The strategic decisions and success factors of the global integration-local responsiveness of Japanese MNCs in China

The strategic decisions and success factors of the global integration-local responsiveness of... This article applies Foreign Direct Investment (FDI) theories to the strategic management analysis of the global integration-local responsiveness of multinational corporations (MNCs) in China, from the perspective of company characteristics (ownership advantages and internalization advantages) and environmental dynamics (locational factors) in order to analyze the success factors influencing the sales activities of Japanese MNCs in China. Based on the analysis of a survey conducted on 230 Japanese parent companies with investments in China, the empirical research findings include: Japanese MNCs in China favor global integration strategies; the more significant the ownership advantages and internalization advantages are, the greater the global integration is; the success factors of their operations in China due to global integration are present in manufacturing know-how, procurement of parts and supplies, financial power, previous investment experience in China as well as sales networks and technologies; locational advantages mainly lie in labor cost among other things; internalization factors do not have any significant correlation with the success and performance of the subsidiary company. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Frontiers of Business Research in China Brill

The strategic decisions and success factors of the global integration-local responsiveness of Japanese MNCs in China

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Publisher
Brill
Copyright
Copyright 2007 by Koninklijke Brill NV, Leiden, The Netherlands
ISSN
1673-7326
eISSN
1673-7431
D.O.I.
10.1007/s11782-007-0005-0
Publisher site
See Article on Publisher Site

Abstract

This article applies Foreign Direct Investment (FDI) theories to the strategic management analysis of the global integration-local responsiveness of multinational corporations (MNCs) in China, from the perspective of company characteristics (ownership advantages and internalization advantages) and environmental dynamics (locational factors) in order to analyze the success factors influencing the sales activities of Japanese MNCs in China. Based on the analysis of a survey conducted on 230 Japanese parent companies with investments in China, the empirical research findings include: Japanese MNCs in China favor global integration strategies; the more significant the ownership advantages and internalization advantages are, the greater the global integration is; the success factors of their operations in China due to global integration are present in manufacturing know-how, procurement of parts and supplies, financial power, previous investment experience in China as well as sales networks and technologies; locational advantages mainly lie in labor cost among other things; internalization factors do not have any significant correlation with the success and performance of the subsidiary company.

Journal

Frontiers of Business Research in ChinaBrill

Published: Jan 1, 2007

Keywords: Japanese MNCs; global integration-local responsiveness; ownership advantages; locational factor; internalization advantages

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