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A Study on Network Power and the Enterprises Spatial Behavior under Its Influence

Author: JingXiuYan
Tutor: ZengGang
School: East China Normal University
Course: Human geography
Keywords: network power local production network global production network enterprises spatial behavior
CLC: F270
Type: PhD thesis
Year: 2007
Downloads: 900
Quote: 6
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Localization can also be witnessed in globalization era. The organization, such as global production or local production network, featured by significant network relation are becoming more and more popular accordingly. In the field of economic geography, more and more scholars’ attentions are put on such relationships between geographical spatial form and industrial organization structure.Different from the research angle of the upgrade of industrial cluster or local production network in this field, inspired by the researches of a few geographical scholars in past two years, the dissertation concentrates its discussion on the power relationships between key actors and network members and the enterprises spatial behavior under the influence of production network power.The theories of enterprises power, network governance and the decision of spatial behavior derived from the field jointly studied by economics, management science, sociology and geography. Based on the basic theories of human geography, and also benefited from theories of economics, management science and sociology, the author attempts to concentrate on the power relationships between enterprises and enterprises spatial behavior under its influence.The author tries to construct the concept system of network power for the first time, which is different from the enterprise ability theory, enterprise power theory. And the discussion of network power focuses on three aspects as follows: global production network and its power structure, local production network and its power evolution, the joints of local and global network power. Based on a contrast with the spatial behavior of traditional enterprises and vertical intergraded mode of production, and viewing from the angles of the spatial grade of network power and the effect of spatial following, the author discusses the influences on enterprise’ behavior and regional industry, to make an additional study on location theory of vertical production for enterprises.In production network, there are two kinds of basic power centers: lead producer and lead buyer. And there are three kinds of governance model: leadership type, modular type and relation type. The governance of production network shows two spatial dimensions, both global and local. Jointly influenced by the different growth oflocal protogenous production network and the entry of multinational companies, the power of network evolved from symmetric to asymmetric. As for exogenic network of production, its power structure remains asymmetric characteristic, and its evolution ofpower concerns foreign lead companies, foreign suppliers, government and local firms. The lead buyer in a production network often contacts with local production network through outsourcing, and governs local network through controlling local main suppliers. And the lead producer governs local production network by its subsidiary company.Network power has become one of important factors for enterprise’s investment. When an enterprise wants a trans-border migration or enlargement, it has to take some consideration on the interdependent relationships with other network members both in source and investment territories. The spatial distribution of power structure and organization structure are coupled. In some sense, the position in power network means the ability of influencing network locations. The lead producer has the strong ability of choosing locations, making use of location advantages and reproducing location advantages, thus influencing the network members to follow its directions. And the lead buyer can influence its main suppliers (the local lead companies)moving to the region of lower cost or its potential market. However, a perfect local network can also has such direction over foreign lead companies.The author uses South-east Motor City and QL Company of Jinjiang garment industrial cluster in Fujian province as cases for study, analyzing the motor production network and garment production network power and its spatial behavior.The author thinks motor industry is a typical producer-driver industry, and the power structure of motor network assumes the shape of a pyramid. The brand motor manufacturer is on the top, and the FDI of motor manufacturer can drive its spare parts suppliers to follow or attract them to localize. As modular type production appeared, part of motor production network take on governance character of OEM or ODM.The garment industry is a typical buyer-driving industry, the brand sellers and the brand manufacturers which own the R&D technology and marketing channels can be the leaders in garment production network. The protogenous powerful manufacturer relies heavily on local suppliers for a long time, and shows distinctive features of relation type production network. However, the demand on quality suppliers, may makes it widen its eyesight in a broader view and attempts to improve its position in network through taking key producing technologies from other networkmembers in other networks.

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