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Upper Echelons Theory and International Joint Ventures (IJVs): A study of CEO personalities and IJVs
In virtually any organization, no leader is more influential than the CEO (Finkelstein, Hambrick, and Cannella, 2009). We’re all aware of the impact of CEO on his/her firm. However, little research has been delivered as to how two CEOs jointly affect the IJV created by their firms.
Many companies formed IJVs to develop their company by using their own or their partner's resources and core competencies effectively (Mitsuhashi & Hoshino, 2006). But these international partnerships are problematic because “cooperative behaviors maximize joint returns from complementary resources, but competitive actions maximize an individual firm’s share of returns” (Bello et al., 2010). Therefore, it’s critical to have a better understanding of the IJV dynamics through analyzing the joint impact of CEOs from both sides of a partnership.
We draw on both upper echelons theory and IJV theory to develop a new model which delineates the relationship between hybrid CEO personalities of IJVs and IJV performance.