Determinants of joint venture performance in the construction industry : cases from the mass rapid transit project of Singapore
International Construction firms have extensively used joint ventures as a vehicle to enter new construction markets in South East Asia since the early seventies. Despite its immense popularity, the failure rate of such ventures has been quite alarming. While extensive research has been carried out in the manufacturing and service industries in determining the factors that influence the performance of joint ventures, similar work has not been carried out in the construction industry. This study seeks to fill this gap. A thorough review of the joint venture literature shows that eleven factors have influenced the performance of joint ventures in the manufacturing and services industries. These are partners' objectives in forming the joint venture, partner selection process, partner size, equity control, management control, partner need, commitment, trust, cooperation, conflict and cultural differences. The main aim of this study is to test the relevance of these factors to joint ventures in the construction industry. In this study, a longitudinal research approach is used in order to closely examine the influence of these factors on joint venture performance. Sixteen cases of joint ventures from the Singapore Mass Rapid Transit Project which was built between 1983 and 1990 were chosen for detailed examination. Data for the study was collected through personal interviews, questionnaire and search of MRTC archives. A research model was also developed in order to organise and analyse the cases in a logical manner. The results of the study indicate that cultural differences have a significant influence over the performance of international construction joint ventures. Equally critical are the influence of partner related variables such as trust, commitment, cooperation and conflict. Task related variables such as level of equity and resource contributions have had less impact on the performance.