Factors affecting the integration-responsiveness framework in multinational enterprises: the case of Chinese multinational enterprises operating in Australia

2017-05-15T06:44:52Z (GMT) by Fan, Di
The past two decades have witnessed the rapid growth of China’s outward foreign direct investment (FDI) and the rise of Chinese multinational enterprises (MNEs). Given the pace with which China’s go-global policy is unfolding, how Chinese MNEs should balance global integration and local responsiveness and choose an international business strategy (IBS) have become challenging issues for these emerging firms. Appreciating the need for MNEs to be both globally integrated and locally responsive, researchers have developed a global integration and local responsiveness framework (the I-R framework), and identified four basic international business strategies (IBSs), namely, international, multi-domestic, global and transnational. Within the extant literature, global integration and local responsiveness are general concepts that mean many things to different observers though scholars continue both to seek underlying factors and determine their relative significance. However, these studies mainly focus on MNEs from advanced economies and/or their subsidiaries in emerging markets and tend to be based on quantitative methodologies. This concentration leaves open the question of the relevance of Organisation for Economic Co-operation and Development (OECD) centred findings to MNEs from emerging markets and their subsidiaries in advanced economies. Given this situation, the thesis raises three primary research questions: (1) What factors influence the I-R framework in the context of Chinese MNEs? (2) How do underlying factors induce a preference for either global integration or local responsiveness in the context of Chinese MNEs? (3) How do Chinese MNEs’ preferences between global integration and local responsiveness influence their selection of IBSs? To address the three research questions, nine Chinese MNEs that have invested in Australia were selected for detailed investigation. The nine case studies were examined at both headquarters and Australian subsidiary levels. Perception analysis and cross-case synthesis were employed as major data processing techniques and triangulation was achieved by utilizing three means of data collection: in-depth interviews with key informants; archival analysis; and observation. The contributions made by this thesis include: (1) the examination of thirty-six underlying factors identified as significant by the literature and the identification of three new factors that influence the I-R framework in the context of Chinese MNEs; (2) Bartlett and Ghoshal’s theory of IBS choice is extended by showing the value of applying the theory to MNEs from emergent economies; and (3) it is shown that a contingency perspective can assist MNEs to reconcile forces for global integration and local responsiveness. The study holds that what constitutes a relevant IBS for an MNE depends on how the firm reconciles the need to be both globally integrated and locally responsive and that this issue requires the balancing of three aspects of contingencies, namely, organizational, industrial and environmental. Finally, the research limitations and suggestions for future research are identified and presented.