Internationalization to China: A Model for Australian Architectural, Engineering and Construction Firms

Abstract

The experiences of an architectural, an engineering, and a construction organization, when internationalizing to China, are compared to extant theories of internationalization to develop an enhanced explanation of these organizations’ internationalization. The research examines the explanatory power of both the Uppsala internationalization model and network theory for internationalization. The research determined that, whilst these organizations utilized an incremental internationalization process, the stages differed from those identified in the Uppsala model. Part of this difference reflects the fact that the participants are service organizations and the Uppsala model is more relevant to manufacturing organizations. Network theory was also found to predict some of the participant behaviors; however, it did not correctly predict the reasons for forming partnerships, which was to gain knowledge rather than develop networks. The stages of the internationalization into China identified were: (1) experiencing a motivation to internationalize; (2) adopting one of a variety of entry modes; (3) experiencing a motivation to increase internationalization to the level of a wholly-owned foreign entity; (4) establishment of a wholly-owned foreign entity (WOFE), either by acquisition or development; and (5) further horizontal expansion (such as movement to new locations). A range of different motivations for both stages one and three were identified.