Published by EH.Net (July 2003)

Mathews, John A., Dragon Multinational: A New Model for Global Growth. New York, New York: Oxford University Press, Inc., 2002. x + 258 pp. (hardcover), ISBN: 0-1951-2146-5.

Reviewed for EH.Net by Stephen A. Kolenda, Hartwick College, Oneonta, New York.

John Mathews’ book provides students of international business with fresh insight into how multinational firms have evolved various divergent organizational strategies and structures to compete and grow. Mathews, a Professor of Management at the Graduate School of Management in Sydney, Australia, delivers a valuable study of the interconnectivity of business firms in the global economy.

Dragon Multinational begins with a concise description of the players in the global business arena. The text is well referenced with abundant data and examples to support Mathews’ contention that there is much to learn from the many small and medium sized firms recently dictating patterns of global economic development. Mathews has researched extensively companies that he considers newcomers, focusing on those from “the Periphery” (outside Europe, the U.S. and Japan). By examining newer companies, Mathews recognizes a change in globalization approaches from the traditional resource-rich companies’ product or process driven expansions to the more flexible, adaptive and successful approaches of the smaller newcomers.

Mathews’ book is full of new information on organizational development, which is made especially interesting by the inclusion of case studies examining Taiwan’s Acer Group, Hong Kong’s extensively Li & Fung, Singapore’s Hong Leong Group, India’s Ispat International, and Mexico’s Cemex. Of these case studies, Acer is the most developed. While it is debatable whether Acer, founded in 1976, should be characterized as either a latecomer or newcomer to the global computer industry, this highly successful firm provides an excellent assessment of Acer’s unique structure of relatively autonomous business cells. Obviously granted complete access to Acer’s managers, Mathews’ case is detailed and thorough in its depiction of Acer’s many strategic evolutions. A glimpse directly into the leadership style of Acer’s founder, Stan Shih, includes coverage of Shih’s fascination with the classic Chinese strategy game Go.

Acer also illustrates well the critical nature of successfully competing in today’s global economy through partnerships and joint ventures. Especially important for the growing numbers of new and smaller multinational firms is grasping the relationships-based global economy with its web-like interconnections. This leads Mathews to posit that accelerated business success is available to those companies that internationalize through linkages and leverage, providing evidence that huge resource rich conglomerates are not likely to dominate the global economy in the future.

Mathews’ argument, while generally deductive in reasoning, presents an original theory of how companies can become successful in today’s complex global business environment. The theory focuses on internationalization as a process — a learning experience — in which managers’ decision-making shapes their organizations both in terms of strategies and organizational structure. Innovation in these areas becomes the norm as opportunities and threats arise more rapidly and in more novel ways. New structures evolve to accommodate this mode of operating, and new strategies are needed to capitalize on the realities of an oft-changing global economic environment.

Dragon Multinational, supported throughout by innovative graphics, articulates well a process-oriented account of accelerated internationalization. Particularly insightful is a three dimensional depiction of international trajectories which compares Mathews’ new (latecomer) strategic concepts with conventional theory.

Through a detailed summary of historical and current international business theoretical frameworks, and the addition of his own, Mathews provides a valuable contemporaneous contribution to the body of knowledge about the nature of internationalization for multinational companies. The book would be especially appropriate for graduate courses seeking to extend discussions of organizational structures and strategy to include recent success stories from non-U.S. firms. Well written, and with an excellent bibliography, Dragon Multinational will surely prove intriguing to any student of international business.

Stephen A. Kolenda is Chair of the Department of Management & Accounting at Hartwick College. He has lived and taught in China and Thailand, and presented his most recent paper, Economic Development of the Golden Quadrangle, at the 50th Annual Convention of the NYS Economics Association.