Enforcing Intellectual Property Rights through Organisational Measures:

Among practitioners and scholars it is a well known fact that the enforcement of intellectual property rights in newly industrialised countries is nearly not feasible. Neither are intellectual property rights sufficiently defined in such countries nor is the jurisdiction willing to assist foreign firms in enforcing these rights. At the same time companies from all industrialised countries establish subsidiaries in Asian NICs to evade rising costs in their home countries and to open up new markets. In order to run these subsidiaries they need to transfer technology and knowledge, which is not protected by intellectual property rights in the host country and therefore most likely subject to theft and imitation by local employees, competitors or even government officials. In the absence of a backing legal system companies must find different ways to protect their intellectual property rights. Basing on a knowledge-based-view of the firm we explore the organisational measures taken by foreign firms in China to enforce their intellectual property rights. Our study consists of in-depth interviews with chief executives of Chinese subsidiaries of major German and Austrian companies from seven different technology-based industries (lighting, plastics, textile, pharmaceutical, specialty chemicals, automotive and medical engineering). In our findings we identify three elements of organisational configuration, moderated by business strategy. Based on these results we discover three distinct patterns of organisational IPR protection mechanisms that can be applied to a wide variety of industries