Innovation capabilities and sustainable development of Chinese firms: The role of operations excellence

The global dispersion and fragmentation of value chains of companies all over the world is a well-known consequence of globalization. Facing the intense global competition, companies are configuring their operations and innovation activities on a global scale. The globalization of operations and innovation in Western companies gained momentum some decades ago. However, the recent developments in the field also include the spread of the phenomenon to companies from the emerging economies. In the past two decades, China has earned the reputation of the ‘manufacturing power house’ of the world. Chinese companies in their vast numbers have been very successful in exploiting their access to low-cost labour and have established themselves as unbeatable high volume low-cost manufacturing champions. However, recently Chinese companies are increasingly prioritizing innovation, quality and sustainable development.
The paper aims to advance our understanding of these recent changes by focusing on the role of operations in improving competitiveness and capabilities of Chinese firms. The study employs a qualitative methodology and seeks to achieve its objectives on the basis of multiple case studies of Chinese companies.
The research highlights the main factors and dilemmas for Chinese companies seeking to create a foundation for innovation and sustainable growth based on their operations. On the basis of the findings a number of propositions are developed about the role of operations and their contribution to innovation and sustainable development of Chinese firms.