How To Go Inside The Host Market

Chinese firms are going global actively recently.With the advance of the strategy of"the Belt and Road" and Asian Infrastructure Investment Bank,Chinese firms certainly will be facing a new wave of internationalization.So,how to go inside the host market has become a significant problem for Chinese firms to grow into real MNEs.In reality,overseas subsidiary play a very important role in the going global process of MNEs.The premise of MNEs going inside the host market is that their overseas subsidiaries can achieve multiple embeddedness in the host market.However,existing literatures on multiple embeddedness pay more attention to the whole MNEs,rather than subsidiaries in specific host markets.Thus,this thesis investigates how emerging market multinational corporations(EM MNCs)can achieve multiple embeddedness in the host country market,and we propose the following research questions:(1)What is the relationship of institutional distance,response strategies and performance of embeddedness?(2)In the long run,how institutional distance dynamically influences the response of project team to its stakeholders,in international mega projects?(3)Do the Chinese managers exhibit same or different types of ICC working in MNCs in China and in India?And what types of cultural learning are needed for managers in each of the contexts?To answer above questions,we designed three studies,and the method and research results are shown below.Study 1 sets out to discuss how the subsidiary of emerging market multinational corporations(EM MNCs)can achieve multiple embeddedness in the host country market,using in-depth interviews with middle and senior managers from 4 Chinese MNCs operating in Indian market.This paper identifies 2 types of perception on the role of the focal firm:“apprentice-apprentice”means that the focal subsidiary and the host stakeholders both think the focal firm is apprentice;and“master-apprentice”means that the focal subsidiary view itself as master but the host stakeholders look it as apprentice.In the former situation,the focal subsidiary tends to accept the host institutions,using peripheral participation strategy(such as absorption,investigation and training themselves)and to acquire the community of practice's acceptance.However,in the latter situation,the focal subsidiary makes the host stakeholders accept the focal subsidiary's institutions,use leading action strategy(such as visiting,public relations and compromise)and to acquire the community of practice's acceptance.Besides,there are four different multiple embeddedness modes due to different significant node of value chain,including multiplex network mode,market-based mode,government-based mode and identity generalization mode.To sum up,the conclusions enrich international business researches on distance and organizational learning,and offer guidelines to achieve multiple embeddedness in the host country market for the MNCs from emerging economies.Study 2 aims to discuss how institutional distance dynamically influences the response of project team to its stakeholders,in international mega projects,using single case study method on Mao Khe 2×220MW Thermal Power Plant Project contracted by Kaidi Electric Power Engineering Company.The thermal power plant project is the only one that are completed ahead of time in Vietnam so far.We found that:(1)there is different dominant dimension of institutional distance in different project phases and it may change over time.(2)The project team will adopt different kinds of coupling strategies to respond to different stakeholders in different project phases.(3)The responsive strategies of project team to its stakeholders in international mega projects may change with different dominant dimension of institutional distance.Study 3 sets out to compare Chinese managers' views about cross-cultural communication competence in two different contexts of MNCs in going-global firms in India and MNCs in China.Contrary to the some of the extant assumptions in expatriate literature,we found that closer-distance in culture may not entail easier adjustment for individuals or firms.Chinese managers in India have actually encountered more challenges in India relating to a wide range of contexts than those working in MNCs in China.To address this dilemma,we propose a theoretical framework based on cross-cultural competence and situated cultural learning,which offers both theoretical and practical insight for understanding intercultural adjustment in close relation to situated contexts.The paper has made a major contribution to extend cross-cultural competence theories in relation to situated contexts,offering insights for developing cross-cultural competence for managers in MNCs,especially these in emerging economies.This study extends existing research on multiple embeddedness of EM MNEs from four aspects.(1)This study extends existing research on "institutional distance-respond strategy" in single context to multiple contexts.And this paper proposes a new research framework based on nuanced contexts in host markets facing overseas subsidiaries,taking different actors including expatriates,project team,headquarter,local government,local partners,local customers and local staffs into consideration.(2)This study extends existing research on multiple embeddedness,using the perspective of situated learning.And we found that different cognitive apprentice/master would lead to different response strategies of EM MNEs.(3)This study extends existing research on multiple embeddedness,using the perspective of institutional dynamics.(4)This study has theoretical implications for theory development for studying managers in MNCs operating and interacting in different contexts.Our approach of incorporating situated cultural learning is proved to a useful perspective for staying away from stereotypes about national cultures,especially with seemingly similar cultures of China and India;and for capturing the nuanced communication practices.Our findings also have practical implications for multiple embeddedness of EM MNEs.(1)Chinese subsidiaries should identify different embedded contexts and challenges facing them.And then they can classify the challenging issues into different types according to cognitive apprentice/master.In the situation of "apprentice?apprentice",they can adopt peripheral participation strategies;in the situation of"master-apprentice",they can use leading action,to aquire the community of practice's acceptance.(2)Project team,especially in international mega projects,should adjust their responsive strategies to its stakeholders according to different dominant dimension of institutional distance.(3)The lack of training for emerging economies appears to be a niche area for future intercultural training.And new models based on situated learning need to be further developed.With this cultural learning approach,managers working in MNCs especially in going-global firms such as in India should exhibit much more agency and active participation in their adaptation processes.