Empirical Research On Entrepreneurial Orientation, Organizational Learning And OEMS’ Endogenous Innovation

Without advantages of high technology and famous brand, Chinese OEMs joined international distribution of labor in Global Value Chain by means of OEM, merely based on their cheap labor and raw materials. OEMs were engaged in manufacturing and assembly of products according to the requirements of multinational corporations or global buyers on design, quality and standards of products, during which their work involved no innovative or creative activities. By this means, numerous firms yielded rich profits in their mode of production since back then the cost of labor and material was far less than it is now. Therefore, a growing number of companies started to swarm into this area. However, with rocketing cost of labor and materials and appreciation of RMB, Chinese OEM had been going through a hard time. What’s more, the backflow of transnational corporations to native countries and industry transfer to Southeast Asia could only make it get worse. To deal with this situation, Chinese OEMs have to alter their strategic direction. Instead of merely manufacturing for transnational corporations, OEMs have to work on R&D and marketing of value chain by improving their innovative capability, thus upgrading of OEMs can be achieved successfully.The upgrading of OEMS entails continuous learning activities, including processes of knowledge accumulation, integration and application. Organizational learning can facilitate to integrate resources inside and outside of companies and speed up the progress of endogenous innovation. The embeddedness of network can provide abundant resources for organizational learning of OEMs. Knowledge spillover of transnational corporations in GVC is a vital source of imitative innovation, whose heterogeneous resources can give a splendid spur to their innovation in process flows and product design. Nevertheless, over-dependence on imitative learning could lead OEMs to the traps of technology import—more imitation, less innovation. Since explorative learning is the key to break imitative innovation and move towards endogenous innovation, OEMs are supposed to extend learning channels, obtain more resources from competitors, universities, research institutions or alliances. So how do OEMs allocate resources for exploitative learning or explorative learning? Strategic orientation should play its part. Strategic orientation is very important for organizational resource allocation and on this basis the transformation and upgrading of OEMs. As a big part of strategic orientation, entrepreneurial orientation is the reflection of decision-making style and organizational behaviors with entrepreneurship. Characteristics of entrepreneurial strategy like innovativeness, risk taking and proactiveness can enhance OEMs’ identification of market opportunity and capability of resource allocation to promote their adaptable development and hence achieve successful upgrading. For instance, during phase OEM, opportunity identification of entrepreneur can lead OEMs to focus their resources and energy on exploitative learning of foreign process flow and product design. During ODM or OBM, however, the more emphasis should be put on explorative learning to search for new opportunity and accelerate endogenous innovation.In this context, this thesis gave a broad review of entrepreneurial strategy, organizational learning and endogenous innovation of OEMs and their relevance, then put forward several hypotheses about their relationships with case study on BYD Company and finally used the empirical analysis to analyze the result of survey and explore the relationship among three variables. Finally, significant correlation can found among these three variables. Meanwhile, entrepreneurial orientation can significantly promote the endogenous innovation of OEMs and organizational learning played a mediating role between them. Thus, we can draw a conclusion that entrepreneurial orientation can give a big push to alter OEMs’strategy to carry out endogenous innovation by efficient learning style.In the last part, based on empirical analysis, this thesis put forward some suggestions for managers, OEMs and government to make joint efforts for upgrading of OEMs, and besides sum up some deficiency and expectation for future research.