Effects Of Tmt Power Distribution On Ijv Performance In The Context Of Local Ization Strategy Application

Worldwide globalization facilitated entrepreneurs’endeavor to unite resources and strengths in the view of creating universalized and more powerful organizations with wide sphere of marketing, lowered risks and increased incomes. However, statistical data shows that about30%of newly established International Joint Ventures (IJVs) fail to implement declared objectives. While external conditions are to be either chosen or adapted to, internal power is impulsed by top management team (TMT). Being central issue in numerous researches on international organization management, TMT power distribution (PD) however received little attention, being touched upon mediately. While recent studies of TMT concentrated on senior management structure, strategic planning, staff tenure, knowledge transfer, effectiveness, etc., the importance of combining these factors was neglected. Though, combining draws the complete picture demonstrating interrelations between the factors, defining basic and minor linchpins.This research provides empirical study of TMT PD in IJVs based on objective measures of power dimensions introduced by Finkelstein (1992). It shows the "upper echelons" PD issue from both sides, considering the opinions of host and foreign companies’representatives. When PD structure changes in a multinational team due to localization strategy application (LSA), there is a bias to local side, this research tends to find out if it facilitates or hinders IJV’s performance. Sample companies are presented by IJVs with mixed TMTs, located on the territory of the Republic of Belarus and Peoples Republic of China, with participation of Chinese party in each case. Preliminary enquiry showed that TMTs rate strategic implementing first in the list of both enterprise and TMT performance factors. Thus, further research is focused on the significance of PD between managers with divergent cultural backgrounds at three stages of strategic implementing:1) strategic decision generating, discussion and approving;2) strategic decision adopting and maintaining, which comprises creating team spirit, uniting executives by common objectives;3) immediate assignments fulfillment, which primarily focuses on resolutions at official level, due to distinctive features of IJVs, that is unawareness of local external conditions, practices, laws of expatriate managers who principally occupy key controlling positions in IJVs.PD assessment is based on4power dimensions, defined by Finkelstein (1992), who’s research primarily focused on TMTs or "dominant coalitions" power distribution. Multiple method of data collection was applied. Preliminary information on the sample companies was obtained from official web-sites and was later confirmed by the representatives of corresponding JVs. Secondly, main factors of TMT and company performance were defined by the respondents in preliminary enquiries. Further, the full-scale enquiry was effected in the form of personal interviews and questionnaires. Finally, the data was processed in compliance with Li kert’s scale, providing objective measures for logical conclusions.Final assessment shows that the main power dimension that affects strategic decision generating is ownership power. Structural power influences the process of strategy adoption most; and prestige power is the key factor of getting resolutions at official level. Expert power penetrates all the stages of strategic implementation and defines the significance of each manager. The study reveals the ways of avoiding certain pitfalls resulting from LSA. Suggestions on practical balancing PD in the context of LSA and future research implications are provided in the last chapter of this paper.The study contributes to theoretical research by building on the Finkelstein’s power dimensions theory, providing deeper understanding of how TMTs can opt to manage strategy fulfillment processes to achieve "more doing less", showing how LSA affects distribution of power dimensions in IJVs and at the same time provides practical guidance for expert business administration.