Asian Businesses in Europe Foreign Direct Investment Strategies and Management Prof. Dr. Li Choy Chong (Hrsg.) with Anita Subramanian and Peter Lindstrom Asia Research Centre Research Institute for International Management University of St.Gallen featuring papers by Marusa Fasano, Christian Borstnar, Marc Oesch, Andreas Barfuss, Sven Graber, Stefan Graf, Gabriel Le Laidier, Robert Liebl, Daniel Seeli and Anita Subramanian ST. GALLER BUSINESS BOOKS a TOOLS INTERNATIONAL MANAGEMENT SERIES
Table of Contents Foreword Preface Acknowledgements List of Figures List of Tables Abbreviations ii iii vi xi xiii xiv 1. INTRODUCTION: ASIAN FOREIGN DIRECT INVESTMENT STRATEGIES AND MANAGEMENT IN EUROPE 1 2. ASIAN FDI IN EUROPE 7 2.1 JAPANESE FOREIGN DIRECT INVESTMENTS IN EUROPE: WHY AND HOW? (BY MARUSA FASANO) 8 2.1.1 What is Foreign Direct Investment? 8 2.1.2 Theoretical Explanation of Foreign Direct Investment: Existing General Strategic Theories 10 2.1.2.1 The Theory of International Product Cycles (Vernon) 11 2.1.2.2 The Theory of Oligopolistic Reaction (Knickerbocker) 11 2.1.2.3 Theory of Direct Investment (Hymer/Kindelberger) 11 2.1.2.4 Internalisation Theory (Buckley/Casson) 11 2.1.2.5 Eclectic Theory (Dunning) 12 2.1.3 Specific Theories on Japanese FDI and their Hypothesis 12 2.1.3.1 The Theory from Kojima 12 2.1.3.2 Theory from Ozawa 12 2.1.4 Japanese Direct Investment in Europe 16 2.1.4.1 Japanese Investment by Country and by Economic Segment 16 2.1.4.2 Motivation for Japanese Investment in Europe 18 2.1.5 JETRO Survey 19 2.1.6 Case Study - Japanese Automotive Industry in the United Kingdom 22 Commentary: Why do Asian Companies Invest in Europe? 24 vii
2.2 THE INTERNATIONALIZATION OF SOUTH-KOREAN FIRMS WITH FOCUS ON EUROPE: THE AUTOMOBILE INDUSTRY (BY CHRISTIAN BORSTNAR, TRANSLATED FROM GERMAN BY ANITA SUBRAMANIAN) 27 2.2.1 The Internationalization of the South-Korean Economy: The Expansion of the Chaebols 27 2.2.2 Increasing Trade between Korea and the EU 28 2.2.3 The Chaebols discover Europe 29 2.2.4 Case Studies of Daewoo and Hyundai and an Overview of the South Korean Automobile Industry 30 2.2.4.1 Hyundai 31 2.2.4.2 Daewoo 31 2.2.4.3 Comparison of Daewoo and Hyundai 32 Commentary: Internalization Strategies of Asian Companies 33 2.3 SOUTH KOREAN INVESTMENTS IN CENTRAL AND EASTERN EUROPE (BYMARUSAFASANO) 34 2.3.1 International Transfer of Production 34 2.3.1.1 Investment Forms 35 2.3.2 Theoretical Models of FDI Development in Central and Eastern Europe 37 2.3.3 Conceptual Framework 40 2.3.3.1 Transferring Process 41 2.3.3.2 Major Impact Factors 42 2.3.3.3 Interest of South Korean Companies 43 2.33.4 Production Dimensions 46 2.3.3.5 Country Requirements 48 2.3.3.6 Country Ranking 48 2.3.4 Scenarios and Implications for Established Companies in Europe 49 Commentary on Marusa's Model 52 3. ASIAN MANAGEMENT IN EUROPE 54 3.1 JAPANESE MANAGEMENT IN EUROPE: ADAPTABILITY AND PROBLEMS (BY MARC OESCH) 54
3.1.1 A General Comparison of Japanese and Western Management: Some Key Elements 56 3.1.2 Important Characteristics of Japanese Management 57 3.1.2.1 Organization and Personnel 57 3.1.2.2 Communication, Decision Making and Corporate Culture 58 3.1.3 Management Challenges: Literature Findings in Comparison to the EPSON Case 60 3.1.3.1 General Prejudices 61 3.1.3.2 Japanese Executives at the Top: Difference in Leadership 63 3.1.3.3 Deficits in White-Collar Management 64 3.1.4 Conclusions and Solutions 66 Commentary on Management Adaptation 67 3.2 ENTRANCE CONDITIONS FOR UNIVERSITY GRADUATES: A COMPARISON OF SWISS BANKS AND SUBSIDIARIES OF JAPANESE BANKS IN EUROPE (BY ANDREAS BARFUSS, SVEN GRABER, STEFAN GRAF, GABRIEL LE LAIDIER, ROBERT LIEBL AND DANIEL SEELI) 68 3.2.1 Findings 68 3.2.1.1 General Information 69 3.2.1.2 Selection 70 3.2.1.3 Socialization of Employees 71 3.2.1.4 Training.' 72 3.2.1.5 Performance Appraisal 72 3.2.1.6 Compensation & Rewards 73 3.2.1.7 Career Development 73 3.2.2 Theoretical Framework: Main Differences between Swiss and Japanese Human Resource Management 74 3.2.2.1 Comparative Analysis of Swiss and Japanese Personnel Marketing 74 3.2.2.2 The Cultural Influence on Human Resource Management 75 Commentary on Cross-Cultural Problems 77 4. ASIAN BUSINESS SUCCESS: A CASE STUDY 78 4.1 TEKNOSOFT: A LOCAL PLAYER m AN INTERNATIONAL IT COMPANY 78 ix
4.1.1 Information Technology in India and the Tata Group 78 4.1.1.1 The History of TCS 80 4.1.1.2 TCS Today 80 4.1.1.3 Manpower Growth at TCS 80 4.1.2 Teknosoft (TkS) 82 4.1.3 The IT Services Industry in Switzerland Today 83 4.1.3.1 Why Companies Outsource Software 83 4.1.3.2 The Key Success Factors 84 4.1.4 The Product 86 4.1.5 Managing the Project 87 4.1.6 The Strengths of TKS/TCS 89 4.1.6.1 Human Resources and Training 89 4.1.6.2 Quality Management 90 4.1.6.3 Competitive Advantage 90 4.1.7 Outlook for the Future 90 Epilogue 92 5. REFERENCES 94