A Faculty of Business and Law research team have won a grant from the Australia-China Council for their project 'Barriers and Entry Modes Selection for Australian Small and Medium Enterprises (SMEs) Conducting Businesses with China'.
The research team is made up of Victoria Law School (VLS) PhD student Mr. Yongqiang Li, Professor Anona Armstrong (VLS), Professor Andrew Clarke (VLS), and Associate Professor Jordan Shan (School of International Business).
China is growing into a major trading partner of Australia. Also growing is the number of Australian businesses operating in China. However, judiciary and cultural differences create enormous barriers for Australian businesses entering the China market, incurring exorbitant unnecessary costs and hampering them from performing at their best.
Four modes of entry into international business are well documented in the literature on international business: exporting, licensing, joint venture and direct investment, which are contingent on the environmental situation (Pfeffer and Salancik, 1978; Hillman et al. 2009; Williamson 1978, 2003, 2009).
Unveiling the 'hidden rules' of entry is justified given that an increasing number of Australians have paid the cost of learning from the 'business scandals', eg. The Rio Tinto case. This project intends to identify the barriers facing Australians in conducting business in China, the factors that enhance entry, and the optimal entry modes.
Thirty Australian owner/managers of SMEs and thirty Chinese business partners and government officials will participate in the study. The Research methodology includes focus groups and follows up interviews. Consequently, strategies will be proposed, including the optimal entry modes. A training program will be developed for Australian SMEs.