Dr. Qing Hui Huang was born in Dongguan, where China’s reform and opening up first took place. He graduated from Sichuan University in Chengdu with a bachelor’s degree in computer science. Later, he went on for graduate study at Peking University, majoring in public administration. He spent 10 years working as the governor in three different towns in Dongguan. Then, he was elected as the vice mayor of Dongguan municipal government in charge of industry, science and technology, and commerce.
Today upgrading and transformation pertains to the firm long-term development and profitability. It is no more a slogan but is a strategic issue to many Chinese exporters and manufacturers, who are seriously in building their own brands and developing the domestic market. At this premise, can upgrading and transformation be promoted by network resource? It is the aim of this study to explore the nature of network resource and access its effects on upgrading and transformation.
A mix research approach is adopted that qualitative and quantitative data are collected from targeted manufacturers in Southern China. We purposefully select and interview managers of three established manufacturers in various backgrounds to seek an initial understanding on upgrading and transformation. All their views are then incorporated in a questionnaire survey administrated to furniture manufacturers in the same region. After two waves of data collection, we manage to get 186 responses from a list of 426 qualified manufacturers, representing a response rate of 43.7%.
From a series of qualitative and quantitative analyses, we establish the complexity and multidimensional structure of network resource. It represents the information, support, and resource that firm can obtain from industry network. The strength of business and political ties is shown to be highly relevant for the amount of resources available from the network. Therefore, manufacturer can upgrade and transform its business by using network resource for better performance.
Network resource is now operationalized by a network of suppliers, trade associations, clients, industry and commerce departments, and domestic banks that offers resource to firm. This conceptualization reveals the resource contributed by individual network members. It represents a departure from the centrality and embeddedness in network research. Enterprise upgrading and transformation is a matter of network resource. To replicate findings in this study to various industries and regions is encouraged.
The chance to successfully upgrade and transform business is higher for firm having a plentiful network resource. It is, therefore, important for managers to build, promote, develop, and enhance a network relationship with suppliers, trade associations, clients, industry and commerce departments, and domestic banks in a course of upgrading and transformation.
This study is among the first to conceptualize network resource as a five-factor model and apply it in predicting upgrading and transformation in the manufacturing sector. It addresses a pressing issue of Chinese manufacturers.
Network resource, Upgrading and transformation, Firm performance