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1. Cross-cultural Trust-waving in an International Joint Venture: A Case Study of a Chinese and Arab Joint Venture............................................................................................................................................................

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Cross-cultural Trust-waving in an International Joint Venture: A Case Study of a Chinese and Arab Joint Venture
Author: Fan, Yang; Anantatmula, Vittal; Nixon, Mary Anne; Kasprzak, James Publication info: International Journal of Management 29.3 (Sep 2012): 332-346. ProQuest document link Abstract: Through a case study of an international joint venture (IJV) between a Chinese company and an Arab company, the authors used first-hand data to examine the dynamic relationship between the partners. The study indicated that an Eastern collectivist culture and a Western individualist culture have difficulty maintaining sufficient levels of trust. Although economic calculus and capability assessment are the basic trustbuilding processes at the early stage of an IJV, mutual respect, friendship, and intent of the parties will abo impact trust building. The study also found the switch from one trust-building process to another will depend on specific circumstances necessary to insure the success of the business. [PUBLICATION ABSTRACT] Full text: Headnote Through a case study of an international joint venture (IJV) between a Chinese company and an Arab company, the authors used first-hand data to examine the dynamic relationship between the partners. The study indicated that an Eastern collectivist culture and a Western individualist culture have difficulty maintaining sufficient levels of trust. Although economic calculus and capability assessment are the basic trustbuilding processes at the early stage of an IJV, mutual respect, friendship, and intent of the parties will abo impact trust building. The study also found the switch from one trust-building process to another will depend on specific circumstances necessary to insure the success of the business. Introduction Funded by an impressive growth rate, China has substantially increased its outbound direct investment (ODI) in recent years. In 2004, China was the eighth most important foreign direct investment source among developing countries, and was predicted to move into the top four by 2005-2008 (Buckley et al., 2007). But those ODI projects, some of which are international joint ventures (IJV), have run into problems in developing and maintaining trust between partners. Successful future initiatives depend upon an understanding of the factors contributing to these issues; however, current research on China's role in abroad IJV is limited. It is well known that successful implementation of projects must include developing a good working environment and good relations between IJV partners. In general, however, most relationships within IJVs are characterized as adversarial (Mudambi &Helper, 1998; Lin, Xiaohua et al., 2003). The success of IJVs may depend on their adaptability in local cultures, especially their abilities to build a high level of trust with local partners (Buckley et al., 2007). Trust is intentional acceptance of vulnerability based on positive expectations of intentions or behaviors of another (Rousseau et al., 1998). Trust may be developed gradually over time in an IJV (Madhok, 2006), but can be very fragile and easily damaged by inappropriate or opportunistic behaviors. Past research in sustaining trust has been limited to issues of trust deterioration in single cultural organizations. Research is limited, however, in the role of trust in business interactions between Arabs and Chinese, despite the increased size and number of the Chinese ODI investment enterprises in Arab countries (Shenkar &von Glinow, 1994). The purpose of this study was to explore how cultures influence the trust development and maintenance of trust between a Chinese firm and an Arab company. This paper reviews the literature to examine complexities associated with trust building in an IJV due to differences in culture, motivation, and trust. A case study of a joint venture between two companies from China and a Middle East country analyzes how national culture and corporate culture impact trust-building acrosscultures. In the final section, we present guidelines for explaining the fluctuations of trust in an IJV. 12 November 2013 Page 1 of 11 ProQuest

Background As a result of economic globalization, the number of IJVs increases dramatically each year. But given the complex nature of a joint venture, such as dual hierarchies, different cultures and added uncertainties, it is difficult to run an IJV successfully (Madhok, 2006). Each IJV parent company may contribute to IJV uncertainties through several factors, including (1) the extent to which one party's objectives are aligned with those of its partner, (2) moral hazards (situations in which a party has a tendency to act less carefully than it would otherwise, leaving its partner to take all or a portion of the consequences), and (3) the quality and reliability of work undertaken for the joint venture (Atkinson et al., 2006). Trust between partners plays an important role in the success of an IJV. Trust is considered a valuable contributor to lowering transaction costs in a complex, dynamic, and uncertain environment (Child, 200 1 ; Madhok, 2006). Trust also facilitates long-term relationships between different parties or firms (Ganesan, 1994; Ring &Van de Ven, 1992) by improving social communication (Doney, 1998) and providing a high level of adaptability to change (Luo, 2002). Anecdotal evidence has suggested intra-cultural differences in the way trust develops (Schuster &Copeland, 1996; Sullivan, Peterson, Kameda, &Shimada, 1981), but there has been little research on how trust is established and evolves across cultures (Doney, 1998), The question as to how a trusting party to an IJV prioritizes trust-building processes remains unanswered. Our research provides theoretical guidance about the interaction between trust and cultures by investigating the dynamics of the trust-building processes employed by an Arab party in an IJV. Trust building processes: Cognitive and Non-cognitive Trust is defined as a willingness of one party to rely on another party and to take action in a way that the action makes one vulnerable to the other party (Mayer et al., 1995, &Moorman et al., 1 992). Trust in a relationship is not built overnight. "It evolves gradually over time through repeated successful interaction and has to be carefully nurtured through various forms of hard and soft commitment" (Madhok, 2006, ? 33). The trust building process is also influenced by the process of exchange, societal institutions (Zucker, 1986), and cultural norms and values (Doney, 1998). There are different types of trust. For example, the non-cognitive t rust, e.g., "affective" or blind trust (Lewis &Weigert, 1985). This trust is grounded in reciprocal interpersonal care and concern or emotional bonds with strong affective components. Cognitive trust is more rational and economic, based on a partner's reliability and competence. There are five trust-building cognitive processes described by Doney (1998) who examined the extent to which cultural norms and values facilitate or inhibit the formation of trust. The extent to which trust is mainly established through above cognitive processes depends upon societal norms and values which vary across cultures. Culture is defined by Hill (1 997) as a system of values and norms shared among a group of people. Hofstede (1 983, p.76) states that "Culture is precisely that its essence is collective mental programming." This definition articulates the existence of differences in perception of the same reality between people from different nations. One of cultural dimensions proposed by Hofstede is "individualism versus collectivism," which can be used to study the relationship between the trust-building processes and their underlying behavioral assumptions (Doney et al., 1998; Shore &Cross, 2005). Collectivist Culture Attributes According to Doney (1998), there are distinct differences in trust-developing processes between collectivism and individualism cultures (Figure- 1). When both the trustors and trustees are members of a collectivist society, trust is mainly developed through intentionality, prediction or transference processes. The Opportunistic process is less likely to be chosen in such a culture because people are not motivated by self-interest, but rather by the interest of the collective whole (e.g., Earley, 1989; Ueno &Sekaran, 1992). Pursuit of individual interests in a collective society is deterred by social sanctions (e.g., Lindsay, 1983), or by driving up the costs of opportunistic behavior. 12 November 2013 Page 2 of 11 ProQuest

* Predictability process. Trust is built by forecasting a trustee's behavior based on past actions. The consistency of the target's past actions and the extent to which the target's actions are congruent with his or her words affect the degree to which a trustor judges the target's behavior to be predictable. * Intentionality process. Trust formation is influenced by one party's perception of the intentions of the other party; trust is unlikely to develop if one party perceives another to have only selfish intentions. When altruistic intentions are perceived, trust may result. * Transference process. Trust may develop through a transference process, during which the trustor transfers trust from a known entity similar to an unknown one. Individualist Culture Attributes In the individualist culture, willingness to trust is based more on calculation and capability than on principle or emotion; norms promote an economic calculus providing evidence that opportunistic behavior is frequent and has relatively low costs. They foster trust between strangers, and allow for trust across groups by focusing on mitigating the costs of opportunism ~ for example, by offering damages to the insured party. * Calculative process. Partners are assumed to be economically rational beings, and given the chance, will act opportunistically and in their own self-interest (Williamson, 1985). Trust is developed through a calculative process whereby one party determines benefits and risks in the relationship by calculating the costs or rewards of the party cheating or cooperating in a relationship (Lindskold, 1978). To the extent that the benefits of cheating do not exceed the costs and likelihood of being caught, the trustor infers that another party can be trusted (Akerlof, 1970). * Capability process. A trustor's willingness to trust is based on an assessment of the trustee's ability to meet his or her obligations and the trustor's expectations. Trust in Arab Societies Arab Middle Eastern countries such as Saudi Arabia, Jordan, and the United Arab Emirates are "collectivist" societies (Triandis, 1995; Hofstede, 2001). Cultural theory assessments for collectivists predict greater "uncertainty avoidance" and a stronger distinction between "in-group" and "out-group" members than individualist societies such as Western cultures (Bohnet, 2010). In the Arab Middle East, loyalty, reputation and the fear of adverse treatment are the main factors producing trust. This would indicate the use of preventive mechanisms and relation-based processes like prediction, intentionality and transference to assess a partners' trustworthiness and to decrease the likelihood of opportunism. Trust in the Early Stage of an IJV According to Doney et al. (1998) and Child (2001), in the early stage of an IJV, parties with no prior social connections will probably build trust in a calculative process. Partners are assumed to be economically rational beings, and they have an inalienable right to maximize expected gains or minimize expected losses at the expense of others (Kramer 1999; Serva &Mark, 2005; Luo, 2002). Based on cost and benefit analysis, parties may choose an opportunistic behavior if the cost of being caught is lower than the benefit to be gained. A negative consequence is considered inevitable if opportunistic behaviors are discovered by the participating partner. Based on the extent of tolerance for uncertainties and opportunistic behaviors, a party will impose strict controls, form new rules, and/or reject deviant behaviors to mitigate uncertainty and prevent opportunism (Singh, 1990; Doney, et al., 1998). It is common to use a deterrence mechanism, for example, imposing costly sanctions on the other party, to minimize opportunism. This in turn drives up the costs of opportunistic behaviors in the form of penalty for violations (Hagen, J.M. et al. 1998; McEvily, ?. et al., 2003). Das and Dahman (2002) stated that three different deterrence mechanisms are used for controlling opportunistic behaviors: * Initial stage preventive mechanisms including contractual provisions, structured specifications, compensation structures, and staffing policies, * Operational stage mechanisms include monitoring, formal reporting structures, budgeting limitations, 12 November 2013 Page 3 of 11 ProQuest

participatory decision making, and training * Contingency mechanisms used when other mechanisms have failed including direct and indirect retaliation and co-opting the majority control of the organization. Unfortunately the use of these mechanisms may result in trust deterioration between parties in an IJV. If the impact of national cultures in trust building processes is also included in this process, several questions remain: * How do partners allocate trust and control in the approach to operating the joint venture in order to control opportunism cross-culture? * How national cultures interact with corporate culture in controlling opportunism and building trust? * How does a party to an IJV prioritize its trust-building processes? Research Method and Data Collection Research Method The traditional single case study method was selected due to the high complexity of the LTV itself. This single case study method enables us to gain a deeper understanding of the project setting, determine the real-life context (Dyer &Wilkins, 1991), and as a result, record the actual meanings of actions and settings (Gephart, 2004, p455). Case selection A Chinese state-owned oil company created an IJV to pursue overseas direct investment in oil/gas exploration and production. Its partnership with an Arab oil company demonstrated the influences of national cultures in the trust building process in the early stages of the LTV formed. The goal of this IJV was to explore, appraise, and develop oil and gas in a defined area in the Middle East. Data collection For this study, data were collected by accessing primary information directly from email records and other sources within the IJV. One of the authors of this paper was given access to firsthand data and other documents. The actual names of the IJV and its partnering companies are withheld to maintain confidentiality. For the purposes of this paper, they are renamed as C-OIL for the Chinese Oil company, A-OIL for the Arabic Oil company, and ACJV denotes the Arab Chinese Joint Venture. Data analysis method This study began with a research question, "How did ?A-OIL build trust with C-OIL?" We described the initial governance and trust level in the ACJV, followed by an analysis of A-OIL's actions as the project was executed by C-Oil. We then determined how the national culture and corporate behavior of both companies jointly influenced their trust building processes. Through multiple events observation, analysis and comparison, we iteratively refine our findings and develop a conceptual framework on cross-culture trust building (Santo &Eisenhardt, 2009). Case Study Result Background and objectives of C-OIL Spurred by its economic growth and a sharp increase in demand for petroleum products, China has become the world's second largest importer of oil and gas, following the United States (Zweig et al., 2005). Due to the shortage of available energy resources at home and the volatility of the world energy market, China has sought to invest abroad to secure its energy supply (Rosen &Houser, 2007). In addition to investing in upstream oil industry, most of the Chinese oil companies, including C-OIL, have attempted to increase export of products and services to the host countries of their joint ventures (Wu, 2008). Along with their expansion into new areas of oil exploration and development, these Chinese investors were eager to expand their overseas markets. Background and objectives of A-OIL A-OIL, formerly an American oil company nationalized in the 1970's, is a state-controlled Oil company. Although all managers are Arabic nationals with a collectivist cultural background, its business culture and management processes remain predominantly Western-oriented. ?-OIL embraced international joint ventures with great 12 November 2013 Page 4 of 11 ProQuest

enthusiasm for a number of reasons. First, with a fast-growing population, the host Arab country needed more Oil and gas to fuel its economy. Second, this international joint venture allowed A-OIL to access foreign investment capital and advanced oil exploration technologies. Third, the international joint venture was instrumental in the expanding the international market for local Arab products and services. According to the Upstream Agreement between C-OIL and the government of A-OIL' s host country, the ACJV would give procurement priority to local contractors, and ensure that the aggregate expenditures with local businesses for at least forty percent (40%) of ACJV's total expenditures for goods and services. JV profile The percentages of ownership and control in the ACJV were 20% in ?-OIL and 80% in C-OIL, with two levels of management: the Board of Directors (BOD) and the onsite Management Team (MT). The BOD was composed of five directors: three C-OIL Company directors and two host country directors, one from ?-OIL, the other from the host country government. The members of the MT were from both Chinese and Arabic venture partners. The CEO was assigned by C-OIL. Initial governance and trust level In 2004, through a rigid competitive bidding process and based on C-OIL's financial and technical capability and reputation in the industry, ?-OIL chose C-OIL to form a joint venture. All the fundamental agreements of the joint venture were unilaterally prepared by A-OIL; C-OIL was given little opportunity to negotiate the terms and conditions. C-OIL and other bidders concluded that all ACJV agreements were diligently prepared on a rigid economic calculus designed to deter opportunism by any parties to the As per the Shareholder Agreement between C-OIL and A-OIL: All technical and other services that are provided by any shareholder or an affiliate of a shareholder (defined as related party) defined as related-party transactions, and should acquired through competitive bidding process. In addition, related party transactions shall be on terms no less favorable to the ACJV than those that could have been obtained a comparable arm's-length transaction by the ACJV with an unrelated third party. All the related-party transactions with value exceeding a defined threshold must be approved by not less than 51% of the Directors nominated by shareholders other than the related party defined as non-related party directors (Confidential legal document). A-OIL's competitive bidding process and rigid economic calculus in preparing fundamental agreements indicated A-OIL's trust of potential partners was based on Western-dominant calculative and capability processes characterizing an international busineess culture rather than its collectivist culture's traditional reliance on prediction, intentionality and transference. Proposition 1: Upon forming of an IJV, there is a positive association between trust and rigid economic calculus. There is also a positive association between trust and partner's capability. Affective trust development. After the formation of ACJV in 2004, a fatal terrorist attack occurred 150 meters away from the ACJV project site, dramatically changing the ACJV trust profile. The event presented a serious challenge to both partners, but to A-OIL in particular. All foreign oil companies evacuated the area, causing multiple problems with the local security as well as the local economy. C-OIL received a sincere request from A-OIL, to remain on site as the only foreign oil company. In exchange for providing support, A-OIL would provide protection for all C-OIL expatriates, an obvious joint effort to build affective trust between both A-OIL and C-OIL. This non-cognitive, affective trust not only bound the interpersonal relationship, but it also assisted in promoting ACJV's business partnership. As a newly-established small company, ACJV experienced difficulty in acquiring products and services from public markets through competitive bidding. C-OIL proposed entering a "Technical Service Agreement" (TSA) through which ACJV would acquire products and services directly from both shareholders. It provided an express channel for the ACJV to access timely technical services from either parent company or their affiliates 12 November 2013 Page 5 of 11 ProQuest

without going through a tough, restrictive, and time-consuming competitive bidding process as stipulated by the Shareholder Agreement, even though they still required approval from Non-related Party Directors. This new TSA would help ACJV meet urgent and confidential operational requirements, but the pricing and payment terms it contained were ambiguous and trust-based rather than calculative. A quote from the shareholders was considered to be the price for the services and products provided. The trust between both parties was obviously high: The TSA was not well articulated, its use was loosely controlled by both the parties, and there was no procedure in place to challenge or evaluate service prices quoted by related parties. All requests from the ACJV for TSA services received easy approval from the Nonrelated Party Directors and the time frame needed for receiving this approval was short, usually within 20 days. Some of TSA services were even retroactively approved by Non-related party Directors to meet urgent operational requirements. Proposition 2: In an Arab-based IJV, there is a positive association between affective trust and external threats to both parties of an IJV who consider each other as a close-knit. Trust destroyed by opportunism, and furthered by national culture Unfortunately, the high level of affective trust granted by A-OIL was abused by C-OIL pursued its own opportunistic interests by conducting multiple related-party transactions (with its subsidiaries) for the ACJV project: It is a general practice in the oil industry that drilling supervisors, who coordinate and supervise on-site drilling operations, are contracted from outsider manpower companies at a fee calculated using standard industry practices: actual labor costs plus 5% overhead. At the beginning of 2005, per the new technical service agreement, C-OIL provided drilling supervision services for USD $ 900 per day, the ?-OIL company rate for a Western supervisor. It was well known that labor costs in the Chinese market were very low, less than $200 per day. At this early stage of the ACJV, the TSA was loosely controlled and included no penalty to opportunism; therefore, the cost of opportunistic behavior by C-OIL was low. A-OIL accepted the over-quoted price for services the first year due to its high level of trust in its partner C-OIL. The over-quoted TSA services eventually caught the attention of A-OIL, which assumed that C-OIL was behaving opportunistically in its own interest. One A-OIL project manager stated, "I am sorry to say that the ACJV and the contractor [C-OIL] roles are mixed up and it seems that ACJV is favoring [the] contractor. It is not about money but the violation of principal" [sic (personal communication, 2010). Once this threshold had been passed, ?-OIL became very sensitive to any violation, resulting in affective conflict in almost every ACJV procurement meeting between two parties. Rather than amend the agreement with C-OIL to articulate the pricing terms and conditions to curb opportunism, ?-OIL reverted to the collectivist strategy of trust-building by unilaterally changing the governance structure of the joint venture. It added two additional required signatures in the approval process for all related-party transactions: the project management office (PMO), and the ?-OIL Legal Department. With the addition of the two new check points, the approval procedure for all related-party transactions became complex and time consuming. First, a procurement plan required endorsement of the management team, which included all the members from both parent companies. Second, the members from ?-OIL demanded that all requests containing related-party transactions justify each quoted price. Third, the written resolution for such transactions was not to be directly submitted to the Non-related Party Directors for approval as was done before, but to the PMO and then to Legal Department for review and endorsement, and only then to the Nonrelated party Director for final approval. A-OIL also set up a monitoring group to track all the operational activities associated with all the affiliates of COIL. Such an extensive and restrictive control created an atmosphere of "skepticism" atmosphere across the ACJV. It not only resulted in enormous difficulties in daily operations by stripping off all the flexibilities needed for contract execution, but also created disputes between the ACJV and its contractors. Consequently, it 12 November 2013 Page 6 of 11 ProQuest

dramatically slowed down the project and increased its overall operational cost. The imposed monitoring and safeguarding to protect ?-OIL from opportunism penalized both C-OIL and A-OIL. The Arab partner's reassessment of its partner's trustworthiness reduced their trust levels and resulted in mutual losses. Such behavior is consistent with known Arab cultural norms: trust was developed through a collectivist/intentionality process, rather than an individualist/calculative process in which that determination is made objectively. Proposition 3: Trust dramatically decreases with the perception of a partner's opportunistic behaviors in an Arab-based IJV. In an attempt to resolve the conflict over its own opportunism, C-OIL voluntarily attempted to compensate ?-OIL for their losses by offering them an over-priced A-OILrelated-party transaction - an individualist calculativeoriented effort to re-establish trust for a collectivist partner. C-OIL offered to pay A-OIL $40,000 for conducting a one-day Health Safety Environmental workshop, which should have cost approximately $20,000. A-OIL refused this offer. Such behavior may seem economically irrational, but it was consistent with known Arab cultural norms to "purify value and principal," a deeply rooted practice of a traditional collectivist culture - to restore the collectivist trust-building process. Proposition 4: Economically irrational control mechanism of opportunism in an IJV is positively associated with a collectivist culture. Reverting to a calculative/capability process Although the partnership between A-OIL and C-OIL remained alive because the fundamental interests of both shareholders remained unchanged, the trust between partners dropped to a very low level because ?-OIL assessed C-OIL based on its perceived intentionality. The relations of the partners were strained for years and costly exploration efforts had little commercial success. C-OIL decided to withdraw from the ACJV at the end of the first contract term, requesting termination of the contract with a Chinese affiliate for drilling service at a Board meeting in September, 2008. But surprisingly, the attitude of ?-OIL toward this related-party transaction reversed. ?-OIL rejected that request and sent a delegate to Beijing to convince C-OIL to remain within the partnership. ?-OIL began to behave in a more economically rational manner, turning to a calculative process to weigh the benefits and risks from their relationship. Moreover A-OIL began to utilize an individualist/capability process, acknowledging C-OIL's financial and operational ability to meet its obligation in the partnership. A-OIL relinquished pursuit of "social value" in the ACJV after years of interactions with C-OIL for an approach more likely to develop trust between the parties. Proposition 5: In certain circumstances, a collectivist party in an IJV may deviate from its national culture, and behave in a calculative manner to develop and maintain trust with its international partner. Discussion All types of trust-building processes - capability, calculative, intentionality and prediction - occur in relationships, but the emphasis in each process differs according to national cultures. The calculative process is fundamental to the Western-dominant business culture, while in the traditional Arab world, building trust is mainly based on intentionality, prediction or transference processes. In Arab societies, there is a much stronger distinction between "in-group" and "out-group" relationships in developing trust than in individualist Western cultures. In a cross-cultural partnership, or between out-groups trust building becomes complex (Bohnet, 2010). Using this case study of an international joint venture between Chinese and Arab Oil companies as an example, our research extends Doney's theory (1998) of exploring the complexity of cross-culture trust building. By proposing a contingency framework as presented by Figure-2, we find that an Arab national culture and Western-dominated corporate culture interacted to jointly determine how trust could be built between the parties. From the Arab group's perspective, the Chinese participants were an "out-group," but when faced common external threats, affective trust was created across groups to defend the business relationship (P2). It is clear 12 November 2013 Page 7 of 11 ProQuest

that affective trust, grounded in reciprocal interpersonal care and concern or emotional bonds, can be extended across cultures. On the other hand, integrity trust may disintegrate if a collective party discovers opportunistic behaviors of its foreign partner (P3), because collectivist society highly values social principles and strongly opposes opportunistic behaviors. In addition, its control mechanism of opportunism is characterized as economic irrationality, which is positively associated with a collectivist culture (P4). Our findings differ from Pressey and Selassie's (2002) conclusion, in that we find national culture does play a role in developing trust between partners. It is important to note that when the Arab company made strategic decisions such as the formation or extension of partnership with a foreign party, its Western-dominant corporate culture and calculative/capability process rather than its Arab national culture prevailed. An Arab company may behave economically and rationally in developing and maintaining trust with its foreign partner in the IJV by switching to calculative and capability processes (PI , P5). Therefore, we conclude that trust building is a contingency process; it is not only impacted by national culture, but also by its corporate culture, particularly when a strategic decision is to be made. Given this orientation, it is evident that an Arab partner is not likely to follow a single trust-developing process, but rather implement other appropriate processes in interacting with business partners. Its willingness to trust a partner fluctuates with its choice of trust-building processes according to the business environment - as shown in Figure-2. We agree with Doney (1998) and Child (200 1) in that at the early stage of an IJV, building trust between partners is most likely a calculative process, and partners are assumed to be economically rational beings who aim to maximize expected gains or minimize expected losses at the expense of others. Our research finds that this Western-oriented international business calculative and capability culture, facilitated by the fundamental agreements between partners upon the formation of the IJV, is just the baseline of trust-building at this early IJV stage. National culture impacts that baseline in cross-culture trust building. We emphasize that in Arab societies, such factors as affection, capability and intentionality will play a role in trust building in an IJV, therefore creating a fluctuating trust building process which may continue to constitute a challenge to any foreign partner. Conclusion This research extends previous research on the impact of national culture in trust building processes, especially in a cross-culture partnership. Using a case study of an international joint venture between Chinese and Arabic Oil companies, we examined a dynamic relationship between the two companies, and analyzed how the Arab company chose trust-building processes. We found that at the beginning of the IJV, the relationship was mainly based on a calculative or capability process during which actors are assumed to be rational beings. Additionally, we found national culture also impacts cross-culture trust building processes. We propose a contingency framework to explain how Arab company chose different processes in various circumstances at the early stage of an Arab-based IJV. When making a strategic decision, the Arab company tended to adopt calculative or capability processes; otherwise, it tended to embrace intentionality processes in assessing a foreign partner's trustworthiness, even though such a choice resulted in an economically irrational decision. Limitations and Suggested Future Research The study results are directly applicable to the Chinese oil industry and to some extent, to the oil industry in the Middle East seeking international joint ventures. Many of the study findings are generic in nature, and caution should be exercised in interpreting these results in other contexts. As an important outcome of a study of this nature, one would expect to learn about measures of trust reduction or trust enhancement when influenced by cultures. Future research efforts may consider examining the influence of other cultural dimensions such as distance of power and risk propensity on the trust building process in an international joint venture. References 12 November 2013 Page 8 of 11 ProQuest

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Contact email address: yfan@email.wcu.edu Subject: Studies; Joint ventures; International trade; Trusts; Culture; Location: China, Middle East Classification: 2310: Planning; 9179: Asia & the Pacific; 9178: Middle East; 1220: Social trends & culture; 9130: Experiment/theoretical treatment Publication title: International Journal of Management Volume: 29 Issue: 3 Pages: 332-346 Number of pages: 15 Publication year: 2012 Publication date: Sep 2012 Year: 2012 Publisher: International Journal of Management Place of publication: Poole Country of publication: United Kingdom Publication subject: Business And Economics--Accounting, Business And Economics--Management ISSN: 08130183 Source type: Scholarly Journals Language of publication: English Document type: Case Study, Feature Document feature: Tables References Diagrams ProQuest document ID: 1040715965 Document URL: http://search.proquest.com/docview/1040715965?accountid=8107 Copyright: Copyright International Journal of Management Sep 2012 Last updated: 2012-09-17 Database: ProQuest Central

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