Model for Organizational Governance Structure Choices in Construction Joint Ventures

Abstract

Due to the recent trend of utilizing joint ventures (JVs) in construction, construction firms are faced with the challenges in managing construction JVs. Among those challenges, the choice of organizational governance structure has a profound impact on JV performance, but receives little attention. The objective of this study is to investigate the choice of organizational design in construction of JVs and the underlying rationales of the choice. Through the theoretical lens that integrates both cost and resource perspectives, we develop a model that focuses on four major factors for determining governance structure choices, namely, corporate cultural difference, trust, needs for procurement autonomy, and motivation for learning. A case study of eight JVs in the Taiwan High Speed Rail project was conducted to empirically evaluate the proposed model. It is shown that the eight cases studied jointly replicate the linkage between the hypothesized determinants and the governance structure choices and reasonably support the proposed model.