CHAPTER 1: INTRODUCTION
1.1. Research Background
The economic growth of China, over the last few decades, has been staggering and is considered as one of the emerging and most powerful economies of the world (Ahrens, 2013). The major power of the Chinese economic growth is conjoined with its mass selling power and arbitrage activities (price difference between two markets) (Zhang, 2017). The low labour cost has earned China a very unique and powerful position in the global corporate market. It is quite recently that the focused has been shifted from mass selling to technology innovation (Ahlstrom & Ding, 2014).
The economic reform in China was observed in 1978, when the Chinese government adopted a number of developmental policies, following the Soviet central planning model (Tang & Hussler, 2011; Zheng, 2010). The commitment of the China towards entrepreneurship was not confined to easy licensing alone, but developing the R&D sector of the country as well (Rethel & Sinclair, 2014). The fact that innovativeness is the key to successful entrepreneurship, the government’s vision was quite clear and vibrant. From 1995 to 2005, China had 19% growth in its R&D budget, reaching US$30 billion per year. This figure has increased unremittingly since then with the current investment of just under US$31 billion (by 2012), with an annual growth rate of 1.97% (Minin, et al., 2012; Zhao & Pira, 2013). Thus, the Chinese market represents a great potential for studying technology and process innovation for businesses and the transition from the conventional business model to the ‘innovation-based business model’, implying that many firms are still on the verge of this transformation (Liu, et al., 2011).
1.2. Research Aims and Objectives
The primary aim of the study is to look at the technological and business-model evolution in China, using the Huawei Technologies as the research lens. The pursuit of this research aim, the research will shed light on some of the recent technologies of Huawei to get an idea of their commitment and approach towards innovation and business expansion. Based on these research aims; the study will try to cater the following objectives:
- To analyse the premise of technology innovation in the context of Chinese latecomer manufacturing firms.
- To shed light on the technological advancements and business evolution of the Huawei Technologies Co Ltd.
- To understand how commitment to innovation can lead to overall economic transformation, taking support from Huawei’s case study.
1.3. Research Hypotheses
The current study will try to test the two hypotheses off:
H1: Innovation-based business model is the most sustainable form of business for the manufacturing firms, considering the swift technological advancements and shrink of market difference.
H2: The innovation and entrepreneurship traits of the Huawei Technologies can be used as a benchmark for other Chinese firms struggling to embrace the innovative transformation.
1.4. Research Questions
Complying with the research aim and the proposed hypotheses, the present study will try answering the following research questions:
- What are the key factors contributing in the success of Huawei innovation-based business model?
- Can the Huawei’s business model and approach can be imitated by other firms and SMEs in China?
- What business challenges and obstacles need to be overcome in order to transform from the conventional latecomer model to the innovation-based business model?
CHAPTER 2: LITERATURE REVIEW
2.1. Innovation-Based Entrepreneurship
One of the early works in the field of innovation and its relationship with entrepreneurship was carried out by Schumpeter (1942) through the “Opportunity Theory of Entrepreneurship (OTE)” also termed as the ‘equilibrium destruction theory’. The theory rests on the principle that entrepreneurship is not about earning, but about being the innovative leader. The premise is further explained by Sledzik (2013), claiming that OTE does not deny the premise of wealth accumulation or gaining social power, but asserted the significance of economic leadership rather than being part of the equilibrium and do not risking the position due to the fear of finical loss. OTE stresses on being a technology leader than a follower and also moving out of the equilibrium by investing in innovative abilities of the firm or the human resource (Marcotte, 2014).
2.2. Innovative Learning in the Technology Sector
Beckman, et al. (2012) and Flatten, et al. (2014) focused on innovative learning in entrepreneurship. Flatten, et al. (2014) noted that technology-based ventures are vulnerable to market risks and imitation by competitors. If the innovation rests on a single or a few specific individuals, the entire innovation model would collapse if those individuals are hired by the competitor firms. So, there must be systematic and productive learning process through which the entire organisation can grow through the new changes. El-Awad, et al. (2017) discuss the need of finding a balance between static efficiency and dynamic flexibility. Static efficiency means doing the same thing better, while dynamic flexibility means completely changing the course of operations.
2.3. R&D v/s Technology imitation
Xu and Li (2014) argue that technological innovation takes a different route in the developing countries as compared to the developed countries. In the developed countries, technological innovation is realized mainly through imitation of R&D, that is, repeating and improving the research and then applying the theoretical model (Kim, 1997). On the contrary, for the developing nations, technological innovation is realized through the imitation of ‘imitation by doing’ approach (Kim & Seong, 2010). Like in China, a number of manufacturing companies do not have any R&D support behind their products and manufacturing procedures, but they simply replicate the approach by other firms. For such firms to become more innovative, they need to move from duplicative imitation to creative imitation and then to innovation, that is producing entirely original products, supported by the R&D efforts.
CHAPTER 3: METHODOLOGY
3.1. Study Location
The study will be conducted in China, but from London UK. The researcher will be situated in London and will collect the primary data from participants residing in China via emails, social media networks, and other online chat/call channels like Whatsapp and Skype etc. The data will represent the business environment and mindset of the Chinese firms.
3.2. Units of Analysis
The units of analysis for the study will be individuals, who are currently employed at Huawei Technologies or have worked with the company in the past. The data set will be divided into three categories of Employees, Managers/ Team- Lead, and CEO / Branch Manager. The researcher will try to observe similarities and differences between the responses of participants from these three categories.
3.3. Sampling Procedure
The “stratified random sampling” approach will be used in the present study. With the predefined categories of Employees, Managers/ Team- Lead, and CEO / Branch Head, the researcher will try to collect similar number of responses from each category. However, since the number of employees and managers is always greater than the CEOs, a defined ratio has been set; Employees (50%), Managers (30%), and CEOs (20%). In this way, there needs to be at least 2 responses from the CEOs or Branch Head for every 10 response.
The study will take use of the semi-structured interviews for data collection. The present study is an “Explanatory Case Study” and will use qualitative data from the selected individuals to address the research hypotheses.
3.4. Ethical Considerations
As the study involves primary data collection, all ethical parameters need to be adhered. First, the parameter of participants’ confidentiality will be justified by not recording the name, email address, phone number, or any other personal information during the interview. Second, the online interviews will not be recorded and only hand notes will be taken of the responses. In this way, any response cannot be tracked back to the actual respondents. Third, prior permission will be taken from Huawei Centres (HR Department) and also individual participating in the study. For individuals contacted via social media, the Huawei HR will not be taken into the loop as it may cause confusion and raise unnecessary doubts.
CHAPTER 5: DATA ANALYSIS & DISCUSSION
The qualitative data from the online interview will be analysed using the ‘thematic analysis’ approach. The NVivo-11 software will be used to identify keyword frequency and generate relevant themes from the data. Using the thematic analysis approach, the researcher will be able to identify common patterns and relationship between different codes and variables, thus, presenting a more comprehensive discussion on the subject and stressing on new discoveries.
Some possible recommendations from the present study can be off:
- Better investment and budget planning for uplifting the innovativeness of the organization.
- Systematic and procedural steps to the business transformation from the conventional latecomer approach to the innovation-based business approach.
The last chapter will of conclusion which will summarize all the major research findings and will also try to relate the findings with the study objectives and research questions. Apart from this, this chapter will also talk about the study limitations and the research objectives that could not be fully addressed in the present study.
|Identifying secondary sources|
|Literature Review Chapter|
|Interviews for Data Collection|
|Data Filtering & Themes Identify|
|Data Analysis Chapter|
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