Resistance to restructuring in Sino‐foreign joint ventures: toward a preliminary model

Many Sino‐foreign joint ventures are set up by acquiring existing state enterprises. Under this arrangement, the foreign partner normally has to restructure the original state enterprise by transferring its routines to China. More often than not, resistance to change is experienced during the transition period. This paper explores the factors affecting such resistance. A grounded theory approach using five cases is adopted. The major factors identified are: Chinese partner's perceived need for change, number of active foreign partners, deployment of experts by the foreign partner, age of the former state enterprise, and joint venture performance. Propositions are derived from the case evidence and relevant literature. A preliminary model linking up the propositions is developed.