1. Introduction
1.1 Research Background
On the subject of Taiwan’s traditional industries, the public will think of Contract Manufacturing (CM) of well-known international factories. Among others, bicycle industry is a critical role which can truly stand for Taiwan. In 2007, the export volume approaches to around 4.75 million sets whose growth rate rises almost to 17 %.
Moreover, the export value amounts to $10.54 billion, all the growth rate in 2007 closes to 25.63%. Even the average export unit price jumps from the level of $200 to
$221.91 respectively in 2005 and 2007. It cannot be denied that CM of bicycle and related components is a marvelous industry, which creates high value-added profits and at one time has great effects upon Taiwan’s economic development. Since industrial environment has progressed by leaps and bounds, small and medium-size firms which insist on staying in Taiwan must be difficult to face international competition individually, especially low-price trend in China and other countries of Southeast Asia. Hence, in 2003 Giant and Merida propose establishing A-TEAM (Taiwan Bicycle Association) in order to possess firmly industrial foundation and strong link of global supply chain. The study follows above streams to mainly explore bicycle and components firms in A-TEAM whether they possess a better organizational performance than those outside the association.
1.2 Research Motivation
Nowadays, global bicycle industry is under the condition that supply is greater
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than demand. Numerous companies, therefore, have become involved in price war.
Taiwan’s SMEs cannot help adjusting their business strategies in order to shine succeed in international markets. For this reason, bicycle’s association, A-TEAM, is positioned to improve industry level collectively and to provide high-end and innovative key components and bicycle.
Moreover, it is considered that traditional competition would be no effect.
Business network consisting of conflict and harmony attributes displays competition and cooperation synchronously (Bengtsson et al., 1999). However, competition within strategic teams, as Caves and Porter (1977) suggests, isn’t more intensive than between strategic teams. Rivals within a strategic team still incline to abstain from competing directly. Since the concept of mutual cooperation is easily accepted by those firms. That is the reason why Taiwan’s bicycle and components companies have higher motivation to join A-TEAM.
Firms in bicycle industry can be classified into two categories: bicycle and components firms. It displays an assembler-supplier relationship between two types of firms. Apart from Giant and Merida (OBM), most bicycle components firms in A-TEAM belong to OEM and ODM manufacturers. Therefore, it presents the nature that relationships among components firms are competitive and cooperative.
According to the strategy of Co-opetition, the goal of strategic association is to enlarge the scale of the international marketplace; instead they merely compete with each other in the same market. Undoubtedly, most firms in A-TEAM seek competitive advantage; even anticipate possessing possible opportunities of mutual learning and innovation among other partners.
Some research point out that a variety of organizations have executed organizational
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learning strategies. Even many studies have discussed the relationship between organizational learning and organizational performance, yet mere high-tech and financial firms have confirmed the concept of organizational learning throughout overall companies (Yang, Wang, & Niu, 2007). Additionally, it would be a mistake to assume that innovative thought is the sole competence of large firms. SMEs incline to innovation and learning, since effects of scale are not significant and SMEs can be more closer to market demand and flexibility (Garcia-Morales et al., 2007).
In the past, one mode of technology transfer, as Fransman (1985) proposed, originates from the role of foreigners: learning by exporting. Those American buyers, in addition to providing technology transfer, actively assist the local producers in management, such as monitoring process of production, offering financing through issuing letters of credit, and marketing the products in developed countries. Moreover, one bicycle assembler need the support of full network of local components suppliers, otherwise pre-existence of accumulated learning will disappear today. All in all, the study hopes to test the above viewpoint and interprets the importance of organizational learning in this research.
1.3 Research Objectives and Research Questions
In the past research, most reference related to bicycle industry is concentrated on in-house R&D, the level of usage, and the demand of bicycle users. What seems to be lacking, however, is to use a visually whole framework to explore the industry.
Therefore, the study will employ social network analysis (SNA), its concepts coming from graph theory, to discover the pattern of network, to detect which ones are the key
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actors, and to trace the direction of the flow of information among those surveyed firms whether it will indirectly do good to the follow-up accumulated learning. Then, to know well the network positions will state the close business relationships in the industry. By those messages, it is discovered that what effects will benefit organizations to actively learn new productive techniques and trends in market, and finally tend to become learning organization.
Since it is worth while examining the research objectives more closely, objectives can be divided into three parts. First, by use of exploratory study and descriptive statistics, the study can dig out the motivations why bicycle and components firms participate in A-TEAM. Therefore, the research questions include:
¾ To which degree have these join motivations have been achieved? Have expectations been met?
¾ By examining cooperative business relationships, did firms appear to be divided into several sets of actors known as cliques or clusters?
Second, the study exercises social network structure to represent the positions of bicycle and components firms of Taiwan’s bicycle industry. The research questions include:
¾ To visualize the communication network of bicycle and components firms and to seek out critical actors in Taiwan’s bicycle industry.
¾ To describe network structures such as degree level, close level, betweenness level.
Third, research objectives are stressed on whether quality of business
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relationships affects organizational learning and network position, even eventuating in differently organizational performance. Two questions need to be made as follows:
¾ Between firms inside and outside A-TEAM, which type benefits organizational performance profoundly?
¾ With the thought of learning and innovation, do bicycle and components firms within the A-TEAM learn more techniques and possess innovational experience?
1.4 Research Procedures
According to the research question, the relevant literature was initially searched and reviewed for the statement of social network analysis and Taiwan bicycle industry.
In succeeding to that, the conceptual framework, the scope, and hypotheses of the study were then proposed. A survey questionnaire was developed for conducting the static method. Afterward, the in-depth interview was proceeded to assure that the analysis outcomes are correct. Finally, the conclusion is presented in the research.
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Figure 1.1 The Flow Chart of this Research
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