The Impacts of Ownership Structures and CEO Incentives on the Internationalization Process：Case Studies of Taiwan Heavy Electrical Equipment Industry.
Date Issued
2009
Date
2009
Author(s)
Tseng, Hsien-Chun
Abstract
Because of the entry barriers by huge initial investment, high pro-technology and special sale market, the heavy electrical equipment industry formed an oligopoly in Taiwan. In addition, since the HEE industry as a domestic-oriented industry, mainly in the domestic market, the export ratio of products has always been low, the impact of the domestic economy is more pronounced. HEE industry with an annual production capacity of up to the same sales, is mainly due to production according to orders. However, the quantities of domestic HEE manufacturers are over, which companies can share each of the orders are small.PC is the most important customer of heavy power products. However, TPC is a state-owned enterprise; power equipment purchase always contracts the lowest bidding price. In the meantime, manufacturers in order to maintain the performance of the company, most of them unconsciously get into low-price bidding. In recent years, rather than increasing the industrial use of electricity down, resulting in TPC slowdown the footsteps of power construction. By the demand in the domestic market can not meet the re-growth of HEE manufacturers, the transformation into an international enterprise will be heavily critical. Taiwan''s power industry is facing heavy international pressure, the company''s leaders and the board of directors should have the correct concept of internationalization in order to grasp the exact way for the company’s internationalization. However, due to the characteristics of the huge investment and the slow recovery, most of domestic manufacturers are conservative to overseas investment.esides, due to the needs of technical promotion and restrictions of market size, Taiwan HEE manufacturers must depend on foreign long-term cooperation, which formed the inevitability of technological internationalization. The industrial structure of the HEE industry, in addition to the traditional "Taiwan family business", there are also entirely by the "professional agency management". By facing long-term changes in the external environment, the structure of the leadership to the "professional agency management" may be moving.he research method of this case study by the Stanford University, Kathleen M. Eisenhardt, "Building Theories from Case Study Research" will explore the suitability and the rules of the internationalization of enterprises from the experience of several international HEE companies. After nine steps of the case study research, we get three hypotheses are as follows,irst hypothesis: Since "the level of quality and technology" and "the risk of expansion" is inversely proportional, "Quality Maintenance" and "Mature Technology" must be as the core competences in the internationalization of heavy electrical equipment industry.econd hypothesis: For Taiwan HEE industry, "To grasp the market knowledge" can obviously reduce the risk of international investment, and would result in a more positive business strategy.hird hypothesis: The speed of expansion of Taiwan HEE industry is concerned with management structure. "Agency management" is relatively positive than "Family business". The rhythm of expansion is unsteady. And the path of expansion is similarly three-steps, technical cooperation, technology integration and the development of initiative.
Subjects
case-study method
internationalization
expansion
heavy electrical equipment industry
the family business
agency theory
core competence
Type
thesis
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