Control and Power within Sino-Dutch Joint Ventures

Control and Power
within
Sino-Dutch Joint Ventures

Title Master thesis: Control and Power within Sino-Dutch Joint Ventures
Faculty of Social Sciences
Department of Organization Studies
University of Tilburg
Student: C. Bloem
Supervisor: professor J. Soeters
Second reader: professor M.J.D. Schalk.
Datum: October 2007
Leo Bloem ©

Abstract
This study explores the way control is organized and exercised within Sino-Dutch joint ventures. In
order to answer our research question, we conducted more than 30 interviews with Dutch and Chinese
managers and executives that are active in joint ventures in Shanghai and Nanjing. We found that the
dependency of the partners show different patterns for the Dutch and the Chinese parent organizations.
The Chinese partner is most dependent in the early stages of the joint ventures, whereas the Dutch
partner experiences an increase of dependency during the process of venturing. Consequently, as the
partnership evolves, the Dutch partner tends to increase its control efforts, hereby marginalizing the
role of its local partner. Based on this conclusion, we suggested several measures for the Dutch partner
to increase the effectiveness of its control efforts.
With regard to the way individual managers control their subordinates, we found that the cultural
backgrounds of the managers only partially accounts for the way they manage. The cultural
backgrounds of the local employees seems to hold more explanatory power. In order to overcome the
culture clash that exist within the joint ventures, we have suggested the use of transformational
leadership. The reason for this idea lies in the resemblance with paternalistic leadership (which is
common currency in China) and the aim of developing employees (which is needed in order to build
innovative and creative organizations that can survive in hyper competitions).
Key words: Management control; power; China, the Netherlands, joint ventures; management
style; transformational leadership; dependencies

Table of contents
Abstract 3
Table of contents 4
Preface 6
Acknowledgements 7
Chapter 1 Introduction ___________________________________________________ 8
Chapter 2 Theoretical background ________________________________________ 12
2.1 What is control?________________________________________________________ 12
2.2 Parental control ________________________________________________________ 14
2.2.1. Inter-organizational control in China; a transaction cost perspective ___________________ 14
2.2.2. Voluntary inter-firm cooperation; a resource dependency perspective ___________________ 17
2.3 Headquarters control____________________________________________________ 24
2.4 Managerial control – who is in charge _____________________________________ 24
2.4.1. Vertical managerial control ____________________________________________________ 25
2.4.2. Horizontal control____________________________________________________________ 28
2.5 Hofstede’s Cultural Dimensions ___________________________________________ 29
2.6 Globe cultural dimensions________________________________________________ 30
2.7 Chinese culture – Confucian structures_____________________________________ 31
2.8 Dutch culture – Calvinistic merchants______________________________________ 35
2.9 Consequences of cultural dissimilarities for control___________________________ 39
2.9.1. Relations (guanxi) versus pragmatism ____________________________________________ 39
2.9.2. Indirectness versus directness___________________________________________________ 40
2.9.3. Hierarchy versus consultative management ________________________________________ 40
2.9.4. Sino centrism versus internationalism and openness _________________________________ 41
2.10 Leadership in the Chinese context _________________________________________ 41
2.11 Research model ________________________________________________________ 43
Chapter 3 Methodology _________________________________________________ 45
3.1 Research strategy_______________________________________________________ 45
3.2 Units of analysis and observation __________________________________________ 46
3.3 Data collection _________________________________________________________ 47
3.4 Site selection ___________________________________________________________ 48
3.5 Sampling strategy_______________________________________________________ 48
3.6 Role of the researcher ___________________________________________________ 49
3.7 Reflection on the interviews ______________________________________________ 49
3.8 Potential vulnerabilities__________________________________________________ 49
3.9 Data analysis___________________________________________________________ 50

Chapter 4 Findings _____________________________________________________ 51
4.1 Parental control - setting the stage_________________________________________ 51
4.1.1 Drivers for start up ___________________________________________________________ 51
4.1.2. Selection of organizational structure _____________________________________________ 57
4.1.3. Partner selection _____________________________________________________________ 58
4.1.4. Trust building efforts__________________________________________________________ 60
4.1.5. Comparison with Yan and Gray (1994) ___________________________________________ 61
4.2 Headquarters control – staying involved ___________________________________ 62
4.3 Board control - safeguarding parental interests ______________________________ 64
4.3.1. Board composition ___________________________________________________________ 64
4.3.2. Joint venture equity___________________________________________________________ 65
4.3.3. Joint venture agreement _______________________________________________________ 65
4.3.4. Termination Clauses __________________________________________________________ 67
4.3.5. Expatriating_________________________________________________________________ 67
4.3.6. Organizational structure_______________________________________________________ 68
4.4 Human resource control – managing human capital __________________________ 69
4.4.1. Managerial control ___________________________________________________________ 69
4.4.2. Management style ____________________________________________________________ 75
4.4.3. Management development______________________________________________________ 78
4.5 Loyalty – binding employees to the joint venture _____________________________ 83
4.6 Ethical issues – pushing or adapting _______________________________________ 85
4.7 Dominant cultural influence – localizing or global strategies? __________________ 87
4.7.1. Differences in organizational cultures ____________________________________________ 87
4.7.2. Hofstede’s dimensions_________________________________________________________ 88
4.7.3. Globe dimensions ____________________________________________________________ 90
4.7.4. Localization_________________________________________________________________ 91
Chapter 5 Conclusions & Discussion_______________________________________ 93
5.1 Dependencies between the partners ________________________________________ 93
5.2 Joint venture as organizational structure ___________________________________ 94
5.3 Cultural backgrounds ___________________________________________________ 95
5.4 Theoretical implications _________________________________________________ 97
5.5 Research limitations_____________________________________________________ 98
Chapter 6 Recommendations ____________________________________________ 100
6.1 Relation______________________________________________________________ 100
6.2 Design _______________________________________________________________ 101
6.3 Management__________________________________________________________ 102
References ____________________________________________________________ 103

Preface
Together with Verhiel (2007), this study is part of larger project of the Department of Organization
Studies of Tilburg University. Every year a circle is formed consisting of Master students that focus
their thesis on one of the various organizational aspects of international business and globalization.
With regard to the emerging market of China, Jie Sam Foek (2007) has studied the rather broad notion
of doing business in China, whereas De Bakker (2007) focused on the concept of guanxi (relation) and
Verhiel (2007) on trust building within Sino-Dutch joint ventures. It has been the joint goal of these
researchers to contribute to the scientific knowledge of intercultural cooperation between Chinese and
Western organizations, whereby we have a specific interest in the role of Dutch organizations
operating in China.
However, although much is known already about cross cultural cooperation, joint ventures, and doing
business in China, many questions remain open to discussion. We have tried to explore and reveal the
way control is exercised within the joint ventures in China. As the reader will experience, our study
has revealed new questions, questions that need to be answered in order to increase the knowledge on
cross cultural cooperation in China and other places in the world. We hope that our results will be of
assistance for scholars and practitioners that are active in the field of international collaborations in
China.
October 2007, Utrecht
Leo Bloem

Acknowledgements
Doing research on the other side of the world is a challenging undertaking and one that needed the
support of many people. Therefore, I am indebted to a number of people that have, some way or
another, contributed to this thesis:
My closest friend and lover Petra, because without her love, support and incessantly encouragements,
I would not have gotten this far. Deciding to go studying in Tilburg has affected both our lives in
many ways, and I am more than grateful that she stood by my side, always.
My loving parents, who have always enabled and encouraged me to achieve my goals. Gratefulness is
an emotion that is sometimes hard to express, but the reasons for me to be grateful are more numerous
than the stars above.
Professor Sjo Soeters, who understood the obstacles former Premaster students face in conducting
independent research and who guided me with patience.
All our respondents, because the pages would have been left blanket without their willingness to
cooperate.
Emily and Matthijs, who have been my ‘partners in crime’ over the past two years. It has been a
bumpy two years, but through our friendship, we stimulated each other to hang on and to surpass our
own expectations.
Jan Beekmans, who was the first person to help us out with our trip to the Far East and by doing so,
giving us a head start in China.
Other persons that have in some way or another contributed to this study are: Yvonne Drijfhout of
Bencham, Eric Verwaal and Jan van Weijen from the Dutch consulate in Shanghai, Fulco Wijdooge
and Steven Wang of the NBSO in Nanjing, Dominic Phinn of the European Chamber of Commerce in
China, Lucas and Arthur, Dirk van den Ven, and Monique Mol.
Everybody that needed to be mentioned but that I somehow have forgotten to mention. Please forgive
me for my ignorance and bad memory.

Control and Power within Sino-Dutch joint ventures 8
Chapter 1 Introduction
‘Oh, East is East and West is West, and never the twain shall meet….’
Rudyard Kipling (1865-1936)
With the opening of the Chinese markets in 1978 and the strong emergence of international joint
ventures in China, Kipling’s controversial statement, indicating unbridgeable differences between the
East and the West, became seriously challenged. With the prospect of mutual benefits, the economy
was believed to function as a vehicle for bridging two cultural spheres that have been separated for
centuries. Instigated by the entering into the World Trade Organization (WTO) in 2001, the isolated
Peoples’ Republic of China set in train wide-ranging reforms of its economy, making it more
equivalent to Western styled economies.
However, although international joint ventures have played an undeniable large role in the growth and
alteration of the Chinese economy, the structure itself has gotten out of favor. In 2006, the Dutch
newspaper ‘Het Financiele Dagblad’ reported a strong declining in the use of the joint ventures in
China1
. The reasons for this decline, it was argued, could be traced back to unreliable and whimsical
partners and deficient control for the Western partners. The article quoted Marc David Brand, who
stated that:
“Most Sino-Western joint ventures have gone bankrupt, are dissolved or make losses.
Many Chinese companies use practices that you can never discover. You’re never the
only partner and because a Chinese entrepreneur has to balance between diverse
relations, it could be that another partner is preferred.”
In another Dutch newspaper (the NRC), the case of the French Danone versus the Chinese Wahaha is
discussed2
. Both companies have joint their forces in 1996, but are currently involved in a fierce
juridical dispute over their shared joint venture. The article speaks of dubious companies, hidden
profits, juridical threats, acquisitions of ‘evil deeds’ and tyranny. The article concludes by stating that
joint ventures can be a recipe for difficulties, especially in China, and that the advantages of partnering
with a Chinese enterprise no longer outweigh the risks of a failing joint venture.
1
Daling, T. (2006, Jan. 9). Joint Ventures in China op hun retour. Financieel Dagblad, pp. 11.
2
Martin, D. (2007, June 23). Samenwerking wordt smerig gevecht. NRC Handelsblad.

Since the first developments, it has become clear that operating in China, especially within an
international joint venture, can be a complicated, challenging, and thus costly exercise. Not only do
the cultural, legal, political, and economical backgrounds of the Chinese and Western companies
differ, but the joint venture as organizational structure itself is prone to add complexity to the
manageability of those organizations. An important issue in the management of these joint ventures is
the exercising of control, as can be read in the two newspaper articles cited in this introduction. Joint
ventures, by definition, imply shared ownership by at least two autonomous parents, which creates
high levels of interdependence between the parent companies (Contractor and Lorange, 1988). The
parents of the joint venture may have (or develop) different interests and backgrounds (Kamminga,
2003), which can, at least over time, create some severe difficulties with regard to the direction,
supervision, and controlling of the joint venture. When mismanaged, these difficulties can result in
serious power struggles, with all the involved costs, as the case of Danone versus Wahaha shows.
Previous research on control within Sino-Western joint ventures has mainly focused on inter-
organizational control (Johnson, Korsgaard and Sapienza, 2002). From the perspective of the parent
companies, it is studied which mechanisms have been implemented in order to secure the parental
interests. However, focusing on parental control alone has some severe limitations. For instance, one
does not gain much understanding of the processes that occur within the joint ventures, although this is
the place were the actual power division becomes manifest. Put differently, the structures, cultures,
systems, board compositions, and more, within the joint venture reflect the way the power is divided
between the organizations. For this reason, this study aims at broadening the knowledge on control
within Sino-Western joint ventures, by taking into account also the control mechanisms and processes
that are employed by Dutch and Chinese managers in the international joint ventures in China. As will
be explained in the following chapters, we will perceive the notion of control within joint ventures as a
multifaceted concept that subsequently needs to be studied as an integrative concept. Therefore, both
inter-organizational and intra-organizational control mechanisms are taken into account, since they are
both part of the same joint venture setting.
To sum, the goal of this study is to gain a deeper understanding of the various management control
mechanisms and processes employed within Sino-Dutch joint ventures in China, in order to find best
practices regarding the controlling of international joint ventures in China.
In order to find explanations for the way control is exercised within the joint ventures, three elements
are given special attention, which are concerned with three separate levels within the joint venture
setting. These elements are:

- dependencies of the partners
- the structural characteristics of the joint venture
- the cultural backgrounds of the managers
The first element, dependency of the partners, is concerned with the relation between the joint venture
partners and the attached power position. This power position, we believe, is likely to influence the
process of controlling within the joint venture. Studying the structural characteristics of the joint
venture helps us to understand the implications of the design of the organization on the process of
controlling. When we study the cultural backgrounds of the managers, we focus on the individual
managers that operate within the joint venture. This way, we will get a comprehensive overview of the
way control is organized and exercised within the joint venture setting.
Hence, these deliberations lead to the following research question;
How is management control within Sino-Dutch joint ventures in China organized
and how can the developments and patterns be explained?
In order to be able to answer this rather extended research question, various sub questions need to be
answered. These sub questions are divided into questions that are concerned with the way both the
parent organizations and the individual managers exercise control.
Control by the parent organizations
- Which reasons do both partners have for establishing a joint venture in China?
- How is the power between the partners divided and which factors are found to be most
influential with respect to the power position of the partners?
- Which control mechanisms have the parent companies put in place?
- How does the design of the joint venture reflect the power position of the partners?
Control by the individual managers
- How do the managers from both sides try to control the organization?
- To what extent do the control mechanisms that Dutch managers use differ from the ones
Chinese managers use?
- How do the cultural backgrounds of the managers bear on the way control is organized within
the joint ventures?
- What are the major challenges for managers in the joint ventures with regard to the issue of
control?

- Which practices are perceived by the managers to contribute to effective controlling of the
joint venture?
In order to answer these questions, a group of both Dutch and Chinese managers operating within
Sino-Dutch joint ventures have been interviewed, during a three month stay in Shanghai, China.
During the interviews, the respondents were asked to (a) explain how control is organized within the
joint ventures, (b) identify bottlenecks/critical issues in the management control of the joint ventures,
and (c) provide clues on how to deal with these issues. The outcomes of these interviews eventually
resulted in a list of recommendations, which can be found in chapter six.
In chapter two, we have constructed a theoretical framework regarding the issue of control within
international joint ventures. In this chapter, we look at various dependencies between the partners that
are likely to be present, the need to control these dependencies, and the way national cultures bear on
the subject of managerial control.
Chapter three provides an explanation of the research strategy that is used in this study. It discusses the
use of qualitative research methods, potential hazards and limitations, and the used sample strategy.
In chapter four, we present the findings from the empirical study. Here, the outcomes from the
interviews are analyzed by relating these results to the various concepts that we have developed in
chapter two.
Chapters five and six contain the conclusions of this study, the related discussion, as well as
recommendations for practitioners.

Chapter 2 Theoretical background
Part 1: Control within Joint Ventures
At first, the phrase ‘control within joint ventures’ may sound a bit contrary, since a joint venture, being
an organization, is itself a structure put in place in order to coordinate certain activities. However, as
will be outlined in this section, control does play an important role within today’s organizations,
especially when these organizations operate in a multinational environment. Due to differences in
languages, values, cultures and common business practices, coordination of activities in such
organizations tend to get challenging (Child & Yan, 2003). Besides that, the joint venture structure,
that lies at the heart of this research, is likely to hold more complicated coordination mechanisms,
because these organizations are confronted with a complex ownership structure (Kamminga, 2003;
Kemp, 1999). Hence, controlling in such non-traditional organizations is likely to be less
straightforward, since the control is divided by at least two autonomous partners (Yan and Gray,
1994).
In order to be able to study the concept of control within joint ventures, we need to gain a broader
understanding of the reasons why organizations cooperate and why they feel a need to exercise
control, as well as a clear perception on the concept of organizational control. Transaction cost theory
and resource dependency theory are used to answer the former two questions, while the latter question
is discussed by taking into account the three dimensions of control from Geringer and Hebert (1989).
2.1 What is control?
Before we can study control within Sino-Dutch joint ventures, we need to gain a deeper understanding
of the concept of organizational control. Geringer and Hebert (1989: 236/237) define management
control as:
“(…) the process by which one entity influences or tries to influence, to varying
degree, the behavior and output of another entity through the use of power, authority
and a wide range of bureaucratic, cultural and informal mechanisms.”
From this definition, several important implications can be derived. Apparently, control has to do with
power and influence from one entity over another, something that can be accomplished by using a
variety of instruments. However, this does not say anything about the motives of control; why does
one entity feel a need to exercise control (or influence) over another entity?

When studying the concept of control within organizations more thoroughly, we can distinguish two
interrelated goals that are at the heart of control. At first, control aims at ensuring required actions to
take place. At second, control aims at preventing deviations of the norm to occur. Moreover, control
contains both a positive element (ensuring something) and a negative element (preventing something).
This chapter aims at grasping the essence of control within organizations, by elaborating on these two
dimensions from both an inter-organizational and an intra-organizational (or managerial) perspective.
As stated before, previous studies on control within joint ventures have for the most part focused on
control from an inter-organizational perspective: which control mechanisms do the parent
organizations use to ensure that their interests are secured, which partner acts most dominantly within
the relation, and what are the major determinants of power in the relationship?
Within this literature on inter-organizational control, three dimensions of control are distinguished
which, according to Geringer and Herbert (1989), should be studied as an integrative concept:
• Mechanisms by which control may be exercised
• The extent or degree (Kamminga (1999) speaks of tightness) of control sought by the partners
over certain activities
• The focus of control
These dimensions are visualized in figure 2.1.
Figure 2.1: Dimensions of control (based on Geringer and Hebert, 1989)
Although initially intended for inter-organizational control, these dimensions can be used in the
analysis of managerial control as well, although the concrete content of the dimensions is likely to
vary for both the parental control and the managerial control issues. In order to be able to distinguish
the various levels on which control is exercised, we need to realize the multiple relations that exist
within joint ventures settings, since these different levels probably call for different control
mechanisms. We can distinguish four types of relations within the joint venture structure:

1. Parent – parent relations (inter-organizational level)
2. Parent – joint venture relations (hybrid form of inter – and intra organizational level)
3. Joint venture – vertical relations (intra-organizational level)
4. Joint venture – horizontal relations (intra-organizational level)
Figure 2.2 offers a visualization of the four different types of relations, existing in a joint venture
setting.
Fig. 2.2 Types of relations within a Sino-Dutch joint venture
In each of these relations, power and control play a central role, although the techniques, tightness and
focus of control will differ within each type. For this reason, different theories and analytical tools are
applied to the different type of relations. Following the broad distinction we drew between the inter
and the intra organizational levels, this section starts with an elaboration on the first relation (parent-
parent). Within this relation, we will focus on two basic elements: power and control. We will take a
look at the motives both partners have to cooperate, the (inter)dependencies between the partners, and
the need to control.
After this elaboration, the other three relations are explored, which provides a framework to study the
way control is organized within the joint ventures.
2.2 Parental control
2.2.1. Inter-organizational control in China; a transaction cost perspective
Transaction cost theory (Williamson, 1975) is often used in the control literature to explain the
existence of coordination and control mechanisms (see for example: Harzing, 1999; Kamminga, 2003;

Kemp, 1999). The theory basically states that markets and organizations are two alternative means for
completing (or controlling) a transaction, each with its own governance mechanisms. The market uses
mechanisms such as price, contracts, and competition, while the organization relies on managerial fiat.
Markets are often believed to be the cheapest instrument to complete a transaction because it uses the
‘invisible hand’ of the price mechanism (Smith, 1776). However, Coase (1937) has shown that
sometimes, completing a transaction through market mechanisms is more costly than completing a
transaction within an organization.
When we look at our research context, it is interesting to see whether we can apply such transactional
reasoning to explain the existence of joint ventures as well. In order to answer this question, we need
to take a closer look at the underpinnings of the theory.
The transaction cost theory rests on two basic assumptions about the economic actors that are involved
in any transaction: bounded rationality and opportunism, which both lead to uncertainty. Bounded
rationality refers to the fact that all actors have cognitive restraints and therefore, cannot possess all
information they theoretically would need in order to make a ‘perfect’ decision (Williamson, 1975).
Simon (1947) elucidated bounded rationality by stating that ‘actors are intendedly rational, but only
limitedly so’. When actors would not have these cognitive boundaries, they would be able to write
contracts with unlimited complexity, wherein they could forecast all possible outcomes and events that
might occur, and, hence, anticipate on them in advance (Williamson, 1975).
The second behavioral assumption of transaction cost theory is opportunism: some actors are self-
interest seeking with guile. According to Williamson (1975), there is a possibility that actors will
behave opportunistically (e.g. stealing, cheating, lying, incomplete disclosure of information), which
again leads to uncertainty and a need for safeguards.
As a result, uncertainty, created by the treat of opportunism combined with bounded rationality,
explains the need for control3
. Actors will seek to control transactions in a way that reduces the
potential problems that arise from bounded rationality and the threat of opportunism, at the lowest
possible costs. Costs involve activities like monitoring and writing contracts.
When we apply this knowledge to our research context, we can distinguish multiple sources of
complexity, related to both the aspect of bounded rationality and the threat of opportunism. Moreover,
when we look at the Chinese business context, we see an emphasis on relations (Buckley, Clegg &
Tan, 2006), leading to very little transparency on all kinds of levels (e.g. inter personal, inter
organizational, governmental) with regard to rules, habits, decision making criteria, et cetera (Child &
Yan, 2003). This adds to the bounded rationality of the Dutch companies that operate in China. This
3
Other determinants of control that are distinguished within the theory are Asset Specificity and Asset
Frequency.

bounded rationality becomes even more obvious when we take into account the unfamiliarity of the
Dutch companies with these Chinese business customs and practices, which heavily diverge from the
Western business world (Gibb and Li, 2003; Hoon–Halbauer, 1999). Besides, one look at the horror
stories in the news papers and in popular books like ‘Mister China’ from Tim Clissold learns us that
the threat of opportunism in the Chinese business context is still evident and substantial, although we
have to be aware of exaggerations or caricatures. This threat of opportunism is enlarged by an
underdevelopment of China’s legal structure (Henley, Kirkpatrick and Wilde, 1999; Potter, 1995),
which diminishes the role of contracts and other forms of formal safeguards. Hence, enforcement of
contracts tends to be complicated and thus costly, and the outcomes often remain uncertain. From a
transaction cost perspective, therefore, the market as governance form, in many cases, will be less
appealing for Western enterprises than hierarchical structures, because of the high levels of uncertainty
and the inappropriateness of the governance mechanisms that are attached to the market, such as
contracts. Hence, it is likely that many foreign enterprises that enter the Chinese market will choose to
start an organization in China, in order to reduce the uncertainties they are faced with. By starting a
new organization, the risk of opportunism is lowered, because the involved parties have common goals
(at least on paper), can monitor each other more easily, and have the possibility to build trust among
each other. Trust is believed to lower the need to control (Das & Teng, 1998; Ellis, 1996) or at least
that it makes the process of exercising control less complicated (Xin & Pearce, 1996). We have
visualized the above reasoning in fig. 2.3.
Figure 2.3 Factors leading to a hierarchy in China
However, within our research context, the question is not whether to start an organization on a certain
market or not, but whether a joint venture, with its shared ownership structure, is an appropriate

organizational form to cope with (i.e. to control) the high levels of uncertainty which the Dutch
companies are confronted with.
When we look at the joint venture structure, it seems as if the structure itself is a potential source of
opportunistic behavior: valuable assets are brought into the joint venture, assets that can often be
imitated i.e. copied by the other partner, while prospective profits need to be shared. Hence, as the
examples from the introduction chapter show, disputes are likely to emerge within joint ventures when
the incentive of behaving opportunistically outweighs the risks or costs of this kind of behavior. When
we recall the underdevelopment of China’s legal infrastructure, we can expect that the incentives for
especially Chinese organizations (coming from an emerging economy) to behave opportunistically are
tempting. Whereas joint ventures in Western economies can rely on extensive contracts, both the
complexity of the local business context (which we can relate to the bounded rationality) and the
underdeveloped legal infrastructure (which ads to the threat of opportunistic behavior), seem to
diminish the importance and value of contracts, such as joint venture agreements.
Therefore, the choice for a joint venture structure cannot easily be explained from a transaction cost
perspective. Hence, the Chinese business context seems to contain a larger need for control than the
Dutch business context does and the joint venture structure seems to enlarge this need for control even
further. Besides, in a growing number of markets, often joint ventures are no longer compulsory to do
business, so wholly owned subsidiaries are, from a transaction cost perspective, likely to replace the
joint venture structure in China. Obviously, wholly owned foreign enterprises carry less difficulties
regarding the issue of controlling, because the ownership structure is unambiguous and
straightforward. Hence, the issue of inter-organizational control does not exist in fully owned
subsidiaries. Within this type of organizations, opportunism and uncertainty are brought under
managerial control, while the monitoring costs are likely to be much lower than in the joint venture
structure. From a transaction cost perspective, therefore, the wholly owned subsidiary is more likely to
be adopted by Western enterprises wherever the governmental restrictions on foreign entries are
removed. Still, although the wholly owned foreign enterprise has become the most popular
organizational structure, almost a third of all foreign investment is controlled through a joint venture
structure4
. Apparently, Dutch enterprises have other rationales for adopting a joint venture structure in
China. The next section explores the raison d'être of the international joint venture structure in China
and the nature of the relationships of its partners.
2.2.2. Voluntary inter-firm cooperation; a resource dependency perspective
The most striking characteristic of joint ventures is that two or more autonomous organizations
establish a relationship with each other that goes far beyond traditional inter-firm collaborations. In
4
Internet article: Cooperative Joint Ventures by Paul H. Folta. (2006) www.chinabusinessreview.com

order to achieve some overlapping organizational goals, the involved organizations set up an entirely
new organization that operates under direction of the parent companies. The reason for this
interweaving of organizational entities derives from the need for certain resources (Jolly, 2005).
Pfeffer and Salancik (1978) argue that organizations that are lacking essential resources will seek to
establish relationships with other organizations in order to obtain those needed resources. When we
look at the Sino-Western joint ventures, it is important to realize the nature of the resources that both
joint venture partners are seeking to obtain, because this knowledge can shed light on the relation
between the partners and, hence, on the division of power and influence in these relations. Put
differently, when we obtain knowledge about the main reasons organizations want to be involved in
these Sino-Dutch joint ventures, this can help us to understand how control between the partners is
organized and divided.
There are several reasons for Western enterprises to start up joint ventures with local enterprises in
China. However, it is important to start with a distinction between the reasons why Western
organizations enter the Chinese markets in the first place and secondly the reasons why they choose to
organize their business in a joint venture structure. The main reasons why Western enterprises have
become so unequivocal present in China in the past two and a half decades is twofold. In the first
place, Western organizations are seeking cheap labor in order to lower their production costs. The
combination between cheap labor, good infrastructures and governmental support (e.g. tax incentives)
has made China the ‘world’s manufacturer’ (Zhang, 2001). To boot, outsourcing and production are
still the main activities for Western enterprises in China.
However, this focus on low cost production is gradually changing towards a focus on the rapidly
growing Chinese market. Enthused by annual growth figures of the Chinese market that go around the
7 till 10 percent and the sheer size of the Chinese population, numerous Western enterprises are trying
to enter this ‘booming’ market. Illustrative for this recent focus on the Chinese markets are books like
‘1 billion customers’ from James McGregor and ‘the Chinese century’ from Oded Shenkar.
Summarizing, Western enterprises are entering the Chinese market because of the cheap production
facilities and the possibilities they presume with regard to trading and sales in this emerging market.
However, this does not provide an answer to the question why Western enterprises so often choose to
organize their local business in a joint venture, in which they tightly cooperate with a local Chinese
partner. It also does not say anything about the motives Chinese enterprises have for partnering with
Western companies.

Arguments for partnering
For Western enterprises, there is a resilient, yet declining legal argument for partnering in China. Since
the opening of the Chinese markets in 1979, the Chinese government has remained, although declining
under the influence of the 2001 WTO entering, a significant grip on the Chinese economy (Child &
Tse, 2001; Potter, 1995). Examples of this influence are extensive and ambiguous procedures for
licensing and restrictions for foreign enterprises in certain markets, like the petroleum market, the
energy market, and the automotive market. These restrictions are documented in the various
investment laws. These restrictions often consist of limitations for the foreign enterprise with regard to
the ownership structure (e.g. in the automotive industry, a foreign company is not allowed to own
more than 50 percent of the stocks - for the most recent information about governmental regulations
and investment laws, visit www.mofcom.gov.cn). This way, foreign enterprises that want to enter
these markets are forced to start a joint venture with a local partner, in order to acquire the needed
licenses. However, the Chinese markets are progressively opening to foreign direct investments (Li,
Yang and Yue, 2007), thus decreasing the number of legal restrictions. As a consequence, one can
examine, in an increasing number of markets, a shift towards wholly owned foreign enterprises
(Economic Intelligence Unit, 1999b). The majority of all new entries are organized in a wholly owned
foreign enterprise. Simultaneously, there seems to be a movement within multinationals to buy out
their local venture partner(s). Nonetheless, joint ventures still seem to play an imperative role in the
current Chinese business environment (Child & Yan, 2003). One of the objectives of this research
therefore is to find out which reasons Western enterprises have for operating in a joint venture
structure.
Another reason for Western enterprises to organize their business in China in a joint venture structure
is the possibility to learn from their local partner how to survive in the opaque Chinese context (Child
& Yan, 2003). The Chinese business context is complex: government regulations and procedures lack
transparency, the legal system is underdeveloped (Henley, Kirkpatrick and Wilde, 1999; Potter, 1995)
and local business practices and customs strongly diverge from the Western habitat (Gibb & Li, 2003;
Hoon-Halbauer, 1999). Partnering with a local company is a means for Western corporations to
overcome these obstacles, which increases their chances on survival.
The case for Chinese corporations seems to be a bit more straightforward: for Chinese enterprises,
partnering with a Western enterprise means that they gain access to both new knowledge and to new
sources of funding. Since the Chinese economy is still characterized as a transitional economy (Tsang,
2002; Yan & Gray, 1994), these two elements (knowledge and funding) remain scarce for many
Chinese enterprises. Especially the traditional state owned enterprises suffer from outdated technology
and machinery, while they lack sufficient funding which is essential for modernizing their factories
and for improving and extending their inadequate production systems (Siu & Glover, 2001). For years,

the Chinese state owned enterprises’ financial deficits were covered up by state banks that provided
the state owned enterprises with non-performing loans (loans that are in default or close to being in
default) (Steinfeld, 1998; 2004), a situation that could potentially jeopardize the Chinese economic
aspirations. Central in the large-scale reforms in the past three decades, therefore, is the attraction of
foreign direct investments. With the attraction of foreign capital, Beijing aims at revitalizing its
economy (Henley, Kirkpatrick and Wilde, 1999), so that large-scale investments in the economic
infrastructure become possible and accessible. A clear example of the active approach of the Beijing
government to attract foreign investments can be found in the Special Economic Zones (SEZ) that are
characterized by excellent infrastructures, relaxed tax regimes and governmental support. As a
consequence of this focus on foreign investments, non-performing loans will play a diminishing role
within the Chinese business context, which urges Chinese companies to seek alternative ways of
funding. Hence, insolvent Chinese enterprises have increasingly become dependent on foreign
enterprises for the attraction of capital.
According to Child and Yan (2003, p312), partnering with foreign enterprises is also a means for
Chinese corporations to obtain the latest management skills;
“The quality of resourcing provided by foreign-investor IJV (international joint venture
– red) partners is critical in a developing country context like China where inward FDI
(Foreign Direct Investment – red) is a necessary vehicle for the transfer of technology
and management expertise.”
In sum, Western enterprises are attracted to the low cost production possibilities China offers,
combined with a strong interest in the upcoming Chinese consumer markets, while Chinese enterprises
are looking for new technological knowledge, managerial expertise and financial resources.
With the motives of both sides clarified, we can take a closer look at the expected consequences for
the nature and composition of the relationship between the Western and Chinese partners and the
attached power distribution.
At first glance, one might expect the Western partner to be dominant in the relation, since they control
valuable tangible assets, such as capital and technology. These elements are generally believed to be
key success factors for modern enterprises. Consequently, the Western partners can be expected to
obtain most of the power in the relation, which is likely to result in a relatively large influence on the
direction of the organization.
The Chinese partner often lacks capital and innovative technological knowledge. However, the assets
they bring into the joint venture are, apart from the licenses, often much more elusive. Assets like local
knowledge, human resources and ‘guanxi’ (relations) are hard to calculate and quantify and can

therefore more easily be overlooked. Decision makers often tend to focus on tangible assets, such as
production output, profits and turn over, because these assets are easier to measure. However, focusing
on intangible resources may offer valuable information about the actual power distribution, since these
resources can function as a kind of ‘secret weapon’ for the Chinese partner. Especially in the Chinese
business context, which is often regarded as exceptionally complex and obscure (Child & Yan, 2003),
knowing how to ‘get things done’ or ‘how things work’ can prove to be vital know-how and the
difference between organizational survival and downfall.
When we translate this knowledge into mutual dependencies of the partners, we see that the Western
partners are dependent on their Chinese partners for market access, local knowledge, business and
governmental relations, licenses and human resources. The Chinese partners on the other hand, are
dependent on the Western partner for capital, technologies, knowledge about innovation and
managerial expertise. However, dependencies only become critical sources of power when the
required resources are important for the other organization and cannot (easily) be obtained elsewhere
(Pfeffer and Salancik, 1978). In order to evaluate the dependencies of the partners, we have found five
elements that influence the level of dependency:
Strategic importance
Yan and Gray (1994) argued that the strategic importance of the joint venture to the partners is one of
the core determinants of the partners bargaining power. The same reasoning could be applied to
determine the interdependencies of both partners with regard to the resources they want to acquire by
partnering. When the resources brought into the joint venture by partner A are of great importance to
the partner B, this will weaken the power position of partner B.
Possibility to substitute
Besides the strategic importance, it is also important to include the possibilities of a partner to
substitute the needed resources for other resources, because a high possibility of substituting a
resource diminishes the dependency of a partner. Likewise, Yan and Gray (1994, p. 1481) state:
Alternatives available to negotiators specify the extent to which they can choose
different arrangements for achieving the same goals sought in the negotiation. Thus,
availability of alternatives is positively related to bargaining power.
Level of rivalry
Another aspect that needs to be included in the analysis of the dependencies, is the level of rivalry or
continuity of the resources both partners contribute to the joint venture. Is it a one time investment of
the partner or does the partner continuously need to provide the joint venture with a certain resource,

such as knowledge? When it is a one time investment, which often occurs during the start up of the
joint venture (e.g. capital for acquisition of machinery), it is likely that the dependency of the other
partner will diminish after the contribution is made. When however, the partner continuously needs to
supply the joint venture with a certain resource (e.g. raw materials, guanxi), the dependency will
remain until the other partner has found a substitute, has learned from the partner, or when the
resource has lost its value.
Sunk costs
This facet is related to something that is referred to in accountancy as ‘sunk costs’: costs that have
been incurred and cannot be recovered. An example of sunk costs are investment costs for new
machinery. The moment the money is spend, it becomes irrelevant for future investment decisions.
However, often decision makers do take into account such costs, because of the public perception and
the fear of being accused of wasting money. With regard to the issue of partnering, sunk costs can be
understood as resources that cannot be pulled back from the joint venture once they are invested by the
venture partner. Obviously, partners that have high sunk costs will experience higher exit barriers,
since terminating the joint venture will often be regarded by third parties (e.g. stockholders, media,
public opinion, employees, et cetera) as a waste of scarce resources and therefore as loss of face. This
way, having high sunk costs will likely mean that a partner becomes more dependent on the success of
the joint venture and therefore more dependent on the willingness of the other party. Hence, in such
case, the power in the relation will shift to the other party.
Learning abilities
A last element refers to the question what the learning abilities from the partners are with regard to the
resources that are contributed by the other partners. Put differently, what are the odds that the partner
can imitate the resources that are brought into the joint venture by the other partner, and by doing so,
lowering its dependency from the other partner.
Because of the abovementioned reasons, the resources both partners contribute to the joint venture
need to be examined from the perspective of the other partner. In order to facilitate a structured
analysis of the relation between the invested resources and the mutual dependencies, we have
constructed a framework (see fig.2.4) which contains the five characteristics of dependencies as we
have described them above and which will be used during the empirical part of this research.

Figure 2.4 framework to analyze the relation between the invested resources and the mutual dependencies
When we know the dependencies of both partners, we can predict their power position and hence, the
amount of control that will be exercised by both partners. A different, yet akin approach is provided by
Yan and Gray (1994), who provide a model to determine the relation between bargaining power (the
ability of bargainers to change the bargaining set in order to influence the outcomes of a negotiation)
and joint venture performance. This model (see fig. 2.5) also includes some additional factors that they
believe influence the relation between power and control. This model has been used to construct a
topic list for the interviews and will subsequently be discussed in chapter four.
Fig 2.5 Yan and Gray’s (1994) integrative model of international joint ventures
Dependencies/
resources
Importance Ability to
Substitute
Continuity Sunk Costs Learning
abilities
Western
- Market access
- Local knowledge
- Guanxi
- Licenses
- Human resources
Chinese
- Capital
- Technologies
- Knowledge
About innovation
- Managerial expertise

2.3 Headquarters control
The second type of relation within a joint venture setting is the relation between the headquarters and
the joint venture. Within this relation, we need to study the formal control mechanisms (e.g. reporting
systems, goals, incentive programs, reward systems) as well as the informal control mechanisms (e.g.
number of contact moments between the boards of the headquarters and the joint venture, level of
involvement of headquarters). One can assume that a partner’s strong involvement with the joint
venture will result in a greater influence on the direction of the joint venture. Likewise, a tight
connection is expected to be translated in a stronger power position of that partner.
In order to systemize our analysis of headquarters control, we will use Choi and Beamish’s (2004)
categorization of control. In a study to determine which control strategy is most effective for
international joint ventures, they studied four types of joint ventures, each with a different power
position of the partners: split control joint ventures, shared control joint ventures, multinational
enterprise-partner-dominated joint ventures, and local-partner-dominated joint ventures. The
difference between split control joint ventures and shared control joint ventures is the presence or
absence of a functional division of control. Within shared control joint ventures, partners manage the
joint venture jointly, without considering the specific expertise of the separate venture partners. Within
split control joint ventures, controlling is divided in a way that each venture partner controls its own
firm-specific advantages (Choi and Beamish, 2004). Moreover, when we look at the resources that
both partners contribute to the joint venture, we have already interpreted these resources as
dependencies for the other partner. In this case, we can interpret these resources as fields of expertise,
with each partner controlling its own fields of expertise, leading to a functional division of control.
2.4 Managerial control – who is in charge
After a joint venture is established, the organization needs to be structured. Where traditional
organizations usually show a gradual development, both in size and professionalism, a joint venture,
like other subsidiaries, is often designed from scratch. Within this design, one can find indications for
the way control and power is exercised by the parents. The struggle for influence over the direction of
the organization now shifts from the parental level towards the joint venture level. Hence, the newly
established organization becomes, to some extent, a ‘battleground’, wherein the actual power division
is ascertained. On paper, one partner might be authorized to make all critical decisions, can assign its
own people on key positions, and maybe even have a majority equity position. However, it is only in
the actual design and practices of the organization that power becomes manifest. As will be shown, we
need to make a distinction between vertical and horizontal control within the joint ventures.

2.4.1. Vertical managerial control
In the proposed study, intra-organizational control is seen as managerial control over internal
processes; all types of actions that the management of an organization takes in order to influence the
internal organizational processes, so that certain goals are reached and certain deviations of the norm
are prevented (Leksell, 1981). This perception on managerial control holds both a positive element
(ensuring that certain goals are reached) and a negative element (preventing certain deviations of the
norm to occur).
Yan and Gray (1994, p. 1481) explicate management control, by stating that:
“Management control refers to the process by which an organization influences its
subunits and members to behave in ways that lead to the attainment of organizational
objectives.”
Adler (2002) ‘humanizes’ the concept of control when she speaks of “effective managing of human
resources”. Based on both the perceptions of Adler (2002) and Yan and Gray (1994), managerial
control can be specified towards ‘the attempts by which managers try to influence employees to
behave in certain ways, in order to attain organizational objectives’.
A more practical outline of the concept of control within international organizations is provided by
Harzing (1999). In an attempt to synthesize various authors (e.g. Merchant, Ouchi, et cetera),
definitions, and conceptions related to control, she distinguishes, based on two dimensions, four
categories of intra-organizational control (Table 2.1). The two dimensions are Direct/Explicit versus
Indirect/Implicit and Personal/Cultural versus Impersonal/Bureaucratic/Technocratic.
Personal/Cultural Impersonal/bureaucratic
(founded on social interaction) (founded on instrumental artifacts)
Direct/Explicit Category 1: Personal centralized Category 2: Bureaucratic formalized
control. control
Indirect/Implicit Category 4: Control by socializa- Category 3: Output control
tion and networks
Table 2.1 Classification of control mechanisms on two dimensions (derived from Harzing, 1999)
Personal centralized control
This type of control assumes some form of hierarchy: certain decisions are taken at the top and
managers conduct (strong) personal surveillance on the execution of these decisions.

Bureaucratic formalized control
This type of control aims at pre-specifying the behavior that is expected from employees. These
control mechanisms usually come in written form, such as written manuals, rules, regulations,
formalization, et cetera.
Output control
Whereas the other three types of control mechanisms focus on behavioral control, this type of control
refers to the actual outputs. These outputs are usually generated by the use of monitoring systems,
wherein all kinds of data can be gathered and analyzed (such as financial data, productivity figures, et
cetera).
Control by socialization and networks
Harzing (1999) sees this category as a sort of ‘garbage can’, because it actually contains three sub-
dimensions. However, we will limited ourselves to socialization: the process of ensuring that
employees share certain organizational values and goals that are socialized into an organizational
culture.
Harzing (1999) states that these categories should not be seen as substitutes, but rather as
complementary, since combining control mechanisms from more than one category within an
organization is possible.
When we explore the works of the various authors on which Harzing (1999) based her four categories,
we can see three different types of control emerge, which sometimes overlaps: input control (e.g.
setting goals and targets, influencing organizational cultures), process control (e.g. personal
surveillance, milestones), and output control (e.g. measurement of results, managing by numbers). We
can relate this distinction to the focus of control, as found by Geringer and Hebert (1989) (see fig. 2.1).
Within the empirical study, we will take this focus of the managers in the joint ventures into account,
when we examine the way they exercise control in the organizations.
There is one important notion to make regarding Harzing’s (1999) categorization, that is that the
works included in Harzing’s (1999) categorization are almost all English contributions5
(only one
German exception). This could form a potential bias towards a Western position regarding control
strategies in the joint ventures. For this reason, it is particularly important to include leading Asian
scholars in our study. In 2000, Farh and Cheng found that a paternalistic leadership style is prevalent
in Chinese societies. Cheng, Chou, Wu, Huang, and Farh (2004) stated that although paternalistic
5
Kenter (1985) was the only non-English contribution in Harzing’s (1999) study.

leadership is identified as one of the core characteristics of Chinese management, little academic
studies on this topic are available. One important contribution however, is made by Farh and Cheng
(2000), who came up with a model of paternalistic leadership and subordinates responses. This model
is shown in fig. 2.6. Another contribution to the issue of paternalistic leadership is provided by
Aycan, et al. (2000).
Fig. 2.6 Paternalistic leadership and subordinates responses (adapted from Farh and Cheng (2000).
From this model, we can learn that paternalistic behavior consists of three dimensions:
authoritarianism, morality, and benevolence, which triggers employees to respond with dependency,
respect, and gratitude. Several authors have pointed at the overlaps between paternalistic leadership,
which is merely seen as an Eastern concept, and transformational leadership, which is commonly
studied by scholars and used by practitioners nowadays (Chen and Farh, 1999; Cheng, et al., 2004).
Transformational leadership (Bass, 1985, 1996; Bass & Avolio, 1990, Burns, 1978) is based on the
idea that inspirational leaders seek for a shift in the beliefs, needs, and values of their subordinates.
Burns (1978) stated that “the results of transforming leadership is a relationship of mutual stimulation
and elevation that converts followers into leaders and may convert leaders into moral agents” (p.4).
This type of leadership contrasts with transactional leadership (Brass, 1985; Burns, 1978) which is
merely based on exchanges. The overlap between paternalistic leadership and transformational
leadership can particularly be found in the relationship orientation. Cheng et al. (2004) point at
‘individualized consideration’ as one of the core characteristics of transformational leadership,
indicating that a leader: “respects subordinates, cares for them, satisfies their individual feelings and

needs, and gives them appropriate support”. Obviously, they relate this concept to the benevolence of
paternalistic leadership. Other characteristics of transformational leadership which Cheng et al. (2004),
to some degree, relate to paternalistic leadership are ‘high performance standard’ (which they relate to
the doctrines of authoritarianism) and ‘modeling’ (which they relate to morality). It could be argued,
therefore, that transformational leadership holds the potential of bridging cultural dissimilarities (as
discussed in the next section) that can arise within Chinese-Western cooperation, with regard to
management practices.
2.4.2. Horizontal control
Based on the different categories of control, the control mechanisms that are used within the joint
ventures can be analyzed. However, the proposed research setting is believed to add complexity to the
issue of control within the organization. In the proposed study, managerial control is studied within a
joint venture. This setting potentially complicates the executing of managerial control because of the
shared ownership, which will often be reflected in a joint exercising of management activities (Yan
and Gray, 1994). Therefore, besides control over employees, managerial control within joint ventures
will probably also be directed towards control over the direction of the organization. Hence, power
struggles are likely to occur within the management of the organization, because the joint venture is
founded to serve the interests of both parents, interests that may vary over time (Kamminga, 2003).
Therefore, actions will be taken by the individual managers to try to influence the direction of the
organization, in order to secure the parental interests. This contains the risks of conflicts, coalition
forming, opportunism and undermining actions (Wong, Tjosvold, Yu, 2005; Inkpen and Beamish,
1997).
To sum, we can distinguish two elements of managerial control within joint ventures. At first, we have
identified vertical managerial control, which refers to the control over employees. This type of control
will be labeled as managerial control. Second, horizontal control refers to the control over the direction
of the organization. This type of managerial control will be labeled as board control. Board control
offers a clear indication of the actual power division between the parent companies, since it reflects the
outcomes of the negotiation processes between the partners. Important indicators of board control,
such as board composition, distribution of voting rights, and the role of the general manager, are all
stemming from the joint venture agreement or contract that the venture partners have obligated
themselves to. Moreover, as Yan and Gray (1994) have suggested, when we are trying to understand
the actual power division between venture partners, we need to take a closer look at the way the board
is organized.

Part two: Cultural influence on control within joint ventures
Besides the joint venture structure, another element is likely to complicate the carrying out of
management activities: the cultural dissimilarities within the Sino-Dutch joint ventures. It is legitimate
to expect that the cultural issues that are at play influence the way control is exercised within the joint
ventures. Likewise, Clark and Mueller (1996, p. 136) state that:
The earlier tendency in management studies towards an intra-firm, universal, context-
free and time-free analysis has been increasingly challenged over the last ten years or
so.
Moreover, the various ways control is carried out is likely to vary in different cultural environments
(Harzing, 1999), such as the Dutch and Chinese business environments. According to some authors
(e.g. Gibb and Li, 2003; Hoon–Halbauer, 1999), Chinese and Western business cultures are like chalk
and cheese and different perceptions on relationships, trust, and control are prone to be present.
Therefore, it is important to study the extent and the way the cultural backgrounds of the managers
bear on the way they exercise control. This information could provide explanations for the way control
is organized and, hence, could offer suggestions on how to improve the effectiveness of the control
mechanisms that are put in place. In this section, an initial comprehensive overview is provided of
some central elements of both the Chinese and the Dutch culture, which results in an overview of the
main differences between both cultures. However, this overview is by no means exhaustive, but serves
only as a preliminary acquaintance with both cultures. In the process of exploring both cultures,
Hofstede’s model of cultural dimensions (Hofstede, 2001) is used. This analytical framework
structures the analysis of national cultures, because it offers the possibility to compare and evaluate
cultures in a systematic manner. A similar approach is used in the Globe (Global Leadership and
Organizational Behavior Effectiveness) studies, which was conducted more than two decades later
than Hofstede’s original research. The Global study identified nine culture dimensions, some of which
are overlapping with Hofstede’s dimensions.
2.5 Hofstede’s Cultural Dimensions6
Hofstede (2001) developed five dimensions, by which national cultures can be classified and studied.
The five dimensions he found were:
- Power Distance Index; reflects the acceptance and expectations about the power distribution
within countries, organizations, families, et cetera.
6
Descriptions of the dimensions based on Hofstede, 2001 and the website www.geert-hofstede.com

- Individualism; as opposed to collectivism. It reflects the extent to which individuals are
integrated into groups or, on the other hand, function as detached individuals.
- Masculinity; reflects the extent to which social roles are divided by sexual categories (e.g.
men ought to be assertive, forceful and aimed at material success, while women ought to show
great modesty and be aimed at the quality of life).
- Uncertainty Avoidance Index; reflects the extent to which members of a culture feel
threatened by uncertain and unfamiliar situations.
- Long-Term Orientation7
; as opposed to short term orientation. Values associated with Long
Term Orientation are thrift and perseverance. Values associated with Short Term Orientation
are respect for tradition, fulfilling social obligations, and protecting one's 'face'
2.6 Globe cultural dimensions8
The Globe study identified nine dimensions to explain differences in national cultures. These nine
dimensions are:
- Performance Orientation; the extent to which a community encourages and rewards
innovation, high standards, and performance improvements. Values that are related to this
dimension include an emphasis on results, direct communication, and individual achievement.
- Future Orientation; the degree to which a collectivity encourages and rewards future-
oriented behaviors. Values associates with this dimension, are propensity for saving, long
strategic orientation, and flexible organizations and managers.
- Gender Egalitarianism; the extent that societies prescribe and proscribe different roles for
women and men. Societies that score high on Gender Egalitarianism tend to have more
women in management positions, have more women participating in the work force, and have
less occupational sex segregation.
- Assertiveness; the degree to which members of a society are encouraged to be assertive,
aggressive, and tough. Societies whose members are assertive have sympathy for the strong,
value success and progress, try to have control over the environment, and emphasize results
over relationships.
- Collectivism I, Societal Institutional Collectivism; the degree to which societies encourage
and reward collective distribution of resources and collective action.
- Collectivism II, In-Group Collectivism; The degree to which individuals express pride,
loyalty and cohesiveness in their organizations or families. Values associated with
7
This dimension was discovered years after Hofstede published his original work ‘Cultural Consequences’ in
1980 and only after an intensive study of the Chinese culture by Michael Bond.
8
Definitions derived from Culture, Leadership, and Organizations, edited by House, Hanges, Javidan, Dorfman,
and Gupta (2004).

collectivism are relatedness with groups, extended family structures, indirect communication,
and a large distinction between in-groups and out-groups.
- Power Distance; the extent to which a community accepts and endorses authority, power
differences, and status privileges.
- Human Orientation; the degree to which a collective encourages and rewards
individuals for being fair, altruistic, generous, caring and kind to others.
- Uncertainty Avoidance; the extent to which ambiguous situations are threatening to
individuals, to which rules and order are preferred, and to which uncertainty is tolerated in a
society.
The Globe dimensions can to some extent be interpreted as an extension of the Hofstede dimensions
(although criticized by Hofstede in 2006). Most important difference between them, we believe, is the
distinction Globe makes between social practices and social values. Hence, there can be a discrepancy
between a broad societal desire for certain behavior and the actual behavior as it is found to be
dominant within this same society. However, Hofstede, again, has criticized this distinction after
conducting factor analysis on the scores of the Globe dimensions (Hofstede, 2006).
2.7 Chinese culture – Confucian structures
With a five thousand year old, relatively homogenous civilization, China has one of the oldest cultures
in the World. Some important events that have shaped the culture to what it is today, are the rise and
fall of the empire, the civil war during the first half of the twentieth century, the several wars against
Japan, the Communist revolution and the opening of the Chinese markets in 1978 by Deng Xiaoping.
The institutional context in China is believed to be an assembly of all kinds of informal principles,
which contains an emphasis on relations, tacit and ambiguous codes of behavior, complex mechanisms
of enforcements of (often unwritten) rules, and great reliance on authority. This reliance on authority
derives from the influence of the Confucianism (based on the tenet of Kongzi), which focuses on
societal order. This societal order, Kongzi believed, has to be accomplished through strong
hierarchical relations. According to Wang, Wang, Ruona & Rojewski (2005), Confucian moral and
political and social principles govern nearly every aspect of Chinese life.
Wang, et al. (2005) have identified five core values of Confucianism that influence, among other
things, organizational management in China:
a) Hierarchy and harmony
b) Group orientation
c) Guanxi networks (relations)
d) Mianzi (face)
e) Time orientation

Figure 2.7 and 2.8 offer an overview of the Chinese culture according to the five Cultural Dimensions
of Hofstede (2004) and the nine Cultural Dimensions of the Globe study. These dimensions will be
taken into account during the discussing of the five Confucian elements9
.
Fig 2.7 China’s score on the five dimension model (derived from www.geert-hofstede.com)
Fig 2.8 China’s score on Globe’s Cultural Dimensions
Hierarchy and harmony
Every human being has a predetermined position in society. As long as each individual behaves
according to rank and social status, social harmony can be achieved. Social hierarchy and relations of
subordination and superiority are considered natural and proper. Within Confucianism, five
hierarchical relations can be identified; ruler-subject, father-son, older brother-younger brother,
husband-wife and older friend-younger friend. Subordinates (or juniors) need to show superiors (or
9
The Globe study distinguishes scores for social practices and social values. We use the scores for social
practices here, because our study explores the day-to-day practices of Chinese and Dutch managers in China. In
order to give a comprehensible and meaningful overview, we have altered the varying scales, into one scale that
goes from zero till hundred.
PDI Power Distance Index
IDV Individualism
MAS Masculinity
UAI Uncertainty Avoidance Index
LTO Long-Term Orientation
PO Performance Orientation
FO Future Orientation
GE Gender Equality
AS Assertiveness
COI Collectivism I
COII Collectivism II
PD Power Distance
HO Human Orientation
UA Uncertainty Avoidance

seniors) their respect and obedience, while the superiors have an obligation to provide their
subordinates with protection and consideration (Hofstede, 2001).
The focus on hierarchy within the Chinese culture can be related to Hofstede’s Power Distance Index
(PDI). China scores 80 points on the PDI, which is well above the world average of 55. Accordingly,
Chinese organizations can be expected to be highly hierarchical with great emphasis on procedures
and with a great power distance between the various hierarchical layers in the organization.
Group orientation
Individuals exist for the benefit of the group, group pressure is applied to ensure conformity through
eliciting shame (losing face), and conflict is generally handled through internal meditation rather than
an external legal system (Wang, et al., 2005). Likewise, Hofstede (2001) describes the Chinese culture
as highly collectivistic as opposed to Western cultures (China scores only 20 out of a possible 100
points on the Individualism dimension). In addition, Globe indicates that China scores high on both in-
group collectivism (80) and institutional collectivism (77). The collectivistic nature of the Chinese
culture can be related to the Confucian doctrines that stress the importance of kinship and close
personal relations (guanxi) (Wang, et al., 2005) in order to achieve social harmony and stability.
Guanxi networks
Guanxi refers to the emphasis on relations. These relations play a vital role in the distribution of
resources, knowledge and money. According to Wang et al. (2005), the traditional translations of
guanxi, such as relationships, networks or connections, are not capable of capturing the essence of
guanxi. Based on Parrish (2003), they state that the term actually means that ‘doors are opened or
barriers are conquered, depending on the right connections’ (p.317).
In addition, Luo (1997, p. 34) provides an expounding description of the concept of guanxi;
The Chinese word guanxi refers to the concept of drawing on connections in order to
secure favors in personal relations. It is an intricate and pervasive relational network
which Chinese cultivate energetically and subtly. It contains implicit mutual
obligation, assurance and understanding, and governs Chinese attitudes toward long-
term social and business relationships.
This focus on relations is in line with both the low score on Hofstede’s Individualism dimension (20)
and the high scores on both types of Globe’s Collectivism (77 and 80).

Mianzi
Mianzi (literally: face) represents somebody’s prestige, which is linked to somebody’s power and
authority. (Ho, 1976). Although the concept of face is present in every known culture, it plays an
exceedingly important role in the Chinese culture. According to Hofstede (2004), the importance of
Mianzi is strongly related to the strong collectivistic character of the Chinese culture. Collectivistic
societies experience a strong need for harmony, since open confrontation could jeopardize the
harmony in the collective structures of the society. Hofstede (2004) poetical states that within the
Chinese tradition, ‘loosing face can be equaled to loosing your eyes, your nose and your mouth’.
Accordingly, much effort is put in place by members of the Chinese culture, albeit members of a
family, community, organization, et cetera, to avoid other members loosening their face. Even
stronger, members try to ‘give face’ to other members. Like guanxi, it is firmly based on reciprocity:
when someone gives face, this person gets face in return.
Time orientation
According to Adler (2002), the Chinese culture is more past-oriented than present and future oriented.
Within the ancient Chinese culture, tradition seems to play a significant and long-lasting role.
However, Wang et al. (2005) have stated that the Chinese perceive time as a process of eternity; what
truly matters is the quality of every-day life. This perception can be related to the Long-Term
Orientation dimension. China scores 118 points on a scale that only goes from 1 till 100, to indicate
the significance of the perception of time within the Chinese culture.
The values that lie beneath the Long Term Orientation dimension are not always clear-cut for
Westerns, most likely since this dimension is developed within the Chinese context (Hofstede and
Bond, 1988). The values that Hofstede (2001) ascribes to the long term orientation consist of
‘persistency’ and ‘thrift’. The values that are ascribed to a short term orientation consist of respect for
traditions, protecting one’s face, and fulfilling social obligations. It is interesting to see that most
descriptions of the Chinese culture emphasize the persistency and thrift as well as the importance of
traditions and protecting face. When we look at these values that lie beneath the Time Orientation, we
would expect that China scores high on both long term orientation and short term orientation, resulting
in an average score on this dimension. However, China scores no less than 118 points, indicating an
enormous emphasis on long term orientations. Perhaps we can find a theoretical explanation for this
seemingly contraction, by looking at China’s collectivistic character. It could be argued that the
Chinese have a long term orientation within their inner circle, while they have a short term orientation
within their outer circle.
According to the Globe study, China scores rather low on Future Orientation, which seems
contradicting with Hofstede’s Long-Term Orientation dimension. According to the Globe study,
societies that score low on this dimension have a tendency to ‘spend now, rather than to save for the

future’, which contradicts with the value of thrift, which Hofstede’s sees as a typical Confucian value.
We did not find a theoretical explanation for this contradiction.
2.8 Dutch culture – Calvinistic merchants
According to Meekanon (2002), the Dutch history is characterized by four intertwined factors: the
seas, merchant traditions, Calvinism and verzuiling (‘pillarization’). The latter factor is actually
typically Dutch and can perhaps best be translated with ‘compartmentalization on a national scale’,
meaning that during the 20th
century, the country was culturally deeply divided into four main groups:
the Socialists, the Protestants, the Catholics and the Liberals (Goudsblom, 1967; Schryer, 1998).
Fortuyn (2002) stated that the Dutch culture, like other Western cultures, is founded on Christianity,
Judaism, and Humanism. Other, more recent developments consist of the Second World War, the
restoration and modernization of the Dutch economy in the ‘post-War era’, the various immigration
waves, and the European integration. These historical elements have shaped the Dutch culture as it is
experienced these days. Vossestein (2004) found five elements to be most dominant in the present
Dutch business and work culture. These five elements will be discussed, by again taking into account
the five dimensions of Hofstede (2001). The five fundamental elements of the Dutch culture are:
a) Low hierarchy
b) Directness and critical attitudes
c) Pragmatism
d) Procedures and planning
e) Internationalism and openness
Figures 2.9 and 2.10 offer an overview of the Dutch culture according to the five Cultural Dimensions
of Hofstede (2001) and the nine Cultural Dimensions of the Globe study (2004). These dimensions
will be taken into account during the discussing of the five building blocks of the Dutch culture.
IDV Individualism
MAS Masculinity

Fig 2.9 The Dutch score on the five dimension model (derived from www.geert-hofstede.com)
Fig 2.10 The Dutch score on Globe’s Cultural Dimensions.
Low hierarchy
The Dutch society is believed to be egalitarian (Meekanon, 2002, Vossestein, 2004), which is reflected
in a relatively low score on the PDI. A common Dutch saying, illustrating this anti-authoritarian
attitude, is ‘act normal, that’s strange enough’, meaning that it is commonly not appreciated if
someone tries to outshine others. Within the Dutch society, this same attitude can be witnessed in the
educational system, in the extensive social security systems, and in the progressive (leveling) tax
system.
With regard to Dutch organizations, one can observe assertive employees, managers that display a
consultative leadership style and little privileges for superiors. There is even a saying illustrating the
small power distance within organizations: ‘dogs have bosses, men don’t’.
Directness and critical attitudes
The Dutch are often believed to be very rude in their communication (Vossestein, 2004), because they
often don’t hesitate to express their feelings and opinions. The Dutch themselves, however, experience
their own directness as a form of ‘honesty’. Even stronger, indirectness will often be perceived as a
sign of non-trustworthiness; ‘apparently, this man or woman has something to hide’. The Dutch
illustrate this phenomenon with the expression that somebody is ‘straight through the sea’, meaning
that somebody is honest and straight about his intentions.
This phenomenon can perhaps best be explained by the low power distance, since every member feels
free to express themselves, even to superiors. Besides, the high score on the Individualism dimension
indicates that all members are entitled to have their own opinions and believes, instead of submissive
accepting general believes and opinions.
PO Performance Orientation
FO Future Orientation
GE Gender Equality
AS Assertiveness
COI Collectivism I
COII Collectivism II
PD Power Distance
HO Human Orientation
UA Uncertainty Avoidance

This attitude becomes plainly observable in organizations: superiors will have to consult their
subordinates before a decision can be made, many discussions between all kinds of members of the
organization are going on, and the interests of the employees are secured by the obligated attendances
of works councils and the attached co-determination rights.
Pragmatism
According to Vossestein (2004), the Dutch tend to focus on the content, rather than the relation. In
addition, Noorderhaven, Benders, and Keizer (2007) labeled the Dutch consensus culture as
pragmatic. In line with the low power distance, this pragmatic mentality leads to a Dutch aversion to
an emphasis on status, which is regarded as irrelevant and undesirable. In the Netherlands, job titles,
previous accomplishments, family positions, and lineage are considered less important and secondary
to the content of the decision. A typical Dutch expression, illustrating this egalitarian attitude, is ‘equal
monks, equal caps’.
Likewise, the role of reciprocity is considered to be less important than in many other countries.
Decisions are made based on rational reasoning and cronyism is considered a cardinal sin. This
attitude is reflected in Dutch organizations, although political games do of course exist within Dutch
organizations. By means of HRM instruments such as performance appraisals, clear job requirements,
and extensive reporting systems (both internal and external), organizations try to increase their
transparency.
This element could be related to the extremely low score on the Masculinity dimension: 14. In the
Netherlands, status is regarded relatively irrelevant, while modesty is highly appreciated. Other aspects
that are believed to be important within a feminine culture are ‘a good relation with the superior’, ‘a
collaborative atmosphere with colleagues’, ‘a comfortable living environment’, and ‘the certainty that
employees can work within one organization as long as they would like’ (Hofstede, 2004).
Procedures and planning
At first glance, the Netherlands seems a remarkably structured and organized country. Accordingly,
Vossestein (2004, p114 & 115) explains the Dutch tendency to structure and order, by stating that;
“As a whole, the Netherlands can be seen as a finely-tuned machine where rules and
regulations, permits and prohibitions, time schemes and spatial planning all
contribute to keeping the economy running smoothly and to promoting the well being
of the 16 million people who live here”. P.114

“The idea is that everything can be under control and ‘makeable’ if you just try hard
enough”. P.115
Within organizations, this tendency towards structure and order becomes plainly observable: there is a
focus on time arrangements and planning, plans are worked out in detail, and many meetings are held
to ensure that an ‘optimal’ decision is made.
This organizing mentality seems only partly consistent with the Dutch average score on the
Uncertainty Avoidance Index (53 points). Likewise, Meekanon’s study (2002), which was based on
Hofstede’s Cultural dimensions, states that the Dutch have only a weak uncertainty avoidance. A
possible explanation for this divergence in the literature can be found in the arguments of the authors.
Meekanon, who based his arguments almost exclusively on Hofstede, appears to focus on the Dutch
tolerance and acceptance for differing opinions and ethic standards, as did Hofstede. Since differing
and new influences cause uncertainty within a society, the Dutch acceptance of those influences could
be interpreted as a low tendency towards uncertainty avoidance.
Vossestein on the other hand, appears to place an emphasis on the actual procedures and business
practices that are put in place. From this perspective, he observes sophisticated processes and detailed
regulations, which could be understood as mechanisms to reduce uncertainty. Besides, it could be
possible that the formalized rules are more stringent than the actual day-to-day practices. As the
French put it: ‘une règle rigide, une pratique molle’. It is possible that we can link this idea to the
pragmatic characteristic of the Dutch culture (Noorderhaven, Benders, and Keizer, 2007).
Internationalism and openness
With an old English expression, one can state that ‘no moss grows under Dutch feet’, meaning that the
Dutch are eager to explore the outside world. For years, the Dutch have a reputation as global
merchants. Already in the 17th
century, the Verenigde Oostindische Compagnie (VOC – the Dutch
East Indies) dominated the overseas trade, while in this day and age, large scale, originally Dutch
multinationals are present all over the world (e.g. Philips, Unilever, Dutch Royal Shell, Akzo Nobel,
DSM, SHV).
These merchant traditions have altered the Dutch society considerably: the Dutch society has absorbed
large groups of immigrants, national laws are made compliant and secondary to international
conventions, and in the early fifties, the Dutch took, together with five other countries, the initiative
towards the founding of the forerunner of the European Union. Accordingly, Lawrence (1991, p9)
states that:

“Heterogeneity at home, with cultural and institutional differences, has been the
backdrop to their business internationalism. And these are considerations of which
the Dutch themselves are conscious, indeed proud”.
With regard to business, this international focus of the Dutch has resulted in the development of large
enterprises that operate on a broad range of foreign markets, a focus on the export position of the
Netherlands and related distribution activities, and large investments in foreign countries.
Within these international oriented organizations, one can find employees with relatively advanced
English skills and even larger cultural sensitivities (Vossestein, 2004).
2.9 Consequences of cultural dissimilarities for control
From the brief outlines of both cultures, some contradicting elements become manifest. These
dissimilarities become plainly observable when the scores of both cultures are placed in one model
(see fig. 2.11).
Fig. 2.11 A comparison of the Chinese and Dutch culture (derived from www.geert-hofstede.com)
From this comparison, we can observe that, at least from a structuralized point of view, both cultures
differ to a large extent. The largest variations can be found on the dimensions IDV, MAS and LTO.
However, also the PDI diverge significantly. Below, four discrepancies between both cultures are
discussed;
2.9.1. Relations (guanxi) versus pragmatism
An interesting approach to discuss the difference between relation based societies and content based
societies, is by taking a socioeconomic perspective. Within this research tradition, Granovetter (1985)
stressed that ‘economic relations between individuals or firms are embedded in actual social networks
and do not exist in an abstract idealized market’. Granovetter (1973) also introduced the distinction
IDV Individualism
MAS Masculinity

between strong ties (ties that are embedded) and weak ties (ties that are not embedded). Granovetter
(1973) associates strong ties with a large amount of time invested by the actors, a large emotional
intensity and intimacy, and reciprocal services. Weak ties obviously are characterized by lacking these
specific elements.
Within different societies, different sociological approaches towards economic action exist
(Fukuyama, 1995). Based on the outcomes of Hofstede’s research (2001), one could state that within
the Chinese society, embedded relations play a bigger role than in the Dutch society. China has a
collectivistic society, resulting in strong ties between its members. This corresponds with the large
emphasize on guanxi. The Dutch society, on the contrary, consists of more or less ‘atomized’
individuals that need to build many (weak) ties in order to be able to function within the society.
Since the joint ventures that are studied all operate within the Chinese business context, the focus on
relations is likely to influence the way control is organized within these joint ventures. Since the large
majority of employees within the Sino-Dutch joint ventures is Chinese, Dutch managers lack the
guanxi that they might need to ‘get things done’. Subsequently, they will seek for alternative ways to
influence and control the direction of the organization and the behavior of their employees.
2.9.2. Indirectness versus directness
As stated before, the importance of harmony has led to a fundamental element of the Chinese culture:
mianzi or face. To avoid somebody to loose his face, communication happens very indirect and
correcting someone’s behavior happens only in a very subtle manner. This forms a great contrast with
the Dutch style of communicating, which emphasizes directness and criticism.
With regard to managerial control, mianzi could form an important obstacle for Dutch managers that
are not familiar with it. Because of the attempts of Chinese subordinates to avoid a loss of mianzi for
their managers, it is more difficult to discover ‘what is actually going on’ in the organization. This
could result in an intensification of controlling activities or in more formalized ways of controlling.
Next to that, unfamiliarity with mianzi can also complicate the communication between Dutch
managers and Chinese managers and employees.
2.9.3. Hierarchy versus consultative management
The large power distance in China has led to authoritative management styles, which Farh and Cheng
(2000) label as paternalistic leadership styles. In the Netherlands, however, the power distance is
relatively low, resulting in management styles that are characterized by discussion, consulting and
explaining. In the Netherlands, it is more common to work with targets, whereby employees receive
freedom to execute the work in a manner they perceive to be appropriate.

With regard to the joint ventures, it is interesting to see how these two different management styles
coalesce: to what extent will the Dutch adapt to the Chinese context, how much control will be
exercised, and how will Chinese employees react to the Dutch approach.
2.9.4. Sino centrism versus internationalism and openness
Chinese culture is generally believed to be characterized by a persistent Sino centrism; a tendency to
view China as central, unique and superior, relative to other countries. Illustrative for this attitude of
supremacy is the term ‘Middle Empire’, indicating that China is the center of world. This inside focus
can partly be explained by the long history of isolation (other explanations could emphasize the level
of development of the ancient empire compared to other parts of the world). The Dutch however, have
a history of trading and of international collaborations. Global trade requires an open mentality and the
ability to empathize with actors that have different cultural backgrounds, customs and traditions. The
latter is often described as local responsiveness.
From this difference, we can expect the Dutch managers to display a relatively high level of local
responsiveness. We see local responsiveness as the attempt to respond to specific needs existing in a
host country (Luo, 2001). Subsequently, control within Sino-Dutch joint ventures is likely to resemble
the Chinese business culture more than it does the Dutch business culture.
2.10 Leadership in the Chinese context
Closely related to the influence of national cultures on management styles is the question to what
extent the effectiveness of leadership is culturally contingent. Because of the tight connection between
management style and leadership, we will use these concepts interchangeably. The Globe study (2004)
provides an interesting model to determine the effectiveness of leadership styles in different cultural
contexts. Based on seven indicators, Globe provides an overview of what is seen by members of a
society as the most effective leadership style. These indicators are: charismatic/value based, team
oriented, participative, humane oriented, autonomous, and self-protective.
Fig 2.12 and 2.13 provide an overview of effective leadership styles as perceived by members of
Germanic Europe (which includes the Netherlands) and Confucian Asia (which includes China).

Fig 2.12 Effective leadership within Germanic Europe
Fig 2.13 Effective leadership within Confucian countries

Probably the most notable observation is the similarity in leadership styles. In both cultural contexts,
similar scores were found by the Globe study on ‘an orientation towards teams’, ‘charismatic
leadership’, and ‘autonomy’. The outcomes diverge most on ‘participative leadership’ and ‘self-
protective’, whereby the former scores higher in Germanic Europe and the latter scores higher in
Confucian Asia. This seems in line with the already discussed Dutch tendency towards consensus and
the Chinese leaning towards power distance. Furthermore, Chinese leadership is believed to be a
slightly more humane oriented than Dutch leadership is, which confirms the paternalistic leadership
style from Farh and Cheng (2000).
The similarity in leadership styles deviates strongly with the cultural dimensions of both Hofstede
(2001) and Globe (2004) that indicated great differences between both cultures. Moreover, although
the Chinese and Dutch cultures are believed to diverge to a great extent, apparently the leadership
styles that are perceived as effective in both cultural spheres show much resemblance. During the
empirical part of this study, it will be interesting to see whether we can identify managerial practices
and behavior to which both groups of managers can relate. Hence, such practices hold the potential of
overcoming possible culture clashes that can occur during Sino-Dutch cooperation.
2.11 Research model
We have identified various environmental and organizational facets that are likely to influence the
power position within Sino-Dutch joint ventures (see figure 2.14).
Fig. 2.14 Conceptual model

Environmental facets contain an ambiguous and obscure Chinese business environment, an
underdeveloped Chinese legal infrastructure, and complex governmental relations. Organizational
facets contain capital position, possession of technologies, local knowledge and possession of licenses.
These element comprise a power position that is likely to be reflected in the exercising of control
within the four identified relations (inter-organizational, headquarters, vertical and horizontal). When
looking at the sources of power, the Chinese seem to have an advantage when it comes to the
environmental factors, while the Dutch seem to have a stronger position regarding the organizational
elements. Within the empirical part of this research, we will study the way the environmental and
organizational characteristics, as well as the cultural backgrounds of the managers, influence the way
control is organized within the joint ventures (see fig. 2.14). During the empirical part of our study, we
will structure our analysis by taking into account the three dimensions of control: the mechanisms, the
tightness and the focus of control (Geringer and Hebert, 1989).

Control and Power within Sino-Dutch Joint Ventures

Control and Power within Sino-Dutch Joint Ventures

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