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安徽工业大学 毕业论文
Appendix :Related foreign literature and translation
Internationalization strategies of chinese IT
Ning Su
service suppliers
Abstract
With China emerging as a new frontier of global IT outsourcing, many Chinese IT service suppliers are actively expanding in three major markets:Asia, especially Japan, the West, especially the United States, and the Chinese domestic market. Compared to multinational suppliers and established Indian suppliers, Chinese IT service firms are at a relatively early,but rapidly growing stage, which offers a unique opportunity to explore an understudied topic in the information systems literature: internationalization strategies of IT service suppliers from emerging economies. Through a three-part qualitative case study of 13 China-based IT service firms, including almost all of the Chinese suppliers recognized globally, this study elaborates the internationalization behavior and decision rationale of these suppliers. The findings show that these major Chinese suppliers include both firms that incrementally internationalize and firms that are ―born global.‖ For both types of firms, the entry and growth in different markets is a highly dynamic activity combining a strategically planned, resource-seeking process and a flexible,opportunistic bricolage process based on existing operation capabilities and client relationships.The suppliers dynamically oscillate betw-een these processes to exploit and create opportunities while expanding inmultiple markets.
Keywords: IT outsourcing, supplier‘s perspective, internationalization, strategy
process, China
1. Introduction1 China is rapidly emerging as a leading destination for global IT service out sourcing (KPMG 2010). The country‘s software industry has reached a significant scale of over 200 billion USD (China Ministry of Commerce 2011),about three times the size of India‘s (NASSCOM 2010). However, the industry has been domestically-oriented, with only about 5 percent of revenue coming from export (China Ministry of Commerce 2011), compared to 80 percent in India. In recent years, the software and IT service industry has been increasingly recognized by China as a key to thecountry‘s strategic transformation 第 28 页 共 62 页
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from a manufacturing-oriented economy to a service-driven economy, an initiative called ―From ?Made in China‘ to ?China Service‘‖ by the Chinese media (Rottman and Hao 2008), and the government had launched policies that spawned rapid growth of the software and IT service industry.
Although as an offshore IT service destination, China has been consistently ranked behind India (e.g., AT Kearney 2011), the country is far from a newcomer to the global IT service industry, and has even achieved worldwide leadership in certain niches such as offshore research and development outsourcing (IAOP 2010b). Some Chinese suppliers have been providing IT services to large Japanese firms for over two decades (Carmel et al. 2008), and China is Japan‘s largest offshore software and IT service outsourcing destination (Xinhua 2007). In recent years, many suppliers have shifted their growth from the Japanese market to the West, especially the United States (China Business News 2007). Today, Japan and the United States each accounts for about 30 percent of China‘s software and IT service export (China Ministry of Commerce 2011). For many Chinese IT service suppliers, a key challenge in this transformation is making managerial decisions on whether and how to expand their business in multiple markets (e.g., De Filippo et al. 2005).
Compared to established multinational suppliers and Indian suppliers in particular, Chinese IT service firms are at a relatively early but rapidly growing stage in their development. This provides a unique opportunity to extend the information systems (IS) literature. Specifically, while existing research has explored global outsourcing from the perspective of IT service suppliers and has examined their managerial practices in international markets, the literature has not elaborated how these suppliers expand into different markets in the first place. Related research in international business (IB) can be drawn upon to help understand firms‘ foreign market entry behavior. However, the IB literature has not adequately conceptualized the actual strategy formation process of internationalization (e.g., Rialp-Criado et al. 2010). Furthermore, existing research on IT outsourcing primarily focuses on the more mature U.S., European, and Indian suppliers; China is understudied in the literature. This study seeks to contribute to the IS literature by examining Chinese suppliers‘ internationalization strategies, including both the behavior and decision rationale behind suppliers‘ entry and expansion in multiple markets.
To obtain insights into this topic, qualitative case studies based on 95 interviews with 13 Chinese IT service suppliers were conducted over a period of 6 years. The firms encompassed almost all of the most globally recognized Chinese suppliers and several other most domes- tically reputable suppliers,according to major global and Chinese industry rankings (e.g., Chinasourcing 2008; IAOP 2008, 2009, 2010a,2010b, 2011). Sixty of the interviews were conducted at one of the largest Chinese IT service 第 29 页 共 62 页
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安徽工业大学 毕业论文
suppliers. Based on in-depth interviews with the suppliers‘ top and middle-level managers and supplementary archival data, and drawing on related research in IS and IB, the study elaborates IT service suppliers‘ internationalization behavior and the strategy process by which IT service suppliers form decisions regarding their entry and expansion in different markets.
2. Literature Review
In this section, we first synthesize related IB research on firms‘ internationalization behavior and decision rationale. We then review recent developments in the emerging field of international entrepreneurship. Finally, we compare these results with the IS literature on IT outsourcing, especially research from the IT service supplier‘s perspective, and identifies the gap that this study seeks to address.
2.1 Internationalization Strategy
IT service suppliers‘ provisioning of products and services to foreign clients is a form of international business (Capar and Kotabe 2003). According to the IB literature, suppliers‘ entry and expansion in multiple markets is a process of ―internationalization‖ (Andersen 1993; Calof and Beamish 1995). Over the last four decades, a body of research has been developed to characterize firms‘ internationalization behavior.This research was originally based on Penrose‘s (1959) theory of growth and the behavioral theory of the firm (Cyert and March 1963). In particular, two sets of descriptive models emerged as the most widely used theoretical frameworks, one termed the Uppsala model (U-M), and the other termed innovation-related model (I-M) (Andersen 1993). Specifically, U-M views internationalization as a process driven by firms‘ gradual accumulation of market knowledge (Johanson and Vahlne 1977, 1990; Johanson and Wiedersheim-Paul 1975). I-M views internationalization as a process analogous to innovation diffusion within the firm (Bilkey and Tesar 1977; Cavusgil 1980; Reid 1981). Both models suggest that internationalization is an incremental process, as firms successively enter markets with increasing ―psychic distance.‖ Psychic distance is a unique term in IB, referring to differences of markets in factors such as language, culture, education, political system, industrial development, and business practice (Johanson and Vahlne 1977, 2009).
While these theoretical frameworks focus on characterizing firms‘ behavior in international expansion, several economicsbased theories have been proposed or adopted to explain the rationale behind firms‘ internationalization. The most prominent theories that are specific to the field of IB include the monopolistic advantage theory, the internalization theory, and the eclectic paradigm. The monopolistic advantage theory suggests that firms‘ success in international markets is based on exploiting their unique superior advantages, in the form of technology, capital, or brand, which 第 30 页 共 62 页