An institutional analysis of the new product development process of small and medium enterprises (SMEs) in China, Hong Kong and Taiwan

Abstract

Since China and Taiwan became members of the WTO, conducting business in Greater China (China, Hong Kong and Taiwan) has come to the fore. However, researchers point to the importance of understanding the similarities and differences of new product development (NPD) practices of Chinese small- and medium enterprises (SMEs) in China, Hong Kong and Taiwan. The available literature does not elaborate clearly how and to what extent SMEs in Greater China manage their NPD practices, nor does it consider the contextual factors. This paper uses an institutional perspective to examine the interplay of government intervention, manufacturing systems and business approaches and its impact upon the NPD practices of SMEs in the three regions. In-depth personal interviews with 43 Chinese, 26 Hong Kong and 28 Taiwanese SMEs were undertaken to examine the respective similarities and differences in NPD practices and to compare and contrast the Chinese practices with those of their Western counterparts. The grounded theory approach was used to analyze the interview scripts. Based on the research results, a schema is proposed depicting the interplay and its impact on the NPD practices of Chinese SMEs.