German companies engaging in China: Decision-making processes at home and management practices in Chinese subsidiaries
Year: 2009
Type: preprint
Abstract: This paper attempts to explain why internationalization processes to China are growing\ndespite the significant difficulties that foreign direct investments into China encounter.\nThe answer to this question can be found in the processes of decision-making on internationalization\nat the company level and how these affect management practices in\nChinese subsidiaries. The argument I put forward in this paper is that for the small and\nmedium-sized enterprises the study focuses on, the decisions concerning investment\nin China are mainly the product of structural and legitimation pressure. Structural\npressure can encourage cognitive mechanisms and behavioral consequences similar to\nthose occurring when individuals (and organizations) cope with threat. Legitimation\npressure can foster wishful thinking, which pushes actors to believe that desired options\nare good despite evidence to the contrary. These pressures have an impact on how well\ncompanies are prepared when they internationalize and can particularly affect some\ncrucial management practices, leading to inefficiencies and problems in subsidiaries.
Author: Geny Piotti
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1560837574