You are on page 1of 21

This article was downloaded by: [National Sun Yat-Sen University]

On: 11 August 2015, At: 01:13


Publisher: Routledge
Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: 5 Howick Place,
London, SW1P 1WG

Asia Pacific Business Review


Publication details, including instructions for authors and subscription information:
http://www.tandfonline.com/loi/fapb20

A Comparison Study of Manufacturing Industry


in Taiwan and China: Manager's Perceptions of
Environment, Capability, Strategy and Performance
a

WEN-SHINN LOW & SOO MAY CHENG


a

Ching Yun University, Department of Business Administration , Taiwan

University of Macau, Faculty of Business Administration , Macau, China


Published online: 10 Jan 2007.

To cite this article: WEN-SHINN LOW & SOO MAY CHENG (2006) A Comparison Study of Manufacturing Industry in Taiwan and
China: Manager's Perceptions of Environment, Capability, Strategy and Performance, Asia Pacific Business Review, 12:1, 19-38,
DOI: 10.1080/13602380500336996
To link to this article: http://dx.doi.org/10.1080/13602380500336996

PLEASE SCROLL DOWN FOR ARTICLE


Taylor & Francis makes every effort to ensure the accuracy of all the information (the Content) contained
in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no
representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of the
Content. Any opinions and views expressed in this publication are the opinions and views of the authors, and
are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied upon and
should be independently verified with primary sources of information. Taylor and Francis shall not be liable for
any losses, actions, claims, proceedings, demands, costs, expenses, damages, and other liabilities whatsoever
or howsoever caused arising directly or indirectly in connection with, in relation to or arising out of the use of
the Content.
This article may be used for research, teaching, and private study purposes. Any substantial or systematic
reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in any
form to anyone is expressly forbidden. Terms & Conditions of access and use can be found at http://
www.tandfonline.com/page/terms-and-conditions

Downloaded by [National Sun Yat-Sen University] at 01:13 11 August 2015

Asia Pacific Business Review,


Vol. 12, No. 1, 1938, January 2006

A Comparison Study of Manufacturing


Industry in Taiwan and China:
Managers Perceptions of Environment,
Capability, Strategy and Performance
WEN-SHINN LOW* & SOO MAY CHENG**
*Department of Business Administration, Ching Yun University, Taiwan, **Faculty of Business
Administration, University of Macau, Macau, China
ABSTRACT This article compares managers perceptions of environment, capability, strategy and
business performance in Taiwan and China. Based on an analysis of survey data collected from the
fastener industry, results show that the industrial environment and network capability are
significantly associated with performance in China, but not in Taiwan. The findings highlight the
difference between actual and perceived situations which results from what specific context decision
makers find themselves in and how they allocate attention to specific issues. In addition, path
analysis reveals that both organizational and network capability of Chinese firms are significantly
associated with strategy and performance. This demonstrates that the strategy selected by the
Chinese firms as a mediator influences their performance. Implications of these findings are
discussed.
KEY WORDS : Environment, strategy, network capability, performance

Introduction
Contingency theory has acknowledged the appropriateness of various strategic
orientations in a variety of environmental conditions, arguing that no one strategy
can be appropriate in all situations; effective strategies are dependent on the
specific environmental conditions (Lawrence & Lorsch, 1967; Miller & Friesen,
1983; Miller, 1988; Wright et al., 1995). Organizational ecology from a broad and
long-term view postulates that organizations must either fit their environmental
niches or fail; their survival is a result of environmental evolution (Wholey &
Brittain, 1979; Ulrich, 1987). The r-selection and K-selection put forth by
MacArthur and Wilson (1967) represent two types of biological proliferation
in different climates: rigorously seasonal and uniformly benign. On the basis
of this, Brittain and Freeman (1980) developed r-strategy and K-strategy.
The r-strategists are organizations that move quickly to exploit resources and
focus on activities that require low levels of capital investment and simple
Correspondence Address: Soo May Cheng, Faculty of Business Administration, University of Macau, Av. Padre
Tomais Pereira, Taipa, Macau SAR, China. Email: smcheng@umac.mo

1360-2381 Print/1743-792X Online/06/010019-20 q 2006 Taylor & Francis


DOI: 10.1080/13602380500336996

Downloaded by [National Sun Yat-Sen University] at 01:13 11 August 2015

20

W.-S. Low & S.M. Cheng

structures, because their success depends heavily on first-mover advantages. Such


organizations persist only where the pattern of resource availability is highly
uncertain and resources are dispersed over time or space. The K-strategists, on the
other hand, are organizations that are structured to compete successfully in a
densely settled environment. They expand more slowly into new resources than
the r-strategists because the structures generating competitive efficiency
frequently preclude the rapid adjustments necessary to capture first-mover
advantages (Brittain & Freeman, 1980: 312). Both contingent and ecological
perspectives underline the congruence between organizations and their external
environments.
The external environment of a firm comprises the whole range of economic,
social, political, technological and industrial factors. However, measures between
the actual and perceived characteristics of the environment are not highly
correlated (Downey et al., 1975). What you see depends on where you sit! It is
managers perceptions, not reality, that lead to decisions (Robbins, 1990: 208).
This notion highlights the limits of human rationality in explaining how firms
make decisions. From an attention-based view, Ocasio (1997: 187) indicates that
what decision-makers do depends on what issues and answers they
focus their attention on. What issues and answers they focus on
depends on the specific situation and on how the firms rule, resources
and relationships distribute various issues, answers and decisionmakers into specific communications and procedures.
The perceived environment and distributed attention might differ in formulating
strategy and further influencing performance in small and medium-sized
enterprise (SME) dominated countries (for example, Taiwan) and in transitional
countries (for example, China). The study seeks to understand the relative
importance of strategy and environment perceived by opposite sides of the Taiwan
Strait (cross-strait) managers in influencing the level of performance.
In addition, the resource-based viewpoints to the firms resources and
capabilities as the basis for formulating its strategy and the primary source of its
profitability (Rumelt, 1984, 1991; Barney, 1991; Peteraf, 1993; Hamel &
Prahalad, 1994). From a network perspective, the utilization of network resources
and the leveraging of interfirm relationships may differentiate interfirm
performance stemming from the participation of firms in the networks (Gulati,
1999; Lipparini & Fratocchi, 1999; Lorenzoni & Lipparini, 1999). These
perspectives underscore the importance of a firms organizational capability
(Grant, 1998) and network capability (Chen, 1999). Most research has focused on
either organizational capability or network capability; however less attention has
been paid to both capabilities which may influence performance. Meanwhile,
firms might have recognized the importance of strategies, such as developing new
products, entering new markets and shaping high quality images. Nonetheless, are
they armed with the capabilities to formulate and implement those strategies? It is
anticipated that strategy will mediate to impact on firm performance.
The objectives of this article are: (1) to examine the relationships between
environment and performance in China and Taiwan; (2) to examine the relationships

Downloaded by [National Sun Yat-Sen University] at 01:13 11 August 2015

A Comparison Study of Manufacturing Industry in Taiwan and China

21

between capability and performance in China and Taiwan; (3) to determine whether
strategies selected by cross-strait managers in different environments mediate to impact
performance; (4) to determine whether strategies selected by cross-strait managers
with different capabilities mediate to impact performance. The results are based on the
analysis of a survey of top managers in the fastener industry of China and Taiwan.
The article begins with an overview of the research background and industry in China
and Taiwan. A literature review is presented, with this discussion leading to a series
of hypotheses. The methodology used to test these hypotheses is next, followed
by a presentation of the research findings. The essay concludes with a summary
and implications, including the limitations of this study and some suggestions for
further research.
Research Background
The Chinese economy has shown dramatic growth in recent years. In the first half
of 2001, the economic growth rate in China jumped by 7.9 per cent from the
previous year despite the slow-down of the world economies (Business Times,
2001). In contrast, economic growth in Taiwan revealed minus 0.73 per cent
growth in the first half of this year, according to the Directorate-General of
Budget, Accounting and Statistics of Taiwan. It was the first minus growth in
Taiwan since 1975. Prior to Chinese industrial development, Taiwan had laid
down solid economic foundations and featured excellent manufacturing
capabilities, but the worsening environment in the last ten years, such as soaring
production costs and environmental awareness, has decimated previous
competitive advantages. Since May 2000, a minority of the governing party has
caused further unrest for the Taiwanese government. In facing different
environments, the cross-strait managers would have different perceptions about
environmental and strategic orientations. Although the management of Chinese
firms has received increased scholarly attention, few scholars have rigorously
examined the issue either empirically and theoretically (Nee, 1992; Luo, 1999).
A review of the literature also shows that most studies about environment-strategy
alignment focus on the firms within specific districts (Kean et al., 1998;
Luo, 1999), international business (Carpano, et al., 1994; Francis & Collins-Dodd,
2000) and small business (Lang et al., 1997; Beal, 2000). Limited research has
been carried out on a specific industry and was studied whether strategy mediates
to impact on performance.
The fastener industry was chosen as the research subject for this study due to its
export significance to Taiwan. Taiwan has been acclaimed as the kingdom of
fasteners due to its fastener export volume remaining the worlds number one for
many years. The achievement is particularly salient as many traditional industries,
such as shoes, umbrellas, bicycles, toys and so forth, have diminished production
scales in Taiwan on the one hand and relocated factories in China on the other.
The fastener industry of Taiwan is characterized by: (1) the domination of small
and medium-sized enterprises; (2) complete industrial systems from up, middle
to down stream; (3) high export-orientation and; (4) export market concentration
(Metal Industry Research and Development Center, 1998). According to statistics
of the Taiwan Institute of Fastener Industry, the number of fastener firms totalled

Downloaded by [National Sun Yat-Sen University] at 01:13 11 August 2015

22

W.-S. Low & S.M. Cheng

1,185 in 2001, mainly located in the south of Taiwan with capital of less than
NT$10 million (about US$300 thousand).
The development of the Chinese fastener industry has taken more than 30 years
since the establishment of the first fastener manufacturer in 1953. The industry
features (1) small factories with average 3 5 workers; (2) standardized and low
value-added products; (3) incomplete up stream and poor quality materials; and
(4) sales divided equally between national and international markets (Metal
Industry Research and Development Center, 1998). The Chinese fastener factories
numbered about 8,000 in 2000. Large-scale fastener manufacturers numbered
about 300, employing more than 220,000 people. Factories are mainly located in
east China.
Theory and Hypotheses
Environment and strategy have been empirically demonstrated to have significant
influence on performance (Miles & Snow, 1978; Porter, 1980; Scherer, 1990).
The structure-conduct-performance paradigm proposed by Scherer (1990)
suggests that organizational performance is determined by strategies, such as
low price and differentiation. Several different conceptualizations of environment
have been adopted to test the environment-strategy linkage, including
environmental dynamism (Miller & Toulouse, 1986; Tan & Li, 1996);
environmental uncertainty (Miller, 1988); environmental munificence (Dess &
Beard, 1984; Venkatraman, 1989; Yasai-Ardekani, 1989). These studies further
demonstrate that the environment-strategy configuration lead to superior
performance. Some scholars focus on the activities of environmental scanning,
such as frequency and scope, to examine the effect of successful congruence
between environment and organizations. They emphasize that effective scanning
of the environment allows firms to learn about opportunities and threats, thus
enabling the firms to choose appropriate strategies congruent with environmental
conditions (Bourgeois, 1980; Jennings & Lumpkin, 1992; Lang et al., 1997; Wu
et al., 1998; Beal, 2000). Specifically, Jennings and Lumpkin (1992) found that
firms following a low cost leadership will focus on the scanning of environmental
opportunities; while firms following a differentiation strategy will look for
scanning environmental threats. Beal (2000) concludes that firms pursuing a
combination of low cost leadership and differentiation in mature industries should
monitor and analyse information regarding their own resources and capabilities.
These findings imply that the environmental scanning follows strategy, suggesting
that firms in a given strategy need to be conscious of the significant trends in a
rapidly changing and/or competitive environment. These findings also adequately
reflect the central argument of the attention-based view which postulates that firm
behaviour is the result of how firms distribute their attention.
Organizations must adapt by changing as environmental conditions change.
By steering ongoing adaptation, organizational theorists note a paradox between
adaptation and inertia (Miles & Snow, 1978; Morison, 1989) because adaptation
might preclude adaptability (Weick, 1979). An organizations capacity to learn and
adapt may be reduced as a consequence of internal congruence and past success.
As a result, todays success may sow the seeds of tomorrows crisis when

Downloaded by [National Sun Yat-Sen University] at 01:13 11 August 2015

A Comparison Study of Manufacturing Industry in Taiwan and China

23

environmental conditions change. An important managerial task is thus to build


organizations that retain their ability to learn and unlearn as environmental
conditions change (Tushman et al., 1989; Hamel & Prahalad, 1994). More than a
decade ago, scholars with an organizational learning point of view have articulated
that the ultimate source of competitive advantage is learning at the individual and
organizational level (de Gues, 1988; Stata, 1989; Senge, 1990; Dodgson, 1993) and
through a learning organization, firms are able to quickly reconfigure to focus on an
emergent opportunity or threat. Sadler-Smith and Badgers (1998) review on
perception and its impact upon innovation and organizational learning affirmed that
managers perception is one of the crucial factors in organizational learning and
change, and it may further influence innovation and organizational performance.
The external environment of a firm is comprised of a complex combination of
factors. Each of these factors tends to influence organizations in its own way.
Hodge, Anthong and Gales (1996) argue that different industries have different
influential levels by environmental factors. Robbins (1990) differentiates general
environment from specific environment. The general environment encompasses
conditions that may influence organizations but their relevance is not overly clear.
The specific environment is that part of the environment that is directly relevant to
the organizations, including customers, suppliers, competitors, government
regulatory agencies, labour unions, trade associations and so on. Similar
environmental subcategories are described by other scholars, such as macro and
micro environment (Kotler & Armstrong, 1999); general and competitive
environment (Miller, 1998); remote, industry and operating environment (Pearce
& Robinson, 2000) and general and task environment (Barney & Griffin, 1992).
Based on these reviews, this study divides the environmental factors into two
constructs: general environment (for example, political, legal, infrastructure and
economic dimensions) and industrial environment (for example, competitors,
suppliers, customers and production conditions).
In 2000, Taiwan experienced the first change of party in government; however,
since then the executive departments of the government have often been boycotted
by the majority of the opposition parties. Such disturbances have caused
instability of the political environment and negatively influence economic growth.
In addition, the slow-down of the US economy and industrial relocations to China
have worsened the economy of Taiwan. In contrast, the Chinese economy has
enjoyed high growth due to the huge domestic markets and the opening policies
which have drawn much capital from foreign investors. These environmental
differences perceived by cross-strait managers may have an impact on firms
performance. Based on this, the hypotheses of this study are:
H1: In Taiwan, perceived environment is positively associated with
performance.
H1a: In Taiwan, perceived general environment is positively
associated with performance.
H1b: In Taiwan, perceived industrial environment is positively
associated with performance.
H2: In China, perceived environment is positively associated with
performance.

24

W.-S. Low & S.M. Cheng

Downloaded by [National Sun Yat-Sen University] at 01:13 11 August 2015

H2a: In China, perceived general environment is positively associated


with performance.
H2b: In China, perceived industrial environment is positively
associated with performance.
Emphasis on the external environment has been the dominant theme in
strategic management since the 1980s. The industry structure view associated
with Porter (1980) suggests that supernormal returns are primarily a function of
a firms membership in an industry with favourable structural characteristics,
for example, bargaining power, barriers to entry and so on. Most strategic
analyses thus concentrated on the industry environment of the firm and its
positioning against competitors. By contrast, the resource-based view argues
that differential firm performance is not rooted in industry structure, but is
fundamentally due to firm heterogeneity (Barney, 1991). Empirical investigations have approved that organizational performance is often influenced by
the possession of unique capability or distinctive competence (Hitt & Ireland,
1985; Neil, 1986; Miller et al., 1997). The search for competitive advantages
has focused on those resources and capabilities that are housed within a single
firm, that is, its organizational capability termed by Grant (1998: 118).
However, a firms critical resource may extend beyond firm boundaries (see
Gulati et al., (2000) for a review). Recently, there has been increased attention
on interfirm networks which provide resources for various types of input that
are complementary or substitutable (Hamel, 1991; Shan et al., 1994; Dyer &
Singh, 1998). Empirical studies also confirmed that investment in relationspecific assets is often correlated with superior performance (Parkhe, 1993;
Dyer, 1996). Chen (1999) further reports that organizational and network
capability are of paramount importance for the industrial upgrading in Taiwan.
Thus, capability in this study is conceptualized by both organizational
capability and network capability.
Taiwanese fastener firms are mostly small in scale, with fewer than 50
employees. Small and medium-sized enterprise (SMEs) armed with fewer
resources than those of large companies rely more on external resources provided
by the networks in which they are situated (Malecki & Tootle, 1996).
The Taiwanese machine tool case study illustrated by Liu and Brookfield (2000)
has showed the distinctive network capability of the industry. In contrast, Chinese
fastener firms are much larger than Taiwanese firms in production scales and
numbers of employees. They are more likely to rely on organizational capability.
In light of the above, performance is likely to be positively related to the firms
organizational and network capability. Based on this consideration, the following
relationships are hypothesized:
H3: In Taiwan, capability is positively associated with performance.
H3a: In Taiwan, organizational capability is positively associated
with performance.
H3b: In Taiwan, network capability is positively associated with
performance.

A Comparison Study of Manufacturing Industry in Taiwan and China

25

Downloaded by [National Sun Yat-Sen University] at 01:13 11 August 2015

H4: In China, capability is positively associated with performance.


H4a: In China, organizational capability is positively associated
with performance.
H4b: In China, network capability is positively associated with
performance.
Strategies must be consistent with environmental conditions. Specifically, they
must take advantage of existing or projecting opportunities and minimize the
impact of major threats. Scholars have different points of view in classifying
strategies. Ansoffs (1988) strategic portfolio, namely market penetration,
production development, market development and diversification, is characterized by the thrust of the firms strategic development. Kotler (1994) has
categorized strategy by intensive, integrative and diversification strategy.
In coping with five competitive forces, Porter (1980) suggests three generic
strategic approaches for firms to outperform competitors in the industry: overall
cost leadership, differentiation and focus. Based on a firms response to
environmental changes, Miles and Snow (1978) categorized firms as prospectors,
analysers, defenders and reactors. The prospector seeks for new products and
market opportunities, taking proactive steps to precipitate change in its productmarket domains. The analyser is always ready to move quickly into new
products and markets that have recently gained some degree of acceptance.
The defender focuses on narrow product-market domains, devotes energy to
improve the efficiency of existing operations, but does not tend to search outside
for new opportunities. The reactor perceives change and uncertainty in the
environment but is unable to respond effectively.
The typology of Miles and Snow (1978) and Porters (1980) generic strategy
have been discussed in strategic literature. The view of Miles and Snow
underscored the opinion that different strategies may not be employed by firms at
the same time. However, the cost leadership and differentiation strategy suggested
by Porter could be adopted simultaneously (Hill & Gareth, 1988). As a mature
industry, price competition in the fastener industry is inevitable. Some firms are
seeking operational improvement, however operational effectiveness is necessary
but not sufficient (Porter, 1996). Instead, the firms should undertake aggressive
activities to develop new products and markets to cope with the changing
environment. Combining the generic strategy of Porter and the typology of Miles
and Snow, this study conceptualizes strategy as proactiveness and conservativeness. The proactive strategy refers to the firm that seeks for new product-market
domains and aggressively differentiates from competitors. Thus the firm is
conceived as following the prospector and analyser. The conservative strategy, on
the other hand, is the firm that concentrates on narrowly defined product-market
domains and engages in continuous and intense efforts to become the most
efficient operator. It is therefore viewed as following the defender and reactor. A
firm with a proactive strategy may lead to better performance if it is closely
aligned to the demands of its external environment. Hence, the hypotheses of
environment-strategy alignment are:
H5: In Taiwan, perceived environment is positively associated with
performance indirectly through proactive strategy.

26

W.-S. Low & S.M. Cheng

Downloaded by [National Sun Yat-Sen University] at 01:13 11 August 2015

H5a: In Taiwan, perceived general environment is


associated with performance indirectly through
strategy.
H5b: In Taiwan, perceived industrial environment is
associated with performance indirectly through
strategy.

positively
proactive
positively
proactive

H6: In China, perceived environment is positively associated with


performance indirectly through proactive strategy.
H6a: In China, perceived general environment is positively
associated with performance indirectly through proactive
strategy.
H6b: In China, perceived industrial environment is positively
associated with performance indirectly through proactive
strategy.
A firms pursuit of market opportunities must be based not only on the
existence of external opportunities but also on competitive advantages that
arise from the firms key resources (Pearce & Robinson, 2000). The task of
business strategy is to determine how the firm will deploy its resources within
its environment, to satisfy its long-term goals and to organize itself to
implement that strategy (Grant, 1998). From a resource input view, strategy
determines the allocation of a firms resources, providing a logical basis for the
distribution of organizational resources (Viljoen, 1991). If the proactive
strategy is desirable, it should be implemented by the firms which have welldeveloped organizational and network capability. For example, to develop new
products, a firm should have excellent manufacturing and R & D capability
and direct its human resources to the new initiative. To explore new markets, a
firm should feature complete distribution channels and maintain good
relationships with its distributors. Therefore, the following relationships are
predicted:
H7: In Taiwan, capability is positively associated with performance
indirectly through proactive strategy.
H7a: In Taiwan, organizational capability is positively associated
with performance indirectly through proactive strategy.
H7b: In Taiwan, network capability is positively associated with
performance indirectly through proactive strategy.
H8: In China, capability is positively associated with performance
indirectly through proactive strategy.
H8a: In China, organizational capability is positively associated
with performance indirectly through proactive strategy.
H8b: In China, network capability is positively associated with
performance indirectly through proactive strategy.

A Comparison Study of Manufacturing Industry in Taiwan and China


Environment
General Environment
Industrial Environment

H5 & H6
H7 & H8

H1 &

H2

Strategy
Proactiveness
Conservativeness

Capability

Downloaded by [National Sun Yat-Sen University] at 01:13 11 August 2015

Organizational Capability
Network Capability

27

H3 &

Performance
Financial Performance
Operational Performance
Organizational Performance

H4

Figure 1. Framework and hypotheses of the study

A framework of the study is shown in Figure 1 as follows:


Methodology
Sample
The data was collected through a mail survey to 900 fastener firms in China and
800 fastener firms in Taiwan. The firms chief exxcutive officers (CEOs) or
managers were invited to participate in a pre-coded, self-reporting questionnaire.
In China, the target firms were the subscribers to Fastener World, advertisement
magazine published every two months in English and Chinese, specifically about
the fastener industry. In Taiwan, the selected firms were the advertisers and
subscribers to Fastener World (it only accepts advertisements from Taiwanese
firms). Before sending out the final version, the questionnaire was pilot-tested by
five Taiwanese fastener managers for language suitability, understanding and
unnecessary repetition.
One month later, a follow-up reminder was mailed to China and Taiwan for
those whose responses had not been received. Due to the lower response rate from
China, a third follow-up reminder was sent. As a result, 81 usable responses were
gathered from China, representing a return rate of 9 per cent. This response rate is
acceptable because questionnaire research is relatively new in China and mail
response rates have proved to be very low (for example, Siu, 1992; Siu & Kirby,
1995). A total of 101 usable surveys were received from Taiwanese firms, which
provided a response rate of 12.5 per cent. The comparative samples show that the
average number of employees in the Chinese firms is far more than those in the
Taiwanese firms.
Measurement
Environment was measured using a two-dimensional construct: general and
industrial environments. Multiple items for measuring general environment were
based on the work of Robbins (1990), Miller (1998) and Barney & Griffin (1992);
items for measuring industrial environment were based on Barney & Griffin
(1992) and Porter (1980, 1990). Minor changes were made for the use in this
study. For example, threat of substitutes was neglected in that fasteners cannot
be replaced so far. One item, good economic prospects of trading partners
was added since the export rates of fasteners in both Taiwan and China are high.

Downloaded by [National Sun Yat-Sen University] at 01:13 11 August 2015

28

W.-S. Low & S.M. Cheng

For the general environment, respondents were asked for their perceptions of the
level of economic, political, financial, infrastructure and exporting segments in
their countries. For the industrial environment, respondents were asked for their
perceptions of the level of competition, supply, customer demands and production
conditions in their countries. These questions were measured by using a balanced
5-point Likert scale. Each respondent was asked to indicate the extent to which
they disagreed or agreed with the given statement, such as 1 Strongly Disagree
and 5 Strongly Agree.
Strategic orientation was measured along a proactive/conservative continuum,
based on the operationalization by Beal (2000), Miller (1988) and Porters (1980)
generic strategies. The approach was defined by asking respondents questions
about their emphases on developing new products and markets, creating a high
quality image, establishing distribution channels and increasing advertisement
expenditure. These questions used a 5-point Likert scale.
Firm capability was suggested by Chen (1999) as a two-dimensional construct:
organizational and network capability. Organizational capability was measured
using an adaptation of existing instruments (Grant, 1998; Lin, 1999). Network
capability was based on the work of Lin (1998) and Lin (1999). Respondents were
asked whether their companies were characterized by the organizational
capability (for example, manufacturing, R & D, marketing, management, finance
and distribution channels) and network capability (for example, relationships with
suppliers, distributors, associates, R & D organizations and financial institutions).
A 5-point Likert scale was used to measure these scales, such as 1 Very Low
and 5 Very High.
In addition, a set of questions was included in the survey to measure the
subjective evaluation of performance. In such studies, because most of the
objective data are confidential for the enterprises, the information is difficult
for researchers to access. Instead, scholars use a subjective way to evaluate
performance, including financial, management and technical performance (Grant,
1990; Boardman & Shapirot, 1997; Reuer & Miller, 1997). Although these data
are subjective, according to Grants research findings (1990), the results of the
subjective method are very close to those of an objective method. Chandler and
Hanks (1993) also contended that the subjective, self-reporting approach was
appropriate as these measures of organizational environment and performance
have been validated and shown to correlate with objective measures with a high
degree of reliability. This study adopted Venkatraman and Ramanujams (1986)
constructs, that is, financial, operational and organizational dimensions to
measure performance for they have broader domains to examine an industry
in different environmental contexts. Financial performance was measured by the
mean of the response scales for sales growth and profitability. Operational
performance was defined as the mean of the response scales for quality
improvement, market share enlargement and customer satisfaction. Organizational performance was then measured by the mean of the response scales for
working satisfaction and productivity of employees.
Reliability was assessed using Cronbachs coefficient. Generally a value around
0.7 is considered adequate to conclude internal consistency (Nunnally, 1978).
The results of the reliability coefficients ranged from 0.672 to 0.805, suggesting

A Comparison Study of Manufacturing Industry in Taiwan and China

29

Table 1. Environment-Performance relation: results of multiple regression


Dependent Variable (Performance)

Downloaded by [National Sun Yat-Sen University] at 01:13 11 August 2015

China

Taiwan

Independent Variables

General Environment
Industrial Environment
R square
F
Df

0.079
0.286
0.100
4.345
80

0.712
2.572*
0.015
0.743
100

0.126
2 0.109

1.111
2 0.963

* p , 0.05
** p , 0.01
*** p , 0.001
b: standardized coefficient.

an acceptable degree of internal reliability. Research hypotheses were tested by


multiple regressions for environment-performance relation and capabilityperformance relation. In addition, path analysis was used in order to access the
multivariate effect of the environment-strategy-performance relation and the
capability-strategy-performance relation.
Results
As shown in Table 1, multiple regression analysis suggests that the general
environment is not significantly related to performance in both China and Taiwan.
The industrial environment, however, has a moderate impact on performance. So,
only H2b is supported.
With regard to capability and performance, Table 2 shows that organizational
capability is significantly and positively associated with performance in China and
Taiwan. Network capability has some impact on performance in China,
Table 2. Capability-Performance relation: results of multiple regression
Dependent Variable (Performance)
China
Independent Variables
Organizational Capability
Network Capability
R square
F
Df
* p , 0.05
** p , 0.01
*** p , 0.001
b: standardized coefficient.

Taiwan

0.478
0.243
0.438
30.348
80

4.286***
2.176*
0.325
23.615
100

0.533
0.057

5.010***
0.532

Downloaded by [National Sun Yat-Sen University] at 01:13 11 August 2015

30

W.-S. Low & S.M. Cheng

Figure 2. Environment-Strategy-Performance relation: path analysis (Taiwan)

confirming the impression that guanxi or relationships are important for business.
However, network capability is not significantly related with performance in
Taiwan. Hence, H3a is supported, but H3b is not.
Path analyses in Figures 2 and 3 show the possible role of strategy in
influencing performance, when environment does not. It was expected that the
success of the manufacturing industries could have been due to proactive
strategizing which transcended the environment. But path analysis revealed
otherwise. Strategy does not mediate between environment and performance in
China or Taiwan. Therefore, both H5 and H6 are not supported.
In Figure 4, organizational and network capability are not significantly related
to strategy and performance in Taiwan. On the contrary, both organizational and
network capability are significantly and positively related to strategy and
performance in China. Thus, H8 is supported.
Discussion
The result that general environment is not significantly related to performance
confirms Grants (1998) argument that for most strategy decisions, the core of the
firms external environment is its industry which is defined by the firms
relationships with customers, competitors and suppliers. In this light, political
unrest and economic conditions in Taiwan have little impact on performance.
In addition, the industrial environment is significantly associated with
performance in China. The finding reflects Deng and Darts (1999) empirical
study, stating that market orientation in Chinese enterprises varies across company
General
Environment
.442***
.138

Strategy

Performance

.421***

Industrial
Environment
(*): p<0.05; (**): p<0.01; (***): p<0.001; value: standardized coefficient

Figure 3. Environment-Strategy-Performance relation: path analysis (China)

A Comparison Study of Manufacturing Industry in Taiwan and China

31

Organizational
Capability
.055
Strategy

Performance

.173
Network Capability
(*): p<0.05; (**): p<0.01; (***): p<0.001; value: standardized coefficient

Downloaded by [National Sun Yat-Sen University] at 01:13 11 August 2015

Figure 4. Capability-Strategy-Performance relation: path analysis (Taiwan)

location, ownership type, governmental control and company size. In other words,
as the industrial environment in China has changed dramatically in recent years,
Chinese firms which are sensitively aware of the changes in the industrial
environment may yield superior performance. Conversely, the industrial
environment is not significantly linked with performance in Taiwan. This may
be attributed to the fact that disadvantageous factors that have existed within an
industrial environment for several years have little influence on performance
because firms have found the solutions to these disadvantages. For example,
Taiwanese fastener firms have developed high-speed, multi-station forming
machines to cope with soaring labour costs; therefore this disadvantage does not
pose a threat.
The result that network capability does not impact firm performance is contrary
to the understanding that Taiwanese industries are characterized by close network
relationships. This might be explained by the specific situation the cross-strait
managers are located in and the distribution and allocation of their attention into
specific activities, communications and procedures. In field experiments
investigating individual decisions about littering, Cialdini et al., (1990, 1991)
found that individuals litter less in litter-free environments than in littered ones;
individuals litter more in litter-around environments because they feel further
litter would not make any difference. Taiwanese fastener firms are clustered in
south Taiwan, especially in the Tainan area. Businessmen can meet readily with
their suppliers, customers and associates in the neighbourhood, thus diminishing
the strategic importance of their relationships. On the other hand, an industrial
forum is held twice a year in Shanghai; attending Chinese fastener firms would

Organizational
Capability
.270**
.268**

Strategy

Performance

Network Capability

(*): p<0.05; (**): p<0.01; (***): p<0.001; value: standardized coefficient

Figure 5. Capability-Strategy-Performance relation: path analysis (China)

32

W.-S. Low & S.M. Cheng

Downloaded by [National Sun Yat-Sen University] at 01:13 11 August 2015

regard this gathering as beneficial to their relationships with suppliers, customers


and associates. The difference in the perception actually results from the specific
context decision makers find themselves in. This is consistent with one writers
observation that,
what the particular context decision-makers find themselves in, and
how they attend to it, depends on how the firms rules, resources and
relationships regulate and control the distribution and allocation of
issues, answers and decision-makers into specific activities,
communications and procedures. (Ocasio, 1997: 188)
Therefore, decision makers selectively restrict their attention to a limited set of
issues while ignoring others. Marketing personnel, for example, might ignore R &
D related information even though they have many opportunities to contact
associates. Compared with organizational capability, Taiwanese fastener firms
might give little attention to shaping network advantages. In this sense, an
advantageous environment (for example, industrial cluster) might not become an
opportunity and influence performance.
The findings shown in Figures 2 and 3 support Lees study (2000) of the
Chinese medicine industry in Taiwan which involved participation of firms on
both sides of the China Straits, and concluded that environment was not
significantly associated with strategy and performance whatever kinds of business
styles were adopted. These findings appear to imply that cross-strait firms do not
isolate those environmental elements which are relevant to organizational
activities, nor identify an appropriate niche to position themselves in. There are
three plausible explanations for these results. First, decision making mainly relies
on CEOs subjective judgement, experience and conduct in Taiwanese (Lin,
1998; Zhu & Warner, 2001) and Chinese private enterprises (Schlevogt, 2001).
When the dominance of the CEO approaches autocracy, the effectiveness of the
firms strategic planning and formulating are likely to be diminished (Pearce &
Robinson, 2000: 9). Secondly, as Ansoff (1988) indicates, organizations
generally lack information about themselves and their environment which is
needed for effective strategic planning; or do not have the managerial talents
capable of formulating and implementing strategy. Thirdly, cross-strait CEOs
may be so concerned with daily operations that they fail to monitor
environmental changes and to recognize and act on more important broader
issues of strategy. Strategy as a result does not play a mediating role between
environment and performance.
The result that neither type of capability relates significantly to strategy in
Taiwan reveals that Taiwanese firms might be narrowly focused, paying attention
to operational improvement rather than broader strategy. As a result, strategy is
unable to direct resources as a mediator to influence performance. Comparatively,
the stronger results for China demonstrate that the Chinese firms which have better
organizational and network capability, will adopt a proactive strategy and perform
better than those which do not. In other words, strategy selected by the Chinese
firms provides a logical basis for the distribution of organizational resources and
influences performance.

A Comparison Study of Manufacturing Industry in Taiwan and China

33

Downloaded by [National Sun Yat-Sen University] at 01:13 11 August 2015

Theoretical Implications
Based on the analysis of survey data collected from the fastener industry, this
study provides detailed and insightful information relating to managers
perceptions of environment, capability, strategy and performance in China and
Taiwan. Several theoretical implications are summarized. Firstly, the article
contributes to the literature by focusing on a specific industry, excluding the
variable of different industrial contexts because the same environment can have
different effects on different industries (Miller, 1998). Secondly, the study
investigated not only organizational capability but also network capability which
has been ignored in previous research. Combining both organizational and
network capability to examine empirically their influence on organizational
performance, this essay provides a direction that may be useful for further
research. Thirdly, the study deepens understanding of strategy by examining
whether strategy mediates the relation between environment and performance
as well as between capability and performance. Thus a formulating process of
strategy can be clearly mapped out, showing how firms identify niches and
distribute organizational resources.
Practical Implications
The findings of this study suggest a number of implications for managers in
Taiwan and China. Firstly, the alignment between industrial environment and
performance in China suggests that not only Chinese firms but also foreign
investors in China should be aggressive in pursuit of emerging market
opportunities. Secondly, organizational capability has a strong impact on
performance in both China and Taiwan, regardless of the perceived difficulties or
ease of environmental factors. Thirdly, from the environment-strategyperformance relationship, the findings of this study imply that both Chinese and
Taiwanese fastener firms are not strategy oriented. Therefore, it is easy for the
industry to become embroiled in price competition. Instead of being involved in
daily operations or administrative detail, managers should concern themselves
with broader issues of strategy. Fourthly, the performance of the Chinese firms is
related to network capability. This finding might suggest that the cultural
preference for personal rather than contractual relations, the much discussed
guanxi, remains an important factor in doing business in China (Leung & Yeung,
1995). Further research may be worthwhile to incorporate this issue.
Research Limitations and Future Research
This study has two limitations. First, it focused only on the business people in
China and Taiwan. Given this its limited scope, caution must be exercised when
generalizing its findings to the contexts of different countries. Further research
could test the models of congruence in various economic contexts (for example,
China and Western countries). Secondly, as a cross-sectional approach, this study
does not capture the incremental process of strategic formulation and
implementation or the achievement of external and internal alignment over

34

W.-S. Low & S.M. Cheng

time. Longitudinal studies would be worthwhile to trace the strategic actions


taken by the firms and environmental factors prevailing over the most recent
periods.

Downloaded by [National Sun Yat-Sen University] at 01:13 11 August 2015

Conclusions
Environmental analysis is widely viewed as the first step in formulating business
strategies. Most models of environmental analysis are based on rational choice,
for example, strengths, weaknesses, opportunities and threats (SWOT) and the
Five Forces model (Porter, 1980). However, the actual and perceived
characteristics of environment and capability may vary because of decision
makers perceptions and priorities. This study investigated the relative
importance of environment and strategy perceived by the managers in Taiwan
and China. Its findings indicate that the general environment does not influence
firm performance, meaning that the concern of the managers is not with the
general environment, but with getting their organizational competences right.
Hence the industrial environment was seen to have minimal impact on firm
performance in Taiwan. This reflects that when advantageous or disadvantageous
factors have existed in an industry for several years, their importance may be
lessened. Therefore, to understand the influential levels of a changing
environment, it would be better for researchers to conduct investigations within
the initial periods after the change. For example, as China and Taiwan were
approved to enter the World Trade Organization (WTO) in 2002, research into
the effects of their entry should be conducted during the first few years after
entry.
In addition, previous research has focused on either organizational capability
or network capability but ignored the combination of the two capabilities
(Gulati et al., 2000). This study redresses this deficiency. The results show that the
organizational capability does impact on firm performance in both Taiwan and
China, appearing consistent with the resource-based perspective. However,
networking has little influence on firm performance in Taiwan. The result again
contradicts previous understandings of the networking characteristics of
Taiwanese industries and highlights the limits of rationality in managers
perceptions on network capability as mentioned before.
The environment-strategy-performance relationship is not supported in both
Taiwan and China. This result might relate to the fact that the fastener industry is
mostly mass production orientated. Managers are keen on the improvement of
operational efficiency to the extent of ignoring strategic issues. Besides, decision
making in Taiwanese SMEs and Chinese enterprises may be dominated by
CEOs subjective judgement based on their past experience rather than on rational
strategy formulation. The ability of a firm to sustain its competitiveness beyond
the tenure of the CEO is therefore questionable. As Pearce and Robinson
(2000) indicate, CEOs and senior managers should encourage employee
participation in making strategic decisions because strategy concerns whole
organizations. Employees who are consulted in the decision-making process
are likely to feel they own a part of that decision and have an obligation to
make it work.

A Comparison Study of Manufacturing Industry in Taiwan and China

35

Downloaded by [National Sun Yat-Sen University] at 01:13 11 August 2015

References
Ansoff, H. I. (1988) The New Corporate Strategy, 3rd edn (New York: John Wiley & Sons).
Barney, J. B. (1991) Firm resources and sustained competitive advantage, Journal of Management, 17,
pp. 99120.
Barney, J. B. & Griffin, R. W. (1992) The Management of Organizations: Strategy, Structure and Behavior
(Boston, MA: Houghton Mifflin).
Beal, R. M. (2000) Competing effectively: environmental scanning, competitive strategy and organizational
performance in small manufacturing firms, Journal of Small Business Management, 38, pp. 2748.
Boardman, A. E. & Shapirot, D. M. (1997) The role of agency costs in expanding the superior performance of
foreign MNE subsidiaries, International Business Review, 6, pp. 295 317.
Bourgeois, L. J. (1980) Strategy and environment: a conceptual integration, Academy of Management Review, 5,
pp. 2539.
Brittain, J. W. & Freeman, J. (1980) Organizational proliferation and density dependent selection, in:
J. R. Kimberly & R. H. Miles (Eds) The Organizational Life Cycle: Issues in the Creation, Transformation
and Decline of Organizations, pp. 291338 (San Francisco, CA: Jossey-Bass).
Business Times (2001) Chinas economy keeps growth in first half of 2001, Business Times, 31 July, Taipei
(in Chinese).
Carpano, C., Chrisman, J. J. & Roth, K. (1994) International strategy and environment: an assessment of the
performance relationship, Journal of International Business Studies, 25, pp. 639 661.
Chandler, G. N. & Hanks, S. H. (1993) Measuring the performance of emerging businesses: a validation study,
Journal of Business Venturing, 8, pp. 391 408.
Chen, C. H. (1999) Organisational capability and network capability: international cooperation network
formation in taiwan enterprises. Paper presented at the International Conference on Business
Transformation and Social Change in East Asia II, Tunghai University, Taichung, Taiwan, pp. 1 26.
Cialdini, R. B., Kallgreen, C. A. & Reno, R. R. (1990) A focus theory of normative conduct: recycling the
concept of norms to reduce littering in public places, Journal of Personality and Social Psychology, 58,
pp. 10151026.
Cialdini, R. B., Kallgreen, C. A. & Reno, R. R. (1991) A focus theory of normative conduct, Advances in
Experimental Social Psychology, 24, pp. 201 234.
de Gues, A. P. (1988) Planning as learning, Harvard Business Review, March/April, pp. 774.
Deng, S. & Dart, J. (1999) The market orientation of chinese enterprises during a time of transition, European
Journal of Marketing, 33, pp. 631 654.
Dess, G. G. & Beard, D. W. (1984) Dimensions of organizational task environments, Administrative Science
Quarterly, 17, pp. 313327.
Dodgson, M. (1993) Organizational learning: a review of some literature, Organization Studies, 14, pp. 375 393.
Downey, H. K., Hellriegel, D. & Slocum, J. W. (1975) Environmental uncertainty: the construct and its
application, Administrative Science Quarterly, 20(4), pp. 613629.
Dyer, J. H. (1996) Specialized supplier networks as a source of competitive advantage: evidence from the auto
industry, Strategic Management Journal, 17, pp. 271 292.
Dyer, J. H. & Singh, H. (1998) The relational view: cooperative strategy and sources of interorganizational
competitive advantage, Academy of Management Review, 23(4), pp. 660679.
Francis, J. & Collins-Dodd, C. (2000) The impact of firms export orientation on the export performance of hightech small and medium-sized enterprises, Journal of International Marketing, 8, pp. 84107.
Grant, R. M. (1990) Multinational and performance among British manufacturing companies, Journal of
International Business Studies, 19(Fall), pp. 7989.
Grant, R. M. (1998) Contemporary Strategy Analysis, 3rd edn (Boston, MA: Blackwell).
Gulati, R. (1999) Network location and learning: the influence of network resources and firm capacities on
alliance formation, Strategic Management Journal, 20, pp. 397 402.
Gulati, R., Nohria, N. & Zaheer, A. (2000) Strategic networks, Strategic Management Journal, 21, pp. 203 215.
Hamel, G. (1991) Competition for competency and inter-partner learning within international strategic alliance,
Strategic Management Journal, 12(Summer), pp. 83 104.
Hamel, G. & Prahalad, C. K. (1994) Competing for The Future Breakthrough Strategies for Seizing Control of
Your Industry and Creating the Markets of Tomorrow (Boston, MA: Harvard Business School Press).
Hill, C. & Gareth, R. J. (2001) Strategic Management: An Integrated Approach, 5th edn, pp. 194 196
(Boston, MA: Houghton Mifflin).

Downloaded by [National Sun Yat-Sen University] at 01:13 11 August 2015

36

W.-S. Low & S.M. Cheng

Hitt, M. A. & Ireland, R. D. (1985) Corporate distinctive competence, strategy, industry and performance,
Strategic Management Journal, 6, pp. 273293.
Hodge, B. J., Anthong, W. P. & Gales, I. M. (1996) Organization Theory: A Strategy Approach, 5th edn
(Englewood Cliffs, NJ: Prentice Hall).
Jennings, D. F. & Lumpkin, J. R. (1992) Insights between environmental scanning activities and Porters generic
strategies: an empirical analysis, Journal of Management, 18, pp. 791803.
Kean, R., Gaskill, L., Leistritz, L., Jasper, C., Bastowshoop, H., Jolly, L. & Sternquist, B. (1998) Effects of
community characteristics, business environment and competitive strategies on rural retail business
performance, Journal of Small Business Management, 35, pp. 4553.
Kotler, P. (1994) Marketing Management: Analysis, Planning, Implementation, and Control, 8th edn (Englewood
Cliffs, NJ: Prentice Hall), pp. 77.
Kotler, P. & Armstrong, G. (1999) Principles of Marketing, 8th edn (Englewood Cliffs, NJ: Prentice Hall).
Lang, J. R., Calatone, R. J. & Gudmundson, D. (1997) Small firm information seeking as a response to
environmental threats and opportunities, Journal of Small Business Management, 35, pp. 11 23.
Lawrence, P. R. & Lorsch, J. (1967) Organization and Environment (Boston, MA: Harvard University Press).
Lee, H. M. (2000) Business type, strategy and performance: an empirical study of Chinese medicine
industry in Taiwan. Unpublished Masters thesis, National Defense Management College, Taipei
(in Chinese).
Leung, T. & Yeung, L. L. (1995) Negotiation in the Peoples Republic of China: results of a survey of small
businesses in Hong Kong, Journal of Small Business Management, 33, pp. 7077.
Lipparini, A. & Fratocchi, L. (1999) The capabilities of the transnational firms: accessing knowledge and
leveraging interfirm relationships, European Management Journal, 17(6), pp. 655667.
Lin, C. M. (1999) Building international competitive advantages through international network linkage.
Unpublished Masters thesis, National Chi-Nan University (in Chinese).
Lin, Y. Y. (1998) Success factors of small and medium-sized enterprises in Taiwan: an analysis of cases, Journal
of Small Business Management, 36(4), pp. 43 56.
Liu, R. J. & Brookfield, J. (2000) Stars, rings and ties: organizational networks and their dynamics in Taiwans
machine tool industry, Long Range Planning, 33, pp. 322 348.
Lorenzoni, G. & Lipparini, A. (1999) The leveraging of interfirm relationships as a distinctive organizational
capability: a longitudinal study, Strategic Management Journal, 20, pp. 317 338.
Luo, Y. (1999) Environment-strategy-performance relations in small business in China: a case of township and
village enterprises in Southern China, Journal of Small Business Management, 37, pp. 3758.
MacArthur, R. H. & Wilson, E. O. (1967) The Theory of Island Biogeography (Princeton, NJ: Princeton
University Press).
Malecki, E. J. & Tootle, D. M. (1996) The role of networks in small firm competitiveness, International Journal
of Technology Management, 11, pp. 4357.
Metal Industry Research and Development Center (1998) Interaction and Competitive Analysis in Cross-strait
Fastener Industry, sponsored by the Ministry of Economic Affairs of Taiwan (in Chinese).
Miles, R. E. & Snow, C. C. (1978) Organizational Strategy, Structure and Process, pp. 5674 (New York:
McGraw-Hill).
Miller, A. (1998) Strategic Management, 3rd edn (New York: McGraw-Hill).
Miller, D. (1988) Relating Porters business strategies to environment and structure: analysis and performance
implications, Academy of Management Journal, 31, pp. 280 308.
Miller, D., Droge, C. & Vickery, S. (1997) Celebrating the essential: the impact of performance on the functional
favoritism of CEOs in two contexts, Journal of Management, 23, pp. 147168.
Miller, D. & Friesen, P. H. (1983) Strategy-making and environment: the third link, Strategic Management
Journal, 4, pp. 221235.
Miller, D. & Toulouse, J. M. (1986) Strategy, structure, CEO personality and performance in small firms,
American Journal of Small Business, 11, pp. 4762.
Morison, E. (1989) Gunfire at Sea: A case study of innovation, in: M. L. Tushman, C. OReilly & D. A. Nadler
(Eds) The Management of Organizations: Strategies, Tactics and Analysis, pp. 463476 (New York:
Harper & Row).
Nee, V. (1992) Organizational dynamics of market transition: hybrid forms, property rights and mixed economy
in China, Administrative Science Quarterly, 37, pp. 1 27.
Neil, T. (1986) Distinctive competence: a marketing strategy for survival, Journal of Small Business
Management, 24, pp. 16 21.

Downloaded by [National Sun Yat-Sen University] at 01:13 11 August 2015

A Comparison Study of Manufacturing Industry in Taiwan and China

37

Nunnally, J. C. (1978) Psychometric Theory, 2nd edn (New York: McGraw-Hill).


Ocasio, W. (1997) Towards an attention-based view of the firm, 18, Summer, Special Issue, on The Interactions of
Organizational and Competitive Influence on Strategy and Performance, Strategic Management Journal,
18, pp. 187 206.
Parkhe, A. (1993) Strategic alliance structuring: a game theoretic and transaction cost examination of interfirm
cooperation, Academy of Management Journal, 36, pp. 794 829.
Pearce, J. A. & Robinson, R. B. (2000) Strategic Management: Formulation, Implementation and Control,
7th edn (Singapore: McGraw-Hill).
Peteraf, M. A. (1993) The cornerstones of competitive advantage: a resource-based view, Strategic Management
Journal, 14(3), pp. 179191.
Porter, M. E. (1980) Competitive Strategy: Techniques for Analyzing Industries and Competitors (New York:
The Free Press).
Porter, M. E. (1990) The Competitive Advantage of Nations (New York: The Free Press).
Porter, M. E. (1996) What is strategy?, Harvard Business Review, 74(6), pp. 6182.
Reuer, J. J. & Miller, K. D. (1997) Agency costs and the performance implications of international joint venture
internationalization, Strategic Management Journal, 18, pp. 456478.
Robbins, S. P. (1990) Organization Theory: Structure, Design and Applications, pp. 204 208 (Englewood Cliffs,
NJ: Prentice Hall).
Rumelt, R. P. (1984) Towards a strategic theory of the firm, in: R. B. Lamb (Ed.) Competitive Strategic
Management (Englewood Cliffs, NJ: Prentice Hall).
Rumelt, R. P. (1991) How much does industry matter?, Strategic Management Journal, 12, pp. 167 185.
Sadler-Smith, E. & Badger, B. (1998) Cognitive style, learning and innovation, Technology Analysis & Strategic
Management, 10, pp. 247 266.
Scherer, F. M. (1990) Industrial Market Structure and Economic Performance, 3rd edn (Chicago, IL: Rand
McNally).
Schlevogt, K. A. (2001) The distinctive structure of Chinese private enterprises: states versus private sector,
Asia Pacific Business Review, 7(3), pp. 1 33.
Senge, P. M. (1990) The leaders new work: building learning organizations, Sloan Management Review, 32(1),
Ed pp. 723.
Shan, W., Walker, G. & Kougt, B. (1994) Interfirm cooperation and setup innovation in the biotechnology
industry, Strategic Management Journal, 15, pp. 387 394.
Siu, W. (1992) Corporate entrepreneurs in the Peoples Republic of China: problems encountered and respective
solutions, International Small Business Journal, 10, pp. 2633.
Siu, W. & Kirby, D. A. (1995) Marketing in chinese small business: tentative theory, Journal of Enterprising
Culture, 3, pp. 309 343.
Stata, R. (1989) Organizational learning: the key to management innovation, Sloan Management Review, 30(3),
Ed pp. 723.
Tan, J. & Li, M. (1996) Effects of ownership types on environment strategy configuration in Chinas emerging
transitional economy, Advances in International Comparative Management, 11, pp. 217250.
Tushman, M., Newman, W. & Romanelli, E. (1989) Convergence and upheaval: managing the unsteady pace of
organization evolution, The Management of Organizations: Strategies, Tactics and Analysis, pp. 477 489
(New York: Harper & Row).
Ulrich, D. (1987) The population perspective: review, critique and relevance, Human Relations, 40(3),
pp. 137152.
Venkatraman, N. (1989) Strategic orientation of business enterprises: the construct, dimensionality and
measurement, Management Science, 35, pp. 942 962.
Venkatraman, N. & Ramanujam, V. (1986) Measurement of business performance of strategic research:
a comparison approach, Academy of Management Review, 18, pp. 187206.
Viljoen, J. (1991) Strategic management: how to analyse, choose and implement corporate strategies
(Melbourne: Longman Professional).
Weick, K. (1979) The Social Psychology of Organizations, 2nd edn (Reading, MA: Addison-Wesley).
Wholey, D. R. & Brittain, J. W. (1986) Organizational ecology: findings and implications, Academy of
Management Review, 11(3), pp. 513533.
Wright, P., Kroll, M. & Lado, A. (1995) Strategic orientation, competitive advantages and business performance,
Journal of Business Research, 33, pp. 143151.
Wu, S. H. (2000) The Nature of the Strategy (Cite Publish Co. Taipei) (in Chinese).

38

W.-S. Low & S.M. Cheng

Downloaded by [National Sun Yat-Sen University] at 01:13 11 August 2015

Wu, A., Costa, J. & Teare, R. (1998) Using environmental scanning for business expansion into China and
Eastern Europe: the case of transnational hotel companies, International Journal of Contemporary
Hospitality, 10(7), pp. 257263.
Yasai-Ardekani, M. (1989) Effects of environmental scarcity and munificence on the relationship of context
to organizational structure, Academy of Management Journal, 32, pp. 131 156.
Zhu, Y. & Warner, M. (2001) Taiwanese business strategies vis a vis the Asian financial crisis, Asia Pacific
Business Review, 7(3), pp. 139 156.

You might also like