Business Creation and Transformation Processes in Four Software Companies in Dalian, China: Commonalities and Differences

Yan Zhang and Nozomu Kawabata

No 331, TERG Discussion Papers from Graduate School of Economics and Management, Tohoku University

Abstract: This study aims to determine the nature of entrepreneur behavior, business creation, and transformation of software companies in Dalian City through case studies. Four companies that were launched in the 2000s were studied. These companies' businesses initially involved labor-intensive processes of offshore software development for the Japanese market. However, they were confronted with the challenge of business transformation after the global financial crisis. Their set agenda included forays into high-grade processes, diversification of products and services, and exploitation of the Chinese market. All four companies tried to transform themselves by creating a unique advantage. The development of such an advantage was a focal point for the software companies to transform their business structure that relied heavily on labor-intensive offshore development. The acquisition of high-grade human resources was an important factor for gaining this advantage. In the field of offshore development for Japanese market, cross-border cooperation across processes was necessary to advance into high-grade processes. The "on /off -site" hypothesis was valid, while having a Bridge System Engineer (BSE) in the company was not a prerequisite. Differences were observed across the four case studies. In China, Japanese-affiliated companies approached other Japanese-affiliated companies, while Chinese companies approached other Chinese companies. Moreover, the disparity of resource availability for transformation was large between big companies and small-and medium -sized companies. As a result, difference was observed in the strategy employed by the companies for transformation, especially in personnel management in the face of high liquidity in the labor market in China.

Pages: 21 pages
Date: 2015-03
New Economics Papers: this item is included in nep-ent and nep-tra
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