Timing and drivers of management control systems in joint ventures: The effect on JV survival

Purpose – The purpose of this paper is to describe the timing of management control systems (MCS) implementations, their drivers and effect on joint venture (JV) survival. Design/methodology/approach – This paper draws on case study data (archival data, interviews, and site visits) collected at three JVs in the automotive industry. Contingency theory is used to define Cartesian relationships. Findings – A description of the timing and reasons for MCS implementation in JVs is provided. Initially, environment, strategy, and partner culture are considered to implement governance mechanisms and transfer prices/cost allocations for long-term transfers of technology and corporate services. Later, structural and technological factors are considered to implement operative MCS such as budgeting, transfer prices/cost allocations of manufactured parts and performance measurement. Research limitations/implications – All three JVs studied: belong to the automotive industry (SIC 3174); have balanced ownership (50/50); and have one partner in common (a European family-owned business with professional management). Data are obtained mainly through site visits, five interviews, five mailed questionnaires, and public and private archival data. Originality/value – The paper is the first to offer a descriptive model of the timing of MCS implementation in 50/50 JVs explained by the effect of contingent factors in each stage of the JV life and in JV survival.