Keywords: international joint ventures, Singapore, India, China, Confucian values, society, Confucian ethics, strategic alliances, partner selection, Chinese networks, Chinese familial system, diverse cultures, business networks, trust, commitment
Confucian value system and its impact on joint venture formation
Prior research suggests that in international joint ventures (IJVs) between firms from diverse cultures, partner related factors are of importance for the successful management of the joint venture. This paper reports the study of IJVs formed by Singapore firms in People's Republic of China and India. Since Singapore and China share a common Confucian culture, it was expected that a Singapore firm's approach to joint venture formation in India will differ significantly from its approach to joint ventures in China. The results, however, suggest that the partner selection process follows a different logic in Confucian societies, and Singapore firms were as successful in forming IJVs in India as in China. The paper further explores the influence of Confucian ethics and values on the formation of Chinese business networks. Findings also suggest that Singapore firms have bought into the Confucian value system, and the argument that partner commitment and trustworthiness are critical to long-term, harmonious and successful joint ventures.