OWNERSHIP STRATEGIES

The Ownership Choice Strategies of Multinational Corporations' (MNCs) Operations in China

TABLE OF CONTENTS

CHAPTER ONE: INTRODUCTION1

Purpose of the Study2

Chapter Summary2

CHAPTER TWO: Literature Review3

Subsidiary Ownership Strategy9

CHAPTER THREE: METHODOLOGY11

Scope of the Research11

Period of Study11

Nationality:11

Industry12

Population12

Strategy13

Data Collection14

Method14

Questionnaire14

Respondents15

Administration of the Survey15

Statistical Procedures16

CHAPTER FOUR: ANTICIPATED RESULTS18

CHAPTER FIVE: CONCLUSION19

REFERENCES20

The Ownership Choice Strategies of Multinational Corporations' (MNCs) Operations in China

CHAPTER ONE: INTRODUCTION

An MNC can be considered as a system of subsidiaries spread across the world. MNCs have, either by design or accident, emerged into networks of operating entities as a result of their ownership of subsidiaries equity. Ownership, therefore, is the glue that holds the units together in an MNC system or network. Firms adopt various ownership strategies to bring overseas entities into their global networks. For example, corning, Inc. chairman James R. Houghton states that the corporation "has been experimenting with ways. As a result, corning is now what we call a 'global network (Dunning, 2003, 598). A firm entering a foreign market must make a decision concerning the degree of ownership if investing. The ownership strategy, commonly subsumed under the broader topic of entry mode strategy, is critical for foreign entrants as it affects both the foreign affiliate's likelihood of success and the probability of survival. In this analysis, ownership strategy is defined as the choice concerning the degree of ownership (percent equity holding) taken when a foreign investment is made. The implications of the transactional, experience and institutional influences can be effectively determined by examining their relationship with the ownership levels in foreign direct investments.

The Ownership strategy is an important decision for the MNCs entering new international markets through FDI. MNCs' ownership strategies in their foreign operations have important implications for resource commitment, organizational control, and consequently the performance of their foreign operations. Investigations of the evolution of mature 'western' Multinational Enterprises (MNCs) during the process of globalisation emphasise two important trends. First, an increasing range of strategic motivations pursued through individual subsidiaries, with these reflecting host country location advantages. Second, that these differentiated subsidiaries become integrated parts of global networks which, overall, aim to secure all dimensions of competitiveness for the parent company (Lu, & Hebert, 2005, 736). It is the aim of this paper is to investigate the presence of these patterns in the international operations of emerging Chinese MNCs.

Purpose of the Study

The purpose of this study is to investigate Ownership choice strategies of Chinese MNCs. This study will be guided by the questions those innovations in ownership strategy:

Do MNCs create an overall ownership structure of the network of overseas subsidiaries?

Can the ownership structure of the network be categorized?

Is the ownership structure systematically related to the strategic choices made by MNCs? Does the ownership structure differ under different environments?

If the ownership structure is systematically related to strategic choices, would any deviation from the associated ownership structure influence performance outcomes?

Chapter Summary

This chapter reviewed the introduction, purpose, and research question for and the scope of this study. The following chapter will review the existing literature on ownership of ...