The tortuous ascent of global value chains – the case of pharmaceutical R&D in China

Abstract

Purpose This paper aims to explore the micro-political complexities of operating over institutional distance in a modern international enterprise. The focal sector of the study is the pharmaceutical industry, which, in its latest phase of global development, has engaged in “internal sourcing” of research and development (R&D) talent from China. This paper contributes to emergent “socio-political” theorization in international business through revealing complex forms of workplace segmentation and conflictual forms of practice at micro-organizational level. Design/methodology/approach The author of this paper and a UK-based research associate visited the Shanghai-based R&D facility of a major Western owned pharmaceutical concern to carry out interviews with key managers, expatriates and scientists to “hear their stories”. Access was gained to the research site through insider contacts. Findings It was discovered that, in the context of an enterprise intent on innovation, motivational logics themselves emanate from the embedded positions of diverse organizational actors, in turn bringing to the fore issues of power, resistance, ethnicity and language. Research limitations/implications Generalizations from a single case study may have limited significance. However, the unique case setting provides the scope for a novel contribution to the field of international business by examining contradictory and asymmetrical factors in the social construction of a Global Value Chain extending from West to East to source emergent local talent. Practical implications The case offers the possibility for managerial learning in the areas of working across cultures, managing expatriation, dealing with linguistic and etymological differences and formulating international business strategy (integration or differentiation in the MNC). The study highlights the significance of critical realist perspectives in fostering reflexive behaviours of actors in multilayered and complex micro-environments. Social implications The work has significance concerning the devolution of both managerial and medical responsibilities to local agents in China. This is a vital social factor in the emerging economy context. The work also casts light on social and personal issues confronting international managerial and scientific migrants. Originality/value To date, the phenomena of Global Value Chains have been approached in a relatively transactional and economistic fashion. The paper shed light on GVCs as humanistic and political phenomena. A relatively new departure of the study is to demonstrate that workplace actors in modern and modularized industrial enterprises located in the emerging economy setting respond to environmental volatility through engaging in variant and conflictual forms of institutional entrepreneurship.