Strategic decision making about the status of Hong Kong-based regional headquarters of selected European and North-American firms in 1997 : a study in discontinuous change

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Strategic decision making about the status of Hong Kong-based regional headquarters of selected European and North-American firms in 1997 : a study in discontinuous change

 

Author: Tai, Chang-ching Reginald
Title: Strategic decision making about the status of Hong Kong-based regional headquarters of selected European and North-American firms in 1997 : a study in discontinuous change
Year: 1999
Subject: International business enterprises -- China -- Hong Kong -- Decision making
Corporations -- Headquarters -- China -- Hong Kong -- Decision making
Strategic planning -- China -- Hong Kong
Hong Kong Polytechnic University -- Dissertations
Department: Dept. of Management
Pages: ix, 148 leaves : ill. ; 30 cm
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b1500122
URI: http://theses.lib.polyu.edu.hk/handle/200/515
Abstract: Recent research in strategic management relating to discontinuous change tends to focus on technological changes and the effects of the task environment at the product and industry levels of analysis. There is a paucity of studies on discontinuous change in the general environment and no model for integrating executive responses and strategy formulation under conditions of environmental uncertainty and discontinuity. The aim of this study is an analysis of strategic decision making about the status of regional headquarters of Western multinational companies in the run up to the change of sovereignty of Hong Kong in 1997, a discontinuous change in an international business context. This study relates perception theory to the development of a framework about the influences on strategic decisions under discontinuous change in the general business environment. The situation of uncertainty was reconstructed by reference to public polls in the run up to 1997. Management's interpretation of environmental changes and therefore decisions about the status of Hong Kong-based regional headquarters reflect their perceptions of influences including China's past history. The research showed that the attractiveness of the robust Asian economies as well as the diversity of organizational factors, such as size, culture, past experience in Asia and regional business in general all play a part in determining the outcomes of a regional headquarter decision. The status of a regional headquarters is an integral part of the business strategies of a multinational company. Regional headquarters strategies were formulated as responses to perceived impacts arising from business uncertainty. There are proactive as well as reactive responses to stimuli from the environmental changes, reflecting differences in visions about opportunities in China and/or vulnerability of retaining head offices in Hong Kong. The MNCs' strategic decisions on the status of their regional headquarters are closely associated with the characteristics of their organizations. Their varying levels of comprehension of the environmental uncertainty reflect differences in organizational capacities (defenders, visionaries, new comers and dominant leaders), business needs and differences in the understanding of the recent social, economic and political developments in China and Hong Kong. Strategic decisions under discontinuous change in the general environment are made ex ante or in anticipation of a projected future. They are made before complete information becomes available, as the reality is still unfolding. In the international business arena, MNCs' organizational constraints and executives' home-favoured biases are the main reasons for the difference in the outcomes of the RHQ decisions. This thesis found a consistent pattern of RHQ strategy formation and beliefs in long-term business commitments among firms labeled as visionaries and dominant leaders. Whereas a low level of vision was common among firms labeled as defenders and new comers. Strong head office involvement in RHQ decision was evidenced among those firms who saw high vulnerability in the run up of 1997. This thesis found that organizational continuity in the region and who makes the RHQ decisions are the two most important criteria influencing the RHQ outcomes. These two factors reflect the degree of international business exposure and understanding of constraints generated by internal inertia and perceptions.

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