Globalization Strategy Of Chinese Enterprises Based On A Social Network Perspective

Since the reform and open up, the growth rate in number of Chinese based multi-national companies, and the amount of investments made aboard from China are much higher compare to other countries around the world. However, from this mass number of Chinese entrepreneurs, including those who are very talented, very few have succeed outside of China, and globalized Chinese enterprises are far and few, what are the reasons behind this Phenomenon?Studies were done on this subject from various angles. However, all the studies done on this topic from different theories such as entrepreneur behavior theory, innovative behavior theory, structure-hole theory, and comparative advantage theory have struggled to provide a convincing answer on this phenomenon, and none was unable to uncover the true reason why it is so hard for Chinese enterprises to find success outside of China.This study is done based on the following hypothesis:Under the given restrictions, the entrepreneurs’ differences in understanding of comparative advantage and cross-cultural structural-hole, will lead to different behaviors, strategies, and results. Therefore, adopting the theory of cross-cultural social network structure (especially the theory of cross-cultural structure-hole), this study analyzes Chinese entrepreneurs’ behaviors and strategies used in the globalization of their business from three aspects: The entrepreneur’s personality, enterprise’s organization structure, and enterprise’s network of external contacts. Using successful Chinese based multinational enterprises like SANY heavy Industry, Evergreen group, TCL, Mindray, Lenovo, and WanXiang as the subjects in this study, the author attempts to construct a theoretical assessment model on the success globalization of Chinese enterprise.This study finds, that the ownership of cross-cultural social network, or cross-cultural structure-hole, is the key to success for the globalization of Chinese enterprises. The entrepreneur’s ability to acquire new knowledge and understand cross-culturally is a key index reflecting the level of attention and resource this enterprise would have on establishing a cross-cultural social network, it is also a precondition for having such network of contacts. In enterprises which has cross-cultural social network, the structure of such network become the key question, different structures will lead to different management structures. In cross-cultural enterprises, although cross-cultural social network of contacts always exists, the structure varied from one to another. Chinese entrepreneur’s different understanding of their cross-cultural social network and structure-hole will lead to different behaviors and strategies, which will result in different outcomes.In conclusion, this study have not only discussed the root cause of failure in globalization attempts from various Chinese enterprises, but also discussed the behaviors and strategies used in success globalization cases. More importantly, the 3 angles this study used in the assessment of success globalized Chinese enterprises have further enriched the coverage of theoretical studies on globalization of Chinese enterprises, and have made very practice contribution to the establishment of theoretical assessment model on the success globalization of Chinese enterprise.