimensions, including general language categories (e.g., article, preposition), psychological processes (e.g., emotions), cognitive processes (e.g., causal phrases), and contexts (e.g., gender). We analyzed data from the categories directly related to our research context: relationships (e.g., marriage, family, partners), metaphorical words (e.g., “like a big brother,” “as cohabitant partners”), and evaluation on relationships

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(e.g., “constructive partnership,” “happy,” “an exciting relationship to grow together”). Second, we trained two bilingual research assistants with no knowledge of the research question (Butterfield, Trevino, & Ball, 1996; Dutton & Dukerich, 1991; Kreiner, Hollensbe, & Sheep, 2009; Pratt, Rockmann, & Kaufmann, 2006) to code the same texts for any metaphorical language and any descriptions about the relationship between the IJV partners. The research assistants were extensively trained to identify phrases that included metaphors and/or described IJV partner relationships. Cohen’s κ, which measures inter-rater reliability, was 0.85 overall across the three studies and the raters discussed and resolved differences, well above the 0.70 acceptable thresholds (Cohen, 1960; Kreiner et al., 2009). Throughout the two content analysis procedures (LIWC and human coding), we used two-order coding (Gioia, Corley, & Hamilton, 2013). The firstorder data based on original text terms were coded and organized, according to theoretical interpretations related to the research question, with three themes emerging: relationship, metaphors, and evaluation of relationships. The second-order data, distilled from the first-order emergent themes, were coded and further examined through content analysis to determine how the data fit the emergent categories (Butterfield et al., 1996; Kreiner et al., 2009). We used the pattern-matching and explanation-building techniques suggested by Yin (2009) to strengthen internal validity of the content analysis around the IJV cases. From the second-order coding, the two themes of hierarchical relationships (such as parent and child, big brother and little brother) and horizontal relationships (modern marriage) emerge. Additionally, we also conducted cross-case synthesis to analyze convergence and similarity in patterns across different IJV cases. Finally, we checked for match and convergence between the categories of relational phrasing from LIWC and the relational list concluded by the human coders, resulting in further confirmation between the two methods.

Study 1: Language Comparison on IJV Relational Metaphors Reported in Public Press In order to test language discrepancies between the English language material and another language, we investigated 22 IJV cases that were reported in both Chinese and English business press. The Chinese language news sources include Caixin, the Chinese Securities Journal, and Financial News. The English language news sources were the Wall Street Journal (WSJ), the Financial Times (FT), and Bloomberg.

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Following the content analysis processes described above, two bilingual research assistants analyzed the linguistic word count (LIWC) and content coded the relational metaphors used in the articles and found the same metaphors used across the two languages (Butterfield et al., 1996; Kreiner et al., 2009). We found that in both languages, a hierarchical relationship between the IJV partners was referred to as parent–child relationship, and an equal-status relationship between the partners was referred to as marriage. The only difference between English and Chinese reports was that when describing relational metaphors (e.g., family or marriage), the Chinese business press used 27% more verbs while the English language press used more nouns (19%). Although linguists (e.g., Liu, 2002) have found that culture may propel different metaphors, they have also found significant similarity in metaphors used across cultures, even though there may be different roots for the same metaphors (Link, 2013). Link (2013) explains that similar human experiences are the basis for the same metaphors, similar to Jakobson and Halle’s (1956) notion that there are similarities in fundamental linguistics across cultures such as “mama” and “papa.” In the context of our research, Study 1 suggests the metaphors about parent–child relationships being relatively hierarchical and marriage partners being relatively equal are similar across this twolanguage comparison, providing a foundation for us to further investigate relational metaphors between IJV partners.

Study 2: Interviews on Relational Metaphors and Equity Structures in IJVs We gained access to nine IJVs with partnerships between Chinese and foreign companies. We conducted interviews with communication or public relations officers of both Chinese companies and their foreign partners through face-to-face meeting, email, and/or phone. Table 1 summarizes the profiles of the interviewees. The interviews were conducted in Chinese or English, depending on the informant’s native language. The face-to-face and phone interviews lasted about 20–30 min. We asked informants to describe the relationship between their respective IJV partners. We then provided them with the definition of a relational metaphor, and asked for their relational metaphors for the IJV if they have one. Last, we asked their personal opinion of the metaphors for elaboration. All 18 interviewees provided metaphorical descriptions of the IJV relationships. We also asked their interpretation of the metaphor, their general perception of the relationship, future projections of

the relationship, and their estimate of the achievement of strategic goals and quality of relationship in the IJV. We transcribed or translated (using standard translation/back-translation methods (Brislin, 1970) the interview texts for LIWC and human coding as described above to derive patterns of relational metaphors, the equity structure, as well as their impacts on IJV outcomes. Below we elaborate our findings on the patterns of relational metaphors and how they relate to other variables in the IJV. Based on these qualitative findings, we develop propositions about different types of relational metaphors, how semantic fit influences IJV outcomes, as well as the moderating role of equity structure.

Findings and Propositions Two relational metaphors Our second-order coding of interview transcripts reveals two types of relational metaphors used by IJV communication officers. The first type presents a parent–child relationship to describe a hierarchical relational structure between the IJV partners, and text examples include parent firm, mother company, being the little one (child) in the family has no decision power, and our parent company is nurturing. We label this first type of relational metaphor Patriarchal Family to reflect the hierarchy in the relationship. The second type of relational metaphor reflects a more equal relationship between the IJV partners, illustrated by phrases such as happy marriage, our partnership started with love at first sight and has been stronger ever since, we argue like husband and wife but that open communication has been constructive, and we share household responsibilities and mutual respect for the bond with each other. We label this second type of relational metaphor Modern Marriage to reflect equal relationships between IJV partners in managing the alliance operations. We identify Patriarchal Family, primarily a unilateral relationship schema, and Modern Marriage, primarily a bilateral relationship schema (Heide, 1994), as fundamental forms for organizing and managing matrimonial relationships. Forms of marriage are well understood in a cross-cultural context by partners and are evident in whether day-to-day activities such as decision making and planning are conducted unilaterally as a Patriarchal Family or bilaterally as a Modern Marriage (Sussman, Steinmetz, & Peterson, 1999). The metaphor of Patriarchal Family represents the expectation in a relationship where one party dominates in decisions while the metaphor of Modern Marriage

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Table 1

Interviewee profiles

ID

Case ID

Gender

Tenure

Nationality/ Passport

Education

Interview Media

Position

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

AdPro AdPro BMobile BMobile ChemInc ChemInc Dlight Dlight Etrac Etrac

Female Male Male Male Male Female Female Female Male Male

3 5 2 9 2 6 1 5 2 3

Chinese American Chinese American Chinese American Chinese German Chinese Australian

MBA M.S. MBA Bachelor MBA MBA MBA M.S. M.S. Bachelor

Face-to-face Face-to-face Phone+email Face-to-face Phone+email Phone+email Face-to-face Phone+email Face-to-face Phone+email

12 3 2 7 3 2 2 3

Chinese Canadian Chinese French Chinese Australian Chinese American

EMBA M.S. M.S. M.S. MBA MBA MBA M.S.

Face-to-face Phone+email Phone+email Face-to-face Phone+email Phone+email Email Email

Public Relations Officer Corporate communication Officer Communication Specialist VP of Communication Public Relations Officer Communication Officer Manager of Communication Public Relations Manager Communication Officer Senior Manager of Communication & Public Affairs Communication Officer SVP of Public Affairs Manager of Communication Managing Director Director of Public Affairs Manager of Communication Associate Director of Communication Senior Director of Public Relations

11. 12. 13. 14. 15. 16. 17. 18.

Fenergy Fenergy Gturbo Gturbo Htea Htea PharmTech PharmTech

Male Male Female Female Female Female Male Female

embodies the expectation of equal participation in decisions between the partners. “Semantic fit” in the case of patriarchal family necessitates both partners identifying the same partner as patriarch. Conceptualizing organizational mergers as marriage is not entirely new. Previous researchers have described extension, or hands-off mergers as “open marriage,” collaborative, equal mergers as “Modern Marriage,” and redesign, acquisition-type mergers as “traditional marriage” (Cartwright & Cooper, 1993). Others have examined newspaper reports of M&As for evidence of war and marriage metaphors, representing hostile takeovers vs friendly unions (Koller, 2002). Prior studies echo distinctions made in classic relationship literature. For example, some classification schemes distinguish between “complementary” and “symmetric” relationships, representing dominant/submissive vs equal status relationships (Hinde, 1976). A review and synthesis of the close relationship literature propose a typology of marriage that distinguishes between “traditionals,” who emphasize customary gender roles, where, for example, the woman should always take her husband’s last name, from “independents” who believe in individual freedom, companionship, and equality (Fitzpatrick, 1984). We build on this prior close relationship and M&A literature by extending the type of relational metaphors to include not only Modern Marriage, but also Patriarchal Family.

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As noted by Koller (2002) and Hirsch and Andrews (1983), many organizational mergers are described using language of hierarchical relationships, which conveys meaning quite different from the meaning conveyed by language used to describe egalitarian marriage. Therefore we propose that IJVs will use either Modern Marriage or Patriarchal Family as metaphors for their partner relationships. Proposition 1: Members of IJVs use two types of relational metaphors, either Modern Marriage or Patriarchal Family, to reflect their managerial schema for partner relationships with each other.

Semantic fit or misfit: Shared vs mixed metaphors Members in three out of the nine IJVs we interviewed used different relational metaphors to describe the relationship with the other partner, with one partner using Modern Marriage and the other using Patriarchal Family. Six out of the nine IJVs used the same relational metaphors, either Modern Marriage or Patriarchal Family. For example, the Chinese partner of Etrac said the relationship with their US American partner is an equal marriage but the American side described themselves as the leading member of the joint venture family and Our Chinese partner is like a child who is learning fast but sometimes stubborn. We need to take care of them. The differences in relationship metaphors reflected

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differences in relational schemas that led to conflicting expectations and frustrations, as illustrated by the Chinese partner: We think our status with the foreign partner should be equal and indeed some of the colleagues from there acted respectfully and sought our opinions quite a lot. But some members from our team felt significant dominance from the other side – as if they are the boss, even when dealing with issues about the local Chinese market. We are quite confused on what to expect in the partnership – sometimes we are equal, sometimes we feel more powerful than them, especially when dealing with our own market and operation. I have a sense that they are not quite experienced and confused as well as us, in terms what to expect from the other side.

In a different case, respondents from PharmTech expressed convergent metaphorical language about their relationship: Chinese partner: We are the weaker side in this relationship, but we are comfortable with the setup and actually learn a lot from our parent company. Many of our junior researchers look forward to their training and development opportunities in headquarters. Since it is a highly selective program, those who are chosen are really thrilled and proud … like a teenager, both in terms of our company age and our learning stage, we have so much to learn. Fortunately our American partner is nurturing and showing us the way. US partner: As the leader and major parent of this relationship, we try to take care of the needs of our Chinese partner by providing opportunities for the young scientists who will help us in the long run.

In IJVs, goal achievement and relationship quality arise from effective management of venture operations, which depends on a common understanding of organizational processes and routines (Gilliland et al., 2010), such as a common understanding of the nature of the partners’ relationship. For example, a lack of fit between the partners’ operational approaches may jeopardize alliance outcomes, and a “persistent misfit can lead to either dormancy or alliance exit” (Das & Teng, 2002: 729). Divergent goals and approaches to an alliance reduce decision-making quality, divert attention from pressing needs and otherwise interfere with activities, dampening alliance outcomes (Inkpen & Currall, 2004; Steensma & Lyles, 2000). Accomplishing strategic goals and maintaining a pro-social relationship climate are key IJV outcomes, considered important facets of alliance performance (Robson, Skarmeas, & Spyropoulou, 2006). Thus IJV partners who have a common understanding of their informal management schemas should outperform those with

divergent relationship schemas in terms of achievements and relationship quality. As noted above, the convergence or divergence of informal management schemas as manifest in the use of relational metaphors in public reports is an indication of IJV’s semantic fit or misfit, respectively. When two parties in an IJV use the same metaphorical language to describe their relationship, the shared metaphors reflect a common schema and definition for the mode of managing IJV operations, strengthening the basis for cooperation. Kozlowski and Klein (2000) and Liu, Friedman, Barry, Gelfand, and Zhang (2012) show that through emergent processes, individual mental models often converge and manifest as a shared mental model. Shared mental models facilitate joint and collective explanations and coping processes in uncertain situations, and lead to efficiency in communication, adaptation to environment, and performance (Liu et al., 2012; Salas & Cannon-Bowers, 2001). Shared relational metaphors reflect a semantic fit (Brannen, 2004) that aligns the cognition and communication between IJV partners. Relatedly, reduced competition (Gulati, 1995; Nooteboom, Berger, & Noorderhaven, 1997), reduced conflict, and more commitment and satisfaction (Demirbag & Mirza, 2000) have been shown to lead to greater value creation and achievement of strategic goals by the partners (Lane, Salk, & Lyles, 2001). On the other hand, when two partners use different metaphors to describe their relationship, the misaligned relational schemas dampen cooperation and heighten competition due to misunderstandings, miscommunications, and yield poor coordination and performance. Therefore we expect IJVs that have semantic fit, reflected in shared relational metaphors (e.g., either Patriarchal Family or Modern Marriage), will reach greater achievement of strategic goals and better quality of relationships than will IJVs that have semantic misfit, reflected in public reports of mixed metaphors (e.g., Patriarchal Family and Modern Marriage). This proposition addresses whether or not partners share a relational metaphor. Proposition 2: IJVs with shared relational metaphors will have better IJV outcomes than will IJVs with mixed relational metaphors.

Beyond semantic fit: The interaction between relational metaphors and equity structure An optimum goal for IJVs is to integrate sociocultural systems between two groups jointly invested in a common venture (Stahl, Mendenhall, Pablo, & Javidan, 2005). Ownership has properties and

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consequences that are central to our interest in investigating the performance consequences of semantic fit. Following, we present data from our interviews, indicating that the type of relational metaphors used by IJV partners does not necessarily correspond with their equity structure. In other words, IJV partners may use a unilateral Patriarchal Family metaphor even when their equity structure is symmetrical or they may describe their relationship as a bilateral Modern Marriage even when their equity structure is asymmetrical, with one partner owning a majority share of the venture and therefore holding the legitimate, legal power. Then, we develop a prediction of how equity structure can moderate the effect of relational metaphors on IJV outcomes, arguing that asymmetrical equity structure should strengthen the positive effects of a shared (vs unshared) relational metaphor on alliance outcomes. Prior to developing our prediction, we found multiple examples from our interview data where IJVs share a relational metaphor that does not seem consistent with the ownership equity structure. For example, ChemInc is an IJV with an equal or symmetrical ownership structure but a hierarchical or Patriarchal Family relational metaphor used by both partners. The Chinese Vice President of Government Relations explains the uneven power perceived by the two partners, despite their symmetrical ownership structure: Our Chinese engineers are equally qualified or even more qualified in some areas than the expats from our (North American) partner, but they set the priorities and schedules for operation, even sometimes we want to customize some of the products for the China market, we have to go through them. The discussions sometimes are quite frustrating for the Chinese; our (North American) expats sometimes can sound quite patriarchal and arrogant. We know they have good intentions and often hold higher quality standards. These issues wasted a lot of time and compromised efficiency.

Similarly, a North American manager in ChemInc echoed the hierarchical or Patriarchal Family relational metaphor, explaining a similar kind of frustration in their communication: The Chinese have no sense of quality, because our brand and reputation are at stake, we have to persistently push on the standards. Our operation officer and the top engineer can be rigid sometimes, but that’s absolutely necessary. The Chinese in our plant speak acceptable English, but they are still hard to understand, including the professional translator who has an American degree! They don’t tell you what the real problem is; you have to go through many, many rounds of meetings to find out. Of course that’s frustrating.

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While ChemInc provides an example of negative organizational outcomes when the equity structure reflects equality but the parties share a hierarchical relational metaphor, in another example, we saw positive outcomes when members of AdPro shared a Modern Marriage relational metaphor but had an asymmetrical ownership structure between the two IJV partners. The minority Chinese manager explains the relationship with egalitarian metaphors but asymmetrical equity structures, emphasizing the respect that comes from equal treatment by their North American majority owner: Even though our (North American) managing director has full authority over our operation, and he is extremely knowledgeable about China, he always consults us about specific issues in our China practice and when dealing with Chinese customers. He delegated a lot of important responsibilities and projects to the Chinese side; even sometimes we do not have the capacity to handle them in a timely manner and we have to ask for help from the office in Singapore. We feel that we are in the same family and same boat and our partner really want us to grow together for better quality of service and expertise. He always respected our opinions.

In the same IJV, the North American communication manager (majority owner) shared the equal or Modern Marriage relational metaphor, explaining how the minority partner is treated as an equal: Yes the (North American) side is definitely in control, but we do not want our Chinese partner to feel that we make all the decisions. In fact, we cannot make all the wise decisions in our China operation without the input from our partners. We rely heavily on our Chinese partner to smooth government relations and secure contracts with important customers. Regardless of the equity stake, we are truly equal partners in the volatile Asian market …. In the long run, I believe our Chinese partner will grow faster and maybe help us to expand to other Asian areas, and even help us financially back home.

This case shows that ownership imbalance reduces ambiguity in decision making and clarifies task coordination. Specifically, the decision-making clarity of unbalanced equity might strengthen the positive effect of converged relational schemas on IJV’s strategic goal achievement. Of course, these are just two examples of multiple combinations of relational metaphor types, metaphor sharing, and equity structure that may be found in a given IJV. To develop predictions of how equity structure will moderate the effect of semantic fit on IJV outcomes, we turn to research on the unique features of IJVs as an organizational form. Researchers (Geringer & Hebert, 1989; Mjoen & Tallman, 1997) note that because an IJV is a fragile

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and unstable form of organizing, an asymmetrical equity structure provides the decision-making authority and clear strategic direction necessary for such a cooperative venture to attain economic objectives. For example, in exercising property rights, a majority owner can exert legitimate authority to appoint board members, senior management, and otherwise set the strategic direction for IJV assets and resources. Unbalanced equity empowers a majority owner with the legal basis and legitimacy necessary to exercise leadership and control over strategic decisions (Lin & Wang, 2008), avoiding inefficient haggling and renegotiations when important strategic adaptations are necessary (Mjoen & Tallman, 1997). Majority owners can also manage and direct the cooperative efforts of partners toward desirable objectives efficiently, because “if one partner has dominant control, decisions will be less time consuming and easier to make” (Steensma & Lyles, 2000: 834). As for balanced equity, “equal division of control between partners leads to coordination problems” (Steensma & Lyles, 2000: 834), which is due to difficulties in integrating tasks and reaching consensus, delaying timely and strategically relevant decisions (Casson & Mol, 2006). Previously, we noted a shared relational metaphor (i.e., semantic fit) reflects converged relational schemas regarding a venture’s day-to-day operations, leading to common understandings and efficient communications among IJV actors (Brannen & Doz, 2012; Gibson & Zellmer-Bruhn, 2001). However, the partners’ consistent schemas for alliance operations

largely offers a potential for outperformance; superior outcomes can be best realized when this convergence is complemented by the decisive, strategic decision making of a majority owner. We propose that the positive impact of shared metaphors on IJV performance is amplified for asymmetrical equity structures, since focused ownership reinforces and strengthens the benefits of commonly held schemas. That is, a majority owner’s decision-making authority and legitimate leadership are expected to compliment such converged managerial schemas by focusing the efforts and resources of the partners, better exploiting the performance enhancements afforded by semantic fit. In contrast, since symmetrical equity creates “ambiguity over management control” (Casson & Mol, 2006: 18), we suggest such IJVs are less decisive and are prone to compromise, making the partners less able to fully achieve the potential performance benefits from their shared relational metaphors. Proposition 3: Asymmetrical equity greatly strengthens the positive effect shared relational metaphors have on IJV outcomes, relative to symmetrical equity. Figure 1 summarizes our propositions.

Study 3: Testing Propositions with Quantitative Analyses Sources of data We used both newspaper and company reports to identify the relational metaphors associated with

IJV Outcomes

Expressed Relational Metaphors

• Achievement of Strategic Goals

P2

• Shared

° Patriarchal Family ° Mordern Marriage

• Quality of Relationship

• Mixed

Semantic Fit • Fit

P3

Equity Structure Asymmetrical

Symmetrical

° Hierarchical ° Equal

• Misfit

Time 1 (2002-2005)

Figure 1

Time 1 (2007-2009)

Metaphorical language and semantic fit in IJVs.

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Relational metaphors and semantic fit in IJVs

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two-party IJVs initiated during the 2002–2005 time frame. To examine the proposed effects of relational metaphors in IJVs, we first collected IJV announcements and reports in the WSJ, the FT, and local English language newspapers during 2002–2005 (Time 1) from three online databases, Factivia, Lexis-Nexis, and World News Connection. We found about 1700 articles on 355 newly established and signed two-party IJVs. Then we searched for the press release and letter to stakeholders by the IJV partners mentioned by the articles. We used a three-source criterion to identify target IJVs, namely each qualifying IJV had to have information from an international media source (WSJ or FT) and either a company report or local news report from each of the two parties in the IJV. Because companies often do not provide separate reports for their joint ventures, we use the companies’ overall reports to find the section where they mention the relationship and outcomes with their respective joint venture partner. Thus we first identified 168 IJVs that used metaphors in their description of the IJV relationship from all three sources. Then we searched for company reports on descriptions of IJV relationships during 2007–2009 (Time 2). Among the 168 IJVs, 22 IJVs did not survive after 3 years; therefore we used the remaining 146 IJVs employing relationship metaphors in the analyses described below. Among the 146 IJVs, 8 were between companies in Asia, 5 were cross national IJVs between North American firms, 12 were between European firms (including Russia), 39 were between North American and Asian firms, 53 were between European and Asian firms, 12 were between European and South American firms, 15 were between North and South American firms, 7 involved an Australian firm and an Asian firm, and 12 involved a firm from the Mid-East partnering with a firm from Asia, Europe, or North America. Industry profiles include auto (33), pharmaceuticals (21), banking (32), information technology (38), and manufacture and business services (22).

Measures Relational metaphors We used the reports of 146 IJVs employing relationship metaphors by subjecting them to our content analysis and coding procedures. We used dummy variables to code each IJV, Relational Metaphor: Modern Marriage = 0, Patriarchal Family = 1, Semantic Fit: Mixed Metaphors = 0, Shared Metaphors = 1. Content analysis procedures confirmed that among 91 out of 146 IJVs, there was agreement between IJV partners on the relational

Journal of International Business Studies

metaphors. In other words, there are compatible metaphors or metaphorical descriptions associated with each partner. For example, within one IJV, the WSJ reported a “marriage,” one local press mentioned “the recently joined family,” another local press described that one of the partners “courted wholeheartedly” to the other during the negotiation, and was “happy in the end,” and their joint letter to stakeholders talked about the “new engagement.” The other terms coded in the Modern Marriage category include “equal partnership,” “true meeting of the hearts and minds,” “partnership made in heaven,” “marriage of contemporary time,” and so on. Terms coded in the Patriarchal Family category include “patriarch figure in the board room,” “parent control,” “big brother,” “(damage control) like running after an errant child,” among others. We explained earlier that “semantic fit” in the case of patriarchal family necessitates both partners identifying the same partner as patriarch. In our data set all IJVs with the patriarchal family metaphor did, in fact, identify the same partner as the patriarch. The 55 IJVs with mixed metaphors show lack of agreement in the categories of the metaphors they use. For example, one partner reported it is “a happy engagement” and the other party mentioned “our own obligations as the parent company.” IJV equity structure We searched the company websites and industry databases to obtain and verify information about the economic configuration of the IJVs. In our conceptualization, asymmetric equity refers to situations with the unambiguous, legitimate authority of a dominant majority owner, compared with less clear-cut situations where ownership holdings only differ slightly, lacking the strong clarity of one unambiguous dominant owner. Following previous research (e.g., Dhanaraj & Beamish, 2004), we measure equity structure by the majority partner’s equity contribution, in a continuum percentage, with the larger number indicating an asymmetrical equity structure in the IJV. IJV outcomes We employ two dependent variables to measure the outcomes of IJVs at Time 2, which is 3 years after the formation of relational metaphors (measured at Time 1), namely Achievement of Strategic Goals and Quality of Relationship. We coded explicit mentioning about achievement of strategic goals and quality of relationship from the annual reports of the IJVs companies, during the period 2007–2009. Due to the unavailability of unconsolidated financial reports of IJV profitability,

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previous research such as Chung and Beamish (2010) argued that managerial reports are the best alternative to measure IJV outcomes. Further, scholarly evidence (Delios & Beamish, 2001; Dess & Robinson, 1984; Geringer & Hebert, 1991; Woodcock, Beamish, & Makino, 1994) has shown validity and reliability of the perceptual measures in managerial reports. We believe the annual reports issued by companies to stakeholders are one form of managerial reports, similar to those used the previous studies. For example, in each company report, we coded sentences and phrases mentioning directive words such as constructive, beneficial, valuable, and “productive as positive quality of the relationship. So quality of relationship is an average frequency count between the partners about the relationship as they appear in those company and news reports. Achievement of strategic goals regarding the IJV was also coded and counted the frequency of such mentions, depending on how frequent it was explicitly mentioned in the annual reports of both parties in a particular IJV. Control variables We checked the subsamples (IJVs with shared vs mixed metaphors, and IJVs with Modern Marriage vs Patriarchal Family metaphors) for significant differences in IJV industry, prior relationship, and size (measured by number of full-time employees). We did not find significant differences in industry patterns, measured by geographic distance between the capital cities of the two countries where each pair of IJV partners are located. IJVs with shared vs mixed metaphors differed in terms of IJV prior relationship [ χ2(1, 145) = 4.28 p < 0.05] and size [ χ2(1, 145) = −3.93 p = 0.05]; we controlled for the effects of prior relationship and size in all of our analyses. Prior relationship and size did not moderate any of the effects in the analyses related to our proposition

Table 2

testing. We also controlled for cultural distance between the IJV partners, using the composite measure proposed by Kogut and Singh (1988) with the cultural dimensions data from the GLOBE study (House, Hanges, Javidan, Dorfman, & Gupta, 2004). Analysis Because the two categories of relational metaphors – shared or mixed, and Modern Marriage or Patriarchal Family – are dichotomous variables, we conducted regression analysis and planned contrasts in conjunction with Tukey’s Honestly Significant Difference (HSD) test to examine specific differences that we proposed (Abdi & Williams, 2010). Results Semantic fit and IJV outcomes Based on our content analysis of 146 IJVs, 91 had semantic fit with both partners using the same type of metaphor and 55 had mixed metaphors where one partner used an equal Modern Marriage relational metaphor and the other partner used a hierarchical Patriarchal Family relational metaphor, supporting Proposition 1. Table 2 shows correlations and Table 3 shows the descriptive analysis of the sample breakdown in different metaphorical categories. One might argue that metaphorical descriptions might be a personal expression style by the newspaper reporters or the authors of the company reports. Yet we were able to find matching metaphors used by the WSJ or FT, local English language newspapers in the IJV partner’s home country, and corporate reports. The convergence of metaphorical description of the IJV relationship from multiple sources shows unambiguous consensus in the relationship patterns therefore provides confidence in Proposition 1. Table 4 shows results of regression analyses. Proposition 2 suggests IJVs with shared metaphors

Correlations

1. Prior relationship 2. IJV size 3. Cultural distance 4. Shared metaphors 5. Modern marriage 6. Patriarchal family 7. Asymmetrical structure 8. Strategic goals 9. Quality of relationship

1

2

3

4

5

6

7

8

0.03 −0.05 0.09* 0.11* 0.07* 0.03 −0.03 0.06*

0.02 −0.03 −0.03 0.02 0.08* −0.03* −0.05*

−0.12** −0.15** −0.07* 0.08* 0.01 0.02

0.11** 0.12** 0.03 0.25** 0.18**

−0.23** 0.02 0.23** 0.22**

0.27** 0.15** 0.16**

0.12** 0.11**

0.17**

Note: n = 146. *p