The Empirical Research On The Relationship Between Advocated Strategy And Firm Performance In Chinese And Western Enterprises

Enterprise values are the spiritual pillar of enterprise development,and have attracted extensive attention of academia and industry at home and abroad, which have achieved abundant research results about them. But existing research does not involve whether the enterprise values of Chinese and Western enterprises are different due to different cultural backgrounds of China and the Western, and what influence on the selection of enterprise strategy does this difference exert. With the improvement of the reform and openness in China’s economy, more and more Western enterprises enter China market,and compete with Chinese enterprises. The realistic situation of China market demands the research on the influence and its impact mechanism of different enterprise values of Chinese and Western enterprises on the selection of enterprise strategy.This research starts from the realistic situation of China today and the relevant theories, bases on the theories about cultural difference of China and the Western,institution study, resource-based view, and social trust, centers on enterprise values-orientation, advocated strategy, enterprise innovation ability, corporate social responsibility, social trust and firm performance of Chinese and Western enterprises,proposes related hypotheses, and verifies these hypotheses. This research pays equal attention to both academic value and application value. It bases on 116 Chinese enterprises and 80 Western companies sample data, discusses the mechanism of values-orientation, advocated strategy, and firm performance of Chinese and Western enterprises, analyzes the mediation of enterprise innovation ability and corporate social responsibility, and the moderation of the social trust, and puts forward some counter-measures.The main research work and the innovation points of this paper are as following:(1) Enterprise values of Chinese enterprises are connection-orientation, whereas enterprise values of Western enterprises are business-orientation. The Chinese society has a cultural background different from the one of the Western society because their geographical environment, philosophy foundation, and political history are different,therefore, their enterprise values-orientation is different.(2) The enterprise with connection-orientation more emphasizes guanxi, whereas the enterprise with business-orientation more emphasizes brand. When the enterprise values are connection-orientation, the enterprise will operate by the rules concerning guanxi. In the Chinese culture, applying guanxi produces circular relations. You receive someone’s gifts this time, you must give him your gifts another time. This is the main means to generate, maintain and reinforce the guanxi. In the long term, it may bring adverse effect to the economy and the society. When the enterprise values are business-orientation, the enterprise pays more attention to the brand creation and construction, so that the value of the enterprise gets continuing enhancement.(3) The enterprise that advocates guanxi strategy tends to pay more attention to short-term firm performance, while the enterprise that advocates brand strategy tends to long-term firm performance. In the period of the China’s economic and social transition,there are. the system vacuum, the imperfect rule of law, the opacity of the government decision-making, and so on. Guanxi is an effective supplement to the formal system.But the enterprise that advocates guanxi strategy may damage his long-term interests,bring adverse enffects on the economic and social development, thus seriously threaten the country’s soft power. Brand is the key of enterprise competitive advantage and sustainable development. The enterprise that advocates brand strategy emphasizes long-term firm performance, and is more likely to grasp the initiative in the future competition, and achieve long-term development.(4) Enterprise innovation ability and corporate social responsibility play an mediating role between brand-orientation and long-term firm performance. Enterprise innovation ability and corporate social responsibility are the two aspects of enterprise competitiveness. The former enhances the core competence of the enterprise, the latter vindicates the external image of the enterprise. Both of them are indispensible for the sustainable and healthy development of the enterprise. At the same time, enterprise innovation ability and corporate social responsibility do not play an mediating role between guanxi-orientation and firm performance, which to some extent,reveals that it is unable to form a virtuous circle between guanxi-orientation—enterprise innovation ability, corporate social responsibility—firm performance and a interaction both inside and outside the enterprise, that restricts the sustainable development of the enterprise.(5) The social trust has an important moderating role. When the social trust is high,the trust can increase the likelihood of the transation of business, reduce speculative behavior and transaction costs. The enterprise does not apply guanxi to achieve business objectives. Whether advocating connetion-orientation or business-orientation, the enterprise will weaken guanxi tendancy and intensify brand tendency to enhance his own value. When the social trust is low, the enterprise will rely on an informal system,such as interpersonal relationship to conduct commercial transactions, which is bound to seek "guanxi" using various methods. In this context, the enterprise will more rely on guanxi, and less rely on brand. Meanwhile, the moderating effect of the social trust also indicates that there is a close relationship between brand, enterprise innovation capability, corporate social responsibility and long-term firm performance. This shows that brand-orientation, enterprise innovation ability, corporate social responsibility and the social trust form an effective system, work together on improving long-term firm performance.The research on different enterprise values-orientation and its influences of Chinese and Western enterprises is a new task of enterprise management. This research starts from the cultural difference of China and the Western, puts forward two enterprise values-orientations theoretieally, sets forth the difference of enterprise values-orientation of Chinese and Western enterprises and its impact mechanism furtherly,builds the influent path of enterprise values-orientation—advocated strategy—firm performance of Chinese and Western enterprises, meanwile,explores whether the social trust has the moderation in this path. Therefore, on the one hand, this research offers a certain of theoretical support and empirical evidence for Chinese and Western enterprises to solve the problems existing in China market, on the other hand, it has some reference for the enterprise, the government, and the responsible institutions at all levels.