A Motivation-focused Approach to Co-investment in Enhancing Joint Venture Project Quality

Abstract

Joint venture alliances have emerged as an effective approach for acquiring advanced technologies by allowing organizations to pool resources, knowledge, and competitive advantages. Large-scale projects are often assigned to multiple companies as non-integrated joint ventures, sometimes involving companies from different countries, each exhibiting different levels of expertise and quality standards. Disparities in deliverable quality among these partners can increase project duration, generate idle resources, and raise overall costs. This study proposes investing in quality enhancement programs for selected partners to mitigate these challenges. A novel hybrid multi-step framework is developed, integrating a non-cooperative game for delay cost allocation, an optimal control model for planning quality improvements, and cooperative game formulations to fairly distribute costs and benefits among partners. Results indicate that the proposed approach effectively reduces both total project costs and individual partners’ costs. Sensitivity analysis further reveals that higher quality-conversion coefficients and increased partner idleness costs enhance the effectiveness of the cooperative strategy, increasing the cost advantage of the cooperative strategy over the non-cooperative one.