| dc.description.abstract | The construction industry in Taiwan has played a fundamental role in the process of economic development. However, the pivotal position of the construction industry has been replaced by the high tech industry as a result of business circle and macro adjustment of industrial structure, which renders a significant number of enterprises in the construction industry have moved to Mainland China for desirable prosperity. Because the domestic documentations and researches related to Entry Mode of Foreign Investment and key success factors of management have paid less attention to further studies on construction industry, the research sets out to explore the Entry Mode and the key success factor of management with a focus on the Taiwan-based enterprises in construction industry that have already entered China market or are planning to enter China market.
The output value of construction industry in China increased more than 20%, accounting for more than 5.5% of GDP and the employment rate of this sector is accounted for 5.28% of the employment in the nation, which is at the growing stage of the industry life cycle. Moreover, the development has expanded to Yangtze Delta, Pearl River Delta and Bohai Bay.
Although the construction sector in China is allowed to run the operations by wholly owned since 2002, it is still a restrictive industry. The current number of Hong Kong-based, Macao-based, Taiwan-based or even foreign enterprises and their market share are low. In terms of the analysis of the strategic group, the advantages of China-based group are pricing competition and domestic protection policy, whereas weaknesses are lack of technology, inefficiency and capital shortage. The advantages of Hong Kong-based, Macao-based and Taiwan-based enterprises are language, technology and strong management capability, while weaknesses are poor access to capital, insufficient international experience and restricted scale of the target market. The advantages of the foreign group are technology and funding capabilities, although weaknesses are language barrier, cultural gap and higher operating cost.
The investment of Taiwanese construction enterprises to China can be categorized into six modes: (1)joint-venture with local firms, (2) obtaining a special permission for a particular project, (3) cooperating with local constructing companies, (4)setting up a consulting company for engineering management, (5) to build up wholly Foreign-owned subsidiary and (6) using the name (license) of a local constructing company.
The factors success factors for Taiwanese construction enterprises with transnational management in China are sole-proprietary operations, integrating technology and funding capability; those for Small and medium size enterprises are joint-venture with local firms, focused professional construction skills and interpersonal relations. This essay suggests Taiwanese construction enterprises should: (1) identify their own advantages and weaknesses, choosing a proper entry mode; (2) be familiar with industrial environment and legal regulations; (3) be honest pragmatic to declare tax; (4) cultivate construction capability which is recognized internationally; (5) build and manipulate interpersonal relations, and (6) select prudently the employees to dispatch and execute the strategy of local human capital hiring. | en_US |