The research deals with the extent to which multi-national corporation rely on Taiwan subsidiaries¡¦ knowledge resource while operating their capital in subsidiaries in Mainland China. From the interview of the case study, there are three major driving forces affecting parent companies to count on their Taiwan subsidiaries, forces such as specific of parent companies, resource specific of Taiwan subsidiaries and local resource specific in Mainland China, Regarding specific of parent companies, the following factors effect the extent to which parent companies depend on Taiwan subsidiaries¡¦ knowledge resource:1.entry mode 2.experience in Chinese markets 3.The scope of value activities 4. the human resource exercise. Regarding resource specific of Taiwan subsidiaries, the following factors effect the extent to which parent companies depend on Taiwan subsidiaries¡¦ knowledge and resource.1.the strategic roles 2.strive actively to develop 3.industries 4. vertical and horizontal mode of value activities Regarding specific of local resource qualities in Mainland China, the following factors increase the extent to which parent companies depend on Taiwan subsidiaries¡¦ knowledge and resource.1.culture distance 2.uncertainty of local political and economic environment 3.industry value system of the local environment 4.local appropriate talent and the cost

Abstract There is more than 20 years since Mainland China implemented the ¡¥open door¡¦ policy; starting from 1979. China¡¦s large and potential local market, abundant resources i.e. land, labors, raw-materials etc. and various taxation incentives are giving the great attractions to MNCs on making investments in China. On the opposite, Taiwan is now intertwined with the internal political turmoil and global economic downturn that lead the economic development to a situation of stasis. The current economic development in two sides of the strait has revealed the opposite trends, one is rising, and the other is shrinking. In face of such unpleasant situation, what can Taiwan do to create other opportunities for future economic development? The focus of this thesis is on the changes of value activities of MNC¡¦s Subsidiaries in Taiwan. The main themes for this research are (1) MNCs have long been the key players of international investment since 1960s, and influenced substantially on the global economic development. The investment behaviors of MNCs in the new developing market - China have brought the high attentions of academic circles and practitioners. (2) In face of the rapid upraising of China, what are the changes of value activities in MNC¡¦s Subsidiaries in Taiwan? What are the possible solutions for future development of Taiwan? (3) Until now (per our understanding), there are few articles studying about the resources flow and the mutual dependence amongst MNC¡¦s HQ and Subsidiaries, this thesis provides the observations. Therefore, this thesis covers the topics of the initiative behaviors of MNC¡¦s Taiwan Subsidiaries while intending to set up a new Subsidiary in China; the decisive factors of assigning the third country nationals (TCNs) for China Subsidiary and the role shifts of Taiwan Subsidiary upon of the time changes. This thesis indicates that because of the value activities in MNC¡¦s Taiwan Subsidiaries are mostly concentrated on production or operation, and do not take part in business related management thus they have few decision powers on initiating a China Subsidiary. Exceptions are for those Subsidiaries which have the top management with local nationality and/or with entrepreneurship might participate indirectly in decision making. Besides, MNC¡¦s Taiwan Subsidiaries mainly act as the task role in China project therefore, the depth of involvement depends on their capabilities and resources which have relation to the years of establishment. If other MNC¡¦s affiliates or regional headquarters are possessed of the needed capabilities and resources, they might also involve to a certain extent in China¡¦s investment. The assignments of top team members for China project are influenced by the management style of MNCs. In most of cases, the top leading positions are filled by home country nationals of MNCs. But, for the functions of factory construction; operation or production the manager positions are commonly delegated to the experienced persons in Taiwan Subsidiaries. The main considerations are the technical capabilities, cultural background and common language. In respect of the role shifts of Taiwan Subsidiaries during the three developing stages i.e. construction, operation, and expansion of China Subsidiaries, our cases indicate that during the construction period, the main contributions of Taiwan Subsidiaries are to helping the personnel recruitments, providing technologies of factory construction and establishing the management systems; during the operation period, the contributions are to smoothing the daily production, optimizing the process, upgrading the quality of products; during the expansion period, the contributions are to enhancing the supply chain management, improving the productivity, introducing the new products or new manufacturing processes. This thesis concludes that, in line with the continuous growth of China Subsidiaries, the importance of Taiwan Subsidiaries might be dieing down, especially when there will be more and more experienced and capable human resources in China. This thesis also indicates that, due to the product profiles of MNC¡¦s Subsidiaries in Taiwan and China have the high percentages of overlap thus the internal sales competition can be foreseen. However, our cases reveal that there is no fact of strong competition but most cooperation. The main reasons are that the business management is normally handled and coordinated by the separated organization of regional sales & marketing also, the current market demands are still big enough. Therefore, at the moment, two Subsidiaries of Taiwan and China are sitting in a balance or even in a complementary situation. However, if Taiwan¡¦s economic situation can not go abreast with that of China, it can be predicted the fadedness of Taiwan Subsidiaries in MNC¡¦s position. Only the individuals who with the high competencies can continuously play the important roles in MNC¡¦s Subsidiaries or possibly to be upgraded to the higher position in MNC¡¦s regional or global management teams.

With the emergence of China market, MNCs are so attracted by it on one hand, and so afraid of the high failure ratio of entering the Mainland China market. During the process of chasing the Mainland China market, MNCs usually rely on the subsidiaries of Taiwan for support, and utilize it to enter Mainland China. However, with the marker of Mainland China turning bigger and bigger, lots of MNC Taiwan subsidiaries seem to face the threat of substitution of China Subsidaries, and come up with the question weather Taiwan subsidiaries should be continued or not. This study has focused on the subsistence of Taiwan subsidiaries and the relationships between the Cross-Strait subsidiaries. This research is under the observation of Taiwan subsidiaries¡¦ value, Cross-Strait subsidiaries¡¦ resource asymmetry, and the nature of value activities, to explore how these variables influence the subsistence of MNCs¡¦ Taiwan subsidiaries. By Use of the strategic role of MNC subsidiaries, subsidiaries¡¦ dependence on MNCs, resource based view, and subsidiary¡¦s network characteristics, this research probe into the independent variable that influence the subsistence of Taiwan subsidiaries and the relation between Taiwan and China subsidiaries. This research uses questionary survey to collect data. The population is the list of foreignenterprises in Taiwan published by Dun and Bradstreet, 1999 / 2000. The subsidiaries belong to manufacturing industry and non-financial service industry and are owned by foreign MNCs. The scale of these subsidiaries is above 30 people and still under operation by now. We use multi-regression analysis, ANCOVA analysis, and binominal logistic regression analysis to examine the effects of independent variables on Taiwan subsidiaries¡¦ threat of subsistence. After analyzing 59 MNCs¡¦ Taiwan subsidiaries, the results reveal that the importance of Taiwan subsidiary, the resource and capability of Taiwan subsidiaries, the integration of Taiwan subsidiaries with MNCs, the local responsiveness of Taiwan subsidiaries , the industrial embracement of Taiwan subsidiaries, the similarity of value activities between Taiwan and China subsidiaries, do have influence on Taiwan subsidiaries¡¦ subsistence. In addation, different kinds of relation between Taiwan and China subsidiaries have its specific combination of dependent variables, and imply different degree of threat of subsistence.

MNCs face challenges in developing complex strategic and organizational capabilities to meet their global efficiency and local responsiveness needs. Effective competitive strategy involves different management control over its product, functional and geographic diversity, language and culture. There are many options available for MNCs to use to develop models for business operations in different countries. The planning and executing these competitive strategies have significant impact to MNCs and they must be sustainable and successful. Human resources (HR) in MNCs have been playing an increasingly important role to improve organizational capabilities. Organization structure, responsibility, the practices, functions and professionals in the Human Resource management are key factors in creating the organizational capabilities. Meeting the current challenges and laying groundwork for the future calls for the redesign of roles and new competencies among HR professionals. With the aligning of the skills of HR professionals with the changing HR visions, strategies, structures, systems, and processes, the transformation of HR functions will be of value to their organization. Emerging trends in the strategic partner development of HRM is discussed.