Isomorphic mechanisms in manufacturing supply chains: a comparison of indigenous Chinese firms and foreign‐owned MNCs

Abstract

Purpose This study aims to demonstrate empirically the varied mechanisms through which supply chain practices of indigenous Chinese companies are influenced by foreign‐owned multinational companies (MNCs) operating within China. It also provides empirical evidence of how the foreign‐owned MNCs are influenced by the coercive pressures arising from the local cultural norms and begins an exploration of the mechanisms through which isomorphic pressures operate between industries. Design/methodology/approach The study adopts a multi‐disciplinary approach by applying institutional theory from the field of organisational studies. The study is based on 27 in‐depth interviews in matched pairs of firms consisting of an indigenous Chinese firm and a foreign‐owned MNC in three industries. The interviews also include suppliers and third‐party logistics providers and hence the study extends beyond the dyad. Findings The findings show a “startling homogeneity” between the SCM practices of the paired firms and across the three industries studied. They also provide empirical evidence of the rich and varied mechanisms through which isomorphic pressures operate, and demonstrate that the pressures affect the foreign‐owned MNCs as well as the Chinese firms. Practical implications The study identifies a wide range of mechanisms that firms can use to model their SCM practices on those of other firms. The study also identifies a range of implications for policy. Originality/value To the authors' knowledge, this study is the first to explore empirically the rich and varied mechanisms through which isomorphic pressures operate.