How do U.S. multinationals build moral legitimacy with state-owned enterprise joint venture equity partners in China

Abstract

Purpose – The purpose of this research was to explore moral legitimacy as a non-market entry strategy that American multinational could implement to establish corporation and long-term partnerships with their state-owned equity joint venture partners in China. The main objective was to understand how American companies can build moral legitimacy to obtain competitive advantage and long-term profitable success when operating in the Chinese market. Design/methodology/approach – An interpretivism qualitative, exploratory phenomenological research design was applied to explore how American multinationals can build moral legitimacy with their Chinse state-owned equity partners in China. A semi-structured, open ended analysis technique was applied to seek perceptions of both American multinationals and Chinese state-owned joint venture partners whose feedback was thematically analysed to address the primary questions of the paper. Findings – The findings of this research highlight that obtaining trust, fairness, respect community and understanding of cultural and social nuances is fundamental for American multinationals to build moral legitimacy with their Chinse state owned enterprises with an aim to have long-term profitable operations in China. Research limitations/implications – This research was conducted within an international joint venture context between American multinationals and Chinese state-owned equity partners. A research limitation was access to English speaking Chinse state owned partners that had a joint venture with an American company. Originality/value – This exploratory research is original in its contextual focus on exploring how American multinational corporations can build moral legitimacy with their equity joint ventures partners in China particularly in the current political, economic, social and cultural tensions between the two superpowers.