Financial and non-financial performance

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Methodology and method

During this chapter, we will present the methodology and method used in this paper. While displaying the methods and reasoning behind them, this chapter also reveals the handling of data collection and analysis.

The research approach

The aim and scope of this thesis is to provide insights to how does the E-business approach of micro firms which decide to grow and expand into China influence their entry (according to their firm-specific resources and institutional factors).
According to the literature, there are 2 ways of conducting research. The positivism approach employs mechanisms such as measurement and observation in order to obtain trustworthy, objective data based on facts, while disregarding the subjectivity of the human components (be them the stakeholders of the firm, or the researchers) (Easterby-Smith, 2015). On the other hand, the constructionism approach studies thoughts, meanings and motivations that underline actions, and their interpretation. Researchers who use this approach aim to better understand the subjective truth of their object of study, in order for them to provide insights with their findings (Saunders et al., 2009). Since this paper focuses on the intricate nature of entry selection and decision making, we felt that using the constructionism approach would be more suitable, since the human component is crucial in these matters.
Following up the literature review, we have decided to adopt an inductive research approach. The inductive rationale centers on understanding of the meaning that people give to certain events. We chose to approach our research by collecting data, which we later analyze and connect to the theory. Since the research outcomes of an inductive approach are usually specific and not generalizable, issue that is often accused by the researchers which use the inductive approach (Saunders et al., 2009), we aimed that, by using multiple cases we could provide a better framework to be used by the “stakeholders” of this study.
Further on, we had to choose a study type. By reading the literature on this matter, we found out that there are several types. The descriptive study is centered on situations, events and people, and describes and explains them. The exploratory study type focuses on depth in understanding problems. This second study also has flexibility in regards of the research direction, should new events demand it. The explanatory study targets the relationships of variables and the explanations of such relationships (Saunders et al., 2009). Therefore, since our study needs deeper understanding of the problem and clarification of that problem across several examples, we have found the exploratory study to be the most suitable.
Depending on the type and depth of data that a researcher wants to collect, one can employ a qualitative or quantitative research approach. Moreover, one of these two approaches has to be taken keeping in mind the research philosophy and type. Since our study necessitates a qualitative approach, to reveal insights and knowledge about the researched object (Easterby-Smith et al. 2015), we have decided on focusing on the exclusive information and experiences provided by interviewing the founders and key top managers of the companies selected, on which we will elaborate further. Otherwise, by employing a quantitative approach, we would miss out on the information regarding “why” and “how” (Easterby-Smith et al. 2015), with views to our research subject.
In-depth interviews can be unstructured, semi-structured, or standardized. We have decided on semi-structured interviews, for the reason that it provides flexibility to us, as researchers, to address unpredicted aspects during the interview, while still having a “backbone”, a framework on which to conduct the interviews (Sreejesh, Mohapatra, & Anusree, 2014). By stressing the focus of the study, acquiring in-depth knowledge on the topic of choice, we have conducted qualitative research in the interviews.
True to the research design, four case studies were decided upon, to be conducted, and they will be discussed later in this paper.
The literature review is closely done along the center of the research question, “How can firm-specific resource paired with country-specific institutional context influence the strategic entry into China for micro e-businesses?”. The whole review is organized in the rational sequence of resource based review and entry mode, institutional context and entry mode, firm resource configuration with institutional context and entry mode, and in the end, it is followed by the discussion of entry mode and performance. The organization of the literature review has laid a foundation for how the empirical data was collected, which has helped us towards the analysis and findings. Therefore, our interview question list with the four target companies is constructed with the guidance of the literature review. It is designed under four groups: The first group, namely, general questions regarding the company, including in which way they established their business in China, for example, with or without partner. The second question list group is related to the firm-specific resources. The questions are mainly designed according to Barney‟s (1991) summary of firm resources, in terms of physical capital, human capital and organizational capital. Williamson (1975) referred to physical capital resource as applied physical technology, real estate, facility and raw materials. Such forms of resource can be counted as tangible resource. Human capital resources (Becker, 1964) and organizational capital resources (Tomer, 1987) are more on the intangible resource side. Human capital resource refers to the training of the employees, the staff or managerial or founder‟s experience, and their knowledge and insights of constructive input towards the firm. Organizational capital refers to a higher level of resource, focusing mostly on the relationship of the business partners within the organization and the relationship with the external third party, for example the suppliers. The third group consists of questions related with the intuitional context. The questions are comprised of two dimensions, informal culture perspective and formal governmental regulated perspective. The fourth group, are the measurement questions in relationship with the firms‟ performance, both financial and non-financial. As discussed in the literature review, firms might be reluctant to provide financial data. Under such consideration, it would be valuable to examine the firms‟ performance from a non-financial angle. By looking at firms‟ performance after the decision regarding foreign entry, the “strategic” aspect of the entry, which we have defined as financially viable, becomes evident.

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Design of the research study

According to Easterby-Smith (2015), a qualitative case study is a way through which a researcher can investigate a certain object of study or phenomenon in its own context. Traditionally, this method focuses on in-depth looking at either a single or a very small number of organizations, institutions, individuals or events. Yin (2014) argues that, in the case of having research questions that have to do with the “how or why” of certain situations, when the focus of the study is a contemporary phenomenon and/or the researcher(s) do not have control over the behaviors of the decision-makers, case study research should be the preferred method. Case study research allows the gathering of data and insight regarding how people think and why do they think and act in a certain way.
For the purpose of this research, investigating the real-world cases of entrepreneurs which have penetrated through their micro e-businesses the Chinese market was paramount. Their experiences and unique thoughts required close contact with these participants. In using case studies, different methods of acquiring data become available (Yin, 2014). By using just a handful of cases, while concentrating on them, better understanding and in-depth knowledge surfaces.
With the continuous globalization and the shift that networking through the internet has provided, E-businesses are and continue to be more and more popular (Abebe, 2014), while not sufficiently investigated and theorized from the point of view of small businesses entry into a developing country such as China. In the virtue of this, the need for a deeper understanding of the matter, in order to contribute to the existing body of literature in a helpful and informative way, becomes apparent. Considering the patterns within the cases that we investigate, as well as the unique divergences from the traditional entry strategies and modes that we find, this paper can provide a base for further investigation, and also a form of generalization of the findings, however only valid within the specific context investigated by the paper (micro-firms, entry modes, China, E-business).

1. Introduction 
1.1 Background
1.2 Problem
1.3 Purpose
2. Literature review 
2.1 Organization of research
2.2 Theoretical background
2.3. Conclusion
3. Methodology and method 
3.1 The research approach
3.2 Design of the research study
3.3 The data collection
3.4 Data analysis
3.5 Quality and ethical considerations
4. Empirical data analysis 
4.1. Financial and non-financial performance
4.2. The entry strategy and entry modes
4.3 Firm resource
4.4 Institutional factors
4.5 Business strategy
5. Discussion and findings 
5.1 Links to the literature review
5.2 Coupling interaction
6. Conclusions 
Entering the Chinese Market: Implications for foreign micro E-businesses

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