Tie diversity, ambidexterity and upgrading of the latecomer firm in global production networks: Evidence from China's plastic equipment industry

Abstract

Purpose

Global production networks (GPN) propel process and product upgrading of the latecomer firm (LCF), promoting its present operating efficiency on one hand, but, on the other hand, probably hindering the LCF's function and chain upgrading, resulting in the undermining of its future adaptive capability. Previous studies have suggested that ambidexterity is influential to the upgrading of the LCF. However, little is known about how the LCF builds ambidexterity to upgrade in GPN. The purpose of this paper is to examine how the LCF constructs ambidexterity resulting from tie diversity to break through the upgrading dilemma.

Design/methodology/approach

This paper intends to fill relevant gaps in the literatures on the LCF and explore the emerging fields of ambidexterity. The authors employ a longitudinal case study by examining how a manufacturer – Haitian Group – originating from China's plastic equipment industry has managed its diverse ties to build ambidexterity over the past 20 years.

Findings

The research reveals that: the key to successfully transferring from process and product upgrading to function or chain upgrading in GPN for the LCF is to establish its ambidexterity over time; LCF could achieve ambidexterity through creating diverse ties in GPN, namely develop diverse cooperative partners and patterns in different value functions over time; and the process of the LCF building ambidexterity in GPN is incremental, which needs the previous exploitation as a basis.

Originality/value

Previous studies have paid little attention to how the LCF makes use of tie diversity to build ambidexterity to sustainable upgrading in GPN. This paper fills the gaps and contributes to the theory of upgrading in GPN.

Citation

Peng, X. and Wu, D. (2013), "Tie diversity, ambidexterity and upgrading of the latecomer firm in global production networks: Evidence from China's plastic equipment industry", Chinese Management Studies, Vol. 7 No. 2, pp. 310-327. https://doi.org/10.1108/CMS-11-2012-0177