Marcela Porporato
IESE Business School
Abstract: Three cases provide three relevant findings to understand the configuration of management control systems in 50/50 international equity joint ventures. First, four components of management control systems are perceived, three of them under the controllers responsibility budgeting, transfer prices and performance measurement and the other governance mechanisms associated with top management team. Second, each management control system design is done at different stages of the equity joint venture evolution and is affected by contingent factors; it is found that until the initial agreement is signed, environmental uncertainty, strategy and culture impact on governance mechanisms and transfer prices of services and technology; while after the initial agreement has been signed structure and technology impact on budgeting, performance measurement and transfer prices of components produced or consumed by the joint venture. Third, management control systems are not as crucial for equity joint ventures success as between-partners strategic fit or trust.
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