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Home > Books & Journals > Journal Abstracts Last Updated: 14:23 03/09/2007
Journal Abstracts #255: November 6, 2006

Asian Business & Management

Journal Name: Asian Business & Management: September 2006, Volume 5, Number 3


A Flexible Response to Guo Qing: Experience of Three MNCs Entering Restricted Sectors of the PRC Economy (pp315–332)
C S Tseng (City University of Hong Kong) and M J Foster (Kingston Business School, Kingston Hill, Kingston upon Thames KT2 7LB, UK)

This paper examines how foreign-invested enterprises can gain significant early-entry competitive advantage within their respective sectors in China, even when the sectors are in some measure restricted to foreign entities. The paper looks at the case histories of three companies: AIG (from the US) in insurance, Carrefour (from France) in retailing and Star TV (from Hong Kong) in broadcasting. It is suggested that there are two major requirements for such success: development of an understanding of guo qing, special country (Chinese) characteristics, and flexibility of approach. It is found that even that which initially looks impossible may actually be possible with such a flexibility of approach. It is also found that firms in all three sectors must develop an awareness of the notion of necessary reciprocity in regard to their dealings with China's government machinery. The conclusion includes a contextualizing model of the Chinese business environment, as observed by a foreign-invested enterprise, within which to locate the debate.

Keywords: FDI, China, guo qing, government, necessary reciprocity

The Impact of Relational Diversity and Socio-cultural Context on Interpersonal Communication: Nordic Subsidiaries in Japan (pp333–356)
Vesa Peltokorpi (National Center of Sciences, 2-1-2 Hitotsubashi, Chiyoda-ku, Tokyo 101-8439, Japan)

This study examines how readily detected attributes (age, gender, and racio-ethnicity) and underlying attributes (tenure, education, and work values) affect interpersonal communication in Nordic subsidiaries in Japan. The impact of diversity is tested through a regression analysis with 110 employees. The results indicate that diversity in gender, racio-ethnicity and work values have a negative impact on interpersonal communication. In contrast to the original hypothesis, tenure diversity has a positive impact on communication. The linkage can be explained by the impact of socio-cultural context on the relational demographics. Some practical implications are made.

Keywords: interpersonal communication, diversity, nordic subsidiaries, Japan

An Empirical Investigation of Mainland Chinese Organizational Ideology (pp357–378)
Siew-Huat Kong (Faculty of Business Administration, University of Macau, P.O. Box 3001 Macau SAR, PRC)

In the present study, which seeks to identify the chief characteristics of mainland Chinese organizational ideology, two competing sets of justification for organizational actions emerged. The 'power camp', which relies on status by attribution, the personal authority of leaders and instrumental personal connections as its key ideological force, is currently challenged by an emerging belief system, which advocates legitimacy, meritocracy and responsibility within Chinese organizations. Until both camps recognize that these twin belief systems are, actually, based on a common set of underlying assumptions — an ever-hostile world, a hierarchical social reality and self-seeking individuals — China's enterprise reform initiative will be built on very shaky foundations.

Keywords: organizational ideology, assumptions, enterprise reform, China

Inside Contractual Joint Ventures in China: Ownership Advantage, Resource Contribution and Management Control (pp379–398)
Yue Wang (School of Organization and Management, University of New South Wales, Sydney 2052, Australia)

Empirical studies on contractual joint ventures (CJVs) in China are rare. Concentrated in Guangdong province, CJVs represent, rather than FDI, a long-term subcontracting alliance arrangement between Hong Kong and Guangdong firms. The quasi-market quasi-hierarchy nature of the alliance makes uncovering the ownership advantages of CJVs and dissecting the distribution of management control between CJV partners difficult. Drawing on data from cross-case studies, this paper identifies ownership advantages and their sources, and reveals how the pattern of non-equity contributions by CJV partners underpins CJV control structure. The findings show that the concept of ownership advantage can occur in a non-equity alliance, so long as there is a separate alliance organization. The transfer of ownership advantages from parent firms to CJVs takes place in the same way as in equity alliances. The overall design of the CJV control structure is based on the perceived value of non-equity contributions by each side, but as control rights are not clearly derived from equity ownership, power distribution is not always consistent with the pattern of non-equity resource contributions, particularly where trust between partners is lacking.

Keywords: contractual joint ventures, non-equity alliance, ownership advantage, resource contribution, control structure, China

Examining the Impact of Internationalization on Competitive Dynamics (pp399–417)
G R Chandrashekhar (FPM 41, Indian Institute of Management, Prabandh Nagar, Off Sitapur Road, Lucknow 226013, India)

This paper examines the impact of the internationalization process on the competitive dynamics of an industry in an international context. The examination was carried out using two complementary approaches: first, by constructing a Dunning–Porter diamond framework, which is an extension of Porter's diamond framework, and embedding a causal modelling approach in it; second, by using the multi-market contact approach and evolving a deeper understanding of the impact of internationalization on competitive dynamics. One conclusion of this paper is that a firm's cost structure and the quality of skills (resources) possessed are important factors of market defence in an internationalization process driven by cost advantage factors. Another important conclusion is that a firm's cost structure and skills base have a joint influence on the impact of internationalization on incumbents and their subsequent competitive behaviour, especially in larger market segments. This paper combines internationalization and multi-market contact-based approaches towards an understanding of competitive dynamics. This is an initial attempt towards developing an internationalization framework, which may help clarify the complexity and uncertainty involved in operating in international markets.

Keywords: international business, globalization, internationalization, Dunning–Porter framework, multi-market contact, competitive dynamics

Dynamic Effects of Product Diversity, International Scope and Keiretsu Membership on the Performance of Japan's Textile Firms in the 1990s (pp419–445)
Asli M Colpan (Institute for Technology, Enterprise and Competitiveness, Doshisha University and Mizuho Securities Endowment, Graduate School of Management, Kyoto University, Kyoto, Japan)

This paper examines how product diversity, international scope and group membership have affected economic performance in Japanese textile firms since the early 1990s. Through statistical approaches employing cross-sectional time-series data, the study attempts to explore the long-term effectiveness of various business models adopted by the companies. The results indicate that technology investment and related-product diversification are favorably associated with profitability, even in a mature industry, although domain commitment to textiles with the sequence of processing stages has not generated long-lasting yields. Marketing-centered entry into growing but unrelated markets has also proven unsuccessful, as has international diversification. The findings show insignificant performance effects of product diversity from increasing international expansion. The outcomes also suggest that shihon keiretsu membership seems to reduce international diversity in member firms, while not being a significant predictor of particular types of product diversity. Such keiretsu affiliation shows no direct impact on profitability, but weakly moderates the effects of export sales on performance. Main-bank relationships (yushi keiretsu) do not significantly influence a firm's financial outcomes.

Keywords: product diversity, international scope, keiretsu membership, economic performance, textile industry, Japan

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