Network Embeddedness And The Relationship Between Differences In Strategy And Corporate Performance Study

Chinese manufacturing firms are going for strategic transforming, from the traditional cost leadership strategies that depend on low-price resources such as surplus labors to new competitive strategies that depend on sustaining innovations and market managements.With such backgrounds, the dissertation carries out researches on how manufacturing firms accumulate knowledge and competencies in their embedded networks, and then how they upgrade their strategies and performance.Existing relevant researches have all suggested that network embeddedness has impacts on firm performance, but different scholars with different backgrounds suggest distinct mechanisms through which network embeddedness influences firm performance. Based on prior researches, this study tries to examine how network embeddedness influences firm performance through differentiation strategies, and the moderating effects of environmental dynamism on the relationships between network embeddedness and differentiation strategies.On the basis of literature reviews of resource-based view theories, firm network theories, network embeddedness theories, differentiation strategies theories and environmental dynamism theories, the dissertation makes an exploratory case study. After case selection, data collection, data analysis, result statement and discussion, the results reach 5 propositions about the relationships amongst network embeddedness, differentiation strategies and firm performance, and the initiative conceptual model is formulated. Then, by theory researches, the dissertation dicusses the dimensions of network embeddedness, and introduces the environmental dynamism which is proposed to have moderating effects on the relationships between network embeddedness and differentiation strategies. Therefore, the initiative conceptual model is furtherly developed and extended, and the final conceptual model is formulated. Furthermore, based on the data from 182 manufacturing firms, this study tests the hypothesises one by one that are proposed according to the final conceptual model by statistical regression methods, which involve following research processes: questionnaire design, data collection, variable measurement, assessment of reliability and validity, multivariable regression, result statement and discussion. Finally, the study take Global Manufacuring Network (GMN) as an example to dicuss how manufacturing firms accumulate knowledge and competencies, upgrade their strategies and acquire sustaining competitive advantages in the processes of embedding themselves into the GMN. After such exploring and testing processes, following conclusions are reached:(1) On the basis of relevant researches, this study divides network embeddedness into technology embeddedness and business embeddedness, and examines the relationships between network embeddedness and differentiation strategies. The empirical results suggest that both relational dimensions and structural dimensions of technology embeddedness have impacts on firm's acquisition of useful resources, especially useful new knowledge and information, and then influence the formulation and implementation of innovation differentiation stratetegies. And the empirical results also suggest that both relational dimensions and structural dimensions of business embeddedness have impacts on firm's acquisition of useful resources, especially useful new knowledge and information, and then influence the formulation and implementation of innovation differentiation stratetegies and marketing differentiation stratetegies.(2) The research also hypothesizes and examines the relationships between firm differentiation strategies and its performance. The empirical results suggest firm innovation differentiation strategies and marketing differentiation strategies have positive impacts on its performance, that is to say that manufacturing firms' strategic transformation from traditional cost leadership strategies depending on low-price resources to differentiation strategies can improve their performance.(3) On the basis of results above, this study hypothesizes and examines the mediating effects of differentiation strategies on the relationships between network embeddedness and firm performance. The empirical results suggest that the innovation differentiation strategy has mediating effects on the relationships between technology embeddedness and firm performance and between business embeddedness and firm performance, and that the marketing differentiation strategy has mediating effects on the relationship between business embeddedness and firm performance. That is to say network embeddedness can influence firm performance through affecting firm differentiation strategy.(4) Additionally, this study hypothesizes and examines the moderating effects of environmental dynamism on the relationships between network embeddedness and differentiation strategies. The empirical results suggest that technological environmental dynamism has positive moderating effects on the relationship between technology embeddedness and innovation differentiation strategy. That is to say technology embeddedness will be more associated with innovation differentiation strategies when technological environmental dynamism is high. However, the moderating effects of market environmental dynamism on the relationships between business embeddedness and differentiation strategies have been partially supported by empirical results, and market environmental dynamism can only moderate the relationships between geographical diffusion of embeddedness ties and differentiation strategies.On the basis of above research results, this dissertation take the GMN as an example to discuss how manufacturing firms upgrade in the processes of embedding themselves into the GMN and acquire sustaining competitive advantage. In this part, after summarizing the evolution, members and theoretical foundation of GMN, the dissertation discusses the opportunities that GMN provides for local firms in developing countries including China and the processes in which knowledge transfers from network flagships to local manufacturing firms. Furthermore, four processes in which manufacturing firms embed themselves into the GMN and upgrade their stragtegies is edentified, which involve penetration depending on low-cost manufacturing, network embedding and evolution of embedded ties, accumulating knowledge and competencies, and upgrading strategies. Therefore, this part can furtherly reinforce the conclusions reached above.