Research On The OEMs’ Enterprise Upgrading Based On Bridging Social Capital And Organizational Learning

The Pearl River Delta is the fastest growing economic zone of the People‘s Republic ofChina since China‘s economic reform in1979. Especially, The Pearl River Delta has becomea global manufacturing base for many Hong Kong and Taiwan entrepreneurs, and foreignmultinationals. The majority of firms in this area engage in original equipment manufacturerand original design manufacturer, typically, they rely on the cost advantage of cheap labourand raw materials. However, there is growing pressure on the OEMs to create and addbusiness value as the cost of manufacturing has increased dramatically in recent years. For theOEMs, the process of upgrading begins with delineating the production of easy-to-produceitems. From there, the OEMs may sequentially add higher value-adding activities such asassembly of more complex parts, design of components, and the manufacture of completeproduct lines into their portfolio of operations.The increasing interests in EU have inspired a rich literature during the past two decades,especially from the global value chain (GVC) analysis. Upgrading involves a learning processthrough which those who run enterprises acquire new knowledge—often throughrelationships with other firms in the value chain. GVC literature shows that internationallinkages play a crucial role in getting access to technological knowledge and promotinglearning and EU. However, most of the studies within the GVC approach do not explicitlyinvestigate how learning and EU occur within firms through external linkages. The externallinkages can be seen as social capital based on the resource-based view. We also believe thatthe literature dealing with social capital (SC), learning and EU has not been integrated in asystematic fashion, leaving gaps in the understanding of the links among the concepts. Somestress the linkage between relationship development and knowledge transfer, and othershighlight the connection between knowledge process systems (i.e., knowledge acquisition andsharing) and EU. Very few attempts, however, have yet been made to relate key concepts fromthe SC view, organizational learning theory and the resource based view. By emphasizing theimportant link between SC capital, inter-and intra-firm learning and EU, we seek tocontribute to a further convergence between different domains of research. We applied theOEMs in the Pearl River Delta, the total sample of the survey is185. With the corrected andverified of the theoretic model and the correlation hypothesis, we can draw the mainconclusion as fellow:（1）The three dimensions of external social capital: Structural social capital hassignificantly positive effect of cognitive social capital, and relationship social capital; cognitive social capital has significantly positive effect of relationship social capital;Structural social capital is a prerequisite for the development of cognitive social capital andrelationship social capital.（2）Relationship social capital has significantly positive effect ofinter-organizational learning; Structural social capital and cognitive social capital has anindirect impact on inter-organizational learning; Structural social capital is a key element ofsocial capital.（3）Inter-organizational learning has significantly positive effect of processupgrading and product upgrading; Inter-organizational learning has an indirect impact onfunction upgrading.（4）Inter-organizational learning has significantly positive effect ofintra-organizational learning. Organizational learning plays an intermediary role ininter-organizational learning and function upgrading.（5）Intra-organizational learning hassignificantly positive effect of process upgrading, product upgrading, and function upgrading.Through the research of the relationship of social capital, organizational learning andenterprise upgrading, the paper contributes to theoretical literature and managerial practice interms of three aspects:（1）The current research of the OEMs‘upgrade is mainly based on thevalue chain theory (GVC) and technical capacity evolution theory, two theories haveemphasized the inter-organizational relationships, organizational learning the importance ofmanufacturing enterprises to upgrade to achieve. However, the existing literature does notsystematically address the link between inter-organizational relationships, organizationallearning and enterprise upgrading, or emphasize the impact of inter-organizationalrelationships based on knowledge transfer organization of learning activities, or explore theimpact of organizational learning on upgrades, but not the three integrated within a researchframework. Therefore, based on resource-based theory, social capital theory andorganizational learning theory, this study proposes a research framework of social capital,organizational learning and enterprise upgrading. In addition, the research methods in the pastto upgrade enterprise case study and theoretical analysis based paper through a large-scalesurvey carried out, which is a supplement to upgrade research enterprise in the way.（2）Incurrently, GVC theory can not investigate the OEMs in detail that how the learning andinnovation can be generated through inter-organizational relationships and affect the upgrade.Based on the theory analysis, this article views the relationship between the OEMs and itscustomers as the bridge social capital. To better address this problem that howinter-organizational relationships can affect the OEMs organizational learning, this paperproposes the research hypothesis that social capital has the impact on inter-organizationallearning, also proposed a hypothetical link between the three dimensions of social capital. Research results verify the reasonableness of this assumption and found the mechanism ofinter-organizational relationships of local manufacturing enterprises to upgrade the role:international links (structural social capital) and resource balancing or resource leverage (therelationship between cognitive and social capital). And identify the impact of organizationallearning the most important elements of social capital, that trust-based relationship betweensocial capitals.（3）Though Escalation emphasizing the importance of organizational learning,the existing study of enterprises upgrading did not explore in depth that the OEMs how tolearn during the upgrading process? To solve this problem, we divided the organizationallearning of the OEMs in the GVC into two phases: inter-organizational learning, which aboutknowledge acquiring; inner-organizational learning, which about knowledge distribution,integration and application. The framework of inter-organizational learning,inner-organizational learning and enterprise upgrading was proposed. Related researchconclusions not only analysis on the way to the process, product and functional upgrading,and draw on conclusion of the mechanism of the role of organizational learning on upgrading:inter-organizational learning and the effective integration of the learning organization. Theformer is an important source of the OEMs‘technology, market knowledge and otherresources, which is a necessary process to enhance the capacity needed to upgrade it.