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11 – 20 of over 4000This paper examines whether firms choose to source from multinational (MNC) suppliers instead of local suppliers as a means of overcoming weak contract enforcement institutions…
Abstract
This paper examines whether firms choose to source from multinational (MNC) suppliers instead of local suppliers as a means of overcoming weak contract enforcement institutions and as a means of accessing supply chain management capabilities. It uses a unique dataset of international contract manufacturing orders constituting the global supply chains of many of the world’s largest brands in footwear, sportswear, and apparel. It finds strong evidence that buyers are more likely to source from MNC suppliers in countries where contract enforcement is weak and when they have less experience sourcing from a given country. Further, it finds evidence that buyers are more likely to source from MNC suppliers when they source a wider variety of products, have smaller supplier networks, or have smaller order volumes.
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Laszlo Tihanyi, Anand Swaminathan and Sarah A. Soule
We use insights from resource dependence, institutional theories and social movement theories to examine the indigenization of subsidiary management in the multinational company …
Abstract
We use insights from resource dependence, institutional theories and social movement theories to examine the indigenization of subsidiary management in the multinational company (MNC). We discuss the effects of interdependence with local organizations, access to critical resources, and MNC legitimacy in the host country on the indigenization of subsidiary management. We consider the impact of local and extra-local social movement activity as well as the local political opportunity structure in the host country. The organizational variables in the framework include international strategy and experience. We suggest implications for further international management research and practice involving the operation of foreign subsidiaries.
Nicolai J. Foss and José F.P. dos (Joe) Santos
The role of knowledge, organizational learning and innovation as levers of competitive advantage is now a commonly acknowledged insight in research in international management…
Abstract
The role of knowledge, organizational learning and innovation as levers of competitive advantage is now a commonly acknowledged insight in research in international management, specifically in the emerging ‘knowledge-based view’. However, this view has not yet developed into a unifying framework and there are significant holes in the understanding of how knowledge may be turned into a source of competitive advantage for MNCs. In order to advance the knowledge-based view of the MNC – and particularly of the metanational company – we develop the notion of the MNC as a global knowledge system that links local knowledge structures and combines local knowledge elements that are complementary in order to achieve strategic advantage. These ideas are used to frame the changing environments, strategic intents and learning stances that characterize MNCs, and to derive a set of research challenges for MNC research.
Huub Ruël and Luisa Suren
Multinational corporations (MNCs) are experiencing a number of major challenges in the international business arena. Can business diplomacy help them to deal with these challenges…
Abstract
Purpose
Multinational corporations (MNCs) are experiencing a number of major challenges in the international business arena. Can business diplomacy help them to deal with these challenges effectively? In this introductory chapter we conceptualize and identify the relationship between MNCs’ international business diplomatic activities and firm performance.
Design/methodology/approach
We conducted a literature review and interviews with five large MNCs that are operating in distinctive industries. Business diplomatic activities have been classified into three particular areas to support the analysis, namely: (1) MNC–Non-Governmental Organization (NGO) relations, (2) MNC–Host Government relations, and (3) MNC–Local Community relations.
Findings
The main findings suggest that international business diplomacy has a direct positive effect on firm performance with regard to so-called soft or nonfinancial indicators. These indicators include knowledge sharing, reputation, company image, and marketing possibilities. The effect can in turn lead to a better financial performance and market stance in the long run.
Originality/value
The results of this study are important for the future awareness and execution of business diplomacy in large MNCs.
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Dina Abdelzaher, Jose De la Torre and Skylar Rolf
In today’s ever-increasing context of volatile, uncertain, complex and ambiguous market conditions, the shifts of countries’ protectionist policies toward inward Foreign Direct…
Abstract
Purpose
In today’s ever-increasing context of volatile, uncertain, complex and ambiguous market conditions, the shifts of countries’ protectionist policies toward inward Foreign Direct Investment (FDI), and an increased gap between headquarters’ (HQ) and subsidiaries’ perspectives on what makes business sense, it has become apparent that challenges toward foreign expansion are becoming more severe and require a multidimensional dynamic approach. The authors draw from orchestration theory, dynamic capabilities literature and previous literature on dimensions of internationalization [specifically, density, geographic distance and degree of diversity of the multinational corporation (MNC) subsidiary network] to argue that firms must enhance their orchestration capability. In doing so, this study aims to highlight the nuances of orchestrating a three-dimensional (3D) conceptualization of MNCs’ international configurations.
Design/methodology/approach
The authors analyzed the patterns of configurations that are adopted by MNCs. This sample was made up of the international configuration of 78 Fortune 500 MNCs consisting of 3,318 foreign subsidiaries. Furthermore, the authors examined the impact of different configurations of the 3Ds on firm performance using ordinary least squares regression analysis.
Findings
While the research did indicate that the sample MNCs adopted the sample configurations of the three internationalization dimensions more frequently than others, the authors found that orchestrating MNCs with an international configuration characterized by high density, low geographic distance and low internetwork scope diversity had a positive impact on firm performance.
Practical implications
While international expansion is often motivated by financial performance or market/resource gains, it is also impacted by the firm’s dynamic capability profile. Thus, as MNCs seek to continue to expand globally, they must assess and, if needed, develop their management team’s orchestration capability, which includes effectively determining how the addition or removal of a subsidiary will impact the density, geographic distance and diversity dynamics of the MNC’s international configuration. Finally, the management team needs to be able to devise plans to respond to the potential challenges associated with each of these dimensions.
Originality/value
The contribution of this study includes bringing a dynamic capabilities lens to the extant international business literature examining the multinationality and performance relationship by highlighting the importance of an MNC’s process orchestrating capability that is needed for firms to effectively manage increasingly complex subsidiary networks. It also conceptually explains and empirically supports that some configurations are likely to yield higher returns than others, which can act as a guide for firms as they are seeking to expand in more geographically distant as well as diverse sectors. Furthermore, this study highlights the need for a multidimensional simultaneous approach to the examination of internationalization to performance relationship. Finally, it highlights the tradeoffs that MNCs must address across the orchestration of the three internationalization dimensions using a dynamic capabilities theoretical lens that acknowledges the differences in perspective that exist between HQs and subsidiaries.
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Enrique Claver-Cortés, Patrocinio Zaragoza-Sáez, Mercedes Úbeda-García, Bartolome Marco-Lajara and Francisco García-Lillo
Based on the knowledge-based theories of the MNC, this research aims to develop and test a holistic model to analyse the relationship between the strategic knowledge management…
Abstract
Purpose
Based on the knowledge-based theories of the MNC, this research aims to develop and test a holistic model to analyse the relationship between the strategic knowledge management (SKM) processes undertaken by subsidiaries and MNC performance. Additionally, it focuses on determining the impact that the relational context can have on knowledge creation and transfer inside the internal network of an MNC.
Design/methodology/approach
The research hypotheses are tested by partial least squares (PLS) with data from a sample of Spanish subsidiaries of foreign multinational firms belonging to high-technology and knowledge-intensive sectors.
Findings
The results confirm that: the implementation of a SKM by a subsidiary positively impacts on knowledge creation; the knowledge created by a subsidiary positively influences knowledge transfer, increasing the knowledge existing in the MNC; the knowledge transfer across all MNC units has a positive impact on MNC performance; the subsidiary’s relational context arises as a mediating variable between the knowledge created by a subsidiary and its transfer to the rest of the MNC.
Originality/value
The research proposes a holistic model that contemplates the joint interaction of the variables knowledge creation, knowledge transfer and performance. In addition, the proposed model contemplates the variable SMK of the subsidiary as the beginning of the knowledge creation-knowledge transfer-performance process. Finally, the mediating role of the relational context in the relationship between knowledge creation and transfer is analysed.
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The aim of this paper is to analyse the influence of a multinational company (MNC) on its local supplier's network. In particular, how the MNC influences the performance of…
Abstract
Purpose
The aim of this paper is to analyse the influence of a multinational company (MNC) on its local supplier's network. In particular, how the MNC influences the performance of supplier as well as non‐supplier local companies.
Design/methodology/approach
The paper studies a local productive system involved in the manufacturing of lighting systems for automobiles, and made up of small and medium sized companies and led by a single multinational corporation which contracts out to the local industry. The analysis includes both suppliers to the multinational as well as non‐suppliers.
Findings
The study shows how the existence of knowledge transfer influences productivity through the productive linkage established with local suppliers and their hiring of MNC former managers. Direct local suppliers experience higher productivity than do local suppliers from lower levels of the supply chain. Similarly, local suppliers hiring MNC former managers show higher productivity than those who have hired only local managers.
Research limitations/implications
One of the limitations of this paper is the size of the population studied. This paper focuses on one local supplier's network, and it only shows a very local experience. Another limitation is the difficulty in measuring the intensity of every channel of knowledge transfer. Thus, in the case of direct suppliers, it is very difficult to separate the effects of the knowledge transfer derived from the productive link and the effects derived from workers' mobility.
Originality/value
This paper identifies the key factors that influence the performance of the knowledge transfer into multinational corporation suppliers' networks related with the productitivy of local companies.
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Dima Jamali, Yasmeen Makarem and Alberto Willi
Anchored in institutional theory and sense-making theory, the purpose of this paper is to explore the implementation of corporate social responsibility (CSR) at the multinational…
Abstract
Purpose
Anchored in institutional theory and sense-making theory, the purpose of this paper is to explore the implementation of corporate social responsibility (CSR) at the multinational corporations (MNC) subsidiary level in a developing country context.
Design/methodology/approach
This paper follows a qualitative methodology and adopts the interview technique to investigate the CSR practices of eight MNCs.
Findings
The results suggest that the CSR diffusion process goes well beyond simple imitation (i.e. adopting CSR myths or best practices intact), involving complex processes of interpretation and translation at the subsidiary level to reconcile the multiple and contradictory expectations for CSR.
Originality/value
The paper illustrates the dynamics of the sense-making process at the level of the subsidiary and the numerous institutional factors that are accounted for while implementing CSR activities in the host community. This paper argues that the integration of the two theories helps bridge macro and micro levels of analysis, thus providing a much richer account of how organizational actors at the subsidiary level make “sense” of a multitude of institutional pressures in the process of CSR implementation stemming from within the MNC itself on one hand (and the respective home country) and from the host community on the other hand.
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David A. Griffith, Timothy Kiessling and Marina Dabic
One role of a foreign subsidiary within a multinational corporation's (MNC's) global portfolio is to connect the MNC to foreign customers. To examine this key customer contact…
Abstract
Purpose
One role of a foreign subsidiary within a multinational corporation's (MNC's) global portfolio is to connect the MNC to foreign customers. To examine this key customer contact point, this study aims to examine the linkages between local market conditions and strategic orientation, and how strategic orientation influences knowledge management capabilities of MNC subsidiaries, employing the Miles and Snow strategic orientation perspective.
Design/methodology/approach
A survey was conducted of 112 managers in foreign MNC subsidiaries in Croatia. Data were analyzed with both discriminant analysis and MANCOVA.
Findings
The results indicate that in highly dynamic and competitively intense markets, MNC subsidiaries primarily employ a Prospector orientation. Furthermore, the results indicate that there is a significant difference in knowledge management capabilities among subsidiaries depending on their strategic orientation, with the Prospector orientation most closely aligned with knowledge acquisition, knowledge conversion and knowledge application.
Practical implications
The findings highlight the importance of strategic orientation in MNC subsidiaries tailoring to local market conditions. The results suggest that MNC subsidiaries undertaking a Prospector strategic orientation develop greater knowledge acquisition, conversion and application capabilities.
Originality/value
This study conceptualizes the MNC subsidiary as a key marketing element of the global MNC whole and examines the nuanced relationships between the host environment and MNC foreign subsidiary strategic orientation as well as MNC subsidiary strategic orientation and knowledge management relationship.
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Jiafu Su, Qun Bai, Stavros Sindakis, Xuefeng Zhang and Tao Yang
The vulnerability of multinational corporation (MNC) knowledge network is one of the major causes for the failure and even the death of MNCs in the fierce global market…
Abstract
Purpose
The vulnerability of multinational corporation (MNC) knowledge network is one of the major causes for the failure and even the death of MNCs in the fierce global market competition. Employee turnover and knowledge loss are the triggers for the MNC knowledge network vulnerability and a matter of serious concern in the evolution and development of MNC knowledge network. The purpose of this work is to propose a valid and quantitative measurement method to investigate the influence of employee loss and knowledge loss on the vulnerability of MNC knowledge network.
Design/methodology/approach
MNC knowledge network is inherently a heterogeneous network where there are mainly two types of units: employees and their knowledge. Therefore, this paper establishes a weighted super-network model for MNC knowledge network to depict its heterogeneous composition. On the basis of the weighted MNC knowledge super-network, the static and dynamic vulnerability measurement methods are further proposed to investigate and evaluate MNC knowledge network vulnerability.
Findings
A real case is given to illustrate the applicability of the proposed weighted MNC knowledge super-network model and the network vulnerability measurement methods. The results show the super-network model proposed in this paper can effectively embody the complex features of MNC knowledge network, and the vulnerability measurement methods can effectively investigate the influence of employee loss and knowledge loss on network vulnerability.
Originality/value
From the perspective of super-network, researchers and practitioners can get a more systematic and deeper understanding of the MNC knowledge network and its human and knowledge resource constitute which are vital for the evolution and development of MNC. Moreover, the MNC knowledge network vulnerability measurement methods can effectively measure and analyze the influence of resource loss on network vulnerability, which can provide a helpful decision support for monitoring and managing of MNC knowledge network vulnerability to reduce its adverse effects.
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