The objective of this research is to compare strategic behavior, organizational structure, and process between foreign firms and local firms. Since the study is basically exploratory in nature, it attempts to answer the following research questions: (1) Do the foreign firms differ from the local firms in the strategic behavior? if so, how and why?, (2) Are there any differences in the organizational structure and process as means for implementing the strategies between two groups? if so, how and why?
For conceptualization, the studies on the organization theory, strategic management theory, and international comparative management were examined. In particular, primarily built on the strategic management, in order to reinforce the theoretical base which was often found insufficient in most comparative management studies. By universal and contingent approaches, hypotheses about the comparison of strategic behavior, organizational structure and process were generated. As contingent factors in determining strategies of foreign firms, MNC's size and the purposes of investment were taken into account.
The data for this study were collected from 43 firms in the food, machine, chemistry, and electronics industry. In order to control the factors which may affect the strategies, structure and process, 19 pairs of the sample were drawn by the matched sampling. Each pair was composed of one foreign firm and one matched local firm which were not only producing same products but also similar in their size of employees and sales amount.
Bivariate analyses, such as pairwise t-test, the Wilcoxon matched-pairs signed-ranks test were employed for testing hypotheses. The major findings of the comparison on the basis of the universal approach are as follows.
(1) The domain scope of foreign firms is narrow and the product price and quality of them is higher than those of the mached local firms.
(2) In marketing strategy, although local firms relies upon the sales on credit and discount, foreign firms more emphasize the before & after service, and market research before launching new products.
(3) Local firms make more efforts in R & D activities, while foreign firms are more concerned with operating efficiency.
(4) Two groups are not significantly different in the organizational structure, but, in terms of organizational process, foreign firms put more emphasis on planning activity and training of employees.
On the other hand, some different findings which could not be found in the former results obtained from the universal approach, were identified based on the contingent approach. Related findings are summarized as follows.
(5) The foreign firms whose main objective is to acquire local market share put more emphasis on customization of product as same as the matched local firms, and in terms of another dimensions of strategies, differences are to a large extent consistent with the former results. Also, the structure of these organizations is flat form, and, by the transfer of the advanced managerial skill, these foreign firms use more precise and diverse management technique than the matched local firm.
(6) Foreign firms whose objective is only to gain return on investment are not different from the matched local firms in almost all of strategies, organizational structure and process.
(7) But, in some of strategic behavior, the comparison of foreign firms, whose objective is to procure the competitive products with the matched local firms exhibits reverse results as compared with the formers by universal approach. And the structure of these organizations is tall form.
In conclusion, the empirical findings in this research have some implications for related theory, government policies for FDI, and managers of local firms. Limitations of this study and further research direction were discussed in the final section.
