UK Based Company

UK Based Company Products With The Potential To Be A Success In Asia

UK Based Company Products With The Potential To Be A Success In Asia

Introduction and objectives

International strategy is embracing new organisational structures, not only to achieve global coverage from a market perspective but also to gain access to skills and capabilities unavailable within the individual firm. Such structures centre around collaboration and the sharing of risks and rewards. Yet the concept of inter-firm cooperation is one not easily implemented by managers and is creating new challenges for managers and scholars alike.

Environmental change is a major driving force

Environmental change is a major driving force behind international collaboration. Turbulent technological change, for instance, requires a flexibility of response and firms exchange or pool resources in order to reduce risks and rapidly acquire necessary skills and knowledge. However, data collected by one of the authors (Perks, 1993) confirms that international collaboration is still primarily used as a route to market power. An overview of European firms' joint venture (JV) activity, still the most common contractual form of collaboration, signalled that JVs are a common means to exploit specific opportunities, such as access to new overseas markets or the realisation of substantial cost savings through the rationalisation of manufacturing. The international JV continues to be an attractive route to overcome particular obstacles to overseas expansion, typically, for example, conformity to local content legislation in less-developed countries (Buckley and Casson, 1988).

Despite their popularity, the risk of failure of such ventures is high. There is a wealth of academic research studying the factors which may lead to greater success. Some authors suggest that greater attention “up front” to structural and partner characteristic dimensions will arrest the high failure rate (Parkhe, 1993). Recent research effort has been directed towards forwarding general prescriptions for managing the relationship once the alliance is under way. Particular attention has concentrated on the manipulation of bargaining power (Harrigan, 1985; Root, 1988), the maintenance of resource synergy (Perlmutter and Heenan, 1986), the development of learning as a mediator between initial conditions and outcome (Doz, 1996) and the build up of mutual trust (Hakansson and Sharma, 1996). The complexities involved in managing such collaborative relationships cannot be understated.

The majority of research effort is still, however, primarily confined to a study of the pre-alliance partner characteristics or the dynamics of management of the on-going collaborative concern. Little attention has been dedicated to the management of the planning and formation phases of inter-firm collaboration. The authors offer insight into this key phase.

Cross-national commercial relationships

Specifically they focus on the difficulties of developing joint ventures across national cultures. The crucial nature of culture in cross-national commercial relationships is often underestimated or taken for granted in studies of cooperative strategies (Graham, 1988). Culture seems a difficult concept to capture and understand in business research. Most researchers to date have concentrated on addressing problems of definition and measurement. The work of Hofstede (1980), in particular, is considered the most comprehensive effort, involving analysis of a large ...