Index – Multinational Corporation Subsidiaries in China

Index

A

active subsidiaries, 68
analytical findings, 96–133, 141–87
competitive advantage, 117–24
competitive advantage initiatives, 124–33
competitive mandate, 109–17
financial strategy, 154–9
growth and development factors, 103–9
human resource strategy, 170–7
integration and localisation, 146–50
investment entry mode, 96–100
knowledge transfer strategy, 167–70
M&A and alliance strategy, 150–4
marketing strategy, 160–7
R&D strategy, 177–84
shareholding ratio, 100–3
strategic blunders, 184–7
subsidiaries relationships, 141–6
analytical model, 82–4
conceptual analytical framework, 83
ANOVA analysis, 85
atrophy through subsidiary neglect, 77

B

Bartlett and Ghoshal’s theory, 65–7
black hole, 66–7
classification of strategic task model, 65
contributor, 66
local implementer, 66
strategic leader, 66
business risks, 201
business strategy
MNC overseas subsidiaries, 214

C

capabilities, 72, 75
central leadership, 202
‘centralised hub, ’, 50
charter, 75
cluster analysis, 85
competitive advantage, 95, 117–24
competitive edge of different country, 118
context, 117
mean difference based on relative market share, 123
perceived SWOT posture, 124
relative market shares, 122, 123
selected factors by country, 119
significant factors, 117
test of hypotheses, 117–24
three most significant factors by country, 118
three most significant factors by industry, 120
competitive advantage initiatives, 96, 124–33
by country, 127
by industry, 129
context, 124–6
factors by perceived SWOT, 125
perceived SWOT posture, 131, 132, 133
relative market square, 130
statistics, 126
strategic trend, 133
test of hypotheses, 126–33
three most significant factors by country, 127
three most significant factors by industry, 128
competitive mandate, 94, 109–17
competitive posture, 114–16
MNC network strategic position, 115–17
perceived competitors, 109
performance criteria, 110–13
performance measures items, 94
value chain activities, 109–10
competitive posture, 114–16
subsidiaries classifications by perceived SWOT, 114, 115
complex integration theory, 31–3
comprehensive theoretical analysis, 5
corporate strategies, 136–88
finding and analysis, 141–87
hypotheses, 136–41
hypotheses testing result, 187–8
overseas subsidiaries growth and development, 212–14
overseas subsidiaries growth and development strategic system, 213
corporation culture localisation strategy, 31
correlation coefficient analysis, 85

D

developmental strategic posture, 218
direct investment, 36
direct overseas investment strategy, 27
diversification theory, 35
Dunning’s theory, 67

E

eclectic theory, 22, 25
empirical analyses, 4
empirical research
flowchart of empirical analysis, 82
growth and development, 81–7
enterprise development theory, 3
enterprise network theory, 3
environmental factors, 198
export–sales ratio, 139
external network mechanism, 197–9
host countries environmental factors, 198
host government and overseas subsidiaries interactions, 197–8
MNC home external environment, 198–9

F

factor analysis, 85
financial strategy, 138–9, 154–9
avenues for financing, 154
context, 154
financing by age, 158, 159
financing by country, 157, 158
financing by ownership status, 155, 157
items to measure funding channels, 139
test of hypotheses, 154–9
firm-specific factors, 116–17
foreign direct investment, 22, 25–6, 36
Fortune 500, 7
functional strategy, 4
MNC overseas subsidiaries, 215
MNC subsidiaries coordination, 217

G

global market development strategy, 44
global market expansion, 44
global marketing network development, 45
global matrix structure, 48
global organisational model, 50–1
global strategic alliances, 25
global strategy, 216
gregarious growth models, 6
growth and development factors, 92–3, 93, 103–9
additional MNC investments motives, 107–9
by country, 106
context, 103–5
growth indicators for MNC, 93
investment expansion motives for MNC, 93
statistics, 104
test of hypotheses, 105–6
growth and development mechanism, 195–9
external environment, 197–9
internal network, 195–7
mechanism formulation elements, 195
growth and development strategies, 192–212
analytical model, 82–4
characteristics of samples, 86
Chinese MNC subsidiaries behaviour hypotheses, 85, 87
empirical research, 81–7
mechanism, 195–9
MNC subsidiaries roles, 199–206
MNC subsidiaries strategy choice mechanism, 207–12
research model, 194
sample selection, 84–5
statistical methods, 85
synergistic and strategic coordination of overseas subsidiaries, 215–17
Gupta and Govindarajan’s theory, 68–70
role in knowledge flow, 69

H

home external environment, 198–9
human resource strategy, 16–17, 140, 170–7
areas of HR autonomy, 171
HR decision-making autonomy, 170–1
HR decision-making autonomy by country, 174
key personnel appointment, 172–3
labour confrontation by perceived SWOT postures, 176
percentage of expatriate department heads by function, 174
senior leadership origins, 172
test of hypotheses, 173–7
hypotheses, 91–5, 136–41
competitive advantage, 95
competitive advantage initiatives, 96
competitive mandate, 94
financial strategy, 138–9
growth and development factors, 92–3
human resource strategy, 140
integration and localisation, 137–8
investment mode, 91–2
knowledge transfer strategy, 139–40
M&A and alliance strategy, 138
marketing strategy, 139
parent company and subsidiaries relationships, 136–7
R&D strategy, 140
shareholding ratio, 92
strategic blunders, 141

I

independent non-parametric test, 85
independent samples t-test method, 85
independent subsidiaries, 68
innovations, 178
integration/localisation pressure
context, 146–7
function, 147–8
functional strategies localisation, 148, 149
measurement, 138
statistics, 147
test of hypotheses, 148–50
ties strength measurement, 137
time of entry, 150
vs localisation pressure, 137–8, 146–50
intellectual property rights, 180–1
internal environment mechanism, 195–7
resource inflow and outflow mechanism of parent company, 196
subsidiaries resource-sharing and competition mechanism, 196–7
internalisation theory, 22
International direct capital withdrawal, 30
international division of labour, 36, 42
international organisation model, 50
International product life cycle theory, 26–30
three stages model for MNC product life cycle, 28
International structure stage model, 48
investment entry mode, 91–2, 96–100
context, 96–7
country average tenure, 99
first entry method by country, 98
first entry method by time of entry, 98
illustration, 97
present investment mode by relative market share, 10
test of hypotheses, 97–9
investment management localisation strategy, 31
investments motives, 107
additional for MNC, 107–9
factor analysis, 108

J

Japanese MNC strategy, 35–47
model of US MNC development strategy, 38
US MNC development strategy, 37
Japanese multinational corporations, 39–47
development strategy model, 40
Jarillo and Martinez theory, 67–8
model of subsidiary roles, 68

K

knowledge extraction, 200–1
knowledge transfer strategy, 139–40, 167–70
areas of knowledge flow with parent company, 168
areas of knowledge flow with parent company by industry, 170
context, 167–8
KSF impacting knowledge flow with parent company, 169
test of hypotheses, 168–70
Korean MNC subsidiaries, 85
Kruskal-Wallis test, 119, 121, 126, 128, 129, 148

L

liquidation, 30
localisation theory, 30–1

M

Managing Multinational Enterprises, , 23
market expansion, 200
market localisation strategy, 31
marketing endeavours, 163–5
statistics, 163
top three areas by country, 165
marketing strategy, 16, 139, 160–7
export and domestic sales by country, 166
key marketing endeavours, 163–5
local decision-making autonomy, 161–3
sales context, 160–1
selected marketing decision-making autonomy areas by export ratio, 167
test of hypotheses, 165–7
material localisation strategy, 31
mergers/acquisition and alliance strategy, 138, 150–4
context, 150–1
motives, 151
Ministry of Foreign Trade, 85
MNC network, 94, 115, 116
Multinational Company Economics, , 35
Multinational Company Subsidiary
conclusions, 192–223
growth and development strategies, 192–211
policy-makers implications, 221–3
practice and further research implications, 220–1
subsidiaries strategic system, 212–20
multinational corporation (MNC), 3–5, 11–12
analytical model of MNC subsidiary strategy system, 18
conceptual building blocks, 11–18
growth and development strategy system, 12–17
MNC subsidiaries, 12–13
purpose and methods, 8–9
significance of study, 5–7
strategy evolution of subsidiaries, 17–18
theoretical background, 21–79
theory evolution, 22–47
multinational corporation (MNC) overseas subsidiaries strategy, 47–79
parent–subsidiaries relationship school, 54–62
strategy–structure theory, 48–54
subsidiaries’ development school, 72, 75–9
subsidiary role school, 62–72
multinational corporation (MNC) theory
growth and development strategy theory, 26–35
Japanese MNC strategy, 35–47
strategic management theory, 23–6
theory evolution, 22–47
multinational corporation subsidiaries
corporate level role, 14
functional strategies, 16–17
operational strategy, 14–16
SWOT analysis for general business, 15
multinational organisation model, 50
natural resources, 199
network strategic position, 115–17
subsidiaries influencing factors, 116

N

‘no frontier strategy, ’, 43

O

On Foreign Direct Investment, 35–6
operational strategy, 14–16
SWOT analysis, 15
overseas subsidiaries
coordination, 216–17
growth and development corporate strategy, 212–14
growth and development synergistic and strategic coordination, 215–17
host government interactions, 197–8
MNC business strategy, 214
MNC functional strategy, 215
MNC strategic posture, 218–20

P

parent-driven divestment, 77
parent-driven investment, 75
parent–subsidiary relationship, 54–62
Bartlett and Ghoshal’s study, 60–2
classification of control mechanism, 59
Control and coordinated model of Ghoshal and Nohria, 58
control of the parent company over subsidiaries’ operations, 55
control tools, 57
evolution of control mechanisms, 61
Ghoshal and Nohria’s study, 57–8
Martinez and Jarillo’s study, 59–60
Prahalad and Doz’s study, 54–7
parent–subsidiaries relationship evolution theory, 33–5
MNC strategy evolution and MNC structures, 34
perceived competitors, 109
performance criteria, 110–13
expected by MNC parents, 111
performance measures focused by MNC subsidiaries, 112
personnel appointment, 172–3
personnel localisation strategy, 31
policy-makers, 221–3
production efficiency, 200
profit localisation strategy, 31
profits, 200

R

receptive subsidiaries, 68
relative independence, 202
research and development (R&D) strategy, 17, 140, 177–84
decision modes for R&D projects, 179
innovation types by industry, 183
intellectual property rights importance, 180–1
procedure to enhance R&D capabilities, 180
R&D decision making locus, 178–9
R&D funding sources, 178
selected innovation types by country, 183
significance of various R&D funding sources, 179
significant procedure to enhance R&D capabilities, 180
significant procedure to enhance R&D capabilities by strength of IPR protection, 182
test of hypotheses, 181–4
types of innovations, 177–8
resource-based theory, 3
resource-sharing
subsidiaries competition mechanism, 196–7
retreat strategic posture, 219–20

S

S-SWOT analysis, 15, 207–9
framework, 208
overseas subsidiaries growth and development strategy, 210
sales context, 160–1
composition of sales channels, 160
strategic motives, 161
‘Sans Frontiers strategy, ’, 41
Sans Frontiers Time’s Entrepreneurial Strategies, 41
shareholding ratio, 92, 100–3
context, 100–1
direction of change, 103
foreign change statistics, 100
reasons for change, 101–3, 102
SPSS software, 85
strategic alliances, 22, 24–5
strategic blunders, 141, 184–7
percentage distribution, 186
reasons, 185–7, 186
types, 184–5
strategic gap, 24–5
strategic intent
findings and analysis, 96–134
hypotheses, 91–5
hypotheses testing results, 134–5
investment and competitive factor, 91–136
strategic management theory, 23–6
importance of strategic options, 25–6
MNC development strategy, 23–4
role of strategic alliances, 24–5
strategic options, 25–6
strategic posture, 218–20
developmental, 218
retreat, 219–20
stability, 218–19
strategic system
layers and structure, 212–15
MNC subsidiaries, 212–20
strategic posture of MNC overseas subsidiaries, 218–20
synergistic and strategic coordination of overseas subsidiaries growth and development, 215–17
strategy–structure theory, 48–54
Bartlett and Ghoshal’s (1989) chart of multinational organisations, 49
global organisation model, 51
international organisation model, 51
MNC organisational models, 53
multinational organisation model, 50
stage model of Stopford and Wells, 49
transnational organisation models, 52
strength–opportunity (SO) strategy, 15
strength–threat (ST) strategy, 16
subordination, 201–2
subsidiaries’ development school, 72, 75–9
evolution models of overseas subsidiaries, 76
factors affecting evolution, 78
subsidiaries’ relationships, 141–6
context, 141–2
parent company, 136–7
strength of ties with other subsidiaries, 143
strength of ties with parent company, 141
strength of ties with parent company by country, 143
strength of ties with parent company by HQ location, 145
strength of ties with parent company by time of entry, 142
strength of ties with parents and other subsidiaries, 146
test of hypotheses, 142–6
subsidiaries’ roles, 199–206
initial roles, 199–201
mode and stage evolution, 202–6
NMC map, 204
overseas evolution stages and features, 205–6
strategic evolutionary roles, 201–2
subsidiary-driven charter extension, 76
subsidiary-driven charter reinforcement, 76
subsidiary management, 4
subsidiary operations, 4
subsidiary strategies, 4
choice mechanism, 207–12
growth and development strategic choice advantage, 211–12
restriction and constraint on role mechanism, 209–11
S-SWOT analysis, 207–9
system strategy, 4

T

T-test, 105
Taggart’s theory, 70–2
C–C subsidiaries strategy model, 71
studies on subsidiary roles, 73–4
technology development localisation strategy, 31

V

value chain, 23
activities, 109-10
types, 110
Varimax method, 107

W

weakness–opportunity (WO) strategy, 15–16
weakness–threat (WT) strategy, 16
weighted average method, 85
White and Poynter’s classification theory, 62–5
micro copy of parent company, 63
product experts, 64
rational manufacturer, 64
sales satellite, 63–4
strategic independence, 64–5