Post-M&A technological capability-building of emerging market firms in China: the case of Lenovo

Technological acquisitions have become a strong motivation for cross-border merger and acquisition (M&A) activities by firms in emerging countries. However, whether these companies achieve their objectives remains an open question. This article presents a case study of Lenovo’s acquisition of IBM’s PC division with a focus on inventor productivity after acquisition. Our case study suggests that while a ‘light-touch’ integration approach helped avoid the all-too-common post-M&A productivity drop, intra-firm knowledge transfers to veteran inventors of the acquirers remained difficult due to the knowledge gap. However, M&A events create other opportunities to improve the technological capability of the acquiring company by sourcing new talent globally, offering unignorable merit that justifies outbound M&A activities by emerging market firms.     

A resource-advantage perspective on the orchestration of ambidexterity

Strategic resources are key inputs to strategy that can form the basis of superior service performance, yet there is scarce research on the strategic resources used by managers to realise ambidexterity: the simultaneous pursuit of alignment and adaptability. In this article, we draw on a qualitative case study of a leading European airline and examine the resource bundles used by managers in their orchestration of ambidexterity. Adopting a resource-advantage perspective, the study illustrates elements of human, organisational, and informational capital that are mobilised by managers in their incorporation of alignment-oriented and adaptability-oriented activities. By moving beyond a linear association between strategic resources and ambidextrous organisations, we argue that managers' orchestration of ambidexterity is central to how service organisations manage their strategic resources and enhance competitiveness. Overall, we highlight the micro managerial level as an important point of observation to extend current thinking on the ‘how’ of ambidexterity in service organisations.     

Boundary spanners,HRM practices,and reverse knowledge transfer: The case of Chinese cross-border acquisitions

This paper investigates the role of boundary spanners in reverse knowledge transfer in EMNEs’ cross-border acquisitions. Applying a micro-foundational approach and building on boundary spanning as theoretical perspective, we conducted case studies of acquisitions by Chinese companies in Germany and the UK. We find reverse knowledge transfer is a collective endeavour that relies on both the ability and motivation of individual boundary spanners as well as team-based international collaborations. We propose a conceptual framework of reverse knowledge transfer with two mechanisms—enabling and materializing. Their successful implementation depends not only on the personal characteristics of boundary spanners, but on supportive HRM practices.     

Unleashing the dynamics of product-market ambidexterity in the pursuit of international opportunities: Insights from emerging market firms

Extending the current debate surrounding ambidexterity, this study examines how emerging market firms pursue international opportunities by leveraging the dynamics of strategic ambidexterity in product and market domains. The investigation draws on longitudinal and multiple sources of data from four Chinese multinational firms. Two follow traditional or incremental internationalization pathways, whilst the other two pursue rapid or accelerated internationalization. The study offers a more dynamic perspective to help understand the evolving nature of ambidexterity with respect to the routes of strategic product and market development options. In particularly, the findings reveal that incremental internationalization is characterized by structural ambidexterity combining product exploitation with market exploration at the initial stages, whereas accelerated internationalization is best explained by market exploration and exploitation (or market ambidexterity) when first entering foreign markets. Moreover, firms were found to maintain strategic priorities through structural and punctuated ambidexterity across product and market domains at later stages of internationalization. This study contributes to the dynamic perspective of strategic ambidexterity for seizing international opportunities among emerging market firms.     

Organizational Ambidexterity and Innovation Performance: The Moderating Effect of Entrepreneurial Orientation

The influence of organizational ambidexterity on innovation and the growth of enterprises has gradually become an important research topic in the field of strategic management and organization theory. This paper builds up a theoretical framework of the relationship between organizational ambidexterity and innovation performance with regards to corporate entrepreneurship orientation. We select 175 companies from high and new technology industries in China’s three large cities, Beijing, Tianjin and Dalian, as samples to carry out an empirical test. We find that the balance and complement of organizational ambidexterity are positively correlated with the innovation performance of enterprises; a corporate entrepreneurial orientation has a significantly moderating effect on the relationship between the balance dimension of organizational ambidexterity and innovation performance, yet it has no significant positive moderating effect on the relationship between the combined dimension of organizational ambidexterity and innovation performance.     

Corporate social responsibility as cultural meaning management: a critique of the marketing of ‘ethical’ bottled water

To date, the primary focus of research in the field of corporate social responsibility (CSR) has been on the strategic implications of CSR for corporations and less on an evaluation of CSR from a wider political, economic and social perspective. In this paper, we aim to address this gap by critically engaging with marketing campaigns of so-called ‘ethical’ bottled water. We especially focus on a major CSR strategy of a range of different companies that promise to provide drinking water for (what they name as) ‘poor African people’ by way of Western consumers purchasing bottled water. Following Fairclough's approach, we unfold a three-step critical discourse analysis of the marketing campaigns of 10 such ‘ethical’ brands. Our results show that bottled water companies try to influence consumers' tastes through the management of the cultural meaning of bottled water, producing a more ‘ethical’ and ‘socially responsible’ perception of their products/brands. Theoretically, we base our analysis on McCracken's model of the cultural meaning of consumer goods, which, we argue, offers a critical perspective of the recent emergence of CSR and business ethics initiatives. We discuss how these marketing campaigns can be framed as historical struggles associated with neo-liberal ideology and hegemony. Our analysis demonstrates how such CSR strategies are part of a general process of the reproduction of capitalist modes of accumulation and legitimation through the usage of cultural categories.     

French multinational companies' HRM in China: strategic orientation and integration approaches

The purpose of this qualitative study is to identify strategic orientation and integration approaches of French companies in implementing the headquarters-based human resource management (HRM) practices in their Chinese subsidiaries. Through a study of 16 French multinationals’ HRM, our findings reveal that a majority of sample companies tend to standardize the HRM practices in their Chinese subsidiaries to a great extent. This strategic orientation is supported by a combination of specific integration approaches at the subsidiary level. The results add knowledge to international management theory and allow us to develop implications in managing employees in China.     

Why do Chinese firms tend to acquire strategic assets in international expansion?

More Chinese companies are using cross-border merger and acquisition (M&A) to access and source strategic assets so as to address their competitive disadvantage. However, there is lack of research on the rationale for such strategic-asset-seeking M&A. This paper intends to address this critical issue from an institutional perspective. Building on institutional theory, we propose a model of resource-driven motivation behind Chinese M&A. To shed light on the explanatory power of this institutional framework, we draw on a multiple-case study of three leading Chinese firms—TCL, BOE and Lenovo. By arguing that cross-border M&A from Chinese firms represents a means to acquire strategic assets is the logic of Chinese unique institutional environment, this study is of importance not only to stimulate possible theoretical extensions but also to draw implications to other emerging market firms.     

What determines performance of cross‐border M&As by Chinese companies? An absorptive capacity perspective

Chinese companies are increasingly using cross‐border merger and acquisitions (M&As) as a vehicle to source knowledge or strategic assets, so as to enhance their competitive advantage. However, a critical question is: Can strategic assets be effectively acquired by Chinese firms, thereby leading to superior firm performance? This article addresses this fundamental question from an absorptive capacity perspective. This approach concentrates on how an acquiring firm's absorptive capacity influences its ability to identify, assimilate, integrate, and apply external new knowledge into commercial use. By comparatively examining two high‐profile international M&A deals completed by leading Chinese firms Lenovo and TCL, we argue that the performance of Chinese companies' overseas acquisitions is substantially affected by the acquiring firm's absorptive capacity at multiple dimensions, thus drawing strategic implications for multinationals in other emerging markets. © 2010 Wiley Periodicals, Inc.     

Micro-foundations of organizational design and sustainability: The mediating role of learning ambidexterity

This paper builds on prior scholarly works by examining the relationship between organizing paradox (formalization and decentralization), and organizational levels of learning paradoxes, i.e. exploration and exploitation, and firms’ outcomes (organizational creativity, organizational resilience and organizational energy). Using data from 98 executives and 325 senior employees working across a diverse range of firms operating in the Middle East, the findings suggest that organizing paradox (formalization and decentralization) has a positive impact on learning ambidexterity. In addition, we also found that learning ambidexterity has a positive impact on both organizational resilience and organizational energy. Furthermore, the results indicate that learning ambidexterity mediates the relationship between organizing paradox and organizational creativity. These findings provide important insights into the micro-foundation aspects of organizational ambidexterity.     

Strategic choices of firms in expanding overseas business

Based on a case study of Pfizer’s production scope evolution in China from 1993 to 2002, we propose that MNCs usually have to face dual pressures of keeping integration among global businesses on the one hand, and remaining responsive to local market conditions on the other. When there is large discrepancy between the two, due to the bounded rationality of the decision-makers, the development paths of the subsidiaries are likely to exhibit recursive pattern, instead of the sequential mode as suggested in the extant literature. On the other hand, we argue that companies can make strategic choices to facilitate the development of their overseas subsidiaries. By the adjustment of the strategic parameters pertaining to the content and processes of their development paths, companies can accumulate knowledge about the local market and strike a balance between the dual pressures they have to face. The implication of our study for the indigenous Chinese companies in their international expansion is that when facing unfamiliar business environment in overseas market, paying attention to the idiosyncratic local market condition and keeping strategic flexibility are pivotal to their success. __________ Translated from Guanli shijie 맜理世界 (Management World), 2005(10): 123–138     

Interplay between dual dimensions of knowledge sharing within globalized chaebols: The moderating effects of organization size and global environmental munificence

Existing literature exploring ambidexterity based on the organizational and network learning perspectives is sparse. In particular, there are few studies dealing with the characteristics of ambidexterity construct in the context of inter-organizational relationships, and existing studies are limited. To date, studies have suggested only vague and inconclusive conceptualizations and empirical findings. Our research tackles this overlooked area of thought by dismantling the mechanisms of ambidextrous knowledge sharing among group-affiliated companies within the large complex Korean business group known as a chaebol and the impact of those mechanisms on the companies’ global performances. An internationalized chaebol is a cradle of transnational knowledge and resource sharing that functions as a business group–level knowledge reservoir. Conceptually, our research employs two dimensions of ambidextrous knowledge sharing, “balance dimension (BD) of ambidextrous knowledge sharing” and “synergistic dimension (SD) of ambidextrous knowledge sharing,” among group-affiliated companies within a chaebol. In this way, we clarify the conceptual issues regarding the degree to which ambidextrous knowledge sharing affects the extent of explorative relative to exploitative knowledge sharing or affects the combined synergistic extent of both activities. We collect survey data from 337 manufacturing multinational group-affiliated companies that belong to 61 internationally diversified chaebols. We analyze this data using ordinary least squares (OLS) regression with the hierarchical method. Our results show that having a balance between explorative and exploitative knowledge sharing among group-affiliated companies (i.e., BD) within a chaebol increases the global performance of that chaebol’s group-affiliated companies. High synergistic levels of ambidextrous knowledge sharing among group-affiliated companies (i.e., SD) also enhance the group-affiliated companies’ global performance. In addition, our study reveals the moderating effects that organization size and environmental munificence have on the interactions of BD and SD.     

Strategic challenges and issues for Chinese managers and management in the global economy: conclusions

The contributions to this symposium on ‘Demystifying Chinese Management’ have attempted to tackle new strategic issues and challenges vis-à-vis the newly diversified ownership and management system which has occurred since Deng's economic reforms. It is clear that when we try to ‘make sense’ of management in the People's Republic of China, we must take into account the degree to which Chinese management has become distinctive, with an adaptation of exogenous knowledge to local circumstances and a relative degree of ‘convergence’ involving a synthesis of ‘local’, ‘glocal’ and ‘global’ forms.     

Customers’ everyday understanding of ‘value’ from a second-order cybernetic perspective

ABSTRACT

Value is in the centre of service and marketing. However, what does value mean to customers? The purpose of the paper is to contribute to an understanding of value from a customers’ perspective using a second-order cybernetics approach. We found that the word ‘value’ is recursively linked to 13 different ‘meanings’ indicating a variety of understandings of the term ‘value’. Furthermore, the findings support service-dominant logic where customers integrate their own resources (skills and knowledge) in the value co-creation process. Future research has to be aware of the different meanings, which are associated with value. Marketing managers need to understand, on the one hand, that value has a different meaning to their customer and on the other hand, what value means to their specific target groups.     

Talent Management and HRM in Multinational companies in Beijing: Definitions,differences and drivers

Talent Management (TM) has attracted increasing attention from academics and practitioners in recent years, but there are many gaps and omissions left for further theoretical and empirical development. One line of debate has been whether TM is merely a re-packaging of what already exists, not being distinct from traditional HRM practices or disciplines. The paper has three main components: (i) a review of how ‘Talent’ and TM has been conceptualised in the literature and the outline of a framework we have derived therefrom which identifies four main perspectives on TM: exclusive-people; exclusive-position; inclusive-people; social capital; (ii) the presentation and analysis of our research findings relating to TM perspectives and practices in seven multinational corporations (MNCs) in Beijing; (iii) a concluding discussion which compares and contrasts our findings with the extant literature and our framework. Six of the companies had adopted ‘exclusive’ perspectives, seeing TM as ‘integrated, selective’ HRM. For some, this involved an ‘exclusive-people’ focus on certain groups of ‘high-performing’ or ‘high-potential’ people, whilst for others it meant an ‘exclusive-position’ focus on certain ‘key’ positions in the organization. Just one organization had adopted an ‘inclusive-people’ approach. Two of the companies emphasized ‘organizationally focussed competence development’, concentrating upon smooth talent flows and development, and moving towards a ‘social capital’ perspective which took cognizance of networks, contexts and relationships as well as human capital. The implications of our findings for research and practice are outlined.     

Strategic group influence on entry mode choices in foreign markets

This study examines imitation behavior in the foreign entry mode of the members of a strategic group within the industry. Following the institutionalist perspective, we argue that legitimating actors (trade associations, training institutions and investors, among others) can exert pressure on strategic group members to conform to institutionalized organizational practices and structures. We hypothesize that a company’s choice of foreign entry mode is determined by the previous choices of other companies within the strategic reference group. Thus, the probability of entry with a wholly owned subsidiary (versus shared-control entry) increases when the number of wholly-owned subsidiaries established by companies within the strategic reference group of the home-country is higher. We analyze 351 foreign direct investments of 30 Spanish banks in 55 countries between 1986 and 2008. Our results reveal imitation behavior between members of the strategic group and highlight the important role of the strategic group in strategic thinking.     

Strategic prescriptive theories in the business context of an emerging economy

Three strategic theoretical concepts – design, planning and positioning – are examined for their relevance to the business context of Ghana. For design, the Ghanaian culture on respect for elders and authority is argued to be partly responsible for the ‘accepting’ nature of subordinates. Formal planning by organisations is mostly found with large companies and multinationals due to the influence of parent organisations. Firms seek to position on service reliability, value for money, branding, social responsibility and others. The paper contributes to knowledge and practice in African business by developing propositions around which organisations can achieve competitive advantage in the Ghanaian business setting during the application of the strategic concepts discussed.     

Identity,knowledge and strategy in the UK subsidiary of an Anglo-German automobile manufacturer

This paper uses a qualitative case study of an Anglo-German automobile manufacturing plant to investigate the role played by the strategic self-presentation of national, class and ethnic identities by different groups within the organisation in knowledge management and power relations in multinational corporations (MNCs). I explore this using a ‘negotiated culture’ approach to cross-cultural management. My findings are, firstly, that knowledge management played a crucial part in strategic self-presentation and thus in power relations. Secondly, that an examination of knowledge management activities from this perspective provided a way of analysing the complexity of intergroup interaction in the organisation. Thirdly, that workers as well as managers engage in knowledge management and strategic action. I conclude that a qualitative analysis of knowledge management can help researchers and managers deal with the complexities of social behaviour in organisations, and suggest frameworks for understanding of the impact of identity on knowledge management.     

SUPPLY CHAIN PROCESS INTEGRATION: A THEORETICAL FRAMEWORK

The current study was undertaken to further understanding of supply chain process integration. It is suggested that supply chain integration, the practice of realigning firms' operating structures, should be understood from an internal‐external perspective and a process view. Drawing upon four theories—Strategy‐Structure‐Performance framework, the resource based view of the firm, transaction cost economics, and social network analysis—and combining industry inputs, a theoretical framework of supply chain process integration is developed. It is argued that a firm's strategic priorities are key factors of supply chain process integration. Superior performance is likely to be achieved when necessary supply chain capabilities are developed through supply chain process integration.     

Strategic ambidexterity and its performance implications for emerging economies multinationals

Emerging market multinational enterprises (EMNEs) are attracting significant scholarly attention in the international business and general management domain. The extant research has provided important insights into the EMNEs’ internationalization processes and whether the existing theories adequately explain their outward investment motives. This special issue aims to provide a platform suited to extend the current understanding of the rapid rise of EMNEs and examine the vital role played by strategic ambidexterity and its performance implications for the EMNEs. The current research on EMNEs has failed to adequately leverage strategic ambidexterity and link it with the post-entry performance of EMNEs. We argue that the strategic ambidexterity perspective offers valuable opportunities to understand the post-entry performance of EMNEs as they expand into developed and developing markets. The article also highlights important areas for future research by taking into account the current COVID-19 pandemic crisis.