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Formation of Value Chain Theory Jungle and its Developing Status in China

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 Asia Pacific Management Review 14(3) (2009) 279-287

www.apmr.management.ncku.edu.tw

Formation of Value Chain Theory Jungle and Its Developing Status in

China
Yanqing Wang*, Yijun Li

School of Management, Harbin Institute of Technology ,China

Accepted 16 October 2008

Abstract

Dozens of value-chain-related concepts bring about the jungle phenomenon in Chinese

academia, which, however, has two obvious demerits: (a) research direction is decentralized
and has no strong focus; (b) numerous and complicated concepts are confusing the researchers
who have just entered this field. In order to comb and classify the concepts derived from or
related to value chain theory and to explore the developing status of these theories in China,
the formation of value chain theory jungle and its possible contribution are proposed. The
definition of this theory jungle is given and the hierarchical models of three theory trees are
put forward. Based on the preparation work such as data source determination and data
normalization, some information retrieval techniques popular in webometrics are utilized to
collect data. Finally, contrast analysis of the theories and concepts in each tree is carried out
and some particular evolving rules of value chain theory jungle in China are acquired.

Keywords: Value chain, theory jungle, information retrieval, webometrics

1. Introduction1

When a mature theory exists for a long time and outgrows many significant branches, the
researches are probably decentralized and a theory jungle tends to emerge. In recent decades,
theory jungle has been paid much attention by some academics (Harold, 1980; Zhang, 2000;
Kruse, 2001; Peng and Liu, 2005). The existence of theory jungle has its essentiality and
inevitability. The changing world has the demand of theory jungle. The debates among
theories arouse thinking innovation so that the objective of “winnow truth from falsehood”
and “bloom and contend” can be achieved. Moreover, a few scholars sometimes wish to unify
all the related theories to build up one theory system by cutting most branches from the jungle.
Unfortunately, after lots of efforts by these scholars with the hope of walking out of the jungle,
the jungle becomes more and more flourishing conversely. The previous hope is proved a
wishful thinking.
In essence, various viewpoints and theories related to value chain are triggering the jungle
phenomenon in the management field. Porter (1985) derived value chain as activities within
one company. All those value chains including company value chain, supplier value chain,
sale value chain and customer value chain were named by Porter as value system.
Subsequently, many charming fruits were achieved so that people could make more and more
sense of value creation and competitiveness rules. Some new theories and concepts were
derived from value chain such as value network (Li and Whalley, 2002; Chi, 2003), value
cluster (Normann and Ramirez, 1993), value stream (Womack and Jones, 1994), etc.

*
Corresponding author. E-mail: yanqing@hit.edu.cn

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Meanwhile, there exist some concepts which have certain similarity to value chain, such as
supply chain (Fraser et al., 2003; Li et al., 2007), industrial chain (Gong, 2004; Liu, 2006),
product chain (Li et al., 2005), service chain (Qi et al., 2006), profit chain (Wang and Zhang,
2007), knowledge chain (Zhang and Yang, 2007), information chain (Chen, 2005), etc. The
emersion of the value chain theory jungle (VCTJ) extends the connotation of value chain
theory and enriches its research topics. Nevertheless, without systemic classification, these
diverse and complicated theories might become a formless obstacle in front of most scholars
and managers and make them feel lost in the flourishing theory jungle.
In order to solve the problems mentioned above, the definition of VCTJ is given and its
hierarchy is analyzed in Section 2. Afterwards, the methodology and preparation work in
Section 3 are depicted such as data source determination and data normalization. Based on the
work, data is collected by utilizing information retrieving technique and search engines.
Finally, the developing status and evolutionary rules of VCTJ in China are summarized in
Section 4. All the work in this paper can provide an adequate review of past work and serve as
a guide to future research for scholars working in this area.

2. Definition and hierarchy analysis

2.1 Definition of VCTJ

Tens of concepts are related to value chain, among which the ones with prefix value form
a value tree and the ones with postfix chain converge on a chain tree. While dozens of
concepts which are derived from value chain build up a value chain tree. In short, VCTJ is a
theory family which embodies chain tree, value tree and value chain tree just defined, as
shown in Figure 1.

Value
chain tree

Value Chain
tree tree

Figure 1. Component structure of VCTJ.

2.2 Hierarchy analysis of VCTJ

Based on the above definitions, some popular theories or concepts in academia and
industrial circle in China are classified and listed in Table 1. Although every listed concept
might vary, the different definitions of the concepts are not our focus in this paper.

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Table 1. List of the concepts in VCTJ.

Value tree Chain tree Value chain tree
Value stream Supply chain Physical value chain
Value chain Demand chain Virtual value chain
Value cluster Enterprise chain Job value chain
Value constellation Industrial chain Enterprise value chain
Value network Regional chain Industrial value chain
Value system Profit chain Space value chain
Value engineering Knowledge chain Supplier value chain
— Market chain Sale value chain
— Service chain Customer value chain
— Value chain Global value chain

After consulting lots of references, it is found that the growth of the three theory trees
results from scholars’ different research views, which are analogous to branches of a tree. The
value tree has three views: value creating activity, function and cost, and theory evolving path
(see Figure 2). The chain tree has four views, which are enterprise interior and exterior,
enterprise extension direction, form of value representation and form of organization (see
Figure 3). In the same way, value chain tree has four views: research scope and focus, form
of existence, vertical development stage and extra-organizational expanding direction (see
Figure 4).
Value creating Value stream
activity
Value chain
Value system
Value Theory evolving Value cluster
tree path
Value constellation
Value network
Function and
cost Value engineering
Figure 2. Value theory tree.

Enterprise interior Enterprise chain

and exterior Industrial chain
Supply chain
Enterprise Demand chain
extending direction Market chain
Chain
tree Service chain
Knowledge chain
Form of value
presentation Profit chain
Value chain
Form of Regional chain
organization Industrial chain

Figure 3. Chain theory tree.

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Research scope and Global value chain

focus Industrial value chain

Form of Physical value chain

existence Virtual value chain
Value chain
tree Job value chain
Vertical Enterprise value chain
development stage Industrial value chain
Space value chain
Supplier value chain
Extra- Internal value chain
organizational Sale value chain
Customer value chain
Figure 4. Value chain theory tree.

3. Methodology and preparation

With the rapid development of information science and technology, and the popularity of
the Internet, the new-emerging webometrics (Almind and Ingwersen, 1997) becomes an
effective approach to evaluate the Internet information resources. In webometrics, keyword
statistical analysis and hyperlink analysis are two well-accepted measuring approaches (Qiu
and Zhang, 2005). In order to better understand the developing status of each theory in the
VCTJ, information retrieving techniques (Bar-Ilan, 2001) are taken as the measuring approach
in this paper, and all the theories or concepts in each tree are analyzed by means of contrast.
3.1 Data source and evaluating index system
Out of the consideration for the authority and credibility of the data source, two categories
of information sources are determined as the base of the following contrast analysis, which
are China National Knowledge Infrastructure (CNKI, 2008) and some search engines popular
in China. CNKI is a digital library, which has a full text database of almost all Chinese
journals from 1979 till today.
The detailed approach of data collection will be explained as follows. The name of the
concept is taken as a keyword. When searching in CNKI, the number of matched articles
whose title consists of the exact keyword is obtained. Using the same method by searching in
search engines, the number of links whose titles include the exact keyword is gained. In
addition, all the data are divided into two classes. The number of matched articles published
in CNKI and the link number of matched websites in search engine scholar.google.com are
taken as academic class indices, while the link number in search engine www.google.com or
www.baidu.com is taken as public class indices. Because the value of public class is much
greater than the value of academic class and the latter is a part of the former so that the public
class data can be regarded as non-academy class data or industry class data.
So far, the evaluating index system is determined eventually. The data in CNKI and
scholar.google.com are treated as academic indices, while the data in two most famous search
engines in China, www.google.com and www.baidu.com, are determined as industrial indices.
We believe that the more papers about a certain concept have been published, the more
important or mature it is. Also, a term with a larger number of hyperlinks is generally a more

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successful concept (Cai, 2003).

3.2 Data normalization
Because the value of academy class data is far less than that of public class, the data of
these two classes has no comparability. Therefore, in order to display the comparison results
of all research objects visually in an identical table, the maximum value normalization
(Zhuang et al., 1998) process must be carried out in advance. All the academy class data in
Table 2 through 4 has been dealt with this normalization process. The algorithm is described
below. Assume that:
Rmax is the maximum value of all the public class data;
Ki is the number of matching articles in CNKI to the ith research object;
Gi is the number of websites in scholar.google.com to the ith research object;
Kmax and Gmax are the maximum values of all Ki and Gi correspondingly, then
Ki’ and Gi’, the normalized values of Ki and Gi correspondingly, determined as
K i × Rmax
Ki =
'
(1)
K max

Gi × Rmax
Gi =
'
(2)
G max
where i is the number of objects being compared.

3.3 A referencing index - A/I ratio

To help explain the following analysis results in this paper, a new referencing index is
introduced, i.e. a ratio of academic research to industrial concerns (A/I ratio or AIR). AIR
indicates the maturity degree of a concept. Based on the indutrial indices and academic
indices mentioned above, the detailed algorighm of AIR is presented as follows. Assume that:
Vgoogle is the value of data collected with data engine www.google.com;
Vbaidu is the value of data collected with data engine www.baidu.com;
Vgoogle scholar is the value of data collected with data engine scholar.google.com;
VCNKI is the value of data collected in CNKI database, we define A/I ratio as:
VCNKI + Vgoogle scholar
AIR0 = (3)
Vgoogle + Vbaidu
In fact, since the weight of a concept in the whole theory tree is more important than the
AIR0, A/I ratio is associated with the percentage of its occurrence significantly. For example,
even if the AIR0 of one concept is very large, its AIR could not be large if the number of its
matches or links is relatively small. We believe the weight is much more important than AIR0
so Equation (3) is modified as:
VCNKI + Vgoogle scholar
AIR = AIR0 × 0.2 + × 0.8 (4)
∑ (V
tree
CNKI + Vgoogle scholar )

Even though the determination of the two factors 0.2 and 0.8 has subjectivity to some
extent, AIR is enough to be a referencing index helping us explain the following analysis.

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4. Analysis and rules finding

4.1 Contrast analysis

Tables 2 - 4 are the search results of the three trees in VCTJ in China. All the data in these
tables are in unit of 1000 matches (or linkes) except for the normalized data whose titles have
the mark “(Norm.)”. In respect that some concepts, such as regional chain in chain tree, value
cluster in value tree and physical value chain in value chain tree etc., are much older or have
not attracted much attention of researchers, they are not covered in the process of data
collection even though they are listed in the corresponding trees in Figures 2 - 4.
Based on the data in Tables 2 - 4, the developing status analysis will be presented. To
facilitate the description, we define two categories of research: academy research and industry
research (correspondingly related to the data in academy class and public class).
(a) Developing status of chain tree (Table 2)
Fact 1: The three concepts supply chain, value chain and industrial chain are the most
popular concepts in China, which leave the other concepts far behind.
Fact 2: Industry is leading academy on the research of industrial chain. In Chinese
industrial circle, the top three focuses are industrial chain, supply chain and value chain in
descending order, but the research on industrial chain is not the number one in Chinese
academia.
Fact 3: Academy gets the upper hand of industry with the research on supply chain. In
Chinese academia, the top three focuses are supply chain, industrial chain and value chain.
Fact 4: The research on value chain is far behind the research on supply chain no matter
in academia or in industrial field in China.
Additionally, from the AIR values, the same facts can be found. Among the top three
concepts supply chain, industrial chain and value chain, the inequation AIRsupply chain >
AIRindustrial chain > AIRvalue chain is true, so it could be concluded that supply chain is the most
successful theory, and industrial chain has got ahead of value chain.
Table 2. Search result of the concepts in chain tree.
Google
Theory CNKI Google
Google Baidu scholar CNKI AIR
(Concept) (Norm.) scholar
(Norm.)
Supply chain 94,000 800,000 800,000 800,000 12,500 11,830 0.46
Enterprise chain 9,960 253,000 1,792 1,352 28 20 0.00
Industrial chain 85,200 442,000 129,280 547,422 2,020 8,095 0.19
Profit chain 1,410 3,030 6,080 4,937 95 73 0.01
Knowledge chain 839 994 9,664 7,236 151 107 0.03
Market chain 61 2,450 3,840 7,844 60 116 0.02
Service chain 1,630 4,920 7,168 11,699 112 173 0.01
Value chain 32,100 63,000 241,280 200,981 3,770 2,972 0.14

(b) Developing status of value tree (Table 3)

Fact 1: In China, the research attention focuses on value chain, value network and value
engineering while the other concepts draw less attention.
Fact 2: Among the concepts in value tree, industrial research prefers to value chain and
value network, while value engineering and value chain are academia’s favorite topics.
Moreover, from the AIR values, though value network attracts more attention from
industry, the academic research on it is quite behind. It means that it is a new concept and has
not developed well yet.

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Table 3. Search result of the concepts in value tree.

Google
Theory CNKI Google
Google Baidu scholar CNKI AIR
(Concept) (Norm.) scholar
(Norm.)
Value stream 3,150 3,660 1,621 1,844 97 87 0.02
Value chain 32,100 63,000 63,000 63,000 3,770 2,972 0.45
Value network 17,300 17,300 2,507 1,569 150 74 0.02
Value system 487 795 10,645 2,438 637 115 0.17
Value engineering 6,670 12,600 30,414 53,609 1,820 2,529 0.33
Value constellation 34 25 167 148 10 7 0.06

(c) Developing status of value chain tree (Table 4)

Fact 1: In China, within the value chain tree, the top three research focuses are industrial
value chain, enterprise value chain and global value chain in both academia and industrial
field.
Fact 2: The industrial field puts much more emphasis on industrial value chain while the
academia pays approximately equal attention to the top three concepts.
Furthermore, from the AIR values, it can be seen that global value chain has lower AIR,
which implies that it has not developed well yet in China.

Table 4. Search result of the concepts in value chain tree.

Google
Theory CNKI Google
Google Baidu scholar CNKI AIR
(Concept) (Norm.) scholar
(Norm.)
Virtual value chain 181 333 526 483 50 24 0.06
Enterprise value chain 1,890 2,300 5,800 4,310 551 214 0.34
Industrial value chain 3,870 5,800 5,695 5,800 541 288 0.34
Global value chain 1,170 1,550 1,600 3,242 152 161 0.15
Customer value chain 176 248 526 242 50 12 0.05

4.2 Evolving rules of VCTJ in China

Based on the above facts, some important evolving rules of VCTJ in China are discovered
as follows.
(a) The development disequilibrium of value chain, supply chain and industrial chain
From the previous contrast analysis on chain tree (Table 2), it can be discovered that
value chain, supply chain and industrial chain are developing at different speeds. In fact,
under the IT manufacturers’ vigorous propaganda, supply chain turns to emphasize how to
enhance the relationship among circles by means of techniques (Fawcett et al., 2006). The
current developing status shows that the research on supply chain has surpassed that of value
chain all round (both industrial concern and academic research), and the research on
industrial chain is drawing ahead of that of value chain too. All these truths imply the
disequilibrium of the development of these three chains.
(b) The particularity of the research on industrial chain and industrial value chain
Following the above contrast analysis on the three trees in VCTJ and our previous
publication (Wang et al., 2007), it is concluded that the research on industrial chain and
industrial value chain collects enormous attention in China in either industrial circle or

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academia. However, overseas research on these two concepts is nearly at the blank stage
actually (Du, 2005; Wang et al., 2007). In recent years, especially after the reformation of the
Chinese economic policy, the economy of China keeps a high growing speed and the
development of Chinese economy obviously takes on such features as industrial correlativity,
regional scale relativity and so on. Although the research on industrial chain and the
industrial value chain mainly concentrates on the industrial layer at present, it is believed that
once they form systematized theories, they will provide powerful policy-making instruction
for Chinese industrial development and might provide valuable references for the overseas
concerned researchers as well.
(C) In contrast with supply chain, the development of industrial chain and industrial value
chain in China should not be painted as a rosy picture at present.
The above analysis about supply chain research indicates that it is a well-grown and
successful theory example. According to the AIR contrast analysis in Tables 2 and 4, and the
overall contrast with all data in Tables 2 - 4, it can be concluded that the research on
industrial chain and industrial value chain is just in the initial theorisation stage at present. If
they cannot pass the theorisation process as soon as possible, their development tendency will
slack off sooner or later.

5. Conclusion and future work

The research on VCTJ has a very positive meaning. With the development of information
technology, the rapid pace of globalization and the quick development of internet economy,
the research on value chain become more and more active especially in China in recent years.
Under the consideration of combing and classfying the value chain theory and its related
concepts, the definition of VCTJ and its constitution have been proposed. Furthermore, by
contrast analysis of the present developing status of VCTJ, three evolving rules of VCTJ in
China are found.
The future work following this topic might be more interesting and contributory. For
example, the research on the four most popular concepts in China - value chain, supply chain,
industrial chain and industrial value chain - should be augmented. With the help of impact
factor of journal and website (Thelwall, 2002), the development history and the trend of the
four concepts could be studied. Moreover, since the preliminary evaluating index AIR
proposed in this paper might bring about an effective approach in the new-emerging
webometrics, it should be further explored before being utilized to distinguish a real vital
theory from piles of terms especially in this age - the times of industrialization, digitization
and globalization when new concepts break new ground and stretch out before us everyday.

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