Research On The Relationship Among Choices Of Chinese Enterprises’ Horizontal Integration Strategy, Management Model, And Performance Under Condition Of Market Segmentation

In the face of economic globalization bringing the change of the competitive landscapeand the restrinction of Chinese market segmentation, Chinese companies need to strengthentheir main businese and promote the competitiveness of the domestic market through theintegration of domestic market, so as to realize the from the transform―bigger and stronger‖to―stronger and bigger‖. The case study for a handful of Chinese word-class enterprises’, forexample, the CIMC, shows that the best way to achieve this object is to carry out thehorizontal integration strategy for promoting the enterprise’s domestic market share in itsmain business, and to build the international competitiveness form two aspects of cost andinnovation. So the horizontal integration strategy as the important growth strategy of Chineseenterprises under the double background of the economic globalization and marketsegmentation, receives wide attention of scholars both at home and abroad. However, whichkind of horizontal integration strategy is more suitable for Chinese enterprises to grow underChinese current market conditions. Or which kind of horizontal integration strategy underwhat kind of internal and ecternal conditions, can more promote enterprises’ performance?The two questions receive highly theoretical and practical concerns. Market segmentationmakes much more difficuly faced by enterprises integrating the domestic market thanintegrating the international market. And also it provides a good embedded situation for usintroducing the internationalization theory and IR model to study the integration-responsiveness strategy choices faced by Chinese enterprises’ to carry out horizontalintegration in domestic market.Throughout most of the existing research, on the one hand, most of researchs ofintegration-responsiveness expain the integration of multinational companies in globalmarket under the background of the western developed countries. Therefor，recent researchlack the explanation for the emerging economies. On the other hand, IR framework still can’tgive a explanantion for the realationship between choices of integration strategy and thesuccess or failure of cross-regional business. Hence, there is an urgent need of the theorycircle to give answer to this question. Secondly, it is relatively few that the empirical researchabout the relationship between the integration-responsiveness strategy and performance. Andthe research conclusions are controversial, which may be due to not considering the internaland ecternal environment.Thereforce, this dissertation draw lessons from the research results of scholars at homeand abroad, combined with the specific situation of the Chinese enterprises and practicing, and introduced the IR model to study Chinese enterprises’ integration strategy in the domesticmarket of horizontal. And it also based on the resource-based view and the Institution-basedview, integrated the influence factors of environment and organizational level, and discussedthe relationship and mechanism between choices of horizontal integration and performanceunder the condition of Chinese market segmentation. Our study put forward the followingproblems:(1) the impact of enterprises’ responsiveness for the two kinds of stress, which areintegration and responsiveness, on performance in the process of Chinese enterprises to carryout the horizontal integration strategy.(2) the impact of market segmenatation on therelationship between choices of horizontal integration and perfofmance.(3) the impact ofmanagement model on the relationship between choices of horizontal integration andperfofmance.In order to answer the above there problems, our study obstain the corresponding dataaccording to129enterprises which set up branches in another province, through thequestionnaire survey, using multiple resggoison analysis method, this dissertation draw thefollowing conclusions:(1) whatever Chinese companies carry out the integration strategy orresponsiveness strategy in the process of the horizontal integration in domestic market, it canpositively influence the corporate performance. Namely, in the process of horizontalintegration, the integration level is higher, the performance is better; and the higher the degreeof responsiveness, the better the performance.(2) Management model has significant effectson the relationship between the choice of horizontal integration and performance. That is tosay, the degree of centralization has positive effects on the the relationship between theintegration strategy and performance, and it also has negative impacts on on the therelationship between the responsiveness strategy and performance. When the enterprise’stendency of taking objective performance evaluation to judge its cross-regional branch’sperformance is higher, the relationship between the responsiveness strategy and performanceis much more strengthened, and the relationship between the integration strategy andperformance is much more weakened. When the enterprise’s tendency of taking subjectiveperformance evaluation to judge its cross-regional branch’s performance is higher, therelationship between the integration strategy and performance is much more strengthened.When the enterprise use the dominant incentives related to the headquarters to stimulate themanagers of its cross-regional branch, the relationship between the integration strategy andperformance is strengthened. When the enterprise use the dominant incentives related to thesubsidary to stimulate the managers of its cross-regional branch, the relationship between theresponsiveness strategy and performance is strengthened. When the enterprise use the implicit incentives to stimulate the managers of its cross-regional branch, it has no effects on therelationship between the integration strategy and performance, but has positive effects on therelationship between the responsiveness strategy and performance.(3) The institution distancehas negative effects on the relationship between the integration strategy and performance, buthas no notable effects on the relationship between the responsiveness strategy andperformance. That is, when the regional differences in the institutional environment betweenheandquarters and the susdidary is more, the relationship between the integration strategy andperformance is weakened, but the relationship between the responsiveness strategy andperformance is not affected.The conclusion of this research has the following three aspects of innovations andcontributions: first, contribute to the theory. Our study build a framework analyze the effectsof horizontal integration strategy on performance combinating institution situation andorganization situation, which contribute to researches of horizontal integration strategy.Second, the research situation innovation. Our study focus on Chinese market segmentation asthe important institution situation and the management model as the important organizationsituation, and put forward institution distance and managent model respectively has effects onthe relationship between choices of horizontal integration strategy and porfance, whichcontribute to institution-based view and contingency theory. Third, research methodinnovation. Our study put forward the operational definition and measurement of the two coreconstruct, which are horizontal integration strategy and management model. And thenprovides a solid foundation for future study.