Determinants of influence strategies in international strategic alliances
| Date | 03 August 2015 |
| Pages | 273-288 |
| Published date | 03 August 2015 |
| DOI | https://doi.org/10.1108/JABS-01-2015-0003 |
| Author | Xiaohua Lin,Jian Guan |
| Subject Matter | Strategy,International business |
Determinants of influence strategies in
international strategic alliances
Xiaohua Lin and Jian Guan
Xiaohua Lin is based at
Canada-China Institute
for Business &
Development, Ted
Rogers School of
Management, Ryerson
University, Toronto,
Canada. Jian Guan is
based at Ted Rogers
School of Management,
Ryerson University,
Toronto, Canada.
Abstract
Purpose –The purpose of this study is to investigate how relative power and mutual commitment affect
partners’ choice of influence strategies and how national culture may moderate these effects in the
context of international strategic alliances.
Design/methodology/approach –In two experiments involving US and Chinese managers,
respectively, the study looks into situations wherein a party’s power is lower, equal or higher, all relative
to the other party, and there is high versus low mutual commitment between the two parties. The effects
of relative power and mutual commitment on influence strategies are also compared between US and
Chinese managers.
Findings –There is no significant difference between low and equal power with regard to choice of
influence strategies. However, moving from a low/equal power to a high-power position, a party’s use of
integrative (non-mediated) communications decreased significantly, whereas the use of coercive
(mediated) communications increased significantly. The results also show that the effect of relative
power is greater when mutual commitment is low than when mutual commitment is high. Finally, there is
evidence that the effect of power is stronger for the Americans, whereas the effect of commitment is
stronger for the Chinese.
Originality/value –The paper offers a finer account of power relations wherein a party’s power is lower
than, equal to or higher than that of the other party and explores the moderating effect role of national
culture on the linkages from relative power and relationship commitment to influence strategy use.
Keywords Cultural dimensions, Cross-cultural management, Relative power, Foreign joint ventures,
Influence communications, USA-China joint ventures
Paper type Research paper
1. Introduction
In today’s competitive business environment wherein the practice of strategic partner
relationship has become increasingly important (Wu et al., 2012), managers must use
strategies to sustain valuable partnerships, one of such strategies being influence
communications for resolving conflicts and gaining compliance from business partners.
When a business alliance involves international partners, such communications tend to
become more difficult as cross-cultural settings are likely to result in miscommunications
and misunderstandings (Heiman et al., 2008;Su et al., 2009). However, while much
knowledge has been accumulated on influence communication, particularly from
marketing literature (Brown et al., 2009), there are at least three areas where insight and
understanding are still lacking. First, the research has largely been confined to
conventional distribution channels but has ignored other important contexts (e.g. supply
chain partnership and international joint ventures) where the influence process could be
more prevailing and crucial. While much has been written on the important functions of
influence processes in conventional channel relationships, the use of influence strategies
should be of equal importance to governance structures that are more integrated or
non-conventional. For example, participants in strategic alliances involving equity pooling
often favor ongoing communications over more formal mechanisms for resolving
Received 5 January 2015
Revised 4 February 2015
11 April 2015
Accepted 13 April 2015
DOI 10.1108/JABS-01-2015-0003 VOL. 9 NO. 3 2015, pp. 273-288, © Emerald Group Publishing Limited, ISSN 1558-7894 JOURNAL OF ASIA BUSINESS STUDIES PAGE 273
disagreements, as disagreements and issues emerge incidentally and must be dealt with
on a day-to-day basis. It is not only the integrative types such as information exchange that
will be intensified because of high levels of role interdependence but also the use of
coercion can become more frequent because bonding mechanisms do not allow easy exits
(Boyle et al., 1992). From a process perspective, a long-term exchange relationship is
nothing more than a series of communication episodes wherein partners influence and
negotiate in their pursuit of individual gain and the common good (Dabholkar et al., 1994).
Instead of examining the broad phenomenon of the compliance-gaining process among
alliance partners, the extant literature has maintained a focus on conflict resolution. Clearly,
inter-partner communications do not necessarily occur in an overt conflict, but are more
often used to serve broader objectives such as routine coordination or major initiatives.
Second, some of the fundamental issues concerning influence processes have not been
adequately addressed. For example, while many researchers have assumed a linear
relationship (either positive or negative) between relative power and influence
communications, they have rarely taken measures to look into balanced power as a
potentially unique point in the low- to high-power continuum – although a party may well
participate in a joint venture as an equal partner as an alternative to either a minority or
majority shareholder partnership (Beamish, 1988). In other words, researchers have yet to
answer the question: what exactly happens when a party’s power is equal to that of the
other party’s (Frazier and Antia, 1995)? Additionally, despite earlier calls for a more holistic
approach toward alliance management (Thorelli, 1986), researchers have not always
incorporated cooperation-centered constructs (e.g. trust and commitment) along with an
established power paradigm when investigating the influence process (Andaleeb, 1995;
Kim, 2000). Clearly, our knowledge of the influence process in strategic alliances will be
incomplete without a thorough understanding of such relationship contexts. Finally,
although much has been written on culture’s effects in of overt behaviors in
communications, negotiation and conflict resolution (Lynn et al., 2006;Pekerti and Thomas,
2003;Su et al., 2009), the focus of research has often been on the direct associations
between selected national culture dimensions and influence strategies. Yet, the effect of
national culture may be more complicated and intertwined with other contextual variables
(Fu et al., 2004;Lin and Miller, 2003), suggesting the need for taking into account all this
complexity to understand the impact of national culture on influence process fully.
The current study addresses three issues to rectify the shortcomings in the extant literature.
First, in an experimental setting, this study revisits the power construct by explicitly looking
into situations wherein a party’s power is lower than, equal to or higher than that of the other
party. Second, it takes a further step to investigate the interactive effect between relative
power and mutual commitment as key contextual variables. Third, it explores the role of
national culture by focusing on its moderating effect on the linkages between the relational
context variables and influence strategy use. In the context of international strategic
alliances, the study uses two distinct samples, one from the USA and the other from China.
China’s entry into the World Trade Organization has triggered a new wave of business
interaction between Chinese and the USA (as well as other Western) firms. Thus, it is not
surprising to witness increased attention paid to international joint ventures (IJVs) in China
(Reus and Rottig, 2009). Findings from this study should shed light on the possible
implications for managers involved in such interactions.
In the following sections, we review prior literature to develop research hypotheses,
describe research method and procedure and present results of data analysis. After
discussing research findings and their implications, we conclude with suggestions for
future research to overcome the limitations of the current study.
2. Theory and hypotheses
To understand partners’ use of influence behavior in international strategic alliances, we
first consider the direct effect of relative power and mutual commitment, often viewed as
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