Informal Dynamics of Agile Firm Organisation in the Greater Pearl River Delta
Final Report Abstract
It was the aim of the project to analyse the level, dynamics, and impact of agile firm organisation with a focus on 1) the informality continuum of governance and institutions facilitating agile firm organisation in the GPRD, 2) the regional economic rationale of agile firm organisations, and 3) social dynamics that stabilise and smoothen regional agility. It was envisaged to contribute to multiple core themes of the DFG priority programme "Megacities - Megachallenge: Informal Dynamics of Global Change" with an emphasis on the dominance and differentiation of urban economies, but with significant contributions as well to the other core themes by the strong integration of social aspects (labour, social networks), governability of global value chains, and resource flows (production factors, goods, and services). Agility has been defined within our consortium as a combination of flexibility and informality in business practices or regional economic and social configurations. The agility concept complements the flexibility concept by focusing on informality in business practices as a mean to reach flexibility. A firm’s need for agility depends on its competitive and institutional environment. Market volatility, competition, and a dominance of informal or incomplete institutions increase the need for agility. A firm’s means for agility arise from its internal and external capabilities combined with its strategic decisions about resource allocation and governance modes. The topics have been analysed by data from two company surveys in Hong Kong (HK) and the Pearl River Delta (PRD), an employee survey in the PRD, and in-depth case studies of workers and companies. Additional information from secondary data and experts interviews have been obtained. The empirical analysis of the applied governance modes to customers and producers within the value chain in the GPRD provided evidence of how those firms are connected. The majority of HK firms preferred a hierarchical relationship to their producers in the PRD, but some firms also opted for equity cooperation or non-equity cooperation. Taking a time dimension into account, our survey data provide evidence that an improving formal institutional environment in the PRD has encouraged more HK firms to opt for cooperative relationships or even market relationships with their PRD producers. We analysed the importance of personal relationships for companies’ decisions on their locations, partners and governance structures for production and innovation activities. Despite a still high importance of applying personal relationships for business in the PRD in general, companies tend to more strongly emphasise other hard economic criteria for deciding on the business locations and partners for production as well as innovation activities. With regard to innovation, companies generally tend to vertically integrate their activities rather than carrying them out under in cooperation with external actors. It was found that a core element of agility, the ability to respond to volatile demand, is transferred from firms to workers. From the employers’ perspective, the main requirement for a production worker – beside physical abilities – is to be flexible. According to five dimensions of worker flexibility that were assessed by the worker survey, 90 percent of the respondents are flexible according to at least three of the five mentioned dimensions. In addition to the results of the workforce survey, a previously undocumented phenomenon was discovered: the recent emergence of informal job brokers and commercial employment agencies in the PRD. This development is plausibly interpreted as a consequence in a socioeconomic environment where agile firms prevail. They operate with flexible ‘hire and fire’ practices, which leads to increased dynamics in the labour market, which in turn leads to an increased demand in information brokering.
Publications
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(2007): Megacities and Global Change in East, Southeast and South Asia. Asien (103): 9–22
Kraas, F.
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(2007): Megacities and global change: key priorities. Geographical Journal 173 (1): 79–82
Kraas, F.
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(2008): Agile Firms and their Spatial Organisation of Business Activities in the Greater Pearl River Delta. Die Erde 139(3): 251-269
Revilla Diez, J., Schiller, D., Meyer, S., Liefner, I., Brömer, C.
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(2008): Agile Unternehmensorganisation und Wirtschaftsnetzwerke im Perlflussdelta. Geographische Rundschau 60(5). S. 36-43
Schiller, D.; Meyer, S.
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(2008): Ausländische Direktinvestitionen und Wissenstransfer nach China. In: Geographische Rundschau 60 (5): 4‐11
Liefner, I.
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(2008): Bekanntheitsgrad und Umsetzung des neuen chinesischen Arbeitsvertragsgesetzes. In: Asienhaus Newsletter, 5.9.2008
Beißwenger, S.
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(2008): Do Active Innovation Policies Matter? Findings from a Survey on the Hong Kong Electronics SMEs, Kiel Working Paper 1445, Kiel Institute for the World Economy
Liu, W.-H.
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(2008): Megastädte in Entwicklungsländern: Vulnerabilität, Informalität, Regier- und Steuerbarkeit. Geographische Rundschau 60 (11): 4-10
Kraas, F., G. Mertins
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(2009): Academia-Industry Linkages and the Role of Active Innovation Policies – Firm-level Evidence in Hong Kong, Kiel Working Paper 1577, Kiel Institute for the World Economy
Liu, W.-H.
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(2009): Do Sources of Knowledge Transfer Matter? A Firm-level Analysis in the PRD, China. Kiel Working Paper 1578. Kiel Institute for the World Economy
Liu, W.-H.
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(2009): Informal Modes of Governance in Customer Producer Relations: The Electronics Industry in the Greater Pearl River Delta (China). Diss. Univ. Hannover
Meyer, S.
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(2009): Informalität in Megastädten: Das Beispiel der megaurbanen Region Perlflussdelta, China. Praxis Geographie 7-8: 28-32
Bork, T.; Kilian, P.; Sterly, H.
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(2009): Innovation goes east: innovation management in China. Performance 2 (3). Ernst&Young
Bielinski, J.; Meyer, S.; Revilla Diez, J.
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(2009): Megastädte von morgen: Laboratorien der Zukunft? Politische Ökologie 114: 50-52
Kraas, F., H. Sterly
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(2009): Spatial Disparities of Knowledge Absorption, Technological Change, and Prosperity: Theoretical Considerations and Empirical Evidence from China. In: Kochendörfer-Lucius, G.; Pleskovic, B. (Hrsg.): Berlin Workshop Series 2009. The World Bank. Washington D.C.: 71‐80
Liefner, I.
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(2009): The Janus-faced Economy: Hong Kong Firms as Intermediaries between global Customers and local Producers in the Electronics Industry. In: Tijdschrift voor Economische en Sociale Geografie (TESG) 100, No. 2, pp. 224-235
Meyer, S.; Schiller, D.; Revilla Diez, J.
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(2010): Establishing an interface between public sector applied research and the Chinese enterprise sector: preparing for 2020. Technovation 30 (2): 117-129
Kroll, H.; Schiller, D.
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(2010): The Role of Personal Relationships for Doing Business in the GPRD China – Evidence from Hong Kong Electronics SMEs, Kiel Working Paper 1589. Kiel Institute for the World Economy
Bickenbach, F., Liu, W.-H.
