Centers of excellence?: Localization of Sogo Shosha in China

Abstract

This study is an empirical exploration of the localization of the S??g?? Sh??sha in China, and explains this process using a model created from Resourced-based View and Neo-Institutional theories. Though the study concludes that S??g?? Sh??sha are taking steps towards localizing their subsidiary management in chronological, vertical and horizontal dimensions. It also shows that the administrative heritage of their Japanese parent companies remains strong. This study identifies heterarchical power structure in subsidiary management as an important factor influencing patterns of localization. Dependence on parent companies is seen in the low proportion of principal trade among the subsidiaries and their strategic role as a??coordination centersa??. Apart from these internal factors, the study finds local economic, business, and institutional conditions in China as important factors to explain past and future localization.