Engineer-centered enterprise and context-based knowledge: the sources of Chinese competitiveness in grid equipment

Abstract

Purpose The purpose of this study is to explore the competitive source of Chinese firms in an industrial sector of complex product systems. It helps to reveal the organizational innovation developed by Chinese firms in coping with international competition and technological challenges. Design/methodology/approach The study uses a qualitative method of research. The evidences are mainly collected through interviews, field observation and document analysis. Findings A pattern of engineer-centered organization is the source of competitiveness of Nanrui (NR) Electric (NREC) in this study. The firm equips its front project teams, and now its overseas branches with developmental human resources and authorizes them the power of decision-making to leverage R&D projects. It is an emerging challenge to the traditional multi-national companies (MNC) pattern, and enables the Chinese firms to build their capabilities on context-based knowledge. Research limitations/implications As a single-case study paper, there are limitations about the external validity of its argument. Through the in-depth discussion of the NREC case, this paper aims to generate some clues for future study in the relevant academic community, which can be a useful step to formal theorizing and modeling. That is why the authors develop the paper on a single case. As future directions of research, comparative studies covering more cases not only within the power system control and protection industry but also among different complex technology products industrial sectors are really needed. Practical implications For innovative firms from developing countries like China, they need to develop institutional arrangements to incentivize engineers in the frontline, which may help them to build competence upon successful interaction with customers. During the era of globalization, such a pattern may generate special competitiveness over giant multi-nationals or global production networks (GPNs). Originality/value The research provides an instructive case on the Chinese rise in industrial sectors of complex product systems. Its findings can not only provide enlightenment for industrial catch-up in developing countries through organizational innovation but also help to initiate a reconsideration of the traditional theorizing of MNC and GPN.

Guest editorial: Institutions, corporate governance and entrepreneurship: a research agenda for Chinese world-class enterprises

“…In addition, this special issue did not cover adequately the cases that have been world-class like Huawei and the firms that have been ranking at the top. Recent studies of Lei and Wu (2022) investigating the specific feature of Chinese hidden champions, and Shen et al (2022) in this special issue, are examples in this regard. This, indeed, reflects the fact that Chinese firms might be cautious as they are not really at the top in terms of global reputation and business power in the market.…”

“…World-class enterprises should not be assigned to any specific ownership. The case Shen et al (2022) studied demonstrates that SOEs, without government protections, can develop their global competitiveness and technological capabilities in China's grid equipment sector dominated by multinational incumbents as well. Nanrui Electric, the little-known champion in the grid equipment industry, is a scientific and technological SOE transitioned from an industrial research institute.…”