Journal Screenshot

International Journal of Academic Research in Business and Social Sciences

Open Access Journal

ISSN: 2222-6990

The Motives and Selection Criteria of Korean Firms in Establishing Inter-Firm Network with Suppliers in Malaysia

Wonik Kim, Raja Nerina Raja Yusof

http://dx.doi.org/10.6007/IJARBSS/v10-i10/7702

Open access

This research, which focuses on Korean firms, aims to explore the intricacies of the network relationships between buyers and suppliers. Since the influence and strategies of the inter-firm network of overseas Korean firms have not been satisfactorily explored yet, this study attempts to fill the gap by exploring the motives and selection criteria of these firms. The findings revealed that there were three main motives for Korean firms to establish inter-firm networks with suppliers in Malaysia, which are locational decisions, low-cost sourcing, and easiness for procurement. Findings also showed that Korean firms select their suppliers based on seven criteria which are business structure, production capability, partner experience, quality policy, price competitiveness, business potential and relationship. The study suggested practical recommendations for potential suppliers of Korean firms in developing supplier-buyer relationships.

Barney, J. B. (2001), Is the resources-based “View” A useful perspective for strategic management research? Academy of Management Review, Vol.26, No.1, 41-56
Bass, L., Klein, M., Bachmann, F. (2003). Quality Attribute Design Primitives and the Attribute Driven Design Method. In: 4th International Workshop on Product Family Engineering, Bilbao, Spain, October 3-5 (2003)
Batonda, G., & Perry, C. (2003). Approaches to relationship development processes in inter?firm networks, European Journal of Marketing, 37(10), 1457 – 1484.
Benyoucef, L., Ding, H., & Xie, X. (2003). Supplier Selection Problem: Selection Criteria and Methods, Institut National De Recherche En Informatique Et Automatique
Charmaz, K. (2006). Constructing grounded theory: A practical guide through qualitative analysis. London: SAGE
Chin, K-S., Chan, B. L., and Lam, P-K. (2008), Identifying and prioritizing critical success factors for competition strategy, Industrial Management & Data Systems, Vol. 108 No. 4 437-454.
Crone, M., & Watts, H. D. (2003). The Determinants of Regional Sourcing by Multinational Manufacturing Firms: Evidence from Yorkshire and Humberside, UK, European Planning Studies, 11(6), 717 -737.
Das, T. K., and Teng, B-S. (2000), Instabilities of Strategic Alliances: An internal tensions perspective, Organization Science, Vol.11 No. 1, 77-101.
Dekker, H. C. (2008) Partner selection and governance design in interfirm relationships," Accounting, Organizations and Society, Vol. 33(7-8), pages 915-941.
Dicken, P., & Thrift, N. (1992). The organization of production and the production of organization: why business enterprises matter in the study of geographical industrialization, Transactions of the Institute of British Geographers, NS 17, pp. 279-291
Dicken, P. (1998), Global Shift: Transforming the world economy. New York: Guilford Press
Dicken, P., and Hassler, M. (2000), Organizing the Indonesia Clothing Industry in the Global economy: the role of business networks, Environment and planning A 32, 263-80.
Gong, Y. (2003), Subsidiary Staffing in International Enterprises: Agency, Resources, and Performance. Academy of Management Journal, 46:728-739.
Gress, D. R., & Poon, J. P. H. (2007), Firm networks and Korean subsidiaries in the United States. Growth and Change, 8(3), 396-418.
Gulati, R. (1995), Social Structure and Alliance Formation Pattern: A longitudinal Analysis, Administrative Science Quarterly, 40; 619-642.
Gulati, R. (1998), Alliances and Network, Strategic Management Journal 19, 293-317.
Gulati, R., and Gargiulo, M. (1999), Where Do Network Forms Come From?, American Journal of Sociology, March, 177-231.
Gulati, R. (2007). Managing Network Resource: Alliance, Affiliations, and Other Relational Assets, Oxford University Press: New York.
Hoskisson, R. E., Eden, L., Lau, C. M., and Wright, M. (2000), Strategy in emerging economies. Academy of Management Journal, 43, 249–67
Johanson, J., & Mattsson, L-G. (1987), Interorganizational Relations in Industrial Systems: A Network Approach Compared with the Transaction-Cost Approach, International Studies of Management & Organization, Vol. 17
Johanson, M., and Kao, P. T. (2010). Networks in internationalisation, Pla-Barber, J. and Alegre, J. (Ed.) Reshaping the Boundaries of the Firm in an Era of Global Interdependence (Progress in International Business Research, Vol. 5), Emerald Group Publishing Limited, Bingley, pp. 119-142.
Konopaske, R., Werner, S., & Neupertm, K. E. (2002), Entry Mode Strategy and Performance: The Role of FDI staffing, Journal of Business Research, 55:759-770.
Kraaijenbrink, J., Spender, J-C., & Groen, A. J. (2010), The Resource-based View: A review and Assessment of Its Critiques, Journal of Management, Vol. 36 No. 1, 349-372
Krätke, S., & Borst, R. (2007). EU Eastern Enlargement and the Configuration of German-Polish Inter-Firm Linkages, Tijdschrift voor Economische en Sociale Geografie, 98(5), 621-640.
Kwon, Y. C. (2010). Market orientation of Korean MNC subsidiaries and their performance in the Chinese and Indian markets. International marketing Review, 27(2), 179-199.
Lavie, D. (2006), The competitive advantage of interconnected firms: An extension of the resources-based view, Academy of Management Review, 31:638-658
Lee, C. Y. (2004), A comparative study of Automobile Industry Between Japan and Korea, Asia Academy of Management, Fourth Conference.
Li, R., & Cheong, K-C. (2017). Huawei and ZTE in Malaysia: The Localisation of Chinese Transnational Enterprises, Journal of Contemporary Asia, 47(5), 752-773.
Li, X., & Yeung, Y. (1999). Inter-firm linkages and regional impact of transnational corporations: company case studies from Shanghai, China, Geografiska Annaler, 81 B (2), 61–72.
Lopez-Aymes, J-F., and Salas-Porras, A. (2008), Assessing Nationalistic Expressions of Korean companies: Korean FDI in Mexico, UCLA Center for Korean Studies.
Lu, J. W. (2002). Intra- and Inter-organizational Imitative Behavior: Institutional Influences on Japanese Firms' Entry Mode Choice. Journal of International Business Studies, 33(1): 19-37.
Ma, X. (2006), Relationship between Exporters and their Foreign Sales and Marketing Intermediaries, Advances in International Marketing, Volume 16, 23-48
Moeller, K. (2010), Partner selection, partner behavior, and business network performance, An empirical study on German business networks, Journal of Accounting Organizational Change, Vol. 6 No.1, 27-51.
Park, S. O., & Nahm, K-B. (1998). Spatial structure and inter-firm networks of technical and information producer services in Seoul, Korea, Asia Pacific Viewpoint, 39(2), 209-219.
Rooks, G., Raub, W., Selten, R., and Tazelaar, F. (2000). How Inter-firm Co-operation Depends on Social Embeddedness: A Vignette Study, Acta Sociologica, 43, 123-137.
Shah, R. H., & Swaminathan, V. (2008). Factors influencing partner selection in strategic alliances: the moderating role of alliance context, Strategic Management Journal, 29(5), 471-494.
Son, J. W., Han, S. H., Rojas, E. M. (2015). Embeddedness and Collaborative Venture Networks Among Korean Construction Firms for Overseas Construction Projects, Journal of Civil Engineering and Management, 21(4), 478-491.
Su, F., Khan, Z., Lew, Y. K., Park, B. I., & Choksy, U. S. (2020). Internationalization of Chinese SMEs: the role of networks and global value chains, Business Research Quarterly, 23(2), 141-158.
Walker, D., & Hampson, K. (2003) Procurement strategies: a relationship-based approach. Wiley-Blackwell, Hoboken.
Yang, Q., Wang, Y., & Jiang, C. (2019). Local Relational Embeddedness and Subsidiaries’ Innovative Performance, Journal of Behavioral & Applied Management, 20(1), 17-35.
Yozi, J. (1997), Computer Networks and Inter-firm Relationship in the Automobile Industry: A Comparative Study of Japan and Korea. Computers Industry Engineering, Vol.33, No.3-4, 635-638.
Zheng, Y., Liu, J., & George, G. (2010). The Dynamic Impact of Innovative Capability and Inter-firm Network on Firm Valuation: A Longitudinal Study of Biotechnology Start-ups. Journal of Business Venturing, 25(6) 593-609.

In-Text Citation: (Kim, & Yusof, 2020)
To Cite this Article: Kim, W., & Yusof, R. N. R. (2020). The Motives and Selection Criteria of Korean Firms in Establishing Inter-Firm Network with Suppliers in Malaysia. International Journal of Academic Research in Business and Social Sciences. 10(10), 842-858.