Culture and the state matter more in Asian MNEs

Asian multinational enterprises (MNE) do not always internationalise for the same reason as their western antecedents.

by Asia Pacific Business Review
Last Updated: 23 Jul 2013

Two notable differences in Asia are that the state has a much more direct involvement in facilitating such expansion and there are specific cultural factors that underpin the growth of MNEs.

In an example of the driving influence of the state, there is the Keppel Corporation (which has five core businesses: marine; offshore, energy and engineering; property; banking and financial services; and telecommunications and transportation), a government-linked corporation based in Singapore, which led a consortium of firms to set up an industrial township in Suzhou, China.

Culturally, the expansion of many Chinese enterprises has been driven by social networks based on ethnicity and culture, unlike the western, largely business-based, networks. One example of this was a Singaporean textile firm, which built its initial regional expansion on its extended family network but is now capitalising on its network of ethnic associates in Asia to form a grouping for all its businesses.

Other companies in the electronics industry, for instance, also made use of strategic alliances, licensing and partnerships with companies in more technologically advanced nations.

In future, Asian MNEs will will increasingly be driven by the need to develop competitive advantage by differentiating their products and services by developing innovative, cutting-edge technology and brand-building.

Source:
Internationalisation strategies of emerging Asian MNEs: case study evidence on Singaporean and Malaysian firms
A B Sim
Asia Pacific Business Review, Vol 12 No 4, October 2006

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