Legitimacy Concerns and Countermeasures of Multinational Enterprises: Taking Yankuang’s M&A in Australia as Evidence

Abstract

With the continuing integration of global economy, Chinese enterprises speed up the expansion of overseas markets. However, factors such as legal differences, cultural conflicts, political opposition have generated severe legitimacy concerns that Chinese enterprises cannot afford to ignore in their internationalization. Such legitimacy concerns pose a huge challenge and substantially hinder the pace of internationalization of Chinese enterprises. But the current research mainly focuses on the acquirement of organization legitimacy, with little attention paid to the responding strategies of firms under legitimacy concerns. Such research gaps not only seriously hinder our understanding of factors leading to those legitimacy concerns against Chinese enterprises in host countries, but also bring practical losses to the internationalization of Chinese enterprises. This thesis aims to address those research gaps. This study contributes to the legitimacy literature by discovering various factors shaping legitimacy concerns of international Chinese enterprises and their corresponding legitimizing strategies. With the triangulation data focused on legitimacy research from Factiva and through Yankuang Group's overseas M&A in Australia, this thesis finds that firms identify various factors leading to their unique level of legitimacy concerns and adopt distinguishing responding strategies corresponding to those legitimacy concerns. In addition, this thesis provides implications to other international Chinese enterprises by building a framework of "Legitimacy Concerns-Countermeasures-Suggestions".