How the Rules Change the Game

141 Pages·2016·1.41 MB·English

Master’s Thesis

How the Rules Change the Game
A Study on the Effect  of  China’s  Institutional  Framework    
on the Collection of Competitive Intelligence

Authors: My Nyberg
Nick Schuurman
Supervisor: Dr. Richard A. Owusu
Examiner: Dr. Mikael Hilmersson
Date: 26 May 2016
Subject: International Business Strategy
Level: Master
Course code: 16VT-4F80E

Abstract
The competitive intelligence (CI) process has previously been extensively investigated;
however its relation to the internal environment of the firm dictates most of the existing
research. The relationship between CI and the external environment has been researched to
some extent, concluding on the importance of adapting CI practices to ‘the  rules  of  the  game’,  
i.e. the institutional framework of the market from which one aims to collect information.
This adaptation is stated to be especially important in emerging economies since they differ
vastly from developed economies in this matter. Multiple authors suggest the relationship
between  a  market’s  institutional  framework and the collection of CI as the base for strategic
decision-making.  Nevertheless,  to  the  researchers’  knowledge,  no  research  has previously set
out to mainly investigate this relationship further, to gain more understanding about the effect
of the institutional framework on the collection of information, in order to provide empirical
support on how to adapt CI practices in a sufficient manner. In relation to this, China has been
given attention due to its complex institutional framework. However, previous research has
not focused on the complications and problems that Western CI professionals could face when
adapting their CI practices to collect information from China due to lack of knowledge and
understanding of the  market’s  ‘rules  of  the  game’.
Hence, this study set out to address this research gap by investigating and explaining how the
institutional framework of China affects the collection of information for CI professionals
from developed economies. This is done by researching the effect that the institutional
framework has on the quality of information sources, from the perspective of Western CI
professionals. This includes investigating the effect that the institutional framework of China
has on the quality of HUMINT and OSINT information sources, and researching how the
quality of HUMINT and OSINT information sources affects the usage of these sources for
Western CI professionals. With this gained understanding, Western CI professionals will be
able to determine how to adapt the way in which they collect CI from HUMINT and OSINT
information sources in China. Also, CI professionals may use the results of this study to
reconfigure their current approach of collecting information from China.
This research was conducted through a qualitative case study of five Western CI professionals
that have experience of collecting information in China. The empirical data for the purpose of
this study to form the base for the analysis was collected through semi-structured interviews.
The interview questions were grouped under the concepts of information sources, the quality
measurements  ‘intrinsicality’,  ‘representability’  and  ‘accessibility’,  formal  institutions  and  
informal institutions. The data was analyzed and compared to conclude on the concepts
relationship to each other as an explanation  for  how  the  ‘rules’, the institutional framework of
China,   affect   the   ‘game’, the collection of CI. The researchers conclude that the most
important implication of how the institutional framework of China affects the collection of CI,
from  a  Western  CI  professionals’  point  of  view,  is  the  required  emphasis  on  building  and  
maintaining relationships to access high quality information and the utilization of a wide
number and variety of HUMINT and OSINT sources to verify the information collected.
Keywords
Competitive Intelligence, Information Sources, HUMINT, OSINT, Quality, Intrinsicality,
Representability, Accessibility, Institutional Framework, China, Western CI Professionals
Foreword
Our research process has not been without setbacks or challenges, however it has also not
been without a lot of support and assistance, which has made this process and journey, though
in times difficult, an unforgettable learning experience. Hence, we would like to express our
deepest gratitude to the individuals who have helped to make the past months of researching
and writing as valuable and memorable as possible.
First of all we would like to thank all the participating respondents within this study for
devoting their time and energy to share their experience and knowledge with us. Without your
insights and stories, this study would not have been possible.
Moreover, we would like to thank our supervisor, Richard Owusu, for all the advice, guidance
and time that he devoted to our research. Our will and motivation has unquestionably been
influenced by your encouragement and understanding for the nature of our research process.
Furthermore, we would also like to thank our examiner, Mikael Hilmersson, for always
making us think outside the box and constantly refine our text and process with his feedback.
Your approach during the seminars always left us more motivated and eager to develop our
thesis to be the best it could. Additionally, these seminars would not have been as rewarding
if it was not for the discussions and feedback given from our opponents, hence we would like
to thank them for providing us with ideas and insight on how to improve our manuscript.
Last but not least, we would like to thank our family and friends. Without your patience and
support the last couple of months, our motivation would not have been the same.
Kalmar, May 2016.

______________________ ________________________
My Nyberg Nick Schuurman
Table of Contents

List of Tables ...............................................................................................................................
List of Figures .............................................................................................................................
Abbreviations ..............................................................................................................................
1 Introduction ....................................................................................................................... 1
1.1 Background .................................................................................................................. 1
1.1.1 Emerging Economies and Changing Business Environments .............................. 2
1.1.2 China’s  Transition  Towards  a  Market-Based Economy ...................................... 2
1.1.3 Knowledge as a Means of Dealing with Complexity and Uncertainty ................ 3
1.1.4 Competitive Intelligence and Strategic Decision-Making.................................... 4
1.2 Problem Discussion ..................................................................................................... 5
1.3 Research Questions ...................................................................................................... 8
1.4 Research Purpose ......................................................................................................... 8
1.5 Thesis Outline .............................................................................................................. 9
2 Literature Review ........................................................................................................... 10
2.1 Review Procedure ...................................................................................................... 10
2.2 Defining the Concept of CI ....................................................................................... 12
2.3 Conceptualizing the CI Process ................................................................................. 15
2.3.1 The Planning and Focus Phase .......................................................................... 17
2.3.2 The Collection Phase ......................................................................................... 18
2.4 Measurement of CI in Research ................................................................................ 25
3 Theory Chapter ............................................................................................................... 28
3.1 Competitive Intelligence ............................................................................................ 28
3.1.1 The Evolution of CI in Theory and Practice ...................................................... 29
3.1.2 The Knowledge-Based View of the Firm ............................................................ 30
3.1.3 Conceptualizing Information Sources of CI ....................................................... 32
3.1.4 Information Sources in China ............................................................................ 32
3.2 Quality of Information Sources ................................................................................. 33
3.2.1 Quality Measurements in CI .............................................................................. 33
3.2.2 Quality Measurements in Information Systems Management Theory ............... 34
3.3 The Institution-Based View of the Firm .................................................................... 35
3.3.1 Institutional Frameworks and the IBV ............................................................... 36
3.3.2 Institutions in Emerging Economies .................................................................. 37
3.3.3 The Institutional Framework of China ............................................................... 38
3.4 Theoretical Synthesis ................................................................................................. 42
4 Methodology .................................................................................................................... 44
4.1 Qualitative Research Method .................................................................................... 44
4.2 Deductive Approach .................................................................................................. 45
4.3 Research Design ........................................................................................................ 46
4.3.1 Case Study Approach ......................................................................................... 47
4.3.2 Multi-Case Study ................................................................................................ 48
4.3.3 Case Study Selection .......................................................................................... 49
4.3.4 Case Presentation .............................................................................................. 53
4.4 Data Collection .......................................................................................................... 53
4.4.1 Primary Data ...................................................................................................... 53
4.4.2 Semi-Structured Interviews ................................................................................ 54
4.5 Operationalization of Conceptual Model .................................................................. 55
4.6 Data Analysis ............................................................................................................. 58
4.7 Quality of the Research ............................................................................................. 60
4.7.1 Credibility ........................................................................................................... 60
4.7.2 Transferability .................................................................................................... 61
4.7.3 Dependability ..................................................................................................... 61
4.7.4 Confirmability .................................................................................................... 62
5 Empirical Data ................................................................................................................ 63
5.1 Case: Richard van den Berg ...................................................................................... 63
5.1.1 Utilization of Information Sources ..................................................................... 63
5.1.2 Quality of Information Sources in China ........................................................... 64
5.1.3 Implications  of  China’s  Institutional  Framework .............................................. 65
5.2 Case: Patrik Östergren ............................................................................................... 66
5.2.1 Utilization of Information Sources ..................................................................... 66
5.2.2 Quality of Information Sources in China ........................................................... 67
5.2.3 Implications  of  China’s  Institutional  Framework .............................................. 70
5.3 Case: Erik Elgersma .................................................................................................. 70
5.3.1 Utilization of Information Sources ..................................................................... 71
5.3.2 Quality of Information Sources in China ........................................................... 76
5.3.3 Implications  of  China’s  Institutional  Framework .............................................. 78
5.4 Case: Joost Drieman .................................................................................................. 80
5.4.1 Utilization of Information Sources in China ...................................................... 80
5.4.2 Quality of Information Sources in China ........................................................... 82
5.4.3 Implications  of  China’s  Institutional  Framework .............................................. 84
5.5 Case: Tomas Larsson ................................................................................................. 85
5.5.1 Utilization of Information Sources ..................................................................... 85
5.5.2 Quality of Information Sources in China ........................................................... 87
5.5.3 Implications  of  China’s  Institutional  Framework .............................................. 88
6 Analysis Chapter ............................................................................................................. 90
6.1 Quality of Information Sources in China .................................................................. 90
6.1.1 Quality of HUMINT Information Sources in China ........................................... 91
6.1.2 Quality of OSINT Information Sources in China ............................................... 96
6.2 Implications of Quality on the Collection of CI ...................................................... 100
7 Conclusions .................................................................................................................... 103
7.1 Answering the Research Questions ......................................................................... 103
7.2 Theoretical Implications .......................................................................................... 107
7.3 Managerial Implications .......................................................................................... 108
7.4 Limitations ............................................................................................................... 108
7.5 Suggestions for Further Research ............................................................................ 109
Bibliography ......................................................................................................................... 110
Appendix A. Interview Guide ............................................................................................. 125
List of Tables
1: Thesis Outline ........................................................................................................................ 9
2: Consulted Journals and their Ranking .................................................................................. 11
3: Terminology for Structured Intelligence Processes ............................................................. 13
4: Different Forms of the CI Process ....................................................................................... 16
5: Overview of Research on CI Practices in Emerging Economies ......................................... 22
6: Empirical Evidence for the Relationship between CI and Firm Performance ..................... 27
7: Sources of CI (Prescott and Tao, 2001: 73) ......................................................................... 33
8: Presentation of Selected Cases ............................................................................................. 53
9: Operationalization of Conceptual Model ............................................................................. 57
10: Labels of Questions in the Interview Guide ....................................................................... 58