Pre-operational attributes as predictors of organizational success within a joint venture: Modeling joint venture formation in the architecture/engineering/construction industry

Alliances, which include joint ventures, are an increasingly used method to quickly form organizational structures that are competitive in the global market. The joint venture form of alliance allows the participants to quickly assemble project-needed assets on a short-term basis without substantial investment. This study addresses whether factors may be observed at the time of joint venture inception which are predictive of organizational success within the joint venture. An original model is built using concepts of resource-dependence and other open-system theories, in combination with antecedents identified through interorganizational relations (IOR) research, to predict post-operational joint venture success through examination of pre-operational variables. The model predicts that clients will more favorably reward highly resourced joint ventures. Additionally, the new model predicts that a partner who wields strength in a key asset will enjoy a power differential that could hypothetically unbalance the return of the joint venture in its favor. However, original empirical research only partially validated the hypothetical interactions and found unmodeled factors that had an impact as well. As a result, a final Joint Venture Success Model was developed from the survey data of experiences of a cross-section of the top architecture, engineering and construction companies in the United States. The findings of this research indicate that smaller--not larger--partners experience more market growth and are more successful in a joint venture. In another measure, it is found that a firm with strength in legitimacy (client trust) is more likely to gain favorable income, but will likely suffer some market loss in comparison to its partners. It is further concluded that culture match between partners--a factor not identified in the resource-based premise of the original model--leads toward joint venture return and success. Other factors that surround the joint venture were also been found to be statistically significant and are included in the final model. Finally, regression analysis of the predictive variables provides weights for developing indices of success. These indices may be used as guidance for selecting the most likely successful alternative joint venture.