The Role of Network Management in the Internationalization Process - A case study of two Norwegian firms' initial entry into China

Abstract

The master thesis examines the role of network management in the context of initial entry strategies. As operational-level research on this issue is lacking, two exploratory case studies are conducted. The case studies explore the role of network management in two Norwegian firms' initial entry into China. The findings of the case studies suggest that network management is a facilitating contingency, which makes Western firms able to implement their entry strategies into China in practice. They also suggest that the manner in which Western firms should manage their networks to enter China effectively is significantly contingent upon which mode of entry is chosen. For firms opting for low commitment modes of entry, managing relations to customers and intermediaries in China is crucial, whereas for firms opting for high commitment modes of entry, developing and nurturing ties to key individuals that possess the necessary skills, knowledge and connections to implement the high commitment entry mode, is paramount. Lastly, managing networks are found to influence the manner in which opportunities to enter China are discovered and seized. The findings of the case studies also reveal that there is a gap between theory and practice on the manner in which an appropriate entry mode is selected. The theory suggests that the strategic decision making process can be characterized as effectual, whereas the findings suggest that it is causation-based.