Bridging ‘Home’ Political and Economic Rationalities with ‘Host’ Demands and Constraints: The Case of Regional Chinese State‐owned Multinational Corporations
| Published date | 01 April 2023 |
| Author | Xinxiang Li,Le Bo,Dan Shen,Teerooven Soobaroyen |
| Date | 01 April 2023 |
| DOI | http://doi.org/10.1111/1467-8551.12605 |
British Journal of Management, Vol. 34, 1042–1061 (2023)
DOI: 10.1111/1467-8551.12605
Bridging ‘Home’ Political and Economic
Rationalities with ‘Host’ Demands and
Constraints: The Case of Regional Chinese
State-owned Multinational Corporations
Xinxiang Li ,1Le Bo ,1Dan Shen 1and Teerooven Soobaroyen 2
1University of Portsmouth, Richmond Building, Portland Street, Portsmouth, PO1 3DE, UK 2Universityof
Essex, Wivenhoe Park, Colchester, CO4 3SQ, UK
Corresponding author email: Xinxiang.li@port.ac.uk
Regional state-owned multinational corporations (SOMNCs) area major constituent of
the ‘going out’ strategy of the Chinese state. Although SOMNCs are nominally infused
with political rationalities, theyalso have explicit contractual economic targets. We there-
fore explorethe 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 domes-
tic competition via foreign market exploration, mobilizing local engagement, improving
expatriate managers’ morale, and reinterpretingan interdependent government–business
relationship.Our study suggests that coexisting economic and political considerations be-
tween the regional government and SOMNCs are instrumentalized with a view to ‘gov-
ernmentalizing’ overseas operations via business strategies and localization management
practices in the Ghanaian subsidiary.In such an interdependent relationship, political ap-
peals and market imperativesare mutually benecial and complementary, with expatriate
managers skilfully using their afliation with their government. Our theoretical contri-
bution lies in adapting a governmentality driven frameworkto forge an alliance between
liberal forms of management and non-liberal forms of governing and control.
Introduction
The increasing presence and inuence of state-
owned multinational corporations (SOMNCs) in
global trade, nance, investment, business and
markets have spurred a number of questions about
the potentially multi-faceted motivationsand con-
sequences underlying a state strategy for interna-
tional expansion (e.g. throughmacro-level policies
and rm-level ownership arrangements) (Hong,
Wang and Kafouros, 2015; also see Boateng
et al., 2021; Ramamurti and Hillemann, 2018; Wu,
Woodand Khan, 2021). Of note has been the rapid
growth of SOMNCs from emerging economies
and a markedly higher level of state involvement
in SOMNC management, compared with more de-
veloped economies (Aguilera and Crespi-Cladera,
2016; Kalasin, Cuervo-Cazurra and Ramamurti,
2019; Luo, Xue and Han, 2010).
China is one of the most active economies on
this front in terms of its continued efforts to re-
structure and internationalize state-owned enter-
prises (Cuervo-Cazurra and Li, 2021; Rui and
Bruyaka, 2021; Sawant, Nachum and Panibra-
tov, 2021). Chinese SOMNC activity is also heav-
ily present in key sectors such as mining, con-
struction and telecommunication (Khan et al.,
2019; Parente et al., 2019; Xing et al., 2016). Such
© 2022 British Academy of Management and Wiley Periodicals LLC. Published by JohnWiley & Sons Ltd, 9600 Gars-
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The Case of Regional Chinese State-owned Multinational Corporations 1043
expansions have been associated with the central
government’s strategy to mitigate overcapacity in
the domestic market, seek resources overseas that
are unavailable in China, enhance international
trade, and sustain China’s global inuence and
leadership (Boateng et al., 2021; Jackson and Hor-
witz, 2018; Kalasin, Cuervo-Cazurra and Rama-
murti, 2019).
So far, however, there have been relatively few
attempts to delve into the strategies and opera-
tions of what we refer to as ‘subnational’ SOM-
NCs, namelyentities owned by regional, provincial
or other municipal bodies, whose ownership was
transferred by the central government. Although
some form of political control has remained, there
has been relatively more interestin regional SOM-
NCs achieving economic returns, growing mar-
ket share and fostering managerial autonomy (see
also Li, Cui and Lu, 2014; Li and Hendrischke,
2020; Wang et al., 2022). In this context of inter-
national expansion, expatriate managers are seen
to be crucial in achieving these goals while hav-
ing ‘to strike a balance between […] being aware
of political connections at home and being exible
when imperativesimposed by the government arise
as a consequence of overriding economic and so-
cial contingencies’ (Mariotti and Marzano, 2019,
p. 687). Managers also have to contend with host-
country demands, whether at a state/regulatory,
reputational or market level (Hong, Wang and
Kafouros, 2015; Khan et al., 2019). This led us
to consider the following research questions: How
do Chinese regional SOMNCs and their expatriate
managers reconcile the political vision of their home
government with the local (host) demands in their
strategic planning and managerial operations? How
do Chinese regional SOMNCs and their expatriate
managers conceive of a government–business rela-
tionship in a context of signicant international ex-
pansion?
To address these research questions, 55 inter-
views were conducted based on two site visits to
one of the leading regional construction SOMNCs
in China, with a specic focus on one of its over-
seas subsidiaries in Africa (Ghana). From a the-
oretical perspective, we mobilized the governmen-
tality lens (Foucault, 2008; Jessop, 2007; Joseph,
2010; Raffnsøe, Mennicken and Miller, 2019) to
identify the triptych of regional SOMNCs oper-
ationalizing business strategies and the knowledge
and power of expatriate managers in balancing the
state’s geopolitical ends and corporate economic
objectives across the macro and micro levels.
Our empirical ndings emphasize the distinct
rationalities of Chinese regional SOMNCs embed-
ded in the expatriate managers’ practices in gov-
ernmentalizing international expansion. This ra-
tionality is borne out of an interdependent re-
lationship between the regional government and
SOMNCs, whereby political appeals and market
imperatives can be mutually benecial and com-
plementary. Such a balancing of home-country
expectations and host-market demands adds to
existing insights about the politically driven na-
ture and strategies of central government SOM-
NCs (Hong, Wang and Kafouros, 2015; Li, Cui
and Lu, 2014; Sawant, Nachum and Panibratov,
2021). Furthermore, with reference to local di-
versication strategies and implementing bentuhua
(a Chinese version of localization management),
Chinese expatriate managers selectively empha-
size or de-emphasize the SOMNC’s political iden-
tity, reecting how they use their knowledge or
power to position or recast relationships between
various state bodies and businesses (Khan et al.,
2019; Parente et al., 2019). This contributes to
an understanding of the role of expatriate man-
agers in African settings (Cooke, Wood and Hor-
witz, 2015; Gu et al., 2016; Jackson and Horwitz,
2018).
Our theoretical contributions relate to a Chi-
nese way of governmentalizing regional SOMNC
internationalization with a combination of liberal
forms of management (Picard, Durocher and Gen-
dron, 2021; Tuck, 2013) and non-liberal forms of
governing and control (Oakes, 2019; Palmer and
Winiger,2019; Sum and Jessop, 2013). First, while
state power in many countries has been recong-
ured and increasingly diffused at macro and mi-
cro levels, our case emphasizes how state power
continues to frame the prevailing rationality (also
see Jessop, 2007; Sum and Jessop, 2013) through
the ‘going out’ program,thereby facilitating the in-
strumentalization of relevant technologies (diver-
sication strategies and bentuhua) in African mar-
kets. Second, contributing to a particular under-
standing of the power and knowledge of expatri-
ate managers (Khan et al., 2019; Lam, 2017; Wang
et al., 2022; Xing et al., 2016), our research un-
covers how managers rationalize their state aflia-
tion when strategizing, coordinatingand localizing
overseas operations.
© 2022 British Academy of Management and Wiley Periodicals LLC.
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