How do Chinese Multinational Enterprises Adapt to the Uncertainty of Emerging Markets?

Zhang Chaomin; Xu Hui; Shan Yu

doi:doi:10.16538/j.cnki.fem.20210818.105

Summary

In the new era of globalization with the increasingly prominent characteristics of “VUCA”, the overseas market environment and development path on which enterprises rely for survival have been destroyed. Whether they can quickly respond to and better adapt to the environmental uncertainty of overseas markets has become the key to the survival and development of enterprises. Especially in the emerging market environment, due to the uniqueness of embedded situations, enterprises face greater adaptability problems in the process of expanding in emerging markets. On the one hand, as emerging economies are in the transition period of social and economic development, frequent government changes and the continuous intersection of old and new systems lead to the faster frequency and wider scope of institutional changes, resulting in the unbalanced development of society, economy and system. On the other hand, affected by geopolitics, the frequent occurrence of political turmoil and terrorism in some countries in emerging markets and a series of chain reactions induced thereby further increase the difficulty of prediction and control of Chinese enterprises in emerging markets. Therefore, whether Chinese enterprises can cope with and better adapt to the environmental uncertainty of emerging markets has become the focus of the industry and academia. Based on the perspective of organizational attention, this paper selects three overseas subsidiaries of TBEA group as the research object, and discusses the environmental uncertainty and adaptation path selection faced by CMNEs in emerging markets through a multi-case study. The results show that: (1) The environmental uncertainty faced by CMNEs in emerging markets comes from the uncertainty of institutional factors at the macro environmental level of host countries and the uncertainty of task factors at the organizational competitive environment level, and the uncertainty degree of these two dimensions faced by enterprises in different emerging markets is different, resulting in the heterogeneity of environmental uncertainty. (2) On the basis of fully considering the heterogeneity of embedded environmental uncertainty, the choice of enterprise attention focus is also different, and presents three attention allocation tendencies: threat tendency, opportunity tendency and coexistence of the two. (3) Under the interaction between the heterogeneity of environmental uncertainty and attention allocation tendencies, CMNEs respond to environmental changes through embedded, active and integrated adaptation strategies, and finally form three paths to realize the adaptability of enterprises in emerging markets. Based on the emerging market situation, this paper deconstructs the sources and specific manifestations of environmental uncertainty faced by CMNEs in emerging markets from the content dimension, and constructs a path selection model for Chinese enterprises to realize adaptability in emerging markets, so as to contribute new insights and enlightenment for Chinese enterprises to better adapt to the complex and changeable international environment.