A systematic Review of Entrepreneurship;
A case study of Global Automotive Industry
ASSIGNMENT
Conduct a systematic review based on 6 journal(attached) related to Entrepreneurship practice of Global Automotive Company. Critically discuss the following themes (or as close as possible to them):
a. Literature review grounding the conceptual model
b. The conceptual model
c. Research design
d. Data analytical methods
e. Discussion
f. Your overall assessment of the relevance and appropriateness of the study.
Come out with similarity of the study and also synthesis for all journal.
Finally, conclusion towards all the journal is required
Research on International Entrepreneurship Strategy Model
of Automotive Enterprises
MIAO Qing, GE Baoshan
School of Management, Jilin University, P.R.China, 130025
[email protected]
Abstract International entrepreneurial strategy is one of the most important decisions of
manufacturing industry nowadays. World Automotive enterprises all accelerate their international
entrepreneurial process. Chinese automotive enterprises have also entered the international market
actively. The authors have made empirical study by means of questionnaire and constructed a model of
international entrepreneurship strategy. The article studies the typical case based on this model. The
study provides instructive significance for the international entrepreneurship strategy of Chinese
automotive enterprises and the development of automotive industry cluster.
Keywords Automotive enterprise, International entrepreneurship, Entrepreneurial orientation, Model
construction, Empirical study
1 Introduction
The world economy is undergoing a fundamental change. With the development of economic
globalization, there is growing concern about international entrepreneurship issues.
In all manufacturing industries, the automotive industry took the lead of the globalized industries.
The world major automotive groups have been in the implementation of the global entrepreneurship
activities in order to get better access to the economic benefits, low costs and competitive capability.
These international entrepreneurial activities began in the early 1970s. Since the 1990s, the process of
globalization has speeded up significantly. Chinese automotive enterprises have been active in the
foreign market.
The initial research on international entrepreneurship began from Morrow (1988). Zahra (1993)
defined international entrepreneurship as the study on the nature of the entrepreneurial behavior
undertaken by the enterprises when they enter international market. Oviatt and McDougall (2005)
considered that “international entrepreneurship is to discover, evaluate and make use of the opportunities
across the national boundaries in order to create future products and services”.
In China, some scholars are also conducting studies on international entrepreneurship, but the
studies are still in its infancy. Most of the scholars have been focused on the investment of international
entrepreneurship such as Chen Gongmeng and Chen Hongbo (2002) from Hong Kong Polytechnic
University. In addition, Liu Bangcheng from Shanghai Transportation University and Wang Chongming
(2005) from Zhejiang University summed up the international entrepreneurship mode. Li Qianwen and
Zhang Yuli (2004) introduced the results achieved by foreign scholars who are concerned about Chinese
entrepreneurial operations.
The international entrepreneurship studies abroad depended on the American cases (Bloodgood,
1996; McDougall and Oviatt, 1996; etc.) on large extent. The theoretical construction is lack of
consistency. Domestic researches on international entrepreneurship are confined to foreign
entrepreneurship model and research results. Furthermore, the study based on the background of a
certain industry is rarer.
This article reviews the international entrepreneurship situations of the domestic and foreign
automotive enterprises and constructs a model of international entrepreneurship strategy. The authors
have sent out 210 questionnaires to the automobile enterprises to make the empirical study since
Sep.2007. The main names of Automotive Enterprises that have completed the questionnaires are shown
in Table 1.
2 International Entrepreneurial Situations of Automotive Industries
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2.1 World automotive industry
Table 1 List of Automotive Enterprises Completing the Questionnaires
No. Name of Automotive Enterprises No. Name of Automotive Enterprises
1 FAW Group Corporation 7 Great Wall Motor Corporation
2 Tianjin FAW Toyota Motor Co.,Ltd 8 Hafei Automobile Group
3 Chery Automobile Corp. 9 Hebei Zhongxing Automobile Co.,Ltd
4 Shanghai Automotive Industry Corporation 10 Chang Feng Motor (Group) Co.,Ltd
5 Dongfeng Motor Corporation 11 Anhui Jianghuai Automobile Co.,Ltd
6 Nanjing Automobile (Group) Corporation 12 Liuzhou Wuling Motor Co.,Ltd
Since 1990s, globalization has been notably accelerated and foreign automotive enterprises also
accelerate their process of international entrepreneurship.
Among American companies, GM and Ford are the most influential entrepreneurs. So far, GM has
set up automobile manufacturing businesses in 32 countries and its vehicles are sold in 200 countries.
GM has many strategic and cooperative partners all over the world. Ford Motor Company has set up
production, assembly and sales organizations in 22 countries outside US and Canada. Ford has sold its
products in the markets of 180 countries and regions by its distributors.
German automotive industry has already showed an irresistible international entrepreneurial trend.
Audi set plants in Hungary to produce engines and cars. It also produces cars in Brazil. Volkswagen set
up plants in Spain to produce cars. It also produces Skoda cars in Czech, gearboxes in Slovakia,
gearboxes and trucks in Brazil and set up joint venture in China. BMW has built car production lines in
England and USA. BMW has also built a joint venture with China Brilliance Automotive Company in
2004. The overseas entrepreneurial bases of Benz are in Spain, USA, France and Southeast Asia.
In 1980s, Japanese automotive industry invested tens of billions dollars in North America and
Europe. In 1990s, they invested more in Asia, Latin America and Middle East. To the early 21 century,
there are 21 Japanese assembly plants and 6 Japanese engine plants in North America.
2.2 Chinese automotive industry
Chinese automobile enterprises achieve a breakthrough after WTO accession. Automobile
production and export sales have risen every year. Chinese domestic automotive companies begin to
operate foreign direct investment. They are on the road of international entrepreneurship.
2.2.1 Export
Chinese automobiles and parts export have increased yearly. Table 2 shows Chinese import and
export of automobiles from 2000 to 2007.
Table 2 2000-2007 Chinese Automobiles Export
year Total Number
(
10 thousand
)
Amount
(
100 Million USD
)
year Total Number
(
10 thousand
)
Amount
(
100 Million USD
)
2000 2.7 2.0 2004 13.6 6.6
2001 2.6 2.1 2005 17.3 15.8
2002 2.2 2.3 2006 34.3 31.3
2003 4.6 3.7 2007 61.5 73.2
Chinese automobiles’ international market is stable in 2007. Middle East, Africa and Asia remained
as a traditional market. Eastern European markets have been vigorously developed, and the South
American market shows substantial growth.
2.2.2 Foreign direct investment
In the process to expand overseas markets, enterprises usually export at first, and then choose
overseas production at proper time. In 1992, FAW established the first overseas automotive assembly
production line in Tanzania.
In recent years, Chinese automotive enterprises have quickened the pace of foreign direct
investment. Some enterprises with strong financial position acquired foreign automobile manufacturers
to obtain the advanced technology and mature sales channels. SAIC acquired 22.3% shares of Korean
Daewoo Group in 2003. In 2006, Chery signed an agreement of joint venture with Russian Autotour
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Corporation. Nanjing Automobile successfully bid for the British Rover in 2006. In 2007, Brilliance,
Chery, FAW and SAIC respectively built factories in South Korea, Argentina, Russia and Indonesia.
3 Construction of International Entrepreneurship Strategy Model
Based on the questionnaire research and the present international entrepreneurial situations of
automotive enterprises, this paper constructs one model of international entrepreneurship strategy.
3.1 Model variables
3.1.1 International entrepreneurial opportunities
Entrepreneurial opportunity means “inaccurately defined market demand or not fully used
resources and capabilities”. It’s a dynamic concept. The author considers that the automotive industry
international entrepreneurial opportunity could be studied from three aspects, namely, industry and
market, economy and competitive advantage.
3.1.2 Organizational factors
Variables related to enterprise international entrepreneurship are always the focus of international
entrepreneurship research. Here, we discuss two variables: top management team (TMT) and enterprise
resource.
Strategy researchers always insist that characteristics of enterprise top management team can
determine the success or failure of an enterprise. Drucker (1999) considered that the existing enterprises
could occupy dominant position, mainly because they already have management capabilities, which may
enable high-degree innovation.
“The elements put into production activities to create wealth” are all called resources by economists.
Resources are the various inputs of organizations, including human, finance and physical elements. The
researchers conclude that the business experience and resources will strengthen its international
entrepreneurship.
3.1.3 International environment
Based on the study results of entrepreneurial environment, especially the international
entrepreneurial environment, the international environment is divided into three dimensions, namely,
environmental dynamic, environmental heterogeneity and environment hostility in this paper.
Dynamism of the external environment is a key element. It describes the extent of the environment
change over time. Environmental dynamism indicates that the environment is basically static or in a
continuous process of change.
Environmental heterogeneity can be viewed from two angles. One is the number of the related
factors impacting competitive environment. Generally speaking, the more influential factors, the more
complex the environment is. In addition to the number of factors, the correlation between factors also
has an effect on the complexity. If there are multiple interactions among the factors, it will bring more
complexity, which is difficult to deal with, and heterogeneity will be very high.
Hostility reflects the scarcity and uncertainty of resources and information. The more hostile, the
stronger the enterprise competitiveness is in the international market.
3.1.4 International entrepreneurial orientation
The recognized concept of entrepreneurial orientation was proposed by Miller (1983) and perfected
by Dess (1996). All high-entrepreneurship-oriented enterprises often have common characteristics:
innovation-driven, action leading and risk taking.
Innovativeness means that the company engages in or supports the new ideas, creates new things,
do new experiments or other creative actions. It will lead to the emergence of new products, new
services or new technological processes.
The definition of proactiveness is from Lumpkin and Dess (2001). Proactiveness represents the
far-sighted perspectives of market leaders. Their actions with vision and foresight will affect the
environment.
Risk taking is the degree of commitments that Managers are willing to give on great risky resources.
Entrepreneurial-oriented organizations tend to put into a lot of assets to obtain high returns.
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3.1.5 International entrepreneurial performance
When evaluating the performance of a company, the owner or manager’s overall satisfaction with
corporate performance and non-financial objectives may need to be attached great importance to.
Entrepreneurial performance can be discussed from financial performance and non-financial
performance.
3.2 International entrepreneurship strategy model of automotive enterprise
On the basis of the analysis above, the authors proposes an automotive enterprise international
entrepreneurship strategy model (shown in Figure 1). This model analyzes the relationship of the
variables in automotive industry more detailed and specifically.
Figure 1 Automotive Enterprise International Entrepreneurship Strategy Model
Firstly, the model researches the major influential factors of international entrepreneurial
orientation. The author believes that the international entrepreneurial orientation is related with three
factors: international entrepreneurial opportunities, organizational factors and international environment.
Secondly, the model researches the relationship between international entrepreneurial orientation
and international entrepreneurial performance. International entrepreneurial performance consists of two
dimensions: financial performance and non-financial performance.
4 Case study of Chery Automotive Company Based on the Model
4. 1 International entrepreneurial opportunities
The international entrepreneurship of Chery automotive company started totally occasionally. In
Oct. 2001, a Syrian found a Chery car in Beijing, so he made a contract of 200 cars with Chery. From
then on Chery began her overseas trade. Chery made full use of the opportunity in Syria and also created
many opportunities in the markets of United Arab Emirates, Egypt, Cuba and so on. Chery entered the
international market successfully.
From the cases of Chery, we can see that enterprise international entrepreneurship is promoted
remarkably by international entrepreneurial opportunities.
4.2 Organizational factors
4.2.1 Top management team
In Chery automotive company, top management team contains talents of different types. With the
cooperation of TMT members, Chery has continually made achievements one by one.
Chery top management team makes the aim and strategy of international entrepreneurship clearly
and positively promotes international entrepreneurial activities.
4.2.2 Enterprise resources
International Entrepreneurial
Performance
Financial performance
Non-financial performance
International Entrepreneurial
Opportunities
Industry and market
Economy
Competitive advantage
Organizational Factors
Top management team
Enterprise resources
International Environment
Dynamism
Heterogeneity
Hostility
International Entrepreneurial
Orientation (IEO
) Innovativeness
Proactiveness
Risk taking
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In the process of international entrepreneurship, on one side Chery automotive company actively
made full use of the convenient policies given by the government and the sources of its own. On the
other side, Chery actively took in domestic and overseas resources.
Chery implemented turn-key project and made full use of advanced computer techniques to
develop the products. “Based on myself and combine the world resources” is its independent
development rule.
4.3 International environments
With the development of globalization, the international environment faced by automotive
industries is changing. It’s very hard for Chery to compete with others in the three traditional markets
namely America, Japan and Europe. In view of strong opponents and the complex situation of host
countries, Chery chose the countries which are easy to enter like Middle East and Southeast Asia.
Through the analysis of successful international entrepreneurial case of Chery, the author considers
that the international entrepreneurial opportunities, organizational factors and international
environmental factors play vital roles in promoting successful international entrepreneurship of
automotive enterprises. Only when an enterprise is good at analyzing and seizing market opportunities,
establishing visionary top management team and integrating high-end resources effectively, could the
international entrepreneurial strategy achieves truly success.
5 Conclusion
The automotive manufacturing industry is a typical globalized industry. Automotive enterprises are
actively developing overseas markets and carrying through international entrepreneurial strategies.
The key influential factors of international entrepreneurship include international entrepreneurial
opportunities, organizational factors and international environment. A model is developed to illustrate
the relationship between international entrepreneurial key influential factors, international
entrepreneurial orientation and international entrepreneurial performance for the automotive enterprises.
The empirical study has been made by questionnaires to some automobile enterprises. The international
entrepreneurial factors are analyzed by case study based on the model. The study results will help to
enrich and improve the related theories and methods for automotive industry international
entrepreneurship. It will also help Chinese automotive corporations to make correct international
entrepreneurship strategy and achieve long-lasting international entrepreneurial capability.
The researches will not stop. The authors are still making the detailed empirical study on it so as to
outline some suggestions on international entrepreneurship for Chinese automotive enterprises.
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This paper is supported by National Natural Science Fund (No.70672025).
