Skip to main content
Frontiers of Business Research in China
Frontiers of Business Research in China Cover Image
Download PDF

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

Frontiers of Business Research in China volume 1, pages67–90(2007)Cite this article

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.

References

  1. Aharoni Y (1969). The Foreign Investment Decision Process. Boston: Harvard Business School Press

    Google Scholar 

  2. Bartlett C A, Ghoshal S (1989). Managing Across Borders: The Transnational Solution. Boston: Harvard Business School Press

    Google Scholar 

  3. Barlett C A (1981). Multinational structure change: Evolution versus reorganization. In: Otterbec L, ed. The Management of Headquarters-Subsidiary Relationships in Multinational Corporations. Aldershot, Hants: Gower

    Google Scholar 

  4. Buckley P J (1985). The limits of explanation: Testing the international theory of the multinational enterprises. Journal of International Business Studies, 19(2): 181–193

    Article  Google Scholar 

  5. Buckley P J, Casson M C (1985). The Economic Theory of the Multinational Enterprise: Selected Papers. London: Macmillan

    Google Scholar 

  6. Buckley P, Casson M (1976). The Future of the Multinational Enterprise. New York: Holmes & Meier

    Google Scholar 

  7. Dunning J (1989). The theory of international production. In: Khosrow F, ed. International Trade. New York: Taylor & Francis

    Google Scholar 

  8. Dülfer E (1997). Internationales Management. München: Oldenbourg

    Google Scholar 

  9. Egelhoff W G (1988). Strategy and structure in multinational corporations: A revision of the stopford and wells model. Strategic Management Journal, (19): 1–14

  10. Fayerweather J (1969). International Management: A Conceptual Framework. New York: McGraw Hill

    Google Scholar 

  11. Fredrickson J W (1983). Strategic process: Questions and recommendations. Academy of Management Review, (8): 565–575

  12. Geringer J, Herbert L (1989). Control and performance of international joint ventures. Journal of International Business Studies, (Summer): 235–254

  13. Ghoshal S, Bartlett C A (1988). Creation, adoption and diffusion of innovations by subsidiaries of multinational corporations. Journal of International Business Studies, 19(3): 365–388

    Article  Google Scholar 

  14. Hedlund G (1981). The hypermodern MNC: A heterarchies: New approaches? Human Resource Management, (25): 9–36

  15. Hitt M A, Ireland R D (1987). Building competitive strength in international markets. Long Range Planning, 20(1): 115–122

    Article  Google Scholar 

  16. Hofer C, Schendel D (1978). Strategy Formulation: Analytical Concepts. St Paul, MI: West

    Google Scholar 

  17. Hymer, Stephen H (1976). The International Operations of National Firms: A Study of Direct Foreign Investment. Cambridge, MA: MIT press

    Google Scholar 

  18. Johnson J H Jr (1995). An empirical analysis of the integration-responsiveness framework: US construction equipment industry firms in global competition. Journal of International Business Studies, 26(3): 621–635.

    Article  Google Scholar 

  19. Kindlegerger, Charles P (1969). American Business Abroad. New Haven: Yale University Press

    Google Scholar 

  20. Kobrin S (1991). An empirical analysis of the determinants of global integration. Strategic Management Journal, (12): 17–31

  21. Kumar B (1993). Globale Wettbewerbstrategien für den europäischen Markt. In: Haller M, Bleicher K, Breuchlin E, Haller M., Pleitner H J, Wunderer R, Zünd A, eds. Globasisierung der Wirtschaft. Bern: Hauptverlag

    Google Scholar 

  22. Leontiades J (1986). Going global-global vs national strategies. Long Range Planning, 19(6): 96–104

    Article  Google Scholar 

  23. Martinez J I, Jarillo J C (1991). Co-ordination demands of international strategies. Journal of International Business Studies, 22(3): 429–444

    Article  Google Scholar 

  24. Miller C, Cardinal L (1994). Strategic planning and firm performance. Academy of Management Journal, 37(6): 1649–65

    Article  Google Scholar 

  25. Millington A, Bayliss B (1977). Internationalization and the success of UK transnational manufacturing operations. Management International Review, 37(3): 199–221

    Google Scholar 

  26. Quinn J B (1980). Strategies for Change: Logical Incrementalism. Homewood, IL: Irwin

    Google Scholar 

  27. Porter M (1986). Changing patterns of international competition. California Management Review, (28): 9–40

  28. Roth K, Morrison A J (1990). An empirical analysis of the integration-responsiveness frame work in global industries. Journal of International Business Studies, 21(4): 541–564

    Article  Google Scholar 

  29. Rozenzweig P M, Singh J V (1991). Organizational environments and the multinational enterprise. Academy of Management Review, 16(2): 340–361

    Article  Google Scholar 

  30. Taggart J (1997). An evaluation of the integration-responsiveness framework: MNC manufacturing subsidiaries in the UK. Management International Review, 37(4): 541–564

    Google Scholar 

  31. 朱 良瑞 (2000). 「在中日系企業の経営に関する調査と分析」. 『経営研究』(大阪市立大学), 第50巻、第3号, 121–143

    Google Scholar 

  32. 吉原 英樹 (1997). 「多国籍企業の中国ヘの企業進出」. 『国民経済雑誌』, 神戸大学経済経営学会, 第176巻, 11月, 第5号, 1–13

    Google Scholar 

Download references

Author information

Affiliations

  1. School of Business, Sun Yat-sen University, Guangzhou, 510275, China

    Yunshi Mao & Jiancheng Wang

Authors
  1. Yunshi Mao
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Jiancheng Wang
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Jiancheng Wang.

Additional information

Translated from Zhongguo Ruankexue 中国软科学 (China Soft Science), 2005, (3): 89–98

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Mao, Y., Wang, J. The strategic decisions and success factors of the global integration-local responsiveness of Japanese MNCs in China. Front. Bus. Res. China 1, 67–90 (2007). https://doi.org/10.1007/s11782-007-0005-0

Download citation

Keywords

  • Japanese MNCs
  • global integration-local responsiveness
  • ownership advantages
  • locational factor
  • internalization advantages