Global integration strategies of small and medium multinationals: Evidence from Taiwan |
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| Authors: | Julius H Johnson Bindu Arya Dinesh A Mirchandani |
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| Institution: | 1. Strategic Management, College of Business Administration, University of Missouri-St. Louis, One University Boulevard, St. Louis, MO 63121-4400, United States;2. IS, College of Business Administration, University of Missouri-St. Louis, One University Boulevard, St. Louis, MO 63121-4400, United States;1. University of Cyprus, School of Economics and Management, Kallipoleos 75, P.O. Box 20537, CY-1678 Nicosia, Cyprus;2. Dokuz Eylul University, Faculty of Business, Kaynaklar Campus, Buca, 35390 Izmir, Turkey;3. Democritus University of Thrace, 2 Dorilaiou Str., 55133, Kalamaria, Thessaloniki, Greece;4. Cyprus University of Technology, 30 Archbishop Kyprianos Str., 3036 Limassol, Cyprus;5. University of East Anglia, Norwich Business School, Norwich Research Park, Norwich, Norfolk, NR4 7TJ, United Kingdom;1. College of Business Administration, Seoul National University, Gwanak-ro 1, Gwanak-gu, Seoul 151-916, Republic of Korea;2. Economics and Management School, Wuhan University, Luoyu Road, Wuhan 430071, China;1. Department of Management, Chinese University of Hong Kong, Shatin, New Territories, Hong Kong;2. Moscow School of Management SKOLKOVO, Russia;3. SKOLKOVO-E&Y Institute for Emerging Market Studies, Unit 1608, North Star Times Tower, No. 8 Beichendong Road, Chaoyang District, Beijing 100101, China;1. Royal Holloway, University of London, School of Management, Egham Hill, Egham, TW20 0EX, UK;2. Northeastern University, D’Amore-McKim School of Business, 360 Huntington Avenue, 316E Hayden Hall, Boston, MA 02115, USA |
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| Abstract: | This study replicates and extends Birkinshaw et al.’s (1995) model of the predictors of business unit integration of large Western multinational corporations (MNCs). Our study investigates the global integration strategies of Taiwanese small and medium sized enterprises (SMEs) competing in the global information technology (IT) industry. It confirms the importance of some structural forces (i.e. economies of scale and standard market demands) in the global integration strategies of Taiwanese SMEs thereby expanding the applicability of existent internationalization theories developed primarily in the context of large Western MNCs to non-Western SMEs. This study finds three results that add new knowledge to the current SME literature and provides managerial implications. First, it finds a negative relationship between competitive actions and business unit integration. Second, it finds that in the optimally globalized IT industry there is no direct effect of business unit integration on performance. Third, it finds a direct effect of differential comparative advantage on performance. |
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