Acquiring Firm-Specific Advantages: Organizational Innovation and Internationalization at Indian Multinational Corporations

Abstract

Purpose

This study seeks to contribute to the relatively sparse literature on how emerging market firms (EMFs) acquire firm-specific advantages (FSA), how they adjust their organizational structures, processes, HR policies, leadership and cultures in the internationalization process, and how they interact with their domestic institutional context.

Design/methodology/approach

We report the results of a survey sent off to the most internationalized Indian firms, measured by foreign income. Our survey includes 26 variables measuring individual aspects of organizational innovation.

Findings

Our respondents report significant changes along all 26 organizational variables over the period investigated (2003–2008). Based on self-reported assessments by top managers, our findings suggest: first, that Indian firms are rapidly transforming their organizations, second, that Indian executives are increasingly confident that they will be able to compete successfully on an international scale, and third, that Indian firms may increasingly benefit from organizational innovation complementing their low cost advantages.

Research limitations/implications

First, our sample size is relatively small at 76. Second, the ratings on the organizational variables we studied are based on self-reporting. Finally, our survey especially captures developments at the largest and most international Indian companies.

Practical implications

With its organization-wide scope of analysis, our study may guide EMF managers looking at organizational innovation in the internationalization context.

Originality/value

This paper elucidates the interplay of Indian firms’ internationalization and organizational innovation.

Citation

Oswal, P., Ruigrok, W. and Agrawal, N.M. (2014), "Acquiring Firm-Specific Advantages: Organizational Innovation and Internationalization at Indian Multinational Corporations", Emerging Market Firms in the Global Economy (International Finance Review, Vol. 15), Emerald Group Publishing Limited, Bingley, pp. 3-33. https://doi.org/10.1108/S1569-376720140000015002