Skip to main content
SpringerLink
Log in

Knowledge management and innovation strategy: The challenge for latecomers in emerging economies

  • Published:
Asia Pacific Journal of Management Aims and scope Submit manuscript

Abstract

The success of latecomer firms from the emerging economies challenges the conventional wisdom on entry timing and resource-based competence. Building on research on institutions in emerging economies and the resource-based perspective in strategic management, we propose a model to explain how resource poor latecomer firms in emerging economies catch up with the multinational incumbents. We classify latecomers based on their strategic learning intent as either emulators or blind imitators. The strategic learning intent depends on a firm’s complementary assets and its absorptive capacity. Firms that choose emulation develop flexible routines, while firms that choose blind imitation end up with rigid routines. Over time, when there is a need for resource renewal, firms that have flexible routines are better positioned to respond. We take the Chinese mobile phone industry as an exemplar to illustrate the core issues in latecomer catching up of emerging economy firms.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Figure 1
Figure 2
Figure 3

Similar content being viewed by others

References

  • Ahlstrom, D., & Bruton, G. D. 2001. Learning from successful local private firms in China: Establishing legitimacy. Academy of Management Executive, 15(4): 72–83.

    Google Scholar 

  • Amsden, A. H., & Hikino, T. 1994. Project execution capability, organizational know-how, and conglomerate corporate growth in late industrialization. Industrial and Corporate Change, 3: 111–147.

    Article  Google Scholar 

  • Barney, J. B. 1990. The debate between traditional management theory and organizational economics: Substantive differences or intergroup conflict? Academy of Management Review, 15: 382–393.

    Article  Google Scholar 

  • Barney, J. B. 1991. Firm resources and sustained competitive advantage. Journal of Management, 17: 99–120.

    Article  Google Scholar 

  • Bartlett, C. A., & Ghoshal, S. 2000. Going global: Lessons from late movers. Harvard Business Review, 78: 132–142 (Mar–Apr).

    Google Scholar 

  • Baum, J. A. C., & Haveman, H. A. 1997. Love Thy Neighbor? Differentiation and agglomerations in the Manhattan Hotel Industry, 1898–1990. Administrative Science Quarterly, 42: 304–338.

    Article  Google Scholar 

  • Becker, M. C. 2004. Organizational routines: A review of the literature. Industrial and Corporate Change, 13(4): 643–677.

    Article  Google Scholar 

  • Bond, R. S., & Lean, D. F. 1977. Sales, promotion, and product differentiation in two prescription drug markers. Washington, DC: Federal Trade Commission.

    Google Scholar 

  • Boisot, M., & Child, J. 1996. From fiefs to clans and network capitalism: Explaining China’s emerging economic order. Administrative Science Quarterly, 41: 600–628.

    Article  Google Scholar 

  • Bowman, D., & Gatignon, H. 1996. Order of entry as a moderator of the effect of the marketing mix on market share. Marketing Science, 15(3): 222–242.

    Google Scholar 

  • Bruton, G. D., Dess, G. G., & Janney, J. J. 2007. Knowledge management in technology-focused firms in emerging economies: Caveats on capabilities, networks, and real options. Asia Pacific Journal of Management, 24(2): 115–130.

    Article  Google Scholar 

  • Carpenter, G. S., & Nakamoto, K. 1989. Consumer preference formation and pioneering advantage. Journal of Marketing Research, 26: 285–298.

    Article  Google Scholar 

  • China Statistical Yearbook. 2005. Beijing: China Statistics Press.

  • Cho, D. S., Kim, D. J., & Rhee, D. K. 1998. Latecomer strategies: Evidence from the semiconductor industry in Japan and Korea. Organization Science, 9(4): 489–506.

    Google Scholar 

  • Cohen, W. M., & Levinthal, D. A. 1990. Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35(1): 128–152.

    Article  Google Scholar 

  • Collins, D. J. 1994. Research note: How valuable are organizational capabilities? Strategic Management Journal, 15: 143–152 (Winter).

    Article  Google Scholar 

  • Cyert, R. M., & March, J. G. 1963. A behavioral theory of the firm. Englewood Cliffs, NJ: Prentice-Hall.

    Google Scholar 

  • Dunning, J. H. 2006. Comment on dragon multinationals: New players in 21st century globalization. Asia Pacific Journal of Management, 23(2): 139–141.

    Article  Google Scholar 

  • Felin, T., & Foss, N. J. 2006. Organizational routines: A sceptical look. In Becker, M. (Eds.). Handbook of Organizational Routines. Cheltenham: Edward Elgar.

  • Feldman, S. M. 2000. Organizational routines as a source of continuous change. Organizational Science, 11(6): 611–629.

    Article  Google Scholar 

  • Guthrie, D. 1997. Between markets and politics: Organizational responses to reform in China. American Journal of Sociology, 102: 1258–1303.

    Article  Google Scholar 

  • Guillen, M. F. 2000. Business groups in emerging economies: A resource-based view. Academy of Management Journal, 43: 362–380.

    Article  Google Scholar 

  • Hamel, G., & Prahalad, C. K. 1989. Strategic intent. Harvard Business Review, 67(3): 63–76.

    Google Scholar 

  • Haunschild, P. R., & Miner, A. S. 1997. Models of interorganizational imitation: The effects of outcome salience and uncertainty. Administrative Science Quarterly, 42: 472–500.

    Article  Google Scholar 

  • Hikino, T., & Amsden, A. H. 1995. Entrepreneurship in late developing countries: What is unique about East Asia? In G. Corbetta, M. Huse & D. Ravasi (eds.). Crossroads of Entrepreneurship. US: Springer.

    Google Scholar 

  • Hobday, M. 1995. Innovation in East Asia: The challenge to Japan. London: Edward Elgar.

    Google Scholar 

  • Hobday, M. 2000. East versus Southeast Asian innovation systems: Comparing OEM- and TNC-led growth in electronics. In L. Kim & R. R. Nelson (eds.). Technology, learning, and innovation. New York: Cambridge University Press.

    Google Scholar 

  • Hoskisson, R. E., Eden, L., Lau, C. M., & Wright, M. 2000. Strategy in emerging economies. Academy of Management Journal, 43(3): 249–267.

    Article  Google Scholar 

  • Howard-Grenville, A. J. 2005. The persistence of flexible organizational routines: The role of agency and organization context. Organization Science, 16(6): 618–636.

    Article  Google Scholar 

  • Kerin, R. A., Varadarajan, P. R., & Peterson, R. A. 1992. First-mover advantage: A synthesis, conceptual framework, and research propositions. Journal of Marketing, 56(4): 33–52.

    Article  Google Scholar 

  • Khaire, M. 2005. Great oaks from little acorns grow: Strategies for new venture growth. The Academy of Management Best Paper Proceedings.

  • Khanna, T., & Palepu, K. G. 2000. The future of business groups in emerging markets: Long-run evidence from Chile. Academy of Management Journal, 43(3): 268–285.

    Article  Google Scholar 

  • Kim, L. 1997a. Imitation to innovation: The dynamics of Korea’s technological learning. Boston: Harvard Business School Press.

    Google Scholar 

  • Kim, L. 1997b. The dynamics of Samsung’s technological learning in semiconductors. California Management Review, 39(3): 86–100.

    Google Scholar 

  • Kim, L., & Nelson, R. R. 2000. (Eds.). Technology, learning, and innovation. New York: Cambridge University Press.

  • Kim, H., Hoskisson, R. E., Tihanyi, L., & Hong, J. 2004. The evolution and restructuring of diversified business groups in emerging markets: The lessons from Chaebols in Korea. Asia Pacific Journal of Management, 21(1–2): 25–48.

    Article  Google Scholar 

  • Kohn, T. O. 1997. Small firms as international players. Small Business Economics, 9: 45–51.

    Article  Google Scholar 

  • Koza, M. P., & Lewin, A. Y. 1998. The co-evolution of strategic alliances. Organization Science, 9(3): 255–264.

    Google Scholar 

  • Lall, S. 1983. The new multinationals: The spread of third world enterprises. Chichester: Wiley.

    Google Scholar 

  • Lavie, D. 2006. Capability reconfiguration: An analysis of incumbent responses to technological changes. Academy of Management Review, 31(1): 153–174.

    Google Scholar 

  • Levitt, B., & March, J. G. 1988. Organizational learning. American Review of Sociology, 14: 319–340.

    Article  Google Scholar 

  • Lieberman, M. B., & Montgomery, D. B. 1988. First-mover advantages. Strategic Management Journal, 9: 41–58.

    Article  Google Scholar 

  • Lieberman, M. B., & Montgomery, D. B. 1998. First-mover (dis)advantages: Retrospective and link with the resource-based view. Strategic Management Journal, 19: 1111–1125.

    Article  Google Scholar 

  • Mahmood, I. P., & Rufin, C. 2005. Government’s dilemma: The role of government in imitation and innovation. Academy of Management Review, 30(2): 338–360.

    Google Scholar 

  • March, J. G., & Olsen, J. P. 1976. Ambiguity and choice in organizations. Bergen, Norway: Universitesforlaget.

    Google Scholar 

  • Mathews, J. A. 2002. Dragon multinational: Towards a new model of global growth. New York: Oxford University Press.

    Google Scholar 

  • Mathews, J. A. 2006a. Dragon multinationals: New players in 21st century globalization. Asia Pacific Journal of Management, 23(1): 5–27.

    Article  Google Scholar 

  • Mathews, J. A. 2006b. Response to professors Dunning and Narula. Asia Pacific Journal of Management, 23(2): 153–155.

    Article  Google Scholar 

  • Meyer, J., & Rowan, B. 1977. Institutional organizations: Formal structure as myth and ceremony. The American Journal of Sociology, 83: 340–363.

    Article  Google Scholar 

  • MII Website “Ministry of Information Industry of People’s Republic of China”: http://www.mii.gov.cn/mii/hyzw/tjxx.html. Accessed on 01/05/2006.

  • Narula, R. 2006. Globalization, new ecologies, new zoologies, and the purported death of the eclectic paradigm. Asia Pacific Journal of Management, 23(2): 143–151.

    Article  Google Scholar 

  • Nelson, R. R., & Winter, S. G. 1973. Toward an evolutionary theory of economic capabilities. American Economic Review, 63: 440–449.

    Google Scholar 

  • Nelson, R. R., & Winter, S. G. 1982. An evolutionary theory of economic change. Cambridge, MA: Harvard University Press.

    Google Scholar 

  • North, D. C. 1990. Institutions, institutional change and economic performance. New York: Cambridge University Press.

    Google Scholar 

  • Peng, M. W. 2003. Institutional transitions and strategic choices. Academy of Management Review, 28(2): 275–286.

    Article  Google Scholar 

  • Peng, M. W., & Delios, A. 2006. What determines the scope of the firm over time and around the world? An Asia Pacific perspective. Asia Pacific Journal of Management, 23(4):385–405.

    Article  Google Scholar 

  • Peng, M. W., & Heath, P. S. 1996. The growth of the firm in planned economies in transition: Institutions, organizations, and strategic choice. Academy of Management Review, 21(2): 492–528.

    Article  Google Scholar 

  • Peng, M. W., & Zhou, J. Q. 2005. How network strategies and institutional transitions evolve in Asia. Asia Pacific Journal of Management, 22(4): 321–336.

    Article  Google Scholar 

  • Peng, M. W., Wang, D. Y. L., & Jiang, Y. 2008. An institution-based view of international business strategy: A focus on emerging economies. Journal of International Business Studies (in press).

  • Rothaermel, F. T., & Hill, C. W. L. 2005. Technological discontinuities and complementary assets: A longitudinal study of industry and firm performance. Organization Science, 16(1): 52–70.

    Article  Google Scholar 

  • Schilling, M. A., & Hill, C. W. L. 1998. Managing the new product development process: Strategic imperatives. Academy of Management Executive, 12(3): 67–81.

    Google Scholar 

  • Scott, W. 2001. Institutions and organizations. Rev. Ed. Thousand Oaks, CA: Sage.

    Google Scholar 

  • Shenkar, O., & Li, J. T. 1999. Knowledge search in international cooperative ventures. Organization Science, 10(2): 134–143.

    Google Scholar 

  • Simons, T., & Ingram, P. 2003. Enemies of the State: Interdependence between institutional forms and the ecology of the kibbutz, 1910–1997. Administrative Science Quarterly, 44: 592–621.

    Article  Google Scholar 

  • Teece, D. J. 1987. The competitive challenge: Strategies for industrial innovation and renewal. Cambridge, MA: Ballinger.

    Google Scholar 

  • Tellis, G., & Golder, P. 1996. First to market, first to fail? Real causes of enduring market leadership. Sloan Management Review, 37(2): 65–77.

    Google Scholar 

  • Tomasello, M. 1990. Cultural transmission in the tool use and communicatory signaling of chimpanzees? In S. Parker & K. Gibson (eds.). Language and intelligence in monkeys and apes: Comparative developmental perspectives: 274–311. Cambridge, UK: Cambridge University Press.

    Google Scholar 

  • Want, S. C., & Harris, P. L. 2002. How do children ape? Applying concepts from the study of non-human primates to the developmental study of ‘imitation’ in children. Developmental Science, 5(1): 1–41.

    Article  Google Scholar 

  • Wernerfelt, B. 1984. A resource-based view of the firm. Strategic Management Journal, 5: 171–180.

    Article  Google Scholar 

  • Westney, E. 1996. Mass media as business organizations: A U.S.–Japanese comparison. In S. J. Pharr & E. S. Krauss (eds.). Media and politics in Japan. Honolulu: University of Hawaii Press.

    Google Scholar 

  • Winter, S. G. 1984. Schumpeterian competition in alternative technological regimes. Journal of Economic Behavior and Organization, 5: 287–320.

    Article  Google Scholar 

  • Zimmerman, M. A., & Zeitz, J. G. 2002. Beyond survival: Achieving new venture growth by building legitimacy. Academy of Management Review, 27(3): 414–431.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Management of Organizations, Hong Kong University of Science and Technology, Clear Water Bay, Kowloon, Hong Kong, China

    Jiatao Li & Rajiv Krishnan Kozhikode

Authors
  1. Jiatao Li
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Rajiv Krishnan Kozhikode
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Jiatao Li.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Li, J., Kozhikode, R.K. Knowledge management and innovation strategy: The challenge for latecomers in emerging economies. Asia Pac J Manage 25, 429–450 (2008). https://doi.org/10.1007/s10490-007-9076-x

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10490-007-9076-x

Keywords

Search

Navigation