Adaptive Enterprises: A Tale of Two Chinese Textile Manufacturers

Abstract

China is attracting increasing attention because of its rapidly emerging economy. With development becoming increasingly sophisticated, the business environment in China is going through a transformational stage. Enterprises in China have to be able to adjust to social, economic, cultural and technical changes. In other words, to survive and compete in this dynamic environment, enterprises need to be adaptive. Adaptive Enterprises (AEs) have been studied for a long time, with investigations stemming from research on organizational change, organizational learning and complex adaptive systems. According to the literature, AEs maintain a competitive advantage by adjusting their strategies, business processes, organizational structures and information systems. The existing literature on AEs provides a basis for the present research, as well as highlighting some unaddressed problems. In particular, there is a paucity of literature on AEs in the Chinese manufacturing context. Considering that China is widely known for its manufacturing industries, it is important to understand Chinese manufacturers’ approaches to adaptation. To study the Chinese manufacturing industry, this research focused on two textile manufacturers in China, using a case study approach to address how textile manufacturing enterprises adapt in the Chinese business environment and to determine the key components of an adaptive Chinese textile manufacturing enterprise. Corporate strategy, leadership, networks, capability, communication and external environment were found to be the critical components affecting enterprise adaptation. Among these constructive components, the significance of political networks, smooth and comprehensive communication, leadership style, manufacturing and supply chain flexibility, and enterprise systems, which are sub-components, were highlighted. Interestingly, the available evidence from this study did not indicate that agility was important to adaptive enterprises in the Chinese textile industry. It was found that the external environment constrains business adaptation, and that government policies play an important role in this. Interdependent relationships and the dynamic relationships among the six main components are displayed and illustrated using a series of models developed from the data obtained in the interviews.