GOAL ACHIEVEMENT AND SATISFACTION OF JOINT VENTURE PARTNERS

Joint venturing is recommended to avoid some of the obstacles to succe ssful business venturing, such as capability limitations and organizat ional resistance. However, the high dissolution rates for joint ventur es suggest a need to learn how to utilize this cooperative strategy mo re effectively. Two frequently reported problem areas in joint venturi ng are unrealistic corporate expectations and inadequate planning. Thu s, this study sought to examine the impact of strategic intent on join t venture success as measured by partner goal achievement and satisfac tion. A review of the literature on strategic goals and goal consensus suggested that two variables are likely to affect joint venture perfo rmance: the number of partner goals pursued and the overlap in partner s' goals. The type of goals pursued may also affect performance; that is, some goals may be more achievable through joint venturing than are other goals The purpose of this research was two-fold. (1) to empiric ally explore the relative importance of a variety of partner goals for their joint ventures, and (2) to determine if goal disparity, and the number and type of goals pursued affected joint venture success. This approach draws attention to the expectations of partners rather than to the venture itself, the traditional focus in entrepreneurship. The hypotheses and exploratory propositions were tested using data from U. S. firms involved in manufacturing joint ventures. A categorization of partner goals was developed through factor analysis, in which five ca tegories of goals emerged knowledge transfer, market power financial p erformance, efficiency, and financial structure. Partners were found t o have pursued multiple goals simultaneously, with knowledge transfer and market goals being most frequently rated as critically important. These findings suggest the need to expand traditional performance meas ures to account for the diverse and nonfinancial nature of partner goa ls. When examined separately, it was found that a large goal set facil itated partner goal achievement and satisfaction, and that an overlap in partners' goals promoted partner satisfaction. The large goal set w as argued to be necessary in the volatile environments that are often attractive for joint venturing. A large goal set reflects adaptation t o environmental change and facilitates prudent strategy selection by s ubjecting alternatives to multiple goal hurdles. The overlap in partne rs' goals reflects a meshing of individual partner goals and helps to minimize conflict, which could stall strategy development and drain re sources. However, when an integrated model was developed from multiple regression findings, the overlap in partners' goals became a moderato r variable. This model exposed the negative as well as the positive ef fects of the overlap in partners' goals. Analysis further suggested th at the joint venture strategy may be better suited to achieving effici ency goals than financial goals. Possible explanations for the difficu lty in achieving financial goals include: insufficient time (or short lifespan of the joint venture), the complex structure inherent in join t ventures, and the possibility of disagreement between the partners a bout how the financial goals should be achieved. On the other hand, ef ficiency goals, such as vertical integration and economies of scale, r equire expansion or extension of operations and thus fit well with the pooling of skills and resources that are characteristic of joint vent uring. Further, both partners contribute to and gain from efficiency g oals, unlike with market access or knowledge transfer goals where one firm contributes more than it gains or vice versa for that particular goal. Additional analysis revealed that the goal types explained more variance in partner goal achievement and satisfaction than did the siz e of goal sets or the extent of overlap in partners' goals. Taken in c ombination, the various aspects of partners' goals explained 26% of th e variance in partner goal achievement and 38% of the variance in part ner satisfaction. When partner goal achievement was included in the mu ltiple regression model for partner satisfaction, the amount of explai ned variance increased to 69%. The results suggest that a partner firm may be able to significantly enhance its chances of judging a joint v enture to be successful if its goals focus on efficiency rather than r evenues and profits, if it has a relatively large goal set, and if it concentrates on achieving the set of stated goals.