Bridging ‘Home’ Political and Economic Rationalities with ‘Host’ Demands and Constraints: The Case of Regional Chinese State‐owned Multinational Corporations

Abstract

Regional state‐owned multinational corporations (SOMNCs) are a major constituent of the ‘going out’ strategy of the Chinese state. Although SOMNCs are nominally infused with political rationalities, they also have explicit contractual economic targets. We therefore explore the underlying rationalities of regional SOMNCs and the roles of expatriate managers in relation to their international expansion strategies. We mobilize Foucault's conception of ‘governmentality’ in providing a holistic understanding of the case of a regional SOMNC (and its subsidiary in Ghana), notably how its managers rationalize their decisions in terms of reconciling political vision with local contexts, tackling domestic competition via foreign market exploration, mobilizing local engagement, improving expatriate managers’ morale, and reinterpreting an interdependent government–business relationship. Our study suggests that coexisting economic and political considerations between the regional government and SOMNCs are instrumentalized with a view to ‘governmentalizing’ overseas operations via business strategies and localization management practices in the Ghanaian subsidiary. In such an interdependent relationship, political appeals and market imperatives are mutually beneficial and complementary, with expatriate managers skilfully using their affiliation with their government. Our theoretical contribution lies in adapting a governmentality driven framework to forge an alliance between liberal forms of management and non‐liberal forms of governing and control.

POLI advantages of state-owned multinationals

“…We adopt the definition of SOMNEs as "legally independent firms with direct ownership by the state that have value-adding activities outside its home country" (Cuervo-Cazurra et al, 2014, p. 925). The role of the EM SOMNEs' state has long been one of the main topics in the IB literature given the recent global foreign investment of EM SOMNEs (Li et al, 2022). The complex nature of advantages and drawbacks related to state ownership will be attributed to as "helping hand" vs "hindering hand" (Cuervo-Cazurra and Li, 2021).…”

“…, 2014, p. 925). The role of the EM SOMNEs' state has long been one of the main topics in the IB literature given the recent global foreign investment of EM SOMNEs (Li et al. , 2022).…”

Financing Constraints and Corporate Value in China: The Moderating Role of Multinationality and Ownership Type

“…For example, establishing production, technical, and marketing facilities abroad requires substantive financing [35]. To expand to foreign countries, Chinese firms also have to deal with uncertainties arising from cultural, institutional, and linguistic differences between China and a host country, as well as the local economic and political factors [80] to adapt to a host market [36]. Such differences require firms to incur costs to adjust to a host market and manage subsidiaries [37].…”