Location advantages and subsidiaries’ R&;D activities in emerging economies: Exploring the effect of employee mobility

With multinational corporations increasingly seeking subsidiaries’ specific advantages in foreign countries to develop their innovative capabilities, internationalization of research and development has been greatly emphasized. However, in emerging economies, managers are encountering the challenge of high employee mobility under the weak intellectual property protection regime. This article investigates subsidiaries’ employee mobility and proposes that it negatively moderates the relationship between location advantages and the level of subsidiaries’ R&D. This article extends R&D internationalization and enhances current understanding of subsidiaries’ R&D activities. Further, it provides managerial implications as to how managers can improve R&D outcome by mitigating obstacles in emerging economies.

Creating relational rents: The effect of business groups on affiliated firms’ performance in Indonesia

This research attempts to extend the discussion of business groups in emerging economies by treating business groups as a form of interorganizational network that generates relational rents among affiliated firms by creating technological and managerial capabilities. Based on the relational view, this research investigates whether value created by business groups depends upon sharing, combining, and exchanging unique and specific resources or assets among affiliated firms. Results show that technological capabilities contribute to create relational rents in terms of affiliated firms’ investment in R&D and human capital. Managerial capabilities also contributed to generating relational rents through investment in managerial knowledge acquisition for affiliated firms without R&D units and in training for affiliated firms with R&D units. However, learning by exporting and learning from imported input do not yield relational rents within business groups. Overall, these findings reveal that business groups as interorganizational networks are contingent on their internal, unique, and specific capabilities, as social capital theory argues.

Business groups and their types

We clarify what business groups are and analyze their various types. We first distinguish business groups from other types of firm networks based on the strategic relationships among companies; business groups are defined as those networks that exhibit unrelated diversification under common ownership. We then separate business groups into three types based on their ownership: family-owned, widely-held, and state-owned. We argue that each type has different agency costs and diversification logics. As a result of these differences, their performance varies, with family-owned business groups outperforming widely-held ones, and these in turn outperforming state-owned business groups.

An assessment of alternative empirical measures of cultural distance: Evidence from the Republic of Korea

This study assesses the relative merits of alternative cultural frameworks as the basis to construct indices of cultural distance using the one introduced by Kogut and Singh (1988). We assess not only Hofstede (1980, 1991) but also the more recent Schwartz (1994, 2003) and GLOBE (2004) frameworks. Using primary data collected through a questionnaire survey of 228 foreign manufacturing firms in the Republic of Korea, we find consistently across the three different frameworks that cultural distance has a positive association with full ownership. These results support not only the robustness of Kogut and Singh’s method to construct an index of cultural distance but also the consistency of the alternative indices of cultural distance used to explain ownership mode decisions by MNEs.

The influence of firm,industry and network on the corporate social performance of Japanese firms

We develop and test the thesis that corporate social performance (CSP) constitutes a socially constructed and shared strategic asset, which is not only influenced by factors specific to a firm, but also by the social performance of firms in its industry and inter-corporate network. Using variance decomposition, we analyze data from 130 large Japanese firms and find that both firm-specific and industry-level factors account for significant variance in CSP, but network-level factors do not.

Impact of state ownership and control mechanisms on the performance of group affiliated companies in China

This paper examines the moderating impact of state ownership and group control mechanisms on the relationship between diversification and performance of companies affiliated with large business groups in China. We find that the state ownership has enhanced the performance of group affiliated companies when they adopted higher degrees of diversification. We also find that cash flow rights have a positive impact on the performance of companies with lower degrees of diversification while in general group control rights have a negative impact on the performance. These results suggest that a group’s control mechanisms, derived from pyramid ownership structures, enable the dominant owners to expropriate the value from minority shareholders or tunnel corporate resources for their own interest.

Multidimensional latent traits of perceived organizational innovation: Differences between Thai and Egyptian employees

A new approach, the multidimensional latent regression (MLR) approach of item response theory, is employed to evaluate the dimensions of individual employee creativity, workplace atmosphere, and workplace innovative activity. Based on the MLR concept, the relationships among the measurement scales of these variables are tested for their unidimensionality versus multidimensionality. Multidimensionality was found. While workplace atmosphere is closely linked to workplace innovative activity, individual employee creativity forms its own dimension but is still positively linked to the other two measures. To achieve an accurate comparison between the two groups of Thai and Egyptian employees who have the same levels of agreement with the scale items, it is necessary to adjust the scores of Egyptian employees downwards.

The adolescence of Asia management research: <Emphasis Type="Italic">APJM</Emphasis>, 1997–2006

In this article we reflect on the adolescent years of Asia management research published in the Asia Pacific Journal of Management (APJM) by reviewing work published in the past 10 years (1997–2006). We report that during the last decade, APJM has published 223 research articles, written by 373 different authors, who are affiliated with 203 different institutions. Our discussion of the future of Asia management research is guided by Kuhn’s (Kuhn, T. S. The structure of scientific revolutions. Chicago: University of Chicago Press, 1962) perspective on the nonlinear progression of science. We argue that as a growing community, Asia management research is finding its “identity” and establishing its presence in the larger worldwide management research community. Following our analysis, we conclude that the growth of Asia management research—as captured by APJM publications—throughout its “adolescent” years has set forth a challenging and exciting path for the future. All authors contributed equally. We thank Mike Peng (Editor-in-Chief) for his encouragement and advice. This work was completed when Yu-Shan Su was a Fulbright visiting scholar at the University of Texas at Dallas (UTD). She thanks the Fulbright Association and the Taiwanese Ministry of Education for partially funding this work.

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Does knowledge management matter for information technology applications in China?

This study explores the role of knowledge management (KM) in mediating and moderating the relationship between information technology (IT) and firm performance based upon the data collected from 236 firms in China. Through a structural equation model and hierarchical regression analysis, we found that KM capability partially mediated the performance impact of IT resources. Furthermore, KM capability affected the strength of the IT-performance relationship. The theoretical contributions and managerial implications are discussed and limitations of the study are highlighted accordingly.

Managers’ conflict management styles and employee attitudinal outcomes: The mediating role of trust

This study examines the mediating effects of trust on the relationships between manager’s conflict management styles (CMS) and employee attitudinal outcomes, as well as identifies the potential deviations in the areas of CMS and trust from the west in Chinese culture. One hundred sixty-nine employees in Guangzhou of China participated. As predicted, Integrating CMS of managers is found significantly correlated to trust and subordinates’ job satisfaction and turnover intention. Trust fully mediates the link between Integrating CMS and subordinates attitudinal outcomes. Results also support the expectations concerning the deviations on the impacts of the uncooperative CMS on subordinates under Chinese culture. Discussion and implications are presented.

The formation and evolution of non-equity strategic alliances in China

Contractual joint ventures (CJVs) are a major form of non-equity strategic alliance in China, employed mainly by Hong Kong firms in the south China province of Guangdong. Due to their ambiguous legal status and the lack of conceptualisation and of their contractual nature, there has been little empirical research on CJVs. By theorising CJVs as a relational subcontracting arrangement and drawing on data from structured interviews with managers from both sides, this paper reveals the managerial decisions pertaining to the formation and evolution of the CJV non-equity alliances in Guangdong.

Venture capital in China: A view from Europe

This article provides commentary on the analysis of venture capital in China by Ahlstrom, Bruton, and Yeh (Venture capital in China: Past, present, and future. Asia Pacific Journal of Management, 2007). The article considers issues relating to the scope of venture capital and private equity, the nature of venture capital and private equity organizations, the life-cycle process of VC investing, internationalization, and foreign venture capital firms. The paper identifies areas for future research and compares the Chinese VC context with those in Western Europe and Central and Eastern Europe.

Organizational slack and firm performance during institutional transitions

The conflicting views about the impact of organizational slack on firm performance call for more powerful theoretic lens to explore this link. This study finds that institutional theory is insightful to add a deeper and finer-grained understanding on what is behind the relationship between organizational slack and firm performance during institutional transitions. As a replication with extension of the research of Tan and Peng (Strategic Management Journal, 24: 1249–1263, 2003), this study not only replicates the impact of organizational slack on firm performance in a broader and more recent context, but also extends previous work by advocating and enriching the impact of institutional transitions on this link. Using a large sample of Chinese listed firms, we find that unabsorbed slack is critical for firms to sustain their competitive advantages. Further, such a positive impact is especially likely to be profound for firms confronting resource scarcity and environmental dynamism caused by institutional transitions.

Knowledge management and innovation strategy: The challenge for latecomers in emerging economies

The success of latecomer firms from the emerging economies challenges the conventional wisdom on entry timing and resource-based competence. Building on research on institutions in emerging economies and the resource-based perspective in strategic management, we propose a model to explain how resource poor latecomer firms in emerging economies catch up with the multinational incumbents. We classify latecomers based on their strategic learning intent as either emulators or blind imitators. The strategic learning intent depends on a firm’s complementary assets and its absorptive capacity. Firms that choose emulation develop flexible routines, while firms that choose blind imitation end up with rigid routines. Over time, when there is a need for resource renewal, firms that have flexible routines are better positioned to respond. We take the Chinese mobile phone industry as an exemplar to illustrate the core issues in latecomer catching up of emerging economy firms.

Export channel structure in a newly industrialized economy

Using data from the Hong Kong electronics industry, this paper studies the “make” or “buy” decisions associated with export channel strategies (Peng, Zhou, & York, 2006). Findings show that the integrated channels (the “make” decision in transaction cost theory) play a more important role on exporting than the market governance channels (the “buy” decision, i.e., buying channel services from local export intermediaries). In addition to manufacturers’ integrated channels, from the buyers’ standpoint, we find two active integrated channels, namely, (1) the buying offices of firms from developed economies which are located in Hong Kong and (2) the regular visiting buyers of firms from developed economies. These two export channels are integrated channels from the buyers’ standpoint. They are not found in the export distribution structure of developed economies. This paper explains the development and the importance of these buyers’ channels in newly industrialized economies. It also examines the similarities and dissimilarities of export behavior between manufacturing firms in developed and newly industrialized economies, using Hong Kong as an example.

A strategic analysis of surging Chinese manufacturers: The case of Galanz

Recent years have witnessed the surging of Chinese manufacturers, as China has become the world’s factory floor. This paper presents a case study of one of the most successful manufacturers in China, the Galanz Group, now the world’s largest microwave manufacturer. Based on theories of multinational corporations from emerging economies, the paper examines the process of Galanz’s integration into the global market. The company has developed unique competitive strategies that have made it a great success within China and in overseas markets. The Galanz model suggests strong strategic implications for both Chinese firms and incumbent multinational corporations.

Managerial ties, control and deregulation: An investigation of business groups entering the deregulated banking industry in Taiwan

This study investigates the determinants of business groups’ entry to the deregulated banking industry in Taiwan, from the perspectives of social capital and agency theory. The principal objective of deregulation is to increase the efficiency of resource utilization by introducing competition. However, the opportunities inherent in deregulation may induce a battle of strengths among interested business groups. Based on secondary data analysis, this study reveals that the managerial ties possessed by key individuals in a business group, and the degree of overlapping investment between the owner-managers, influences the likelihood of whether or not a business group will decide to enter the deregulated banking industry. The results of this study provide a valuable starting point from which to discuss the influence of internal and external personal networks on business strategy during a time of deregulation.

Technological capabilities and firm performance: The case of small manufacturing firms in Japan

The purpose of this study is to investigate the relationship between technological capabilities and firm performance. We divide technological capabilities into two types—refinement capability, which involves the improvement of the existing asset portfolio, and reconfiguration capability, which involves the restructuring of the asset portfolio through the integration of new assets. The results of an analysis of a sample of 302 small and medium-sized manufacturing firms in Japan suggest that refinement capability relates more positively to operational efficiency than does reconfiguration capability, and that reconfiguration capability relates more positively to strategic performance than does refinement capability. The results also suggest that firms with superior refinement capability tend to possess superior reconfiguration capability. Our findings show that both external and internal factors, such as technological volatility, inter-firm collaboration, and firm age and size, are significantly associated with the level of refinement and reconfiguration capabilities possessed by a firm.

Familial capitalism in global institutional contexts: Implications for corporate governance and entrepreneurship in East Asia

Many of the world’s firms have a familial dimension; including some of the most dynamic and emerging markets of East Asia. However, this important aspect of organizing economic activity remains understudied and misunderstood. A central theme of this article is that while families matter in economic activity throughout the world, they matter in different ways depending on the institutional context. To illustrate this theme a varieties of capitalism perspective is used to develop a rudimentary global comparative framework. Institutional context is portrayed as a key determinant of the degree and type of family governance that typify national economies. Implications for corporate governance and entrepreneurship in East Asia are discussed.

Attributive change in top management teams as a driver of strategic change

This study examines the role of top management team (TMT) member succession in breaking organizational inertia. We compare the impact of two types of change in TMTs—in member number and demographic heterogeneity—on subsequent strategic reorientation using data on the diversification activities of firms in the Japanese textile industry. Our findings suggest that executive succession does not trigger strategic change unless succession entails change in the values and interests of executives embedded in their demographic traits.