Structural and social dimensions of an international joint venture. The case of Hypor Canada in China

Date25 January 2008
Published date25 January 2008
DOIhttps://doi.org/10.1108/17544400810854496
Pages49-61
AuthorSylvain Charlebois
Subject MatterEconomics
International
joint venture
49
Journal of Chinese Economic and
Foreign Trade Studies
Vol. 1 No. 1, 2008
pp. 49-61
#Emerald Group Publishing Limited
1754-4408
DOI 10.1108/17544400810854496
Structural and social
dimensions of an international
joint venture
The case of Hypor Canada in China
Sylvain Charlebois
Faculty of Business Administration, University of Regina,
Regina, Canada
Abstract
Purpose – The purpose of this paper is to advance knowledge in the area of international joint
ventures, more specifically in China.
Design/methodology/approach – The analysis considers events prior to 26 April 2006, when the
joint venture was announced. Organizations involved are considered as units of analysis for the
current study. Using Yin’s methodology for exploratory theory development, this study builds on
existing theories through a case study that explores the execution of international joint ventures.
This study analyzes holistic data in relation to Hypor Canada, Sichuan South Hope Comp any Ltd,
and Shangdong Liu He Group Ltd.
Findings – The findings suggest that strategic intents and resources need to be aligned betwe en
parties involved, and that foreign-based North American firms should cultivate both the structural
and social dimensions of a relationship with a Chinese-based company.
Research limitations/implications – The sample was limited to one case in swine genetics. The
findings of this research may only be fully applicable for explaining joint venture operations in this
particular area.
Practical implications – The Hypor and New Hope agreement shows that a project needs to
address both structural and social dimensions at once. Managers and marketers need to be aware of
this and to consider both dimensions when assessing situations that may lead to a new joint venture.
Originality/value – For various reasons, many joint ventures between North American and Chinese
companies fail. On 26 April 2006, however, Hypor Canada, a leader in swine genetics headquartered
in Regina, Saskatchewan, signed what would prove to be a successful joint venture with China-based
New Hope (Sichuan South Hope Company Ltd). The agreements with Sichuan South Hope Company
Ltd (New Hope) and Shandong Liu He Group Company Ltd (Liu He) were at the production and
distribution of breeding pigs in China.
Keywords Joint ventures, China, North America, International business
Paper type Research paper
Introduction
The popularity of international joint ventures is rising alongside dissatisfaction with
their performance (Madhok, 2006). Many inter national joint venture failures, according
to previous research, are explained by factors such as contrasting human resou rces
practices and cultural incompatibility. China’s burgeoning private sector is a growing
economic force, yet foreign-owned firms have made only limited inroads. Very few
entrepreneurs can claim a full appreciation of the complexities of dealing with Chinese-
based companies. The private sector in China has adopted an approach that serves
primarily to cultivate special relationships with a few very wealthy individuals or
families. One of these firms is Nan Cunhui from Sichuan province which built a vast
agricultural conglomerate, New Hope, and the countr y’s largest private lender, China
Minsheng Banking Corporation, in less than a decade.
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