Strategic capabilities and the emergence of the global factory: Omron in China

Omron Shanghai provides a detailed case-study of a multinational subsidiary’s long-term evolution. The study assesses three streams of international business literature that emphasize the seemingly competing roles of parent firm strategy, national institutions or local management in the development of subsidiaries. It looks at each business function separately to reveal which capabilities were effectively transferred from Japan to China. In tracing Omron Shanghai’s development from international joint venture into wholly-owned enterprise and then global factory, it is the strategic intent of the parent multinational corporations that emerges as the consistent formative influence on management practices and capabilities.