What Permits Small Firms to Compete in High-Tech Industries? Inter-Organizational Knowledge Creation in the Taiwanese Computer Industry

This paper addresses a puzzle related to firm size and competition. Since Stephen Hymer´s pioneering contribution (Hymer, 1960/1976), theories of the firm implicitly assume that only large, diversified multinational enterprises can compete in industries that combine high capital intensity, high knowledge-intensity and a high degree of internationalization. Small firms, by definition, have limited resources and capabilities and are unlikely to possess substantial ownership advantages. They also have a limited capacity to influence and shape the development of markets, market structure and technological change. One would thus expect that they are ill-equipped to compete in a knowledge-intensive industry that is highly globalized. Taiwan’s experience in the computer industry tells a different story: despite the dominance of small- and medium-sized enterprises (SMEs), Taiwan successfully competes in the international market for PC-related products, key components and knowledge-intensive services. The paper inquires into how this was possible. It is argued that organizational innovations related to the creation of knowledge are of critical importance. Taiwanese computer firms were able to develop their own distinctive approach: due to their initially very narrow knowledge base, access to external sources of knowledge has been an essential prerequisite for their knowledge creation. Such “inter-organizational knowledge creation” (Nonaka and Takeuchi, 1995) was facilitated by two factors: active, yet selective and continuously adjusted industrial development policies; and a variety of linkages with large Taiwanese business groups, foreign sales and manufacturing affiliates and an early participation in international production networks established by foreign electronics companies. A novel contribution of this paper is its focus on inter-organizational knowledge creation. I first describe Taiwan´s achievements in the computer industry. The dominance of SMEs and their role as a source of flexibility is documented in part II. Part III describes some policy innovations that have shaped the process of knowledge creation. The rest of the paper inquires how inter-organizational knowledge creation has benefited from a variety of linkages with large domestic and foreign firms; I also address some industrial upgrading requirements that result from this peculiar type of knowledge creation.knowledge creation; learning; small firms; networks; firm strategy; industrial policies;

Asia's and Latin America's development in comparative perspective : landlords, peasants, and industrialization

Latin America;agrarian reform;industrialization;East Asia;Taiwan;agrarian structure;economic development;comparative analysis;Korea R;agricultural policy;development strategy;industrial policy;newly industrializing countries;peasantry

Impact of Business-to-Consumer Electronic Commerce Factors on Firm Performance in Taiwan\u27s E-Brokerage Sector

The new economy influences the entire economy, from corporations and governments to society. Business-to-consumer (B2C) electronic commerce (EC) continues to grow despite the burst of the 2000 e-bubble. Dramatic changes in EC and the significance of EC\u27s impact on firm performance are important practical issues. Variations in firm performance (outcome variable) are attributed to organization effect and to industry effect. Thus, a theoretical framework that combines a strategic typology with a resource-based view of the dynamic capabilities perspective can explain the industry and organization effect on firm performance. This non-experimental, correlational (explanatory) and causal-comparative (exploratory) survey and secondary data research design is the first to investigate the relationships among organizational characteristics (firm size and web age), CEO commitment to EC, strategy types, website design, and IT system integration capabilities on the performance of Taiwan\u27s e-brokerage firms. In this study, integrating factors of strategic types as an industry effect, CEO commitment to EC as a firm resource and website design and IT system integration as EC capabilities provided a better explanation of the performance of Taiwan\u27s e-brokerage firms. Findings indicated that strategy types showed no significant differences on the level of firm performance (online sales and market share). Another finding suggested that website design of catalog application and web age were significant contributors the to the online annual sales growth rate. In addition, CEO commitment to EC, website design of catalog application, IT system integration capabilities, and web age were significant explanatory factors of the online annual market share growth rate. Top managers of e-brokers in Taiwan must have the ability to do all things well in order to succeed in the rapidly-changing EC environment. EC firms can no longer benefit from first-mover advantage which contributes negatively to firm performance. At the same time, they need to emphasize and invest firm resources into EC and bundle and leverage EC (website design capabilities) as a way to create value for customers, build a sustainable competitive advantage, and gain superior performance over competitors

A Knowledge-Based Innovation for High Technology Industries and Applying to Cross Strait Marketplaces

The study discusses after China and Taiwan has finally cleared all the hurdles to gaining World Trade Organization (WTO) membership, joining in November 2001. However, foreign investors in China are increasingly embroiled in disputes with Chinese companies due to innovation barriers. Besides, after China and Taiwan joint WTO, high tech industrial competition faces globalization and digitalization two big problems Therefore, this paper examines the notion that China’s and Taiwan’s entry into the WTO and their innovation reforms in line with globalization and digitalization have a significant impact on the entire system of knowledge-based innovation management. Firstly, the study reviews innovation through a knowledge-based theory lens in the innovation supporting processes to construct a research framework. Internally, the supporting innovation processes include knowledge and technology innovation, Managing & organizing innovation. Externally, the supporting innovation processes include inter-organization networks, innovation networks and eknowledge networks and cooperation innovation. Secondly, the study through case studies critically investigates the supporting processes of innovation management in China and Taiwan in the context of their WTO entry, and puts forward exploratory ideas that may assist in creating a blueprint for deepening China’s and Taiwan’s innovation reforms. Under knowledge based and digital economy, how to overcome barriers of knowledge based innovation over the cross-strait and global markets are the most key factors for firm’s survival. To answer these questions, in this paper, a more complete integrated innovation model and knowledge based innovation supply chain (KISC) for exploring and determining innovative supporting process in high tech industries and applying to cross strait (China and Taiwan) marketplace is presented. The results of the study will benefit not only the construction of knowledge based innovation framework, but also the business model transformation of competitive advantage

External incentives, industrial development and regional economic integration

The revival of regional integration in the European Community (EC) in the early 1980s has brought about profound implications for the development of regional integration and its related theory. Firstly, European industry searching to promote its competitiveness highlighted the need for a "European-level" solution to European economic decline and contributions to the relaunching of European integration. Secondly, as a result of the renewed momentum for regional integration, external factors which were neglected by previous efforts in theory-exploration, have become more noticeable in the process of regional integration.The purpose of this thesis about external factors is to analyse to what extent the progress of regional integration is driven by the private sector. The relaunching of European integration which brought about the successful  passage of the Single European Act has demonstrated the crucial contribution of the business community to  accelerating  the progress of integration.This thesis further offers an analysis of the proposition that the impact of external factors on industrial development is the key to understanding the process of creating the Chinese Economic Area (CEA). It explores the argument  that instead of being motivated by political factors, the process of regional integration is primarily stimulated by  industrial development in the private sector. It concludes by suggesting a new focus for the study of regional  integration - the "external incentives-industrial development" approach, and comparative insights into the EC and  the CEA

A Structural Equation Model of Information Systems Development and Supply Chain Management

This paper employees structural equation modeling to analyze the effects of information system development and supply chain management on manufacturing objective and organizational performance. Survey data of middle managers from Taiwan s computer and electronics industries was used to test the relationships between the constructs in the model. In general, the survey results supported the proposed structural equation model. It is observed that information system development facilitates supply chain management practice and manufacturing objective attainment. In addition, there are significant relationships between supply chain management and manufacturing objective, as well as between manufacturing objective and organizational performance. However, the impacts of information system development and supply chain management on organizational performance were not supported by the data. The study concludes that information system development and supply chain management does not lead to better organizational performance directly. Introducing supply chain management through information system development helps to achieve manufacturing objective, and finally improves organizational performance

Developing the Information Industry in Taiwan: Entrepreneurial State, Guerrilla Capitalists, and Accommodative Technologists

In sum, the contours of Taiwan\u27s high-technology development have been shaped by a dynamic trio of entrepreneurial state, guerrilla capitalists, and accommodative technologists. The first section discusses the linkages between Taiwan\u27s IT development and its previous development strategies. The second sections reviews the key policies of Taiwan\u27s IT strategy. The third section examines the major institutions responsible for promoting IT in Taiwan. This paper concludes with a summary of the political economy of Taiwanese success in high-tech industries in light of relevant theories