This is a slideshow selected for presentation at the IEEE International Conference on Engineering (ICE) Conference in The Hague, Netherlands in June 2013. I completed this presentation as part of my Master of Science in Technology Management from the National University of Ireland, Galway.
Value Proposition canvas- Customer needs and pains
Japanese FDI in Ireland - A new Perspective using Kano
1. Location Specific
Determinants Of
Foreign Direct Investment
Ronan Coy Fujitsu Ireland
Kathryn Cormican NUI Galway
Image Source: Flickrcc.com
An Exploratory Study Of
Japanese Investment In
Ireland
17. Delighter
Source: Adapted from [Lai and Wu 2011], [Yang
2005], [Kano, et al. 1984], [Berger, et al. 1993]
THIS PATTERN IS THE KANO MODEL OF
QUALITY AND SATISFACTION
25. “PEOPLE QUALITY
TRIANGLE” Suggests Japanese
Investors Find Quality People Both
Important And Satisfying
Dysfunctional
Increasing Dissatisfaction if Reduced
Functional
Increasing
Satisfaction
if Increased
26. “THE RISK SPIRE” Suggests
Japanese Investors Are Risk Averse
Dysfunctional
Increasing Dissatisfaction if Reduced
Functional
Increasing
Satisfaction
if Increased
27. “THE GOVERNMENT WEB”
Suggests Japanese Investors Value Stable
& Business-Focused Government
Dysfunctional
Increasing Dissatisfaction if Reduced
Functional
Increasing
Satisfaction
if Increased
28. “THE INDUSTRIAL
DEVELOPMENT CIRCLE”
Suggests Long Term Industrial Strategy is
Important but not a Primary Satisfier
Dysfunctional
Increasing Dissatisfaction if Reduced
Functional
Increasing
Satisfaction
if Increased
31. 2. Japanese Investors
Share Similarities With
US Firms
Low Cost
Overheads
Where Quality
Infrastructure & Tax
Policies Reduce Operating
Costs
An Open
Economy With Trade
Links And & Access To
Regional Markets
High Levels Of
Productivity, With A
Skilled And Educated Workforce
Source: McDonalds.com
33. 3a. They Seek Stability
Both Politically And
Economically And Low
Levels Of Corruption
34. 3b. They Value Long-Term
Industrial
Development Policies
35. SO, WHAT DID ALL
THIS CONTRIBUTE TO
KNOWLEDGE OF FDI
36. UNDERSTANDING FDI
INVESTOR SATISFACTION
USING KANO PROVIDES A NEW
WAY TO LOOK AT INVESTMENT
It is possible for Ireland to FOCUS
LIMITED FUNDS ON
STRATEGIC AREAS OF FDI
Policy Development
Your motivations will change the factors or criteria that you use to choose your destination. It can be a difficult choice as you have limited funds and want to ensure you get maximum return from your investment. It’s the same for foreign companies investing their profits in ventures within a host country.
I have 15 minutes today to bring you on a journey of discovery. Its possible that you have no interest in the topic of FDI but my job today is to give you a new perspective on the topic.I will do that in 6 steps as follows
I have 15 minutes today to bring you on a journey of discovery. Its possible that you have no interest in the topic of FDI but my job today is to give you a new perspective on the topic.I will do that in 6 steps as follows
I have 15 minutes today to bring you on a journey of discovery. Its possible that you have no interest in the topic of FDI but my job today is to give you a new perspective on the topic.I will do that in 6 steps as follows
CIA, 2012
Yet despite the size of the Japanese economy, Ireland has very little investment from Japan. Ireland is overly reliant on the US and there is an urgent need to broaden the FDI base and protect the economy from macro-economic shocks.The severe imbalance is like the mouse and elephant …
So what is the research question. Well it can be broken into three parts.
The literature review highlighted some key issues and some interesting trends
Rios-Morales and Brennan 2007
23 Factors from Literature Review – Synthesis of the most recent literature in the area.. These cover Economic, Policy and Business Facilitation Determinants. These are the range of potential factors that influence where an MNC would make their investment.
Kano categories Adapted from [Lai and Wu 2011], [Yang 2005], [Kano, et al. 1984], [Berger, et al. 1993]A Kano questionnaire was developed to help identify the relative interdependence and strata of determinants for FDI investment. Kano questionnaires have two questions for each determinant. The first question measures how a respondent feels using a Likert scale when a requirement is met (the functional question) and the second question measures how a respondent feels where the requirement is not met (the dysfunctional question). This approach challenges traditional customer satisfaction models that suggests that the better we perform on each service attribute the more satisfied the customers will be. Kano’s model contends that performance on specific attributes is not equal in the eyes of the customers and that certain categories of attributes produces higher levels of satisfaction than others.
I have 15 minutes today to bring you on a journey of discovery. Its possible that you have no interest in the topic of FDI but my job today is to give you a new perspective on the topic.I will do that in 6 steps as follows
survey to empirically capture the salient location determinants A Kano questionnaire was developed to help identify the relative interdependence and strata of determinants for FDI investment. Kano questionnaires have two questions for each determinant. The first question measures how a respondent feels using a Likert scale when a requirement is met (the functional question) and the second question measures how a respondent feels where the requirement is not met (the dysfunctional question). Kano Category(Alternative Names)Description Attractive(Delighter, value-add)An Attractive (A) feature means that a feature of the country provides extra satisfaction when present but the country is still satisfactory when the feature is absent.One-Dimensional (Performance, proportional)A One-Dimensional (O) feature means that the more functional the feature within the country the more satisfied the investor and vice versa.Must-Be(Basic, expected)The Must-Be (M) feature indicates aspects where the investor is more dissatisfied when the country attribute is not there, but satisfaction never rises above neutral no matter how functional the attribute becomes. Extra effort spent improving such features would make little impact on satisfaction for the investor.
4 main features for Kano Model
I have 15 minutes today to bring you on a journey of discovery. Its possible that you have no interest in the topic of FDI but my job today is to give you a new perspective on the topic.I will do that in 6 steps as follows
Quantitative Findings from forced ranking.The forced ranking system used within Survey Monkey shows that the most important factor for FDI is the host country taxation system.The element that stands out from this survey is the importance of political stability and it is not something that was seen as a significant factor in the literature.
The Quality People Triangle: The Japanese firms attach significant importance to the FDI factors of Productivity, Skills and Educated Workforce. Increases in all these factors are seen as highly satisfying and conversely reduction in these factors results in dissatisfaction. The results suggest that every effort must be made to develop the Irish workforce, as increases in these features will increase attractiveness for Japanese investors. The Risk Spire: Foreign investment from Japan is risk averse and the perception of the Legal System and Corruption are of high importance. While improvements in these FDI factors will not result in as much satisfaction as the Quality People Triangle, any decline in these factors will lead to a greater overall dissatisfaction with Ireland as an investment location.The Government Web: The role of Government is linked to a number of factors that respondents highlighted as relatively important. Quality Infrastructure, openness to trade, access to regional markets and bureaucracy are linked to government policy and impact on doing business. Further linkages to operating costs and taxation reflect the importance of profitability for Japanese MNCs. Although each determinant has a lower importance than the previous constellations, on aggregate the importance of the government role is an important determinant of FDI attraction.The Industrial Development Circle: The development of high quality industrial policies leading to many specialised knowledge clusters is ranked with high importance. Improvements in this factor will lead to moderate satisfaction while deterioration will lead to moderate dissatisfaction. This circle seems incongruous but this may highlight that Industrial Development is a more attractive feature and highly valued by Japanese MNCs.
The Quality People Triangle: The Japanese firms attach significant importance to the FDI factors of Productivity, Skills and Educated Workforce. Increases in all these factors are seen as highly satisfying and conversely reduction in these factors results in dissatisfaction. The results suggest that every effort must be made to develop the Irish workforce, as increases in these features will increase attractiveness for Japanese investors. The Risk Spire: Foreign investment from Japan is risk averse and the perception of the Legal System and Corruption are of high importance. While improvements in these FDI factors will not result in as much satisfaction as the Quality People Triangle, any decline in these factors will lead to a greater overall dissatisfaction with Ireland as an investment location.The Government Web: The role of Government is linked to a number of factors that respondents highlighted as relatively important. Quality Infrastructure, openness to trade, access to regional markets and bureaucracy are linked to government policy and impact on doing business. Further linkages to operating costs and taxation reflect the importance of profitability for Japanese MNCs. Although each determinant has a lower importance than the previous constellations, on aggregate the importance of the government role is an important determinant of FDI attraction.The Industrial Development Circle: The development of high quality industrial policies leading to many specialised knowledge clusters is ranked with high importance. Improvements in this factor will lead to moderate satisfaction while deterioration will lead to moderate dissatisfaction. This circle seems incongruous but this may highlight that Industrial Development is a more attractive feature and highly valued by Japanese MNCs.
The Quality People Triangle: The Japanese firms attach significant importance to the FDI factors of Productivity, Skills and Educated Workforce. Increases in all these factors are seen as highly satisfying and conversely reduction in these factors results in dissatisfaction. The results suggest that every effort must be made to develop the Irish workforce, as increases in these features will increase attractiveness for Japanese investors.
The Quality People Triangle: The Japanese firms attach significant importance to the FDI factors of Productivity, Skills and Educated Workforce. Increases in all these factors are seen as highly satisfying and conversely reduction in these factors results in dissatisfaction. The results suggest that every effort must be made to develop the Irish workforce, as increases in these features will increase attractiveness for Japanese investors.
The Quality People Triangle: The Japanese firms attach significant importance to the FDI factors of Productivity, Skills and Educated Workforce. Increases in all these factors are seen as highly satisfying and conversely reduction in these factors results in dissatisfaction. The results suggest that every effort must be made to develop the Irish workforce, as increases in these features will increase attractiveness for Japanese investors.
The Industrial Development Circle: The development of high quality industrial policies leading to many specialised knowledge clusters is ranked with high importance. Improvements in this factor will lead to moderate satisfaction while deterioration will lead to moderate dissatisfaction. This circle seems incongruous but this may highlight that Industrial Development is a more attractive feature and highly valued by Japanese MNCs.
I have 15 minutes today to bring you on a journey of discovery. Its possible that you have no interest in the topic of FDI but my job today is to give you a new perspective on the topic.I will do that in 6 steps as follows
There Is A Need To Move From The List To The Constellation ; From Hierarchy To Network
Japanese have a different approach to time – maybe to do with their longevity…Japanese don’t focus on the stopwatch, on the next quarter results in the same way that US firms do.
I have 15 minutes today to bring you on a journey of discovery. Its possible that you have no interest in the topic of FDI but my job today is to give you a new perspective on the topic.I will do that in 6 steps as follows