Case selection and recruitment

In this study, case selection was purposive, not random. Harrison and Freeman (1999) indicate that case studies with a purpose are most likely to contribute to new knowledge. In a discussion of case studies for theory building, Eisenhardt also argues that “random selection is neither necessary, nor preferable” (1989, p. 537). In this regard, the major concern of the researcher is not to generalise the result of the research but to make the most of the opportunity to identify the emergent patterns or theory. The aim is to pursue analytic generalisation rather than statistical generalisation (Yin, 2009). Hence, the cases selected should be able to cover various aspects of the research that is being conducted. According to Eisenhardt (1989), four to ten cases are sufficient for theory building. Pettigrew (1997) also suggests a small number of cases (normally six to ten) are appropriate for a processual analysis. In this study, the case number was ten based on the requirement to collect information from a diverse range of organisations.

The case companies were selected from firms in Taiwan. Taiwan is a small and open economy that has experienced significant positive and negative impacts from

globalisation and technological advancement in the past few decades (Dahlman, 2008). Many firms in Taiwan had to develop and maintain their competitiveness under a complex and dynamic environment for their survival. Moreover, the researcher is a Taiwanese, who has lived in Taiwan for over forty years with eighteen years of working experience in senior management positions. Taiwan was selected since the researcher could more easily collect data, from a personal perspective. Taiwanese firms were suitable for this study as they could exemplify typical firm behaviours in a competitive environment. The environment of these firms—further information on the Taiwanese context—is provided as follows.

Background of Taiwan

Taiwan is an island situated in East Asia between the South China Sea and the East China Sea off the southeastern coast of China. It has been under the government of the Republic of China since 1945. The Republic of China’s political status, as a state, has been controversial in the international community since 1971, when its United Nations seat was replaced by the People’s Republic of China (PRC)5. Nevertheless, Taiwan's rapid economic growth in the past few decades has advanced it from a developing economy into a Newly Industrialised Economy and one of the Four Asian Tigers—Hong Kong, South Korea, Singapore, and Taiwan (Page, 1994). In 2007, Taiwan was ranked as the world’s 24th-largest economy among the 181 economies listed by the IMF.6

The success of Taiwan’s economic growth can be attributed to its economic policy, including encouragement of exports and foreign direct investment (Dollar, 1992; Edwards, 1993). This explains why most of the case companies were export- or international-market-oriented. Although, the role of government has created hot

debate regarding Taiwan’s growth because of the government’s support, intervention and protection by scholars (Aberbach, Dollar & Sokoloff, 1994; Schrank & Kurtz, 2005), the Taiwanese government’s intervention in economic activities has been dramatically reduced since the 1980s owing to more liberal policies, such as deregulation, trade liberalisation and relaxed foreign exchange control. In other words, the role of government invention in its economic policies, such as promotion of exports, was not so important as before (Hsueh, Hsu & Perkins, 2001). Moreover, the government has since needed to integrate environmental considerations into industrial policy because of increasing demands from stakeholders (Ho, 2008; Rock, 2002).

In maintaining its economic growth, since the 1980s the Taiwanese economy has increasingly abandoned its labour-intensive industries, which were unable to compete with other developing countries such as China, Vietnam, Thailand, etc. Taiwanese companies began moving to southern China in order to take advantage of cheaper labour costs and tax incentives offered by the Chinese government (Hsing, 1999; Young & Lan, 1997). Despite the political tension, the economic relations between Taiwan and China have improved rapidly since the beginning of China’s open door policy in 1978. In 2004, China became Taiwan’s second-largest trading partner, accounting for 15.13% of its total trade. Since 2005, China has become the largest trading partner of Taiwan. In 2008, the trade between Taiwan and China accounted for 19.41% of Taiwan’s external trade, which, together with Hong Kong, totalled 26.7%, of Taiwan’s external trade.7 This explains why there were many activities, such as exporting goods and services, investment in plants and operations sites, and establishing strategic partnerships for marketing research, R&D and new product development, which had been engaged in by case companies in this study.

A final point that needs to be mentioned is about trade unions in Taiwan. Taiwanese workers were not allowed to form trade unions until the lifting of Marshal Law in 1986. Due to the legacy of government intervention, institutional constraints and the problem of limited organisational strength, unions’ bargaining power has always been insignificant in Taiwan, compared to other developed countries (Huang, 2002; Pan, 2001). The implication is that most Taiwanese firms do not treat trade unions as powerful stakeholders, and this was reflected in each case company.

Selection of purposive cases

Miles and Huberman (1994) suggest four parameters as comparable choices for multiple-case studies: setting, actors, events, and processes. To facilitate the comparability of cases, this study uses the same parameters. The settings include the focal firms and their different stakeholders. The actors are the firms, through their senior management, such as the CEOs or senior managers. The events refer to the main foci of interest, which contribute to the understanding of the relations between stakeholder management and competitive advantage, such as investments in R&D and equipment, technology transfer, new product development, environmental protection, and participation in various social or philanthropic activities. The processes are signified by those advancements facilitated by stakeholder management, including resource commitment, capability development and relationship building, which generate and sustain competitive advantage.

To keep the four parameters constant in selecting case companies, it is possible to achieve analytic generality by selecting a diversity of case companies, in terms of different ages, industries, and sizes of organisations. Different ages partially reflect

different stages of the life-cycles of firms. Various industries can mirror numerous dimensions, such as industrial versus consumer goods, individual versus corporate consumers, general versus niche markets, traditional versus high-tech products. Different sizes of firms were sought in terms of different capital value and the number of employees.

The general criteria for case selection

In order to collect sufficient data, this study chose a mix of information-rich cases that could demonstrate the diversity mentioned above. Accordingly, the general criteria for case selection in this study were set as follows:

The firm has been established for more than ten years.

The firm is able to display its leadership position in relation to its competitive advantage, such as financial performance or market share.

The firm has demonstrated its orientation in stakeholder management. The number of firms selected from the same industry is limited to two.

Procedure of case recruitment

Having determined the criteria for inclusion of case companies, there were several steps necessary to recruit the potential participants for this study. Firstly, the main targets were listed companies or public offering firms in Taiwan, as their background information could be collected from sources, such as corporate websites and the database of listed companies in Taiwan, which are accessible by the public. Secondly, the researcher made a phone call or sent an e-mail to each potential company in order to get the names, telephone numbers or e-mail addresses of the CEOs or the senior managers, who had been involved in strategic decisions and stakeholder management

of their companies. Thirdly, the researcher sent e-mail invitations to all potential participants, introducing this research project and inviting them to participate in it. Once the CEO or the senior manager of the potential company had agreed to be a participant, an appointment was made for the interview.

Profiles of case companies

In this study, the capital of case firms ranged from US$ 1.54 million to 2.61 billion; the numbers of employees ranged from 30 to 42,000. The founded year of case firms ranged from 1960 to 1996, reflecting both traditional and high-tech industries, as well as different paths of growth. Details of the case companies are show as Table 3.2.

Table 3.2: Profiles of case companies Company Name Founded Year Industry Number of Employees Capital Size (US$,000) Alpha 1982

Enterprise resource planning

(ERP) software 950 40,960

Beta 1995 Industrial computers 470 32,470

Gamma 1988 Textbook publishing 1,000 26,248

Delta 1960 Adhesive tape 580 89,049

Epsilon 1996

Thin film transistor liquid crystal

display (TFT-LCD) panels 42,000 2,401,762

Zeta 1971

Cathode ray tube (CRT);

(TFT-LCD) panels 24,000 2,610,741

Eta 1961 Textiles (Apparel) 570 42,561

Theta 1980 Property development 60 32,048

Iota 1983 Contracted dyeing & finishing 370 57,973

Kappa 1993 Computer security system 30 11,539