THE INTERNATIONALISATION PROCESSES OF CULTURAL FIRMS: A CASE OF MBC, KOREA Tae Young Choi PhD School of Organisation and Management Australian School of Business The University of New South Wales March 2008 Originality Statement ‘I hereby declare that this submission is my own work and to the best of my knowledge it contains no materials previously published or written by another person, or substantial proportions of material which have been accepted for the award of any other degree or diploma at UNSW or any other educational institution, except where due acknowledgement is made in the thesis. Any contribution made to the research by others, with whom I have worked at UNSW or elsewhere, is explicitly acknowledged in the thesis. I also declare that the intellectual content of this thesis is the product of my own work, except to the extent that assistance from others in the project's design and conception or in style, presentation and linguistic expression is acknowledged.’ Signed …………………………………………….............. Date ……………15/10/2008.…………………….............. Copyright Statement ‘I hereby grant the University of New South Wales or its agents the right to archive and to make available my thesis or dissertation in whole or part in the University libraries in all forms of media, now or here after known, subject to the provisions of the Copyright Act 1968. I retain all proprietary rights, such as patent rights. I also retain the right to use in future works (such as articles or books) all or part of this thesis or dissertation. I also authorise University Microfilms to use the 350 word abstract of my thesis in Dissertation Abstract International. I have either used no substantial portions of copyright material in my thesis or I have obtained permission to use copyright material; where permission has not been granted I have applied/will apply for a partial restriction of the digital copy of my thesis or dissertation.' Signed …………………………………………….............. Date ……………15/10/2008.…………………….............. Authenticity Statement ‘I certify that the Library deposit digital copy is a direct equivalent of the final officially approved version of my thesis. No emendation of content has occurred and if there are any minor variations in formatting, they are the result of the conversion to digital format.’ Signed …………………………………………….............. Date ……………15/10/2008.…………………….............. i Abstract The words ‘Globalisation’ and ‘Internationalisation’ have received a great deal of interest from global nations, enterprises, citizens and academics especially since the late 20th century. Although the process of globalization began as a social trend for tracking the expansion of human population and the growth of civilization since as early as the 16th century, globalization became a business phenomenon in the 19th century from rapid growth in international trade and investment between the European imperial powers, its colonies and, later, the United States. Scholars of the 20th century vigorously attempted to theorise internationalisation of multinational enterprises (MNEs) based on MNEs’ internationalisation processes. As the vast majority of such theories were developed for the manufacturing industry, the validity of theories for the service industry became ambiguous. Despite the fact that one of the fastest growing sectors of global trade since the late 20th century is the trade in cultural goods and services, scholars haven’t attempted to validate such a phenomenon by reference to existing theories of internationalisation processes. This thesis attempts to dismantle the internationalisation processes of cultural firms and to explore the validity of existing internationalisation theories. Due to the inherent difficulties in analysing all sectors of cultural industries, this thesis has adopted a single in-depth case study method with qualitative data to support the findings of the thesis. Although the internationalisation processes of a firm consist of an abundant series of intermittent and continuous ventures by the firm, the particular focus of this thesis is on the longitudinal processes of a firm’s overall internationalisation processes. As one of the foremost runners of ‘Hallyu – Korean Wave’ phenomenon, MBC has been selected as a case study object for this thesis. With a history of internationalisation processes over 40 years, involving various internal and external environmental factors/forces interactively, the case of MBC offers an insight into the empirical study of the internationalisation processes of cultural firms. Although this thesis shows strong support for the dynamic capabilities theory—a theory that explains dynamic activities and behaviours of MBC’s internationalisation processes in accordance with, and as a result of, ever-changing both internal and external factors/forces of environments— dynamic capability theory itself is deficient in explaining the underlying sources and drivers of those factors/forces. In order to overcome such a shortfall, this thesis suggests an integrative approach of integrating multidisciplinary theories as a theoretical framework for future studies of internalisation processes theories especially for empirical and industry-specific studies. This thesis provides comprehensive framework for three components—motives, way-stations and performance—of internationalisation processes of cultural firms, thereby contributing to the under- researched field in the discipline of international business. ii Acknowledgement = In the name of the Father, and of the Son, and of the Holy Spirit. Amen. Thank you GOD! It is finally done. Those to whom I owe most gratitude for making this happen are undoubtedly my two supervisors, Associate Professor Chung-Sok Suh and Dr Seung-Ho Kwon. Not only did they offer intellectual guidance but uncompromising courage, inspiration, encouragement and comfort, and have always been ready to spare themselves for my ever-fractious journey. One of the old Korean Confucius’s teachings asserts “군사부일체 君師父 一體” which, when literally translated, becomes “The King, The Teacher, and The Father are the One”. The underlying message as all would have guessed is that the Teacher must be respected at the same level as the King and the Father who naturally receive one’s respect. As this thesis opens the door to the world of academia, and my supervisors are the integral parts of my new life in the new world inevitably make the old Confucius’s teaching the truth. Thank you my two fathers. I deeply appreciate the generous scholarships provided by Korea Foundation (KF), Korean Studies Association of Australasia (KSAA), SMI-HYUNDAI Group, and Korea-Australasia Research Centre (KAREC) at the University of New South Wales (UNSW). Without the financial support of the above-mentioned organisations my venture would have been severely hindered. I also appreciate the warm and family-like support offered to me by many associates of KAREC, especially Mrs. Anne Hyunok Ke who has given me ongoing and unhesitating assistance, both academically and personally. It is very heart-stomping even to think about writing an acknowledgement to members of my families. First, my mum Julieta Sin Ja Choi and my dad William Myong Hwan Choi who have been praying to God every single day for hours and hours asking to help me through my journey. I also thank my brothers Richard, Dom and Michael Choi for showing its trust in me. Second, my mum-in-law Ms. Veronica Bong Sook Hwang, brother-in-law Min Sung Choi, and sister-in-law Hyun Jung Kim who have sacrificed so much to allow me to embark on this turbulent ride. Last but not the least, my most precious gift from beloved God: my partner Mary Eun Jung Kim whom I can’t thank enough, no matter whatever I do or say. Every word written in this thesis describes the courage, love, patience, sacrifice, endurance and comfort that you have unconditionally offered to me. I can only say “Thank you and I love you”. Of course, more gifts of God—my sons Gene, Sean and Euan Choi, who are the meaning of my life and my future. Boys, you make me very proud, and I thank you for being such happy children and for teaching me there is no such a thing as ‘worry’. iii Table of Contents Abstract .................................................................................................................................................... i Acknowledgement ................................................................................................................................... i CHAPTER 1 : INTRODUCTION .......................................................................................................... 1 1.1 Foundation of the thesis ................................................................................................................ 1 1.2 Case selection: internationalisation processes of MBC ................................................................ 4 1.3 Scope and definitions of terminologies ........................................................................................ 7 1.3.1 Cultural industries/firms/products ......................................................................................... 7 1.3.2 Globalisation and internationalisation ................................................................................... 9 1.4 Theoretical frameworks and research questions ......................................................................... 10 1.5 Research methodology ...............................................................................................................