The impact of political behaviours on internationalisation: The case of Australian companies internationalising to China

Abstract

Purpose

The purpose of this paper is to test a model of cooperation between internationalising businesses and local and host country governments in the context of Australian companies internationalising to China.

Design/methodology/approach

The paper presents a model for the political dimensions of internationalising based on corporate political theory and the cooperative view of management. Data were collected from personal interviews with representatives from 40 Australian organisations with businesses or operations in China. The data were analysed using NVivo.

Findings

Assistance provided by the Australian government was often sought and was perceived to be beneficial. Most participants experienced policies and regulations which affected their entry modes. In ten cases they acted as barriers and significantly influenced entry mode choice. The majority of participants viewed the development of relationships with the Chinese government as important and employed a variety of relationship behaviours. Over half of the participants identified the need to understand and deal with the psychically distant government structures of the Chinese government, namely government intervention in business.

Practical implications

The model links the organisational objectives of businesses internationalising to China, understanding the political/regulatory environment, selecting an entry mode and developing/maintaining a successful business. To achieve these objectives corporate political behaviour must reflect the sovereign powers in place at the time.

Originality/value

The paper presents a model which develops the literature for the political dimensions of internationalisation. It also presents empirical data on the political dimensions of internationalising into China. These findings will assist businesses in understanding political factors when internationalising to China.

Citation

Menzies, J.L. and Orr, S. (2010), "The impact of political behaviours on internationalisation: The case of Australian companies internationalising to China", Journal of Chinese Economic and Foreign Trade Studies, Vol. 3 No. 1, pp. 24-42. https://doi.org/10.1108/17544401011016663