Previous research argue that the structure of ownership, or resource contributions in a joint venture is a direct proxi for management control (Yan and Grey, 2001). Actually cultural differences lead to differences in patterns of thinking (Linowes, Mroczkowski, Uchida, Kornatsu, 2000), divergent values (Gutterman, 2002), and, therefore, dominant control is more preferable. However, on the other hand, mutual interdependence of patterns leads to necessity of shared control and management (Inkpen and Currall, 1998). In uncertain environment the quality and timeliness of corporate decision-making declines (Alexander, 1991). Classical control processes are designed as feedback systems detecting problems and deviations from planned results (Preble, 1992). The link of control systems with effective performance can be realized via different mechanisms including monitoring, learning, signaling, constraint, motivation (Simons, 1990). Control can increase not only efforts to align individual and corporate goals (Good and Quinn, 1990), but also performance outcomes through incentive plans, understanding turnover relationship, opening negative attributes of the managers (Walsh and Seward, 1990). However, control can also be related to performance under certain conditions. For example, Govindarajan (1988) found that high managerial internal locus of control is associated with high performance in strategic business units employing a strategy of differentiation. Under certain conditions managers not-owners can escape internal control rising costs of control to the degree that no effective managerial control exists.
Following Colombo (2003), the challenge in the advantages of organization are individuals' advantages based on path-dependent "cognitive frames" developed in the context-specific environment. Although organization provides shared cognitive frames, development of new capabilities based on pooling of partners' knowledge is an alliance that could not be created in isolation is doubtful. Indeed, as some argue that an alliance is an investment to transfer existing knowledge from one firm to another internalizing partner's capabilities, one might propose that an individual may be reluctant to estrangement of own knowledge to keep own competitive position. Thus, the purpose of an alliance can be obtaining access to a proprietary technology or services of specialized assets including brand, and this extensive individual exploitation can lead to limited learning. Of course, the situation can be more complex if partner's opportunism is taken into account. In this case, as different partners spend different time and effort to perform the same task (White and Lui, 2005), control may be needed to identify the most efficient partners and to avoid conflicts. However, according to Berglof, Bolton, Guriev and Zhuravskaya (2005) in emerging market economies the main concern is poor enforceability of debt contracts, because of corrupted courts, police and law enforcement. Control mechanisms were named as important ways to reduce corporate governance problems. Specifically, the basic property rights of controlling shareholders could protect developing good corporate governance, but it requires uncorrupted bureaucracy and judiciary.
Following Colombo (2003), the challenge in the advantages of organization are individuals' advantages based on path-dependent "cognitive frames" developed in the context-specific environment. Although organization provides shared cognitive frames, development of new capabilities based on pooling of partners' knowledge is an alliance that could not be created in isolation is doubtful. Indeed, as some argue that an alliance is an investment to transfer existing knowledge from one firm to another internalizing partner's capabilities, one might propose that an individual may be reluctant to estrangement of own knowledge to keep own competitive position. Thus, the purpose of an alliance can be obtaining access to a proprietary technology or services of specialized assets including brand, and this extensive individual exploitation can lead to limited learning. Of course, the situation can be more complex if partner's opportunism is taken into account. In this case, as different partners spend different time and effort to perform the same task (White and Lui, 2005), control may be needed to identify the most efficient partners and to avoid conflicts. However, according to Berglof, Bolton, Guriev and Zhuravskaya (2005) in emerging market economies the main concern is poor enforceability of debt contracts, because of corrupted courts, police and law enforcement. Control mechanisms were named as important ways to reduce corporate governance problems. Specifically, the basic property rights of controlling shareholders could protect developing good corporate governance, but it requires uncorrupted bureaucracy and judiciary.
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