The evolved survival of SM entertainment in the Chinese market: Legitimation strategies and organizational survival

Abstract

AVEX, a Japanese leading entertainment company, decided to withdraw from the Chinese market in 2013 due to its business failure. In contrast, SM Entertainment adapted to the Chinese market and has survived. Organizations are affected by their external environment and implement strategies to adapt and respond to this environment. This study investigates reasons for SM Entertainment’s successful entry into China. We analyze how the corporation’s strategies evolved to acclimatize to changes in the Chinese cultural industry policy from 1998 to 2014, and explored the results of these strategies. From this analysis, we argue that it is important for organizations to tailor their response strategies to changing external environments in order to acquire social support.