Exploring the relationships between influencing factors and performance for construction joint ventures

Construction Joint Ventures (CJVs) are commonly used in large construction projects to share risks and resources by partners. Despite their popularity, CJV performances are various due to the influences of different factors. While CJV success and risk factors have been discussed by some researchers, few details are understood for the direct linkages between influencing factors and the final performance of CJV. This research is thus conducted to fill the gap and to achieve the following objectives: (1) To explore critical factors influencing CJV performance; (2) To develop a research model explaining the relationships between key influencing factors and CJV performance; and (3) To test the postulated relationships empirically. Based on previous literature and a pilot interview with CJV professionals, key factors influencing CJV performance were explored, and a research framework was developed. The framework argues that CJV performance is determined by its external and internal influences where the key items are inter-partner fit, partners’ risk, project parties’ risk, general environmental risk and management control. Following this framework, nine main hypotheses were developed. In the first eight hypotheses, each postulates a bivariate relationship between one key influence (i.e., inter-partner goals compatibility, resources complementarity, cultural coherence, partners’ risk, project parties’ risk, general environmental risk, competence-based parent control and effective management control) and CJV performance. The last hypothesis posits the mediation effects of effective management control on other associations. A questionnaire survey was conducted in Hong Kong to collect primary data for empirical testing. The sample data provided different levels of support for the hypotheses. The results provided full supports for the relationships between interpartner resources complementarity (positive), effective management control (positive), partners’ risk (negative), general environmental risk (negative) and CJV performance. The results also provided some supports for the positive relationships between interpartner goals compatibility and CJV performance, and that of cultural coherence and competence-based management control. Effective management control had the strongest explanatory power for CJV performance. The mediation effects of effective management control on the relationships between other variables and CJV performance were observed for all supported relationships. This study has both academic and practical contributions. A systemic model to explain key influencing factors and CJV performance was depicted and tested. The results provide a better understanding for the direct associations between key influencing factors and CJV performance, and the relative strength for each association. The findings also explain the active intervention of effect management control to adapt for the external environments and to change joint venture performance. Finally, managers could use variables with high performance impacts, e.g., effective management control, resources complementarity, partners’ risk, to diagnose JV operation, and to achieve better performance.