Electronic copy available at: http://ssrn.com/abstract=1085313

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Mark E. Parry Ewing Marion Kauffman/Missouri Endowed Chair in Entrepreneurial Leadership &

Professor of Marketing

318 Bloch School

University of Missouri-Kansas City

5110 Cherry Street

Kansas City, MO 64110-2499

parryma@umkc.edu

Michael Song Charles N. Kimball, MRI/Missouri Endowed Chair in Management of Technology and Innovation &

Professor of Marketing

318 Bloch School

University of Missouri-Kansas City

5110 Cherry Street

Kansas City, MO 64110-2499

songmi@umkc.edu

Robert E. Spekman

Tayloe Murphy Professor of Business Administration

The Darden School

University of Virginia

100 Darden Boulevard

Charlottesville, VA 22903

SpekmanR@virginia.edu

April 1, 2007

Acknowledgments: The authors thank the Darden School for its financial support of this research project.

Task Conflict, Integrative Potential, and

Conflict Management Strategies in Joint

Ventures

Electronic copy available at: http://ssrn.com/abstract=1085313

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Task Conflict, Integrative Potential, and Conflict Management Strategies

in Joint Ventures

Abstract

Existing studies of conflict management in joint ventures assume that the characteristics

of the tasks that generate conflict have no impact on either the conflict-performance relationship

or on the effectiveness of conflict management techniques. In this paper we challenge this

assumption by examining joint venture conflict over R&D and marketing tasks. Because joint

ventures decisions are made by two or more partners, often with very different goals and

agendas, the potential for conflict is high. In some cases this conflict can have a positive impact

on performance. We hypothesize that this possibility is more likely in the context of R&D task

conflict, because (1) marketing task conflict is relatively more likely to involve distributive (win-

lose) issues and (2) when win-win (integrative) potential exists, disputants are relatively less

likely to perceive this potential in marketing-task conflicts (i.e., the disputantants in a marketing

task conflict from a fixed-pie perspective). Our analysis of data collected from 196 joint ventures

clearly supports this hypothesis. We also find that the relative effectiveness of different conflict-

management strategies varies depending on whether they are applied to R&D or marketing task

conflict.

Index Terms—joint ventures, cross-functional projects, project conflicts, conflict resolution.

Electronic copy available at: http://ssrn.com/abstract=1085313

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I. INTRODUCTION

Conflict is a pervasive characteristic of modern organizations [32]. Because conflict can

consume significant amounts of employee time, researchers have attempted to understand the

organizational consequences of conflict [57], [73]. Early research tended to focus on the personal

and organizational costs of conflict, as well as on conflict management strategies that might

reduce those consequences [11], [53], [68]. Most of these early studies favored an integrating

approach to managing conflict, where the goal is to find a solution that allows each of the

conflicting parties to reach its own unique goals. More recent research has addressed the

potential benefits of conflict, which include mutual understanding, open-mindedness, and

flexibility, as well as the ability to surface previously unidentified solutions to problems [7], [61],

[62]. A number of studies have linked these positive benefits to task conflict, while linking the

negative benefits to personal or relationship conflict [4], [25], [33], [65].

Within the context of joint ventures (JVs), conflict research has focused on the negative

impact of conflict on partner satisfaction and the impact of culture on the relative effectiveness of

different conflict management strategies [22], [24]. These studies typically assume that the nature

of the tasks that generate conflict have no impact on either the conflict-performance relationship

or on the effectiveness of conflict management techniques. In this paper we challenge this

assumption by examining joint venture conflict over R&D and marketing tasks. Because joint

ventures decisions are made by two or more partners, often with very different goals and

agendas, the potential for conflict is high. In some cases this conflict can have a positive impact

on performance. We hypothesize that this possibility is more likely in the context of R&D task

conflict, because (1) marketing task conflict is relatively more likely to involve distributive (win-

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lose) issues and (2) when win-win (integrative) potential exists, disputants are relatively less

likely to perceive this potential in marketing-task conflicts (i.e., the disputantants in a marketing

task conflict from a fixed-pie perspective). Our empirical results clearly support this hypothesis.

We also find that the relative effectiveness of different conflict-management strategies varies

depending on whether they are applied to R&D or marketing task conflict.

The remainder of our paper is organized as follows. In the next section we briefly

summarize the organizational conflict literature and develop the concept of integrative potential.

Section III reviews recent empirical studies of conflict in joint ventures and presents our research

hypotheses. In Section IV we describe our research methodology, which yielded usable survey

responses from 196 joint ventures involving a least one U.S. partner. Section V contains the

results of our data analysis. In Section VI we discuss the managerial implications of our research

and suggest directions for future research.

II. CONFLICT MANAGEMENT: A BRIEF LITERATURE REVIEW

A. Conflict Management Strategies

Early studies of conflict described a variety of negative consequences for individuals and

organizations. The personal costs include feelings of tension, frustration, and aggression, which

can adversely affect motivation, commitment, and satisfaction [73]. These personal consequences

can affect the productivity, stability, and adaptability of an organization [57]. Losses in

productivity are commonly linked to reduced decision-making efficiency, in part because project

members may seek to avoid confrontation. In addition, conflict may lead members to spend time

in coalition building and protective gamesmanship (e.g., the creation of a document trail

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designed for self-protection in case of project failure; see [67], [75]).

Researchers have identified a number of mechanisms designed to reduce the negative

consequences of conflict while enhancing its positive consequences. Building on the work of

Follet [27], Blake and Mouton [10] argued that the way managers approached conflict reflected

their focus on performance and their concern for people. Managers who scored high on both

dimensions tended to manage conflict through confrontation, which involves openly examining

differences in order to resolve them (p. 85). Thomas [68] and Rahim [59] reinterpreted the

Blake-Mouton dimensions as the desires to satisfy one‘s own concerns and those of the other

party. Both Thomas and Rahim linked these dimensions to five conflict management strategies:

collaborating (also known as integrating or problem-solving), avoiding, compromising,

accommodating (or obliging), and competing (or forcing). These strategies are defined in Table

1, which also lists alternative labels that have appeared in the conflict management literature. In

this paper we will refer to the five strategies using the labels introduced by Blake and Mouton

and adopted by Thomas.

Figure 1 illustrates the relationships among the five conflict-management strategies and

the Thomas-Rahim dimensions of concern for self and concern for others. The two extreme

strategies reflect either high (collaborating) or low (avoiding) levels of concern for both self and

others, while the compromising strategy results from moderate levels of concern for both self and

others. The two remaining strategies combine a high level of concern for either self (competing)

or others (accommodating) with a low level of concern on the remaining dimension. The

dimensions in Figure are typically treated as orthogonal: knowing where a disputant‘s location

on one dimension does not indicate that disputant‘s location on the second dimension.

[Insert Figure 1 about here.]

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Early empirical studies tended to suggest that strategies featuring a moderate to high

concerns for others (collaborating, compromising and accommodating) were more effective than

strategies with a low concern for others (competing and avoiding). For example, in an empirical

study of the Blake-Mouton framework, Burke [13] found that the constructive use of conflict was

positively correlated with the compromising and collaboration strategies and negatively

correlated with the competing and avoiding strategies. Similarly, Thamhain and Wilemon [67]

reported that conflict intensity was positively correlated with the competing and avoiding

strategies and negatively correlated with the compromising and accommodating strategies.

B. Positive Conflict

Over the last 30 years, researchers have paid increasing attention to the potential for

positive consequences from conflict. Deutsch [20] argued that conflict can stimulate interest and

curiosity. Conflict can also surface previously ignored problems and thereby pave the way for

possible solutions [7]. In addition, controversy can encourage mutual understanding and open-

mindedness [70]. Perhaps most importantly, the clash of conflicting perspectives can generate

new ideas and better solutions to problems [45], [48]. As Thomas explained:

Divergent views are apt to be based upon different evidence, different

considerations, different insights, different frames of reference. Disagreements

may thus confront an individual with factors which he had previously ignored, and

help him to arrive at a more comprehensive view which synthesizes elements of

his own and others‘ positions [68, p. 891].

From this perspective, suppressing conflict may actually retard progress and lead to sub-optimal

outcomes.

In his study of 15 managers, Baron [7] classified the self-reported positive results of

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conflict into three categories: improved productivity, improved personal relationships, and

constructive organizational change. Barker, Tjosvold, and Andrews [6] examined the relationship

between the positive benefits of conflict and various conflict management strategies. They found

that feelings of project engagement and satisfaction were positively correlated with the use of a

cooperative conflict management strategy and negatively correlated with the use of the

competitive (forcing) and avoiding strategies.

The desire to account for both positive and negative consequences has produced two

streams of research. Some researchers have hypothesized an inverted, U-shaped relationship

between the level of conflict and productivity [59]. Jehn [34] found support for this hypothesis in

her analysis of the relationship between task conflict and performance in non-routine tasks. Xie,

Song, and Stringfellow [76] found a similar relationship between conflict and performance in

Japanese and Hong Kong firms.

A second set of papers has attributed the positive and negative effects of conflict to

different dimensions of conflict. Jehn defined task conflict as conflict that arises from

―disagreements among group members about the content of the tasks being performed, including

differences in viewpoints, ideas, and opinions.‖ In contrast, relationship conflict involves

―personal incompatibilities among group members, which typically includes tension, animosity,

and annoyance among members within a group‖ (34, p. 258). Procedural or process conflict

arises from disagreements about ―how task accomplishment should proceed in the work unit,

who‘s responsible for what, and how things should be delegated‖ [Jehn 1997, p. 540; see also

Barden, Steemsa, and Lyles 2005].

Jehn‘s empirical results [1995, 1997] suggest that relationship conflict always has a

detrimental impact on performance. In contrast, while high levels of process conflict adversely

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affected performance, low levels can enhance performance. She also found that the impact of

task conflict depended on the routineness of the underlying task. In particular, task conflict was

―generally detrimental‖ to the performance of routine tasks, but had a neutral or positive effect on

non-routine tasks, which ―require problem-solving, have few set procedures, and a high degree of

uncertainty‖ [34, p. 260] (see also [4], [65]).

C. Integrative Potential and Individual Characteristics

Jehn‘s findings regarding task routineness illustrate one way in which task characteristics

can influence the relationship between task conflict and performance. Another important task

characteristic is the degree to which issues are distributive (win-low) or integrative (win-win, see

O‘Conner 1997). A conflict is purely distributive when disputants ―weight issues identically and

have diametrically opposed preferences‖ (Murnighan, Babcock, Thompson, and Pillutla 1999, p.

316). Classic examples involve conflicts over a single fixed resource such as land or money. In

these ―fixed-pie‖ situations negotiations focus purely on the distribution of the resource and

integrative potential is zero, because ―one party‘s gains come at the expense of the other party‘s

gains‖ (O‘Connor 1997).

De Dreu, Koole, and Steinel (2000, p. 975; see also Murnighan, Babcock, Thompson, and

Pillutla 1999) define integrative potential as the degree to which conflicting parties can ―both

attain high outcomes.‖ When integrative potential exists, negotiators can exploit that potential in

a variety of ways, including expanding the pie, logrolling, and bridging (Carnevale and Pruitt

1992, p. 551). ―Expanding the pie‖ involve increasing the amount of a fixed resource so that

more of that resource is available to both parties. Logrolling is possible when a negotiation

involves multiple issues and the importance of these issues varies across negotiating parties In

this situation the parties ―trade concessions on their low prior issues,‖ allowing all sides to

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―achieve mutually beneficial outcomes‖ (O‘Conner 1997, p. 115). Bridging ―involves

constructing new options that have not previously been discussed.‖ This technique requires the

analysis of ―the interests (goals, values, needs) that underlie one or both parties‘ overt positions‖

and a re-framing of the negotiation issues in terms of these underlying interests (Carnevale and

Pruitt 1992, p. 551).

Importantly, integrative potential often goes unexploited. As Thompson and Hastie (1990,

pp. 99-100) explained: ―Case and field studies of real world negotiations indicate that integrative

potential exists in many negotiation situations but that negotiators have difficulty reaching

mutually satisfying agreements.‖ One problem arises from the social motivation of the parties in

conflict (de Dreu and Carnevale 2003). Discussions of social motivation reflect the influence of

Blake and Mouton‘s (1964) work described above. For example, the dual concern theory of Pruitt

and Rubin (1986) distinguishes between other-concern and self-concern. A high level of other

concern (a prosocial motivation) leads a negotiator to look for a fair agreement that benefits both

parties. In contrast, negotiators with a low-level of concern (a selfish motivation) focus on their

own gains or their own gains relative to those of the opposing parties). Self-concern involves a

negotiator‘s toughness, intransigence, or resistance-to-yielding.

Prosocial motivation is closely related to a disputant‘s conflict frame, which Pinkley

defined as ―a well-defined cognitive structure based on past experiences with conflict as well as

present concerns and interests‖ [56, p. 117]. One key dimension of the conflict frame involves

the relative importance of cooperation versus winning. In a pair of experiments, Pinkley and

Northcraft (1994) found that disputants with cooperation frames achieved higher monetary

outcomes than those with winning frames, because the former were more successful than the

latter at ―detecting and implementing advantageous exchanges‖ [56, p. 202].

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A second obstacle to reaching win-win solutions arises from the fixed-pie perception,

which is the belief that opposing parties hold diametrically-opposed preferences (Bazerman and

Neale 1983, de Dreu and Carnivale 2003). Negotiators with fixed-pie beliefs are less likely to

reach agreements that maximize mutual benefits (Thompson and Hastie 1990, Bottom and Paese

1997; Pinkley, Griffith, and Northcraft 1995), in part because they tend to adopt negotiating

strategies that focus on ―value-claiming, forcing behavior‖ (Harinck, De Dreu and Van Vianen

2000, p. 342). Research also indicates that fixed-pie perceptions are ―remarkably robust and

difficult to challenge, even when people have high incentives and ample feedback is available

that contradicts the perception‖ (Thompson and Hrebec 1996, p. 404).

These is some evidence that the impact of fixed-pie perceptions is moderated by prosocial

motivations and by epistemic motivation, which is the ―desired to develop and hold accurate and

well-informed conclusions about the world‖ (de Dreu and Carnevale 2003, p. 262; see also de

Dreu, Koole, and Stienel 2000). In part, variations in epistemic motivation reflect individual

differences in the need for cognitive closure (Webster and Kruglanski 1994). Individuals with a

high need for cognitive closure are impatient with cognitive confusion and ambiguity and tend to

draw conclusions from incomplete evidence. In contrast, individuals with a low need for closure

are comfortable collecting additional, information, suspending judgment, and considering

multiple interpretations that are consistent with available data. Situational variables such as task

involvement, process accountability, time pressure, and fatigue also influence epistemic

motivation (de Dreu and Carnevale 2003).

The preceding discussion suggests that integrative potential has several important

implications for the study of conflict and conflict management. First, when integrative potential

is high, task conflict is more likely to have a positive impact on performance. Second, when

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integrative potential is high, a collaborating conflict management strategy should dominate other

conflict management mechanisms. Third, when integrative potential does not exist, or when

conflicting parties suffer from fixed-pie perceptions, a collaborating strategy reduces to a

compromising strategy, which attempts to partially satisfy the desires of each party. Thus

reductions in integrative potential should reduce the relative effectiveness of a collaborating

strategy relative to a compromising strategy. Fourth, when integrative potential is high, a

compromising strategy should dominate an accommodating strategy, in which one party accedes

to the wishes of the other. Because a compromising strategy involves moderate concern for both

self and the other party, it is possible that a win-win solution will emerge as a by-product of

negotiations that seek to find a middle ground between conflicting parties. In the next section we

use these insights to formulate specific hypotheses about the impact of conflict and the

management of task conflict within joint ventures.

III. JOINT VENTURE CONFLICT

A. Joint Venture Structure

Joint ventures (JVs) are legal entities in which partners pool resources and hold equity

positions. These ventures typically have a management team that is separate from the equity-

holding parents and is responsible for the day-to-day operation of the JV [Bierly and Coombs

2005]. This team often reports to a board of directors (or other oversight committee) that

oversees both the daily business and sets the strategic direction for the JV.

Companies form joint ventures for a variety of reasons [8], [11], [12], [47]. Potential

benefits include access to resources, scale economies, risk sharing and cost reductions in new

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product development, reduced new product development time, and quicker access to markets or

customers (Das and Teng 2000). While not often stated as a central reason for joint venture

formation, an additional potential benefit is the transfer of learning to the parent firm (Mowery,

Oxley, and Sullivan 1996; Inkpen and Beamish 1997).

Despite the continued popularity of joint ventures, success rates are not encouraging

([47]. Yan and Zeng 1999, Das and Teng 2000, and Park and Ungson 2001. In many cases JV

instability can be traced to the destructive effects of conflict [22], [24], [28]. Conflicts arise in

JVs for a variety of reasons [36], [37], [72]. First, partner firms have a natural tendency to act in

their own self-interests, which are often not in the best interest of the JV. This tendency, which is

exacerbated by competitive rivalry, can result in opportunistic behaviors (e.g., shirking, cheating,

dissembling, and appropriating partner resources) that increase the level of conflict between

partners [Das and Teng 1998, 2000, Park and Ungson 2001]. Second, joint ventures are often

motivated by the desire to acquire access to a partner‘s knowledge and skills [Mowrey, Oxley,

and Silverman 1996, Das and Teng 1998, Park and Ungson 2001]. Conflict can arise from the

attempts of one partner to prevent this knowledge transfer, as well as from a change in

commitment once the desired knowledge and skills have been acquired (Inkpen and Beamish

1997, Bearly and Coombs 2005, Park and Ungson 2001). This source of conflict is less likely

when the motive for the joint venture involves market access, economies of scale, or risk sharing

[Das and Teng 2000].

Third, conflict can arise when partners have conflicting goals for a JV. Factors

contributing to goal conflict include differences in partner firm size, experience, expertise, and

market focus (Ding 1997; Dymza 1988; Geringer and Herberr 1991; Julian and O‘Cass

2001;Vanhocker and Pan 1997). Fourth, in international joint ventures, cultural differences

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among managers may hinder coordination and communication and lead to mutual distrust (Park

and Ungson 1997, 2001; Julian and O‘Cass 2001). Fifth, conflict can arise from functional

disagreements between partners regarding policies, practices, or resource allocations in their

R&D, manufacturing, or marketing activities [22], [24]. Sixth, changes in the business, political

and economic environment can challenge the basic business proposition that drove the formation

of the partnership [29]. These changes may lead the JV to alter its strategic focus, modify

important objectives, or modify its market position (Yan and Zeng 1999).

B. Research on Joint Venture Conflict

Much of the research on conflict within joint ventures has addressed either the impact of

conflict on performance or the relative effectiveness of different conflict management strategies.

In a study of U.S.-Chinese JVs, Ding concluded that ―conflicts between joint venture partners

significantly hinder joint venture performance‖ [22, p. 43]. Similarly, Julian and O‘Cass [36]

found that conflict was negatively correlated with the marketing performance of joint ventures in

Thailand. With regard to conflict management strategies, Lin and Germain [43] found that

satisfaction was positively correlated with collaborating and compromising strategies and

negatively correlated with forcing strategies.

More recent studies have focused on the distinction between individualist and collectivist

cultures, arguing that an integrating approach to conflict management is more likely to generate

affective conflict in collectivist cultures like that of China [30], [41], [42], [51]. For example, Lin

and Miller found that American JV partners favored a collaborating strategy for resolving

conflicts, while their Chinese partners favored compromise [44]. Wang et al. [74] found similar

results in their study of Western and East Asian managers.

The existing research on JV conflict suffers from two important limitations. First,

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existing studies have failed to distinguish between the consequences of task and relationship

conflict. Second, existing studies have implicitly assumed that task characteristics have no

impact on either the conflict-performance relationship or on the effectiveness of conflict

management techniques. Because neither of these implicit assumptions is supported by the

conflict management literature, we develop hypotheses that address the relative effectiveness of

various conflict management strategies across two different functional areas: R&D and

marketing.

C. Research Hypotheses

The range of decisions facing a joint venture suggests a significant potential for task

conflict. Following Jehn [34] we define marketing task conflict as perceived incompatibilities

among JV participants regarding marketing strategy and tactics. Existing research indicates that

JV conflicts often arise from disagreements about marketing policies and practices [24]. For

example, joint venture partners may disagree about the identity of high-priority customers [37,

Bramford, Ernst, Fubini 2004]. Such conflict may arise because each partner hopes to focus the

joint venture on its existing customers [36], or because one partner wants to target domestic

markets while the other wishes to target overseas markets [22]. When faced with this type of

conflict, the strategic marketing literature advocates focus. As Shapiro argued in his discussion of

market orientation, ―Because different customers have different needs, a marketer cannot

effectively satisfy a wide range of them equally. The most important strategic decision is to

choose the important customers‖ [64, p. 121]. This kind of recommendation implies that

conflicts over target markets have limited integrative potential. More importantly, to the extent

that these recommendations influence marketing managers, they are likely to approach

disagreements over target markets with fixed-pie perceptions. Because joint venture resources are

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limited, more resources devoted to one segment means less resources available for other

segments. This kind of fixed-pie perception is likely to prevent disputants from exploiting any

integrative potential that might exist in selection of target markets.

Similarly, fixed-pie perceptions are likely to affect conflicts over the allocation of

promotional expenditures. Consider the following example of promotional conflict involving a

pharmaceutical JV:

Two large pharmaceutical companies formed a venture to expand the market for a

specific class of drugs. Each partner contributed complimentary patent-protected

medicines within the drug class and regional marketing strengths to the JV. Yet once the

JV was up and running, one parent wanted to promote its higher-margin, lower volume

products while the other parent wanted to expand its market share through aggressive

pricing. …the venture struggled through two years of friction and weak sales before one

partner ultimately bought out the other (Bamford, Ernst, and Fubini 2004, pp. 93-4).

Because this conflict involved the allocation of a promotional budget between two lines of

product, integrative potential was probably limited. More importantly, the two partners perceived

the dispute as a distributive or fixed-pie conflict, and this perception limited the viability of a

collaborative strategy for conflict management.

We observe that the integative potential in the preceding example was ―probably limited,‖

because there are instances in which a company‘s vigorous promotion of one product line

actually increased that company‘s sales of a competing product line. For example, Ciba Vision‘s

introduction of soft contact lenses increased demand for the company‘s hard contact lenses.

However, the marketing literature suggests that these instances are relatively rare; most

marketing discussions of competing product lines focus on cannibalization. Moreover, even

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when such instances occur, their integrative potential often is not recognized during the conflict

resolution process, but is only recognized after the conflict has been resolved and the settlement

has been implemented. In the Ciba Vision case, Smith and Tushman (2005) report that the

increase in hard contact sales was unexpected by company management.

Fixed-pie perceptions are also likely to affect decisions about pricing strategy [24]. For

example, TRW Automotive and Koyo Seiko formed a JV to manufacturer automotive

components. Once the JV was ready to market to customers, conflict emerged over pricing

strategy: TRW favored high prices to generate profits while Koyo Seiko favored low prices to

build market share (Bamford, Ernst, Fubini 2004). Once again, the integrative potential in this

conflict was probably limited. More importantly, both parties clearly brought fixed-pie

perceptions to their negotiations.

A final example involves transfer pricing for a key resource supplied by a JV‘s parent.

Raising the transfer price can improve the parent‘s financial performance at the expense of the

JV‘s performance. Thus transfer pricing tasks have limited integrative potential because they

involve the allocation of profit between the JV and one parent. Moreover, JV partners are likely

to approach transfer pricing conflicts with a fixed-pie perspective.

Within the context of JVs, fixed-pie perceptions may be exacerbated by different beliefs

about the effectiveness of specific tactics, beliefs that arise from different market experiences [5].

As Dymsza explained, some transnational corporations (TNCs):

…consider control of the key elements in the marketing mix in a joint venture

essential in their type of business. Having a dissimilar experience in their own

country, the national partner may strive to adopt different marketing programs and

procedures, with less emphasis on product differentiation, promotion, aggressive

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selling, and trademarks [24, p. 420]. Also in Julian and O‘Cass p. 26.!!! Or did I

mis-cite? Expand quote if necessary. Transition?

Thus the fixed pie-perceptions that managers bring to marketing-task conflict may reflect their

country-specific experiences ountry-specfic experiences that each managers bring to a marketing

task conflict may reinfrexperience that conflicting manager

We define R&D task conflict as perceived incompatibilities among JV participants

regarding R&D strategy and new product design. The development of innovative product

designs hinges on creativity, which Amible [1983, 1996] defined as the generation of novel and

useful ideas. Creativity depends in part on what Amabile, in a study of R&D scientists, called

creativity-relevant skills [Amabile 1988, p. 131; see also Amabile 1983; eliminate 52]. These

skills include ―a cognitive style favorable to taking new perspectives on problems‖ and ―an

application of heuristics for the exploration of new cognitive pathways.‖ Examples of relevant

heuristics include ―keeping response options open as long as possible‖ and ―suspending

judgment.‖

Importantly, these same cognitive qualities have direct links to the positive effects of

conflict identified in the organizational conflict literature. Those who keep response options open

and suspend judgment are more likely to carefully consider the conflicting evidence and insights

that emerge in discussions of divergent views. This increases the probability of attaining a ―more

comprehensive view which synthesizes elements‖ of their own positions with those of others,

resulting in ―ideas of superior quality‖ and improved performance [68, p. 891].

The preceding discussion suggests that (1) marketing tasks tend to have focus on

distributive issues and therefore have less integrative potential than R&D tasks and (2) disputants

in conflict over marketing tasks are relatively more likely to be affected by fixed-pie perceptions.

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In addition, the cognitive skills that are important for innovation success are also critical to the

positive linkages between conflict and performance. These observations suggest the following

hypothesis:

H1: Relative to marketing task conflict, R&D task conflict will have a larger positive impact

on performance.

This hypothesis does not imply that marketing task conflict is always generates more conflict

than R&D task conflict, nor does it imply that every marketing conflict involves a task with low

integrative potential. H1 simply says that, on average, the integrative potential exploited in

marketing task conflict will be less than integrative potential exploited in R&D tasks.

Our remaining hypotheses address the relative effectiveness of four conflict management

strategies in resolving R&D and marketing task conflict. A collaborating conflict management

strategy attempts to simultaneously satisfy the desires of both parties by looking for win-win

situations. A compromising strategy seeks a middle ground that provides partial satisfaction for

each party involved in the conflict. In an accommodating strategy, one party acquiesces to the

wishes of the other, while an avoiding strategy seeks to minimize confrontation and open

disagreement [58].

Implementing a collaborative strategy requires a willingness to keep response options

open and suspend judgment, resulting in a more careful consideration of the conflicting evidence

and insights that emerge in discussions of divergent views. These same skills are crucial for

successful innovation. An essential element of R&D effectiveness is creativity, and the ability to

generate creative ideas is facilitated by a willingness to investigate ―new cognitive pathways,‖

keep ―response options open,‖ and suspend judgment [Amabile 1983, p. 364; see also Kirton

1994]. Creativity is also a function of task motivation and organizational characteristics. Task

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motivation reflects the individual‘s perception of the match between a task and ―his or her

matching preferences and interests‖ [Amabile 1983, p. 366]. Amabile and her colleagues [1999,

p. 631; see also 1988, 1996]. Key organizational characteristics that influence creativity include

―open information flow and support for new ideas at all levels of the organization‖ [Amabile

1999, p. 631; see also 1988, 1996]

Amabile‘s research has two important implications for the management of R&D task

conflict. First, the importance of keeping response options open and suspending judgment

implies that creative tasks have a high level of integration potential. Second, there is considerable

overlap between the skills required for creativity and the skills required for implementing a

collaborative strategy. This overlap increases the probability that parties to R&D conflict will be

able to leverage integrative potential through a collaborative conflict management strategy.

This conclusion is reinforced by recent discussions of the relationship between

collaborative strategies and the need for cognitive closure. According to De Dreu and Carnevale

(2003, p. 262), individuals with a high need for cognitive closure ―are characterized by

considerable cognitive impatience, leaping to judgment on the basis of inconclusive evidence and

rigidity of thought.‖ In contrast, individuals with a low need for closure are willing to ―postpone

judgment until they have processed as much information as possible, or until time and energy is

depleted.‖ Experimental evidence indicates that negotiators with a low need for cognitive

closure are less-likely to be affected by fixed-pie perceptions and thus more likely to adopt a

collaborative bargaining strategy.

In addition, a collaborative strategy stimulates the exchange of information. These

benefits have direct relevance to R&D, where the exchange of information debate can increase

the range of possible solutions explored [65], [68], [73]. Alternative conflict management

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strategies can lead to quick decisions that preclude the gathering of information and the

emergence of an integrating synthesis [66], [76]. Taken together, these considerations suggest the

following hypothesis:

H2: Relative to the compromising, obliging, and avoiding strategies, a collaborating conflict

management strategy will have the largest positive effect on the R&D-task-

conflict/performance relationship.

We have already argued that, on average, marketing tasks contain less integrative

potential than R&D tasks, and that disputants are more likely to view marketing task conflict

from a fixed-pie perspective. These considerations suggest that a collaborating strategy will have

a greater impact on the management of R&D conflict than on the management of marketing

conflict. Thus we hypothesize that:

H3: A collaborating conflict management strategy will have a larger impact on the R&D-

task-conflict/performance relationship than on the marketing-task-conflict/performance

relationship.

The work of Thomas [68] implies that, when task conflict arises from a decision with low

integrative potential, the outcome of a collaborating strategy and a compromising strategy will be

very similar. The negotiation literature indicates that, when tasks are perceived to have low-

integration potential, disputants are unlikely to reach win-win settlements ((Thompson and

Hastie [69], Bottom and Paese 1997; Pinkley, Griffith, and Northcraft 1995). Thus we

hypothesize that:

H4: The collaborating and compromising conflict-management strategies will have the same

effect on the marketing-task-conflict/performance relationship.

An accommodating strategy involves one party acquiescing to the wishes of the other. In

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contrast, a compromising strategy involves negotiations between parties. Thomas [68] suggested

that obliging and compromising strategies should have equal impacts in terms of integration.

However, in an accommodating strategy, information tends to flow only in one direction [66].

Because information flows between both parties in a compromising strategy, it is more likely to

generate the positive benefits of mutual understanding, open-mindedness, and flexibility [70].

When integrative potential is high, this exchange of information may lead to the discovery of an

integrating solution, despite the fact that such solutions are not the explicit goal of a

compromising strategy. In contrast, when integrative potential is low, a compromising strategy

cannot lead to win-win solutions. As a result, a compromising strategy should be no more

effective than an accommodating strategy. This reasoning suggests the following hypotheses:

H5: Relative to an accommodating conflict management strategy, a compromising conflict

management strategy will have a larger positive effect on the R&D-task-conflict/performance

relationship.

H6: The compromising and obliging conflict management strategies will have the same

effect on the marketing-task-conflict/performance relationship.

IV. METHODOLOGY

A. Instrument Development

To measure the use of different conflict management strategies we used existing, well-

validated measures [58]; however, our review of the literature found no existing scales for the

measurement of R&D and marketing task conflict. According to Nunnally (1978), the validity of

a scale is critically dependent on the procedures used to construct the scale. The first step in

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establishing content validity is the generation of a pool of items that reflect a variable‘s content

domain (Bohrnstedt 1970, Nunnally 1978, Anastasia 1986). To generate these initial items we

used an experience survey, which Churchill (1979, p. 67) defined as ―a judgment sample of

person who can offer some ideas and insights into the phenomenon‖ under investigation. In our

case we conducted in-depth focus interviews with managers from two JV firms. After asking the

managers for their opinions regarding the impact of conflict on the performance of their joint

ventures, we asked them to describe the ways in which they manage conflict. We then asked the

managers to list examples from their experiences of four kinds of task conflict, including R&D

and marketing task conflict. The resulting lists served as the initial pool of items for measuring

R&D and marketing task conflict.

To assess the construct validity of these scales [15], we followed the procedure outlined

by Davis [17], which was adapted in part from Sheif and Sherif (1967). We presented seven

managers with the construct definitions of R&D and marketing task conflict and asked them to

assess how well the scale items fit each of the construct definitions. The managers agreed that all

of the items fit their corresponding constructs. We then gave each manager a randomly-ordered

set of index cards with one scale item on each card. Working independently, the managers sorted

the cards into four conflict categories. Based on the results of this task, we deleted four items that

were misclassified by at least one manager. Because the remaining categorizations were

consistent across managers, we concluded that the scales demonstrated convergent and

discriminant validity [17], [18].

To further assess scale reliability and validity, we combined the items from the four

conflict categories into an overall instrument, which we distributed to 32 employees of the two

JVs that participated in the earlier steps of the scale-development process. After these employees

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completed the instrument, we factor analyzed the results and identified two items with double

loadings (i.e., each deleted item had two factor loadings greater than 0.40). Because the double

loadings indicated a problem with discriminant validity, we omitted these items from our final

questionnaire.

B. Data Collection

We tested our hypotheses using survey data collected from 196 firms. The initial

sampling frame consisted of all joint ventures listed in the TFSD Joint Ventures & Alliances

database obtained from Thomson Financial Securities Data. We selected all joint ventures

located in the U.S. that were formed after 1990. We modified this list to include only those JVs

with verifiable contact information, leaving us with a sampling frame of 824 JVs.

In administering the mail survey, we followed the modified total survey design method

[23]. The first mailing packet included a business card, a personalized letter to the contact at the

company, the questionnaire, an express postage-paid envelope with individually-typed return-

address label, and a list of research reports available to participants. The package was sent by

express mail. One week after the mailing, we sent a reminder letter to all companies.

After two weeks, for all non-responding firms, we sent a second mailing package

included a business card, a personalized reminder letter to the contact at the company, another

copy of the questionnaire, an express postage-paid envelope with individually-typed return-

address label, and a list of research reports available to participants. The data collection was

concluded with phone calls/faxes to the contact person and a personalized letter thanking the

company for its cooperation. This process yielded 196 useable responses (we deleted 13

responses with missing data on multiple sections of the survey). The effective response rate was

24%. A comparison of the responses from two mailings revealed no systematic differences in the

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study variables.

Among the JVs that responded to our survey, the number of employees ranged from 57 to

1,095 and annual sales ranged from $123,000 to $167,731,603. The share of equity owned by the

respondent firms ranged from 17% to 82%. These three variables, along with the age of the joint

venture, were used as control variables in our regression analyses. Of the 196 JVs that responded

to our survey, 181 were domiciled in the United States. A list of the joint ventures is available

from the authors upon request.

C. Measures

With the exception of the four control variables listed above, all of the independent

variables were measured with multiple-item scales. The detailed questionnaire items and

response formats are given in Appendix Table A1, along with reliability coefficients and item-

total correlations for multiple-item measures.

To measure the level of conflict within each joint venture, we asked respondents about

the degree of conflict within different functional areas. R&D Task Conflict (α = 0.87) is a four-

item scale that measures the extent of disagreement between JV partners over the direction of

R&D, R&D expenditures, and new product design. An item that assessed the degree of conflict

over the venture‘s overall technology strategy also loaded on this factor. Marketing Task Conflict

(α = 0.88) is a seven-item scale that measures the level of conflict between JV partners over

various marketing decisions, including target markets, pricing, distribution, advertising, and

marketing expenditures.

We collected two objective measures of JV performance. ROI is the business unit‘s

average return on investment over the last three years. GROWTH is the average annual growth or

decline of sales (expressed as a percentage) over the last three years.

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We hypothesized that the relationship between task conflict and JV performance is

moderated by the ways in which the JV partners attempt to manage that conflict. To measure

conflict management strategies we used a scale developed by Rahim [58]. A confirmatory factor

analysis of Rahim‘s measures indicated that the JV partners in our sample used four different

strategies for resolving conflict. Avoiding Strategy (α = 0.91) is a four-item scale that measures

the degree to which JV partners try to avoid any confrontations or open disagreements.

Compromising Strategy (α = 0.87) is a four-item scale that measures the degree to which JV

partners try to resolve conflicts by compromising and finding some kind of middle ground.

Accommodating Strategy (α = 0.88) is a three-item scale that measures the degree to which the

respondent resolves conflict by acceding to the wishes of its JV partner. Finally, Collaborating

Strategy (α = 0.82) is a four-item scale that measures the degree to which JV partners jointly

investigate a problem, share information, and try to integrate their ideas in order to come up with

the best resolution to their conflict. A fifth conflict management strategy identified by Rahim

(1983), Competing (which Rahim called dominating), did not emerge as an independent factor in

our analysis.

As reported in Appendix Table A1, the construct reliabilities for all variables exceed

0.80 and are well above the conventional threshold of 0.70 suggested by the literature [53], [54].

An examination of the patterns of item-item and item-total correlations indicated that the

measures possessed convergent validity (Churchill 1979). In addition, the correlations between

items from different constructs were low, providing evidence of discriminant validity. Following

the recommendations of Churchill (1979), we also subjected the multiple-item measures to

principle component factor analyses using Varimax rotation. The pattern of factor loadings

reported in Appendix Table A2 is consistent with the six hypothesized constructs (two conflict

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variables and four conflict-management variables). The highest factor loading for each item was

0.59 or greater and linked that item with its corresponding factor. The remaining factor loadings

were all less than 0.40.

Table 2 reports the means and standard deviations of each of the variables described in

this section, while Table 3 contains the correlation matrix for these variables. A review of the

means in Table 2 reveals variability in the measures of the major constructs. Notice that, within

our sample of respondents, conflicts regarding R&D are more serious than conflicts regarding

marketing: the mean value of R&D task conflict is 5.93, while the mean for marketing task

conflict is 3.97. The difference between these means is significant at the 99 percent level of

confidence (t = 7.20).

[Insert Tables 2 and 3 about here.]

Accomodating strategies appear to be the most common way of resolving conflicts,

followed by collaborating strategies. Compromising appears to be the least common way of

resolving conflicts: the mean of the compromising strategy variable is significantly less than the

mean of both the collaborating strategy variable (t = 11.41, p < .01) and the mean of the

accommodating strategy variable (t = 17.31, p < .01). These results contradict the finding of

Wang et. al [74], who found that Chinese, non-Chinese Asian, and Western partners all preferred

a compromising strategy to a collaborating strategy.

V. MODEL ESTIMATION AND RESULTS

A. Estimation Procedures

We evaluated the research hypotheses by regressing the ROI and GROWTH performance

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measures on four control variables, the two task conflict variables, the four conflict management

variables, and the interaction terms created by multiplying the task conflict and conflict

management variables. These regressions enabled us to assess (1) the direct impact of task

conflict on performance and (2) the moderating effects of the four conflict management

mechanisms on the conflict-performance relationship.

We performed several diagnostic tests to evaluate the appropriateness of the assumptions

of normality, linearity, and homoscedasticity. An examination of the residual plots suggested that

these assumptions were appropriate in each regression model. An initial assessment of the

regression model suggested some problems with multicollinearity, a common occurrence in

models featuring interaction terms. Following the advice of Aiken and West [3] we mean-

centered the data. A subsequent application of Belsley, Kuh, and Welsch‘s [9] multicollinearity

test indicated that multicollinearity was no longer a problem (all Condition Indices were below

30 and all Variance Inflation Factors were less than 10). Given these results, all of the analyses

described below were conducted with mean-centered data.

To determine the appropriateness of including interaction terms in our model we

conducted a hierarchical regression analyses [16]. First, we regressed the performance variables

(ROI and Growth) on the control variables. Second, we added the R&D and Marketing Task

Conflict variables. Third, we added the four conflict management strategy variables. Finally, we

added the eight interaction variables. Tables 4 and 5 summarize the results of the hierarchical

regression procedure. We found that the regression R2 rises significantly when the interaction

effects are added to the main effects: the F statistics for the ROI regression (F = 4.83, p < .01)

and the GROWTH regression (F = 4.69, p < .01) are both significant at the 5 percent level of

confidence. These results support our basic premise that the conflict management strategy

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variables moderate the relationship between task conflict and performance.

[Insert Tables 4 and 5 about here.]

B. Direct Effects of Conflict on Joint Venture Performances

Tables 4 and 5 present the results of our regression analysis. The first column lists the

independent regression variables. The remaining columns describe the results of two OLS

regressions using two different measures of performance: ROI over the last three years (ROI) and

sales growth over the last three years (GROWTH). For each regression, Tables 4 and 5 report the

unstandardized regression coefficients, the standard deviations of those coefficients, and the

standardized regression coefficients. The adjusted R2 for the both regressions exceed 0.55 and the

F-statistics for both regressions are significantly different from zero.

Hypothesis 1 states that, relative to marketing task conflict, R&D task conflict will have

a larger positive effect on performance. Our regression results confirm this hypothesis. In both

regressions the coefficient of R&D task conflict is positive and significant, with standardized

coefficients of 0.52 in the ROI regression and 0.55 in the GROWTH regression. In contrast, the

coefficient of marketing task conflict is negative and significant in both equations, with

standardized coefficients of -0.24 and -0.27 in the ROI and GROWTH equations, respectively. In

both regressions, the F-statistic for the difference between the R&D-task-conflict and marketing-

task-conflict coefficients is significant at the 1 percent level of confidence. Table 6 provides

additional information about the F-statistics used to test each hypothesis.

[Insert Table 6 about here.]

C. Moderating Effects of Conflict Management Strategies

Hypothesis 2 states that, relative to other conflict management strategies, a collaborating

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strategy will have the largest positive effect on the R&D-task-conflict/performance relationship.

Our regression results support this hypothesis. In both regressions the coefficient of the R&D-

task-conflict/integrating-strategy interaction variable is positive and significant, with

standardized coefficients of 0.15 in the ROI regression and 0.16 in the GROWTH regression. In

contrast, the standardized coefficients of the R&D-task-conflict/compromising-strategy

interaction variable are positive and significant, but much smaller in magnitude (0.01 and 0.00 in

the ROI and GROWTH equations, respectively). The remaining R&D-task-conflict/conflict-

management interaction variables have coefficients that are negative and significant in each

equation. Within each regression, F-tests indicate that the difference between the R&D-task-

conflict/integrating-strategy coefficient and the remaining R&D-task-conflict/conflict

management-strategy coefficients are significantly different from zero.

To gain further insight into the nature of the interaction effects we used simple slope

analysis. Following the recommendations of Aiken and West [3], we calculated the effects of the

moderated predictors (R&D task conflict and marketing task conflict) at the mean of each

conflict management strategy variable, and also at one standard deviation above and below the

mean. Tables 7 and 8 contain the results of this analysis. An examination of Table 7 reveals that,

for both the ROI and GROWTH equations, increases in the collaborating strategy variable

generate the largest increase in the coefficient of R&D task conflict. Moreover, increases in both

the obliging and avoiding strategy variables decrease the magnitude of the coefficient of R&D

task conflict. These results lend further support to Hypothesis 2.

[Insert Tables 7 and 8 about here.]

According to Hypothesis 3, a collaborating conflict management strategy will have a

larger impact on the R&D-task-conflict/performance relationship than on the marketing-task-

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conflict/performance relationship. Our regression results confirm this hypothesis. In the ROI

regression, the difference between the standardized coefficients of the R&D-task-

conflict/collaborating-strategy variable and the marketing-conflict/collaborating-strategy variable

is 0.18. In the GROWTH equation, the same difference is 0.16. The relevant F-tests in Table 6

indicate that both of these differences are significantly different from zero. The simple slopes

analyses of Tables 7 and 8 also support Hypothesis 3. While increases in the collaborating

strategy variable produce the largest increase in the coefficient of R&D task conflict, Table 8

indicates that increases in the collaborating strategy variable have no impact (the GROWTH

equation) or a slightly negative impact (the ROI equation) on the coefficient of marketing task

conflict.

Hypothesis 4 states that the collaborating and compromising conflict management

strategies will have the same effect on the marketing-task-conflict/performance relationship. In

the ROI regression, the difference between the standardized coefficients of the marketing-task-

conflict/collaborating -strategy variable and the marketing-task-conflict/compromising-strategy

variable is -0.09. In the GROWTH equation, the same difference is -0.03. Statistically, we cannot

reject the hypothesis that these differences are zero (the relevant F-statistic is 1.40 for the ROI

regression and 0.19 for the Sales regression). The results of the simple slopes analyses also

suggest that a collaborating strategy has no greater impact than a compromising strategy on the

marketing-task-conflict/performance relationship. These results are consistent with Hypothesis 4.

Hypothesis 5 states that, relative to an accommodating strategy, a compromising conflict

management strategy will have a larger impact on the R&D-task-conflict/performance

relationship. Our regression results confirm this hypothesis. In the ROI regression, the difference

between the standardized coefficients of the R&D-task-conflict/compromising-strategy variable

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and the R&D-task-conflict/accommodating-strategy variable is 0.17. In the GROWTH equation,

the same difference is 0.19. The relevant F-tests in Table 6 indicate that both of these differences

are significantly different from zero. The simple slopes analyses reported in Table 7 also support

Hypothesis 5. For both the ROI and GROWTH equations, increases in the accommodating

strategy variable decrease the coefficient of R&D task conflict. In contrast, increases in the

compromising strategy increase the coefficient of R&D task conflict (although the magnitude of

the increase is very small in the ROI equation).

According to Hypothesis 6, the compromising and obliging conflict management

strategies will have the same effect on the marketing-task-conflict/performance relationship. In

the ROI regression, the difference between the standardized coefficients of the marketing-task-

conflict/compromising-strategy variable and the marketing-task-conflict/accommodating-strategy

variable is 0.23. In the GROWTH equation, the same difference is 0.16. Both differences are

statistically different from zero, which contradicts Hypothesis 6. The simple slopes analyses

reported in Table 8 also fail to support Hypothesis 6. For both the ROI and GROWTH equations,

increases in the compromising strategy increase the coefficient of marketing task conflict, while

increases in the accommodating strategy variable have the opposite effect.

VI. DISCUSSION

A. Review of Results

For many years the conflict management literature has recognized the importance of

collaborative mechanisms that seek to simultaneously satisfy the concerns of opposing parties. At

the same time, scholars have recognized that decisions differ in their integrative potential: some

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conflicts arise from decisions that have the potential for a win-win resolution, while others arise

from decisions that are inherently win-lose. In this paper we have argued that the level of

integrative potential, along with disputant perceptions of that level, influence both the task-

conflict/performance relationship and the relative effectiveness of various conflict management

strategies.

We tested our reasoning by comparing the relationship between task conflict and

performance in two different functional areas across 196 joint ventures. We hypothesized that

integrative potential was higher (or perceived to be higher) in decisions involving R&D task

conflict than in decisions involving marketing task conflict. Our analysis supported this

hypothesis: R&D task conflict had a positive and significant effect on performance, while the

impact of marketing task conflict was negative and significant. These results assume particular

importance in light of recent discussions of the task-conflict/performance relationship. In a meta-

analysis of this relationship, De Dreu and Weingart [19] concluded that task conflict is negatively

correlated with team performance. The research presented here raises the possibility that, in

general, the task conflict examined in the studies covered by this meta-analysis involved (1)

decisions with low integrative potential or (2) disputants with fixed-pie perceptions.

We also examined the impact of integrative potential on the relative effectiveness of

different conflict management strategies. We found that a collaborating strategy was the only

strategy with a positive and significant impact on the R&D-task-conflict/performance

relationship. In contrast, the accommodating strategy had a negative impact on this relationship,

an impact that was significantly less positive than the impact of both the integrating and

compromising strategies.

These results support five of our six research hypotheses. The only hypothesis that was

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not supported was H6, in which we hypothesized that the compromising and obliging strategies

would have a comparable effect on the marketing-task-conflict/performance relationship. Our

regressions indicated that the compromising strategy had no impact on this relationship, but that

the accommodating strategy had a negative impact. Our results may reflect the fact that, in an

accommodating strategy, information flows primarily in one direction (from the obliging party to

the party being obliged). In contrast, a compromising strategy involves a two-way flow of

information, which can generate mutual understanding and flexibility and lead in turn to greater

productivity. These benefits (which are also benefits of a collaborating strategy) may explain why

we found that a compromising strategy had a non-negative impact on the marketing-task-

conflict/relationship, while the impact of an accommodating strategy was negative.

B. Theoretical Implications

Our results have several important theoretical implications. First, we found that joint

venture performance is an increasing function of R&D task conflict and a decreasing function of

marketing task conflict. These results raise important questions about earlier studies [22], [36]

that find a negative relationship between JV performance and a summary measure of conflict.

One immediate implication is that a summary measure of conflict can obscure important

differences among different types of JV conflict. For this reason, future studies of joint venture

conflict should distinguish among different kinds of conflict and assess the impact of each type

of conflict on performance.

Second, Xie, Song, and Stringfellow [76] argued that the effectiveness of a collaborative

strategy is a decreasing function of the level of conflict. Their empirical results confirmed this

hypothesis in two Eastern countries (Japan and Hong Kong) but failed to confirm it in two

Western countries (the United States and Great Britain). Our results suggest that this hypothesis

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may be contingent on the nature of task conflict. In particular, we found that the effectiveness of

a collaborating strategy was an increasing function of the level of R&D task conflict, but was

unaffected by changes in the level of marketing task-conflict. Thus future studies of joint venture

conflict should account for the nature of task conflict when assessing the effectiveness of

conflict-management strategies.

Third, we provided a theoretical explanation for the observed differences in the impact of

conflict in the R&D and marketing functions. We argued that (1) relative to marketing tasks,

R&D tasks have greater integrative potential, and (2) relative to parties involved in marketing

task conflict, those involved in R&D-task conflict are relatively less likely to be affected by

fixed-pie perceptions. As a result, the benefits of task conflict will be relatively higher for R&D-

conflict than for marketing conflict. Our results suggest that future studies of the relationship

between task conflict and performance should control for fixed-pie perceptions and the level of

integrative potential.

C. Managerial Implications

Our results also have important managerial implications. First, we found that that the

nature of task conflict influences the value of conflict. In particular, R&D conflict had a positive

impact on performance, while marketing conflict had a negative impact. This suggests that some

types of conflict merit greater attention from managers than others. Managers should be most

concerned about conflicts in which (1) integrative potential is lacking or (2) fixed-pie perceptions

prevent the adoption of collaborative strategies.

Second, our research underscores the importance of conflict-management abilities as a

key managerial competence. Our results reinforce the findings of other studies that indicate the

application of inappropriate conflict management strategies can adversely affect performance.

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Active listening, along with the abilities to take the other‘s perspective, consider multiple

options, and postpone judgment when appropriate, are valuable skills that should be part of any

management development program.

Third, our analysis indicated that the effectiveness of various conflict-management

strategies depended on the task that generated the conflict. For example, relative to a

compromising strategy, a collaborating strategy was relatively more effective in resolving R&D

task conflict, but was not more effective in resolving marketing task conflict. These findings

suggest that managers should not follow a ―one size fits all‖ approach to managing task conflict,

but should align their choice of conflict management strategies with the nature of the underlying

tasks. Managing task conflict with a collaborating strategy takes time and resources, in part

because parties to the conflict must collect and share information and because the search for a

win-win solution may require the generation and investigation of a large number of possible

solutions. When this process generates a win-win solution, the conflicting parties may well

reflect positively on the process. In the midst of the process (before the win-win solution

emerges), the conflicting parties may grow impatient and frustrated. If decisions are delayed, this

frustration may generate relationship conflict [65]. This outcome appears more likely when the

probability of finding a win-win solution is close to zero (e.g., the allocation of a fixed marketing

budget between two different products or customer segments). To avoid these negative

outcomes, managers must adjust their conflict management strategy to reflect the integrative

potential inherent in specific decisions. When integrative potential is high, a collaborating

strategy makes sense, but when integrative potential is low, a compromising strategy is more

efficient and less likely to generate relationship conflict.

Fourth, removing fixed-pie perceptions may be a necessary first step for managers

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wishing to implement a collaborative conflict-management strategy. The negotiation literature

indicates that the negative impact of fixed-pie perceptions can be lessened by increasing

epistemic motivation, which de Dreu and Carnevale [2003, p. 262] define as ―the desire to

develop and hold accurate and well-informed conclusions about the world.‖ Research indicates

that process accountability—the expectation of observation and evaluation by third parties with

―unknown views about the process of judgment and decision making‖—can increase epistemic

motivation (de Dreu and Carnevalue 2003, p. 262). Managers should also be sensitive to the

effects of time pressure and fatigue, which can decrease epistemic motivation.

Fifth, to effectively manage conflict, managers must be sensitive to variations in the need

for cognitive closure. On one hand, individuals with a high need for cognitive closure may

impede the attempt to capture integrative potential though their impatience with the process of

collaborative problem-solving. On the other hand, individuals with a low need for cognitive

closure may prolong attempts to implement a compromising strategy by looking for integrative

potential that does not exist. Managers who are sensitive to the potential for task conflict in

teams and to variations in cognitive closure can enhance the conflict-management abilities of a

team by selecting team members with cognitive styles appropriate to the conflicts a team is likely

to encounter.

D. Limitations and Directions for Future Research

Our conclusions must be qualified in several ways. First, our data consists of aggregate

judgments about the level of task conflict experienced in executing different R&D and marketing

tasks. Although our analysis is consistent with the existence of a significant difference in the

integrative potential of R&D and marketing decisions, we know that integrative potential varies

across specific decisions. It is highly likely that some marketing decisions have greater

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integrative potential than some R&D decisions. For example, marketing decisions that feed into

the R&D process (e.g., choice of target market segments) may carry greater integrative potential

than more tactical, execution-oriented decisions For this reason, the collection of data about

specific R&D and marketing task conflicts may generate additional insights regarding the best

ways to manage different kinds of conflict.

Second, in our study we used our knowledge of the kinds of decisions made within each

functional area to infer the existence of differences in integrative potential across functional

areas. The collection of data about specific task conflicts would permit direct measurement of the

perceptions of integrative potential. Prior research on negotiating conflict has used open-ended

questions to assess perceptions of integrative potential [55], [56], [63]. An alternative is the

development of explicit scales for measuring the perceived integrative potential of specific

decisions.

Third, we have attributed our empirical results to differences in (1) the level of integrative

potential in R&D and marketing tasks and (2) fixed pie perceptions among disputants in R&D

and marketing task conflict. Jehn‘s work on task routineness raises interesting questions about

the impact of complexity on the effectiveness of conflict-management strategies. It is possible

that interfunctional differences in task complexity contributed to the empirical results reported

here. This possibility should be examined in future research.

Fourth, the interaction between integrative potential and relationship conflict is also an

important topic for future research. Task conflict may be more likely to generate relationship

conflict when integrative potential is low. If this speculation is correct, then the magnitude of the

negative relationship between marketing task conflict and performance reported here may reflect

a positive correlation between marketing task conflict and relationship conflict.

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Despite these limitations, we believe that the research presented here makes several

important contributions. First, we have argued that the level of integrative potential and disputant

perceptions of that level influence (1) the relationship between task conflict and performance and

(2) the relative effectiveness of various collaborative conflict management strategies. Second, we

have tested the theoretical model by analyzing data collected from 196 joint ventures that involve

one U.S. partner. Our results validate the idea that integrative potential and its perception

influence the relationship between task conflict and joint venture performance. Our results also

indicate that integrative potential and its perception should influence the way managers manage

task conflict.

Our findings have important implications for executives who seek to benefit from joint

ventures. Difference in culture, operating philosophies, technology, complementing product

lines, and the like, all are reasons to partner. Yet, if not managed properly, such diversity can

drive a wedge between partners. To invest in a joint venture without preparing for conflict is to

court disaster. Potential synergies can be lost, valuable managerial effort wasted, and unintended

signals can be sent to other potential partners. If researchers can better understand the conditions

under which different conflict-managing strategies are effective, managerial practice is well

served. By introducing the concepts of integrative potential and fixed-pie perceptions into

discussions of JV conflict management, this paper takes an important step in that direction.

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TABLE 1

CONFLICT-MANAGEMENT STRATEGIES

Conflict-Management

Strategy

Definition Labels Used in Previous

Research

Collaborating Looking for a way to

simultaneously satisfy the desires

of both parties

Integrating (Rahim 1983),

Collaborating (Blake and

Mouton 1964, Thomas 1976),

Problem-Solving (Carnevale

and Pruitt 1992, Lin and

Germain [43], an de Vliert et

al. 1999), Confrontation

(Burke 1970)

Compromising Offering partial acceptance of the

other party‘s desires in return for

partial acceptance of one‘s own

desires

Compromising (Blake and

Mouton 1964, Burke 19970,

Rahim 1983, Thomas 1976)

Accommodating Yielding to the desires of the other

party

Accommodating (Blake and

Mouton 1964, Thomas 1976),

Concession Making

(Carnevale and Pruit 1992),

Obliging (Rahim 1983),

Smoothing (Burke 1970)

Competing Attempting to impose one‘s

desires on the other party

Competing (Blake and

Mouton, Thomas 1976),

Contending (Carnevale and

Pruit 1992), Dominating

(Rahim 1983), Forcing (Burke

1970, Van de Vliert et al.

1999)

Avoiding Ignoring the conflict between

one‘s owns desires and those of

the other party

Avoiding (Blake and Mouton

1964, Rahim 1983, Thomas

1976), Withdrawing (Burke

1970)

>

1

TABLE 2

VARIABLE MEANS AND STANDARD DEVIATIONS

Mean

Standard

Deviation Minimum Maximum

Dependent Variables

Three-Years Averaged ROI 3.49 1.83 1.00 6.00

Three-Years Averaged Sales Growth 8.20 12.52 -15.00 25.00

`

Main Effect Variables

R&D Task Conflict 5.93 2.32 1.00 10.00

Marketing Task Conflict 3.97 2.38 0.00 10.00

Interaction Terms

R&D Task Conflict * Collaborating 30.17 17.34 0.00 87.75

R&D Task Conflict * Compromising 16.99 13.26 0.00 72.00

R&D Task Conflict * Accommodating 44.85 26.68 0.00 100.00

R&D Task Conflict * Avoiding 21.77 15.06 1.75 74.00

Marketing Task Conflict *

Collaborating 23.03 19.01 0.00 84.29

Marketing Task Conflict *

Compromising 13.47 16.15 0.00 85.00

Marketing Task Conflict *

Accommodating 29.21 22.40 0.00 94.29

Marketing Task Conflict * Avoiding 18.53 18.84 0.00 82.18

Moderator Variables

Collaborating strategy 5.44 2.37 0.00 10.00

Compromising Strategy 3.01 2.09 0.00 9.75

Accommodating strategy 7.15 2.78 0.00 10.00

Avoiding Strategy 4.09 2.49 0.25 10.00

Control Variables

Age of the Joint Venture 5.95 2.44 2.00 10.00

Number of Employees 397.11 251.65 57.00 1095.00

Annual Sales 42.31 36.64 0.12 167.73

% of Equity Owned 59.05 17.28 41.00 82.00

>

23

TABLE 3

CORRELATION MATRIX

Th

ree-

Yea

rs A

ver

aged

RO

I

Th

ree-

Yea

rs A

ver

aged

Sal

es

Gro

wth

Sat

isfa

ctio

n

R&

D T

ask

Co

nfl

ict

Mar

ket

ing

Tas

k C

on

flic

t

Co

llab

ora

tin

g s

trat

egy

R&

D T

ask

Co

nfl

ict

*

Co

llab

ora

tin

g

Mar

ket

ing

Tas

k C

on

flic

t *

Co

llab

ora

tin

g

Av

oid

ing

Str

ateg

y

R&

D T

ask

Co

nfl

ict

*

Av

oid

ing

Mar

ket

ing

Tas

k C

on

flic

t *

Av

oid

ing

Acc

om

mo

dat

ing

str

ateg

y

R&

D T

ask

Co

nfl

ict

*

Acc

om

mo

dat

ing

Mar

ket

ing

Tas

k C

on

flic

t *

Acc

om

mo

dat

ing

Co

mp

rom

isin

g S

trat

eg

y

R&

D T

ask

Co

nfl

ict

*

Co

mp

rom

isin

g

Mar

ket

ing

Tas

k C

on

flic

t *

Co

mp

rom

isin

g

Ag

e o

f th

e Jo

int

Ven

ture

Nu

mb

er o

f E

mp

loy

ees

An

nu

al S

ales

% o

f E

qu

ity

Ow

ned

Three-Years Averaged

ROI 1.00 Three-Years Averaged

Sales Growth 0.95 1.00

Satisfaction 0.89 0.89 1.00

R&D Task Conflict 0.72 0.76 0.73 1.00

Marketing Task Conflict -0.51 -0.53 -0.55 -0.31 1.00

Collaborating strategy -0.37 -0.40 -0.42 -0.38 0.25 1.00 R&D Task Conflict *

Collaborating 0.25 0.26 0.20 0.42 0.00 0.63 1.00 Marketing Task Conflict

* Collaborating -0.55 -0.57 -0.59 -0.39 0.84 0.66 0.30 1.00

Avoiding Strategy -0.58 -0.56 -0.58 -0.44 0.38 0.35 -0.05 0.47 1.00 R&D Task Conflict *

Avoiding -0.12 -0.05 -0.10 0.24 0.21 0.08 0.26 0.23 0.70 1.00 Marketing Task Conflict

* Avoiding -0.61 -0.60 -0.62 -0.37 0.76 0.35 0.02 0.76 0.82 0.57 1.00

Accommodating strategy 0.36 0.37 0.36 0.38 0.12 -0.12 0.17 0.06 -0.10 0.17 0.05 1.00 R&D Task Conflict *

Accommodating 0.60 0.64 0.63 0.82 -0.08 -0.32 0.32 -0.18 -0.31 0.26 -0.18 0.79 1.00 Marketing Task Conflict

* Accommodating -0.22 -0.23 -0.26 0.00 0.82 0.16 0.16 0.66 0.28 0.31 0.62 0.57 0.33 1.00

Compromising Strategy -0.36 -0.36 -0.35 -0.18 0.30 0.11 -0.04 0.26 0.40 0.39 0.42 0.07 -0.09 0.31 1.00 R&D Task Conflict *

Compromising -0.04 0.01 0.00 0.27 0.17 -0.09 0.15 0.07 0.25 0.59 0.29 0.24 0.30 0.31 0.83 1.00 Marketing Task Conflict

* Compromising -0.43 -0.45 -0.45 -0.19 0.67 0.17 0.00 0.57 0.43 0.38 0.66 0.13 -0.04 0.62 0.83 0.67 1.00

Age of the Joint Venture -0.06 -0.07 -0.10 -0.01 0.04 0.03 0.02 0.04 -0.04 -0.06 0.07 -0.09 -0.07 -0.05 0.01 0.01 0.02 1.00

Number of Employees 0.10 0.10 0.08 0.03 -0.04 -0.07 0.01 -0.05 -0.09 -0.02 -0.07 0.03 0.05 -0.02 0.00 0.03 -0.03 -0.05 1.00

Annual Sales 0.06 0.07 0.10 0.10 0.05 -0.06 0.04 0.03 -0.04 0.04 0.03 0.08 0.12 0.07 0.04 0.08 0.08 -0.02 0.52 1.00

% of Equity Owned -0.07 -0.03 -0.04 0.04 0.03 0.08 0.08 0.08 0.17 0.16 0.12 -0.06 -0.01 0.01 0.06 0.11 0.05 -0.06 -0.01 -0.03 1.00

>

24

TABLE 4

ROI REGRESSION

Coefficient

Estimate

Standard

Error t-Value P-value

Standardized

Estimate

Intercept 0.42 0.34 1.24 0.22 0.00

Main Effect Variables

R&D Task Conflict 0.41 0.04 9.44 <.0001 0.52

Marketing Task Conflict -0.18 0.03 -5.27 <.0001 -0.24

Interaction Terms

R&D Task Conflict * Collaborating 0.05 0.02 3.02 0.00 0.15

R&D Task Conflict * Compromising 0.01 0.02 0.27 0.78 0.01

R&D Task Conflict * Accommodating -0.04 0.01 -3.67 0.00 -0.16

R&D Task Conflict * Avoiding -0.03 0.02 -1.98 0.05 -0.11

Marketing Task Conflict *

Collaborating -0.01 0.02 -0.55 0.58 -0.03

Marketing Task Conflict *

Compromising 0.02 0.01 1.23 0.22 0.06

Marketing Task Conflict *

Accommodating -0.04 0.01 -3.77 0.00 -0.17

Marketing Task Conflict * Avoiding -0.04 0.01 -2.61 0.01 -0.13

Moderator Variables

Collaborating strategy -0.05 0.04 -1.33 0.19 -0.06

Compromising Strategy -0.10 0.05 -2.23 0.03 -0.12

Accommodating strategy 0.10 0.03 3.48 0.00 0.16

Avoiding Strategy -0.08 0.04 -1.94 0.05 -0.10

Control Variables

Age of the Joint Venture -0.03 0.03 -0.86 0.39 -0.03

Number of Employees 0.00 0.00 1.40 0.16 0.06

Annual Sales 0.00 0.00 -0.69 0.49 -0.03

% of Equity Owned 0.00 0.00 -0.63 0.53 -0.02

Adjusted R2

= 0.73

F-statistic = 30.74 (p < .01)

Results of hierarchical regression analyses:

Adjusted R2 for regression with three control variables = -0.002

R2 for regression with three control variables and R&D Task Conflict and Marketing Task Conflict = 0.614

R2 for regression with three control variables, R&D Task Conflict, Marketing Task Conflict, and the four

conflict resolution methods = 0.691.

R2 for regression with three control variables, R&D Task Conflict, Marketing Task Conflict, the four

conflict resolution methods, and the eight interaction terms = 0.733.

These results suggest that the hypothesized theoretical model is the best model.

>

25

TABLE 5

SALES GROWTH REGRESSION

Coefficient

Estimate

Standard

Error t-Value P-value

Standardized

Estimate

Intercept 1.88 2.13 0.88 0.38 0.00

Main Effect Variables

R&D Task Conflict 2.96 0.27 10.94 <.0001 0.55

Marketing Task Conflict -1.43 0.22 -6.59 <.0001 -0.27

Interaction Terms

R&D Task Conflict * Collaborating 0.36 0.10 3.54 0.00 0.16

R&D Task Conflict * Compromising 0.14 0.13 1.08 0.28 0.05

R&D Task Conflict *

Accommodating -0.28 0.08 -3.59 0.00 -0.14

R&D Task Conflict *

Accommodating -0.28 0.08 -3.59 0.00 -0.14

Marketing Task Conflict *

Collaborating 0.00 0.10 0.00 1.00 0.00

Marketing Task Conflict *

Compromising 0.06 0.09 0.67 0.50 0.03

Marketing Task Conflict *

Accommodating -0.24 0.07 -3.29 0.00 -0.13

Marketing Task Conflict * Avoiding -0.21 0.09 -2.37 0.02 -0.11

Moderator Variables

Collaborating strategy -0.48 0.22 -2.13 0.03 -0.09

Compromising Strategy -0.71 0.29 -2.43 0.02 -0.12

Accommodating strategy 0.73 0.19 3.95 0.00 0.16

Avoiding Strategy -0.37 0.25 -1.48 0.14 -0.07

Control Variables

Age of the Joint Venture -0.20 0.18 -1.07 0.29 -0.04

Number of Employees 0.00 0.00 0.85 0.40 0.03

Annual Sales 0.00 0.01 -0.18 0.86 -0.01

% of Equity Owned 0.01 0.03 0.32 0.75 0.01

Adjusted-R2 = 0.78

F-statistic = 38.67 (p < .01)

Results of hierarchical regression analyses:

R2 for regression with three control variables = -0.006

R2 for regression with three control variables and R&D Task Conflict and Marketing Task Conflict = 0.678

R2 for regression with three control variables, R&D Task Conflict, Marketing Task Conflict, and the four

conflict resolution methods = 0.743

R2 for regression with three control variables, R&D Task Conflict, Marketing Task Conflict, the four

conflict resolution methods, and the eight interaction terms = 0.777.

These results suggest that the hypothesized theoretical model is the best model.

>

26

TABLE 6

F TESTS OF DIFFERENCES IN REGRESSION COEFFICIENTS

Hypothesis Difference Test ROI Growth

1 R&D MKT

0 148.82*** 209.83***

2 R&D,CL R&D,CM

0 2.82** 1.88*

2 R&D,CL R&D,AC

0 24.24*** 28.24***

2 R&D,CL R&D,AV

0 9.03*** 8.27***

3 R&D,CL MKT,CL

0 9.32*** 9.25***

4 MKT,CL MKT,CM

0 1.40 0.19

5 R&D,CM R&D,AC

0 4.09** 6.95***

6 MKT,CM MKT,AC

0 8.92*** 5.43***

Other F tests of Interest:

MKT,CM MKT,AV

0 6.01*** 3.79**

MKT,CL MKT,AC

0 3.63** 4.29**

MKT,CL MKT,AV

0 1.37 1.88

* Significant at p .10 (two-tailed)

** Significant at p .05 (two-tailed)

*** Significant at p .01 (two-tailed)

Note: R&D

= Coefficient of the R&D-conflict variable

MKT = Coefficient of the R&D-conflict variable

X,Y = Coefficient of the product variable XY, where X is the conflict variable

(R&D or marketing) and Y is the conflict management strategy (CL =

collaborating strategy, CM = compromising strategy, AC = accommodating

strategy, and AV = avoiding strategy )

>

27

TABLE 7

SIMPLE SLOPE ANALYSIS FOR R&D TASK CONFLICT GIVEN VARIOUS LEVELS OF THE

CONFLICT MANAGEMENT VARIABLES

Dependent Variable Beta at Various Levels of the Conflict Management Variables

Collaborating Strategy Variable

Low Moderate High

ROI 0.29***† 0.42*** 0.51***

Sales Growth 2.12*** 2.96*** 3.81***

Compromising Strategy Variable

Low Moderate High

ROI 0.40*** 0.41*** 0.42***

Sales Growth 2.68*** 2.96*** 3.25***

Accommodating Strategy Variable

Low Moderate High

ROI 0.53*** 0.41*** 0.28***

Sales Growth 3.73*** 2.96*** 2.20***

Avoiding Strategy Variable

Low Moderate High

ROI 0.49*** 0.41*** 0.33***

Sales Growth 3.31*** 2.96*** 2.62***

*

Significant at p .10 (two-tailed) **

Significant at p .05 (two-tailed) ***

Significant at p .01 (two-tailed)

† The simple slope value of 0.29 was calculated using regression coefficients from the ROI

regression according to the following formula:

Simple Slope =α + βDσIS, where:

α = the regression coefficient of R&D Task Conflict

β = the regression coefficient of the Collaborating strategy

σIS = the standard deviation of the Collaborating strategy variable, and

D = -1 in the Low column (note that D = 0 in the Moderate column and D = 1 in the High

column)

The standard error of the simple slope σSS was calculated using the following formula:

σSS = IS

2

ISRDISISRD sDDs2Ds , where:

RDs = the standard error of the regression coefficient of the R&D Task Conflict variable

ISs = the standard error of the regression coefficient of the Collaborating strategy variable

RDISs = the standard error of the regression coefficient of the R&D-Task-

Conflict/Collaborating-Strategy interaction variable

>

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TABLE 8

SIMPLE SLOPE ANALYSIS FOR MARKETING TASK CONFLICT GIVEN VARIOUS LEVELS

OF THE CONFLICT MANAGEMENT VARIABLES

Dependent Variable Beta at Various Levels of the Conflict Management Variables

Collaborating Strategy Variable

Low Moderate High

ROI -0.16***† -0.18*** -0.20***

Sales Growth -1.43*** -1.43*** -1.43***

Compromising Strategy Variable

Low Moderate High

ROI -0.22*** -0.18*** -0.15***

Sales Growth -1.56*** -1.43*** -1.31***

Accommodating Strategy Variable

Low Moderate High

ROI -0.06 -0.18*** -0.30***

Sales Growth -0.77** -1.43*** -2.09***

Avoiding Strategy Variable

Low Moderate High

ROI -0.08 -0.18*** -0.29***

Sales Growth -0.83** -1.43*** -2.03***

* Significant at p .10 (two-tailed)

** Significant at p .05 (two-tailed)

*** Significant at p .01 (two-tailed)

† The simple slope value of -0.16 was calculated using regression coefficients from the

GROWTH regression according to the following formula:

Simple Slope =α + βDσIS, where:

α = the regression coefficient of R&D Task Conflict

β = the regression coefficient of the Collaborating strategy

σIS = the standard deviation of the Collaborating strategy variable, and

D = -1 in the Low column (note that D = 0 in the Moderate column and D = 1 in the High

column)

The standard error of the simple slope σSS was calculated using the following formula:

σSS = 2

RD IS RDIS IS IS s 2D Ds D s , where:

RDs = the standard error of the regression coefficient of the R&D Task Conflict variable

ISs = the standard error of the regression coefficient of the Collaborating strategy variable

RDISs = the standard error of the regression coefficient of the R&D-Task-

Conflict/Collaborating-Strategy interaction variable

>

29

APPENDIX TABLE A1

MEASUREMENT ITEMS, CONSTRUCT RELIABILITIES, AND ITEM-TOTAL CORRLEATIONS

Factor

Loadings

Level of Conflict between the Joint-Venture Partners:

Joint-venture partners often disagree on the management of some elements of their joint

venture. For this selected joint venture, please describe the degree of conflict between

your company and its partner on joint venture policy in each of the following areas.

(Please circle the appropriate number from 0 to 10. Here 0 signifies "no conflict" and

10 signifies "A lot of conflict") Please do not focus on a particular instance.

R&D Task Conflict (Reliability = 0 .87)

Direction of research and development 0.74

Research and development expenditures 0.73

New product design 0.73

Venture‘s over-all technology strategy 0.72

Eigenvalue: 1.54

Marketing Task Conflict (Reliability = 0 .88)

Promotion and advertising 0.81

Pricing 0.78

Distribution 0.69

Customer service expenditures 0.66

Target markets 0.65

Quality of after-sale service 0.61

Marketing expenditures 0.60

Eigenvalue: 9.29

>

30

APPENDIX TABLE A1 (cont.)

MEASUREMENT ITEMS, CONSTRUCT RELIABILITIES, AND ITEM-TOTAL CORRLEATIONS

Factor

Loadings

Strategies for Handling Conflict

[Adapted from M. A. Rahim (1983), ―A Measure of Styles of Handling Interpersonal

Conflict,‖ Academy of Management Journal, vol. 26, no. 2, pp. 371-373, 1983.]

Looking at this joint venture and the areas of conflict that might exist, how frequently

does your company use the following methods to resolve such conflict? (Please circle

the appropriate number from 0 to 10. Here 0 signifies "Never" and 10 signifies

"Often")

Avoiding Strategy (Reliability = 0 .91)

In dealing with the conflicts between us, we

attempt to avoid being ―put on the spot‖ and try to keep the conflicts to myself. 0.87

usually avoid open discussion of our differences. 0.87

try to stay away from disagreement. 0.77

avoid an encounter with our partner. 0.52

Eigenvalue: 4.08

Compromising Strategy (Reliability = 0 .87)

In dealing with the conflicts between us, we

try to find a middle course to resolve an impasse. 0.78

usually propose a middle ground for breaking deadlocks. 0.76

negotiate with our partner so that a compromise can be reached. 0.75

use ―give and take‖ so that a compromise can be made. 0.67

Eigenvalue: 3.18

Accommodating Strategy (Reliability = 0 .88)

In dealing with the conflicts between us, we

usually accommodate the wishes of our partner. 0.87

usually allow concessions to our partner. 0.78

often go along with the suggestions of our partner. 0.77

Eigenvalue: 1.00

Collaborating Strategy (Reliability = 0 .82)

In dealing with the conflicts between us, we

try to investigate the issue to find a solution acceptable to us. 0.73

try to integrate our ideas to come up with a decision jointly. 0.72

exchange accurate information to solve a problem together. 0.70

try to bring all our concerns out in the open so that the issues can be resolved in the

best possible way.

0.67

Eigenvalue: 1.31

Cumulative percentage of variance explained by these six factors: 95.53%

>

31

APPENDIX TABLE A1 (cont.)

MEASUREMENT ITEMS, CONSTRUCT RELIABILITIES, AND ITEM-TOTAL CORRLEATIONS

ROI

What was the joint-venture's average return on investment (ROI) over the past three years

(approximate)?

__ less than 5%; __ 5.1% - 10%; __ 10.1% - 15%; __ 15.1% - 20%; __ > 20%

Sales Growth

Within the past three years, this joint venture's annual sales have: (Please Circle One)

Grown Remained Static Declined

If you answered Grown or Declined, what was the average rate of growth/decline per year

(approximate)?

% Growth % Decline _____

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32

APPENDIX TABLE A2 (cont.)

FACTOR ANALYSIS OF CONFLICT AND CONFLICT MANAGEMENT STRATEGY ITEMS

Factor

1 2 3 4 5 6

Promotion and advertising 0.80 0.03 0.02 0.00 -0.01 0.09

Pricing 0.77 -0.04 -0.04 0.06 -0.03 0.19

Distribution 0.68 0.07 -0.08 0.08 0.04 0.00

Customer service expenditures 0.66 0.11 0.26 0.01 0.21 0.05

Target markets 0.65 0.33 0.37 0.26 0.19 -0.04

Quality of after-sale service 0.60 0.20 0.21 0.29 0.21 0.12

Marketing expenditures 0.59 0.35 0.36 0.27 0.10 -0.07

Attempt to avoid being ―put on the

spot‖ … 0.08 0.92 0.22 0.12 0.12 -0.12

Usually avoid open discussion of

our differences. 0.10 0.92 0.22 0.16 0.13 -0.12

Try to stay away from

disagreement 0.18 0.80 0.24 0.21 0.15 0.05

Avoid an encounter with our

partner 0.17 0.54 0.02 0.35 0.24 0.04

Direction of research and

development 0.10 0.23 0.74 0.07 0.17 -0.30

Research and development

expenditures 0.11 0.29 0.73 0.00 0.14 -0.16

New product design 0.19 0.15 0.72 0.10 0.10 -0.10

Venture‘s over-all technology

strategy -0.03 0.04 0.71 0.07 0.27 -0.19

Try to find a middle course to

resolve an impasse 0.14 0.06 -0.09 0.81 0.00 0.04

Usually propose a middle ground

for breaking deadlocks 0.10 0.08 0.09 0.79 0.01 0.02

Negotiate with our partner so that

a compromise can be reached. 0.06 0.20 0.06 0.78 0.01 0.01

Use ―give and take‖ so that a

compromise can be made 0.10 0.26 0.21 0.71 0.10 0.08

Try to investigate the issue to find

a solution acceptable to us 0.00 0.11 0.13 0.12 0.76 0.01

Try to integrate our ideas to come

up with a decision jointly 0.10 0.13 0.26 -0.01 0.72 -0.15

Exchange accurate information to

solve a problem together 0.05 0.11 0.10 0.16 0.70 -0.02

Try to bring all our concerns out in

the open … 0.15 0.10 0.09 -0.17 0.65 -0.01

Usually accommodate the wishes

of our partner 0.11 -0.01 -0.09 0.07 -0.09 0.87

Usually allow concessions to our

partner 0.06 -0.03 -0.28 0.01 -0.07 0.80

Often go along with the

suggestions of our partner 0.15 -0.08 -0.20 0.06 0.04 0.78

Variance explained by the factor 3.53 3.25 2.94 2.93 2.40 2.30

Note: Factor 1 = Marketing Task Conflict; Factor 2 = Avoiding Strategy ; Factor 3 = R&D Task Conflict; Factor 4 =

Compromising Strategy; Factor 5 = Collaborating strategy; and Factor 6 = Accommodating strategy.

>

33

Concern for Others

Competing

Avoiding

Compromising

Collaborating

Accommodating

Con

cern

for

Sel

f

Fig. 1. Concern for Self, Concern for Others, and the Five Conflict-Management

Strategies (adapted from Thomas 58 and Rahim 59).