Firm development in Hong Kong : a study of the retail industry from the 1970's to the 1990's

Abstract

This study focuses on how Chinese business firms in Hong Kong adjust their strategies in facing intensified competition from foreign firms and how the contextual factors affected the outcomes of the competition. By examining this adjustment process, we can gain a better understanding of the impact of multinational corporations on host country business systems. I have selected the department store sector of Hong Kong retail industry as a case study to achieve the research agenda proposed above. The Hong Kong retail industry changed from a traditional, localized sector into a highly internationalized sector in the period from the 1970s to the 1990s. The continuously changing Hong Kong retail industry provides an appropriate site for examining the adjustments in the business practices of Chinese firms in the increasing internationalization of the market environment. A multi-level analysis is adopted to analyze the relationships between different variables. The basic unit of analysis is the firm and its business practices, the second level of analysis is the business system, and the third is the institutional context in which the firm has developed. A multiple-case approach is adopted in this projection which eleven cases are selected from five different groups of retailers. These cases are compared according to their mode of control, strategies for business development, supplier relations, collaboration with other retailers, and work systems. The analysis is based on the reconstruction of company and industry histories; sources include company histories and reports, reports from industry and government, newspapers, direct observational evidence, focused interviews with company management. This study has examined the interplay between local firms and the multinationals, and the effects of the host institutional contexts and the home institutional contexts on the development of these firms. These interactions are treated as the primary explanatory factor for the differences in firm development. The institutional contexts still play a key role in shaping the development of firms in this increasingly globalized market economy.