Along the path of datafication, the probability of cyberattacks against critical infrastructure increases as well. The weaponization of 5G networks has brought about further challenges to international economic legal order. Major geopolitical players have adopted comprehensive security measures at home and have also strengthened cooperation with geopolitical allies to protect and enhance the resilience of ICT ecosystems. In this regard, the more recent iterations of international trade agreements are equipped with “modernized” security exceptions to ensure that the exceptions to international trade rules are aligned with the policy needs of the data-driven economy. Innovative exception clauses have been incorporated into FTAs to reconcile conflicts between (digital) trade and (cyber) security, which, overall, grant a dramatically expansive scope and excessively unfettered discretion to states when it comes to “national security.” Questions as to what constitutes “critical infrastructure” and how it should be designated, however, require due process mechanisms to constrain discretionary abuse. Chapter 2 contends that a consensus concerning the scope of “critical infrastructure” would be politically and economically valuable to filter out overgeneralizations of national security claims.

This chapter examines whether the patterns observed for political regimes and Chinese infrastructure spending are also manifested by foreign aid and exports of Chinese digital technologies that promote the adoption of Chinese standards. Analysis of several different datasets consistently show electoral autocracies are the major recipients. The datasets include Chinese smart cities technologies exports, foreign aid in the information and communications technology sector, and foreign deals for Huawei’s cloud infrastructure and e-government services. These quantitative findings are supplemented by case studies of Malaysia (electoral autocracy) and Greece (liberal democracy).

Increasing participation of Chinese companies in Information and Communication Technology (ICT) standardization has been a frequent topic of the recent academic and policy discussions. Many Western governments and companies believe that the growing representation of Chinese companies, especially Huawei, in the leadership of Standards Development Organizations (SDOs) allows these companies to unduly influence standardization processes. Building on previous empirical studies on China’s representation in SDOs, this chapter theorizes whether, and to what extent, different institutional models of SDOs are capable of safeguarding the integrity and independence of their standardization processes and their resilience to political and commercial pressures, by studying the rules on the leadership appointments of four global SDOs. In a broader sense, our analysis sheds light on the neutrality, independence and trustworthiness of these critical institutions of global economic governance and their evolving and continuous relevance for global standardization.

This chapter examines the international controversies surrounding Huawei Technologies, finding that most fears about this private firm are based on misunderstandings of its coevolution within the Chinese business and political environment, as well as unfounded suspicions about its employee ownership structure and alleged Chinese Communist Party control or military links. However, only further reform of the Chinese political ecosystem will help to reduce the international fear and sanctions on the firm.

Fuzzy logic is used by the Chinese government to balance its competing interests in creating an environment that is conducive to innovation and assisting its Network Sovereignty agenda. The book concludes that data localisation laws, which form part of China’s Cyber Security Law, will not (once the law is finalised) have a major impact on open-source AI innovation. This is because the ‘fuzzy logic’ regulatory approach, consistent with prior Chinese regulatory practice, is being employed by the Chinese authorities in selectively implementing these laws to avoid negatively affecting AI development. In short, the Chinese authorities, in presiding over contradictory policy and regulatory decisions that may inhibit technological advancement in China, apply this approach to flexibly navigate those policies – and frequently to defer any conclusive decision-making to a future time (perhaps indefinitely). This is why many legal documents, including both the Cyber Security Law and its implementing rules and regulations, use intentionally vague language around data transfers and security verification and testing; this gives the government broad discretion, allowing for a spectrum of enforcement actions between promoting innovation and maintaining control.

With the internationalisation of production processes and multiplication of jurisdictions involved in these processes, global supply chains can be easily interrupted through weakest links. The fragmentation of production processes and internationalisation of supply chains complicatecoordination and risk management, which necessitate a fresh look of the governance mechanism. Competition law plays a critical role in ensuring supply is not disrupted through anti-competitive practices, such as export-cartel and abuse of dominant power in horizontal and vertical agreements. In linking export restrictions to investment law and policies, two types of investment are most relevant: resource-seeking and strategic asset-seeking investments. The interaction of export restrictions and investment law and policies can be observed from two perspectives: producers v. consumers; outbound v. inbound. A country imposing export restrictions on resources or strategic assets, such as critical components, may use trade and investment measuresm) simultaneously to prevent foreign countries or enterprises from accessing them.

The architects of the post-war international economic order set out for the legal framework for liberal international trade underpinned by the GATT regime. Nonetheless, the East–West division necessitated a regime regulating trade between these two camps with the main objective to prevent strategic and technological articles transferred to the Soviet Bloc. Russia joins the Wassenaar Arrangement (the successor of COCOM) while China is still out. The market economy oriented GATT/WTO widens its membership and importantly accepted China in 2001 and Russia in 2012. Its diversified memberships make it a real ‘world trade organisation’ but at the same time introduce huge challenges for its governance, as manifested in the proliferation of national security exception. Whether the national security exceptions is ‘self-judging’ has been debated since the GATT era, but intensified in the past decade owing to the transformation of ‘negative consensus’ to ‘positive consensus’. The ‘self-judging’ debates of national security points to the underlying tension between sovereign as masters of treaties and adjudicator as treaty-interpreters.

With a case study of the mobile phone industry, this chapter investigates how competition and collaboration among East Asian firms with different backgrounds and business models have created the industry’s dynamics, turning it into the home of major smartphone assemblers, brand firms, and key component vendors. It also explores value chain resilience of the international economy shaped around global supply chains, even if the networks have been gradually disrupted since 2018 due to the escalating US-China high-tech confrontation. In this chapter, China, Korea, Taiwan and Japan are mapped in the global landscape of the smartphone industry and changes in mobile phone production over the last ten years are elucidated in terms of production site and firm nationality. Historical contexts of the electronics industry in each country that produced a variety of business models and allocated different value chain positions to individual firms are then investigated. The discussion concludes by highlighting different competitive advantages of firms from Korea, Taiwan, and China that have contributed to East Asia’s emergence as the world’s hub of the smartphone industry.

This introductory chapter offers an overview of the entire book on the management transformation of Huawei. Huawei is now China’s most prominent multinational company and a leader in 5G mobile telephone technology, which will be rolled out across the world in the next few years. What makes Huawei interesting is its rate of growth and the level of detail in which we can observe not only the creation of routines but also the breaking of routines across most the major functional areas (management, product development, HR, supply chain, finance, R&D, intellectual property, and international). This makes Huawei an ideal case to advance the theory of routines and dynamic capabilities to change routines. Hence the book will particularly appeal to academics in the field of strategy, management, and business history.

Most companies discover that management practices that work on a smaller scale no longer work when the company grows substantially. This is also true for the product development process. As Huawei grew, the firm experienced problems in terms of higher product failure rates, longer development cycles and increased R&D costs. It then turned to the consulting services of IBM to upgrade its product development processes to a larger scale. The integrated product development (IPD) system implemented at Huawei was copied from IBM’s practices. IPD’s central idea is that companies must expand cross-functional teams to perform product development and use standard processes and templates to guide those development activities. IBM promoted the IPD system by providing consulting services to other firms. However, most of them failed during implementation, and only a few of them actually benefited from the IPD system; Huawei was one of them. The IPD transformation completely changed Huawei’s product developing system and helped the company overcome its problems in developing products on a larger scale. The IPD transformation was a turning point for Huawei in becoming a world-class company. This chapter explains how the IPD system helped Huawei solve its management problems and why Huawei was successful in IPD transformation when many other companies were not.

This chapter offers concluding thoughts on the entire Huawei study – the totality chapters and commentaries. It offers comparative perspective by placing the firm in the larger context of corporations in China and to some extent in other countries. The comparison with many other firms throughout the entire book reveals that Huawei is among a select number of firms that are able grow at very high rates by continuously transforming themselves. Consistently investing at least 10 percent of sales starting on R&D at least since 1998 was an important ingredient of this growth. But the importation of western best practice routines and the steering of this process by the Huawei founder and the top management team underlie this ability to grow. Huawei stands out among many Chinese companies that internationalize by relying solely on organic growth rather than on growth through acquisitions. Huawei is also different from state-owned companies (SOEs) that dominate a number of sectors in the Chinese economy in that Huawei motivated a large fraction of employees by giving them shares in a profit-sharing plan so that hard working employees could make a substantial amount of money. Building all chapters, we provide advance management theory by articulating in detail the meta-routines that underpin Huawei’s dynamic capabilities. Finally, we discuss the challenges to future growth of the firm, including geopolitical cross-currents the firm currently finds itself in.

Internationalization plays an important role in Huawei’s transformation from a fledgling Chinese start-up to a powerful multinational company. Huawei’s internationalization is characterized by repeated failures, difficult struggles and unceasing learning by doing. In this chapter, we divide the whole internationalization process of Huawei into three stages based on the different challenges at each stage. They are (1) overcoming the liability of foreignness, (2) managing complexity to achieve synergy from a global perspective, and (3) changing from a latecomer mindset to that of a global leader. For each stage, we summarize and discuss how Huawei adopts routinization and de-routinization strategies to efficiently overcome different challenges. The managerial implications derived from Huawei’s internationalization will be useful for other multinational firms.

Although Huawei started its business as a small agent in 1987, the firm began the independent development of telecommunications equipment in its fouth year of operation and then gradually increased its R&D investments over the years. As the scale of R&D efforts increased, Huawei encountered significant problems with its organization of R&D and felt that it was necessary to transform how it conducts R&D several times over its thirty-year history. In this chapter, we develop a four-step model to analyze three major R&D management transformations in Huawei’s long history of R&D activities. The first transformation, from 1991 to 1995, helped Huawei to establish an informal R&D system; the second transformation, from 1995 to 1998, changed the informal R&D management system into a formal system with clear structures and processes; and finally, the third transformation built up a process-oriented, high-performing R&D organization. We find that although the transformations shifted Huawei’s focus from making structural changes to process changes, all of them were closely aligned with the firm’s market position and with its strategic re-orientation.

Management transformation in the financial management area has contributed significantly to the competitiveness of Huawei. Four Standardizations was the first large-scale financial management transformation project implemented in the company from 1998 to 2007. In 2007, Huawei started a more ambitious Integrated Financial Services project with assistance from IBM consultants, which lasted until 2014. This chapter documents the background, motivation, activities and impacts of these two financial management transformation projects and discusses Huawei’s experience in successfully implementing management transformation in the financial area. It also highlights that Huawei’s employee ownership and financial management strategy with its own characteristics determine the focus of the financial management transformation projects.

This chapter documents how Huawei transformed its supply chain management over the past two decades. We argue that Huawei’s supply chain management transformation can be divided into two stages: the establishment of an integrative supply chain from 1999 to 2003 and the establishment of a global supply chain from 2005 to the present. In the integrative supply chain management transformation project, IBM consultants helped Huawei identify problems in its operational processes, IT system and organizational structure. Subsequently, Huawei addressed these problems through process reengineering, an integrated IT system, and organizational change management, respectively. In the global supply chain management transformation phase, Huawei first promoted the enterprise resource planning (ERP) system in overseas subsidiaries and representative offices by tailoring the system to local laws, regulations and customer requirements and then made efforts to build an integrated global supply chain network.

To facilitate its rapid growth over the past thirty years and build an increasingly capable management team and workforce, Huawei made substantial changes to its HR practices. As the number of employees increased, the firm faced different challenges in recruiting, developing, and motivating employees while broadening its geographic focus from China to all corners of the globe. To accurately describe the changes Huawei made to address these challenges, we divide the history of Huawei’s HR system into five distinct stages that we call (1) personnel management, (2) the beginning of human resource management, (3) strategic human resource management, (4) international human resource management, and (5)talent management. With the help of Western consulting firms, Huawei imported many Western HR practices and combined them with the Chinese tradition of cultivating a strong commitment to a large organization. Huawei also adapted Western ideas. For example, it required employees to pay for their own training costs at the company university.

Huawei by 2014 had become the largest patent filer in the world even though it did not file any patents for the first eight years of its existence (1987–1994). This chapter examines the development of the firm’s intellectual property (IP) management capability. It describes important changes that Huawei undertook both in terms of its IP strategy (whether, when, where, and in what technical areas to patent) and the administration of its IP activities. Unlike the other major transformations that Huawei undertook with the help of Western consulting firms, Huawei could not make up its mind about how it was going to manage its IP strategy until a lawsuit filed in 2003 by a US competitor, Cisco, prompted top management to devote significant attention to this area. To support its internationalization strategy, Huawei subsequently implemented a systematic strategy to create a vast collection of independent intellectual property in telecommunication technology. Starting in 2003, Huawei embarked on a series of five-year plans, first to increase the amount of IP that would be generated by its large R&D efforts and later to increase the quality of its IP. To realize this strategy, large changes in the organization of the IP office had to be made. Huawei now employs over 400 full-time IP professionals to implement its IP strategies. Huawei offers lessons for other companies from emerging economies who want to compete successfully on the world market.