Compromise Theory of Transnational Operation of Chinese Small and Medium Enterprises and Empirical Analysis Under Economic Globalization

Compromise Theory of Transnational Operation of Chinese Small and Medium Enterprises and Empirical Analysis Under Economic Globalization

Jing Sun (Shenyang University, China)
Copyright: © 2012 |Pages: 8
DOI: 10.4018/ijsem.2012070104
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Abstract

Transnational operation of Chinese small and medium enterprises is an inevitable trend of enterprise’s survival and development under the condition of economic globalization. Currently, transnational operation of Chinese small and medium enterprises exist many issues needed to be addressed due to a lack of effective theories and on the basis of analysis of “comparative advantage,” “Internalization advantage,” and “The advantages of geographical location” of China’s medium and small enterprises, trying to propose “compromise” theories of transnational operation of Chinese small and medium enterprises, and empirical analysis, followed by discussion on the countermeasures of transnational operation of Chinese small and medium enterprises.
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2. Overview Of The Theory Of Multinational Operation And Transnational Management

Transnational management, refers to the enterprises engaged in production and business activities in two or more countries, including for optimal allocation of management resources in the international context, providing products and services to the international market, as well as beyond the boundaries of the production, sales, procurement, research and development, and service activities (Li, 2002). In other words, transnational management may refers an enterprise carry out business across borders in production and management activities, including transnational procurement, transnational production, transnational sales and international development (Liu, 2005). Multinational operation theory is to answer why enterprises to engage in transnational business activities, how to engage in transnational business activities, as well as where engaging in transnational business activities (Si, 2003, pp. 15-18).

Theoretical circles believe that multinational operation theory was in the 1960 of the 20th century, more than 40 years ago. From the perspective of theory on the development, multinational operation theory is still in theory of “jungle” stage, it is not ripe. To date, there is not have a recognized, the general theory of multinational operations (Zhou, 2006). On the other hand, there are several representative of transnational business theory, such as “monopoly advantage theory,” “products life cycle theory,” and “internal of theory,” they are based on developed enterprise transnational business activities, they has clear of geographical and time and space constraints, does not full applies China SMEs of transnational business activities.

At this point, is inspired by the Professor Dunning's international production “compromise” theory, in connection with the reality of the transnational operation of Chinese small and medium enterprises, this paper study on transnational operation of Chinese small and medium enterprises of “compromise” theory (Wang, 1999, pp. 31-35).

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