Examining the real costs of us manufacturing decoupling strategies

• Main Author: CHEE, Sze Chiang Jonathan
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2021
• Subjects: Decoupling; Meso-level; Industry structure; SOEs; Leadership succession; Social media attacks; Supply chain; Retaliation; Business Administration, Management, and Operations; Operations and Supply Chain Management
• Online Access: https://ink.library.smu.edu.sg/etd_coll/358; https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=1353&context=etd_coll
• Institution: Singapore Management University

Decoupling strategies have been the main focus of supply chain and resource management studies. Increasingly, due to the shift in geopolitical dynamics, the term ‘decoupling’ is now used in finance, accounting, political, and strategic management fields to describe the effect from the fallout of tense international relations. Existing research on this topic includes modeling strategic retaliation theories and evaluating firm effects from an accounting and finance perspective. Yet, there still is little research published on meso-level analysis of the relationship between macro and micro factors that affect organizational decoupling strategies. This study hopes to add to this new body of research by exploring the real costs of a forced decoupling from one supply chain location to another. The author explains the various costs using three novel approaches: Industry Structure; Governmental Policy, and Leadership Succession. The Industry Structure study investigates and proposes based on grounded theory how firms in China’s manufacturing supply chains are formed. A novel index is used to categorize the focal firms’ innovation strategies and corporate governance choices. The results show that some firms can withstand a forced decoupling better than others. The Governmental Policy approach looks into the history of mobile phone manufacturing in China and the specific roles the Chinese State-Owned Enterprises (SOEs) play in shaping the nation’s sustained competitive advantage. A unique event study of foreign social media attacks is performed to understand the effects of exogenous threats to the state, and its subsequent reactions are observed and analyzed. Finally, the Leadership Succession approach looks into the conduciveness of the proposed alternative sites to China. From a cultural similarity perspective, the study chose Taiwan but finds significant succession challenges with the next generation of leaders in family-owned firms. The findings suggest that weak leadership succession is occurring either because the successor does not have the intention of carrying on the business or if external political forces create adverse shocks to the supply chain, which can put the focal firms at a disadvantage. This leadership void and the firm’s poor performance trend may cause it to be vulnerable to acquisitions, hostile or otherwise. This study concludes by presenting a case study of a large Taiwanese manufacturer that faced a non-family succession and was acquired by a Chinese SOE. As the global environment undergoes seismic shifts post Trump and pre-COVID vaccination, many scientific research fields are joining hands to recalibrate their datasets and research boundaries. This thesis emphasizes the need to conduct meso-level studies when exploring the topic of decoupling to give a richer context of understanding, which is vital for researchers in the pursuit of causal validity.