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Article
Publication date: 1 May 1990

Abbas J. Ali and Mohammed Al‐Shakhis

Saudi managers′ responses and evaluations of the role of MNCs isreported and analysed. The research answers questions regarding thecontribution of MNCs in four areas…

Abstract

Saudi managers′ responses and evaluations of the role of MNCs is reported and analysed. The research answers questions regarding the contribution of MNCs in four areas: political, cultural, economic and technological. Results indicate the Arabian executives consider MNCs to have both positive and negative effects. MNCs′ most obvious negative impacts are on political independence and on values and consumption patterns. On the positive side, the executives recognise the crucial role of MNCs in establishing export capacity, improving productivity, and managerial skills and creation of new jobs.

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Leadership & Organization Development Journal, vol. 11 no. 5
Type: Research Article
ISSN: 0143-7739

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Article
Publication date: 15 October 2021

Yi She, Jin Hong and Chuwei Ji

This study examines the impact of outward foreign direct investment (OFDI) of Chinese multinational corporations (MNCs) and formal and informal institutional distances…

Abstract

Purpose

This study examines the impact of outward foreign direct investment (OFDI) of Chinese multinational corporations (MNCs) and formal and informal institutional distances between the home and host countries on the innovation performance of parent company.

Design/methodology/approach

This study uses panel data to conduct an empirical analysis on the data of 59 mature Chinese MNCs and their 872 overseas subsidiaries over the past 11 years and draws interesting results.

Findings

Results show that OFDI and formal and informal institutional distances between countries exert a significant positive impact on the innovation performance of the parent company and formal and informal institutional distances negatively moderate the impact between OFDI and the parent company's innovation performance.

Originality/value

Although international business research pays increasing attention to transnational differences in institutions and cultures, research on the relationship between technology spillover and distance is relatively limited. In addition, few studies consider the impact of FID and IFID on transnational reverse knowledge spillovers. This research fills these research gaps, and the conclusions have certain practical significance for multinational companies.

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European Journal of Innovation Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1460-1060

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Book part
Publication date: 19 November 2019

Weihao Li, Ying Chen and J. Ryan Lamare

This chapter aims to answer whether foreign multinational corporations (MNCs) operating within the Chinese context differ from indigenous firms on several essential labor…

Abstract

This chapter aims to answer whether foreign multinational corporations (MNCs) operating within the Chinese context differ from indigenous firms on several essential labor standards indicators: white- and blue-collar salaries, pension insurance, and working hours. In drawing upon neo-institutional and organizational imprinting theories and applying these to the Chinese context, the study addresses competing arguments regarding the expected effects of ownership type on these indicators. We employ seemingly unrelated regressions (SURs) to empirically examine a novel national survey of 1,268 firms in 12 Chinese cities. The regression results show that foreign MNCs do not provide uniquely beneficial labor practice packages to workers when compared with various indigenous firm types, including state-owned enterprises (SOEs), affiliate businesses of Hong Kong, Macau, and Taiwan, and domestic private enterprises (DPEs). Specifically, although MNCs provide relatively higher wage rates, they underperform relative to SOEs concerning social insurance. However, DPEs consistently underperform relative to MNCs across most indicators. The mixture of the results contributes important nuances to the application of neo-institutional and organizational imprinting theories to the Chinese context.

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Advances in Industrial and Labor Relations
Type: Book
ISBN: 978-1-83909-192-6

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Book part
Publication date: 28 July 2014

Sarah Inauen and Dennis Schoeneborn

The era of globalization has increased the challenges for multinational corporations (MNCs) to retain legitimacy. In striving for legitimacy, MNCs increasingly engage in…

Abstract

Purpose

The era of globalization has increased the challenges for multinational corporations (MNCs) to retain legitimacy. In striving for legitimacy, MNCs increasingly engage in dialogue processes with their stakeholders. However, the era of globalization and the parallel rise of the Internet and the new “Web 2.0” have dramatically widened the range of options for such dialogue processes. Non-governmental organizations (NGOs) in particular make use of “social media” (e.g., Facebook, Weblogs, Twitter) which enable them to quickly generate attention regarding socially and environmentally harmful business practices by MNCs. In response, MNCs have started applying social media technologies for corporate communication purposes. However, given the novelty of these activities, we lack knowledge on how these organizations make use of social media. Therefore, in this chapter, we examine how MNCs and NGOs utilize one particular social media application, that is, Twitter, for dialogic stakeholder communication.

Design/methodology/approach

In our empirical study, we examine current practices of Twitter usage by MNCs and NGOs. We investigate a dataset of more than 3,000 Twitter articles from 30 MNCs and 30 NGOs in the German-speaking world. Our analysis is based on the “conceptual orality or literality” scale by Koch and Oesterreicher (1994).

Findings

The comparative analysis shows that on average MNCs and NGOs exhibit a surprisingly similar profile on Twitter. Both tend toward conceptual literality. However, the analysis of Tweets per organization reveals a much larger variance. At the extreme poles, while some NGOs (like Greenpeace Youth) make extensive use of the medium’s potential for conceptual orality, some MNCs (like Deutsche Börse) almost entirely adhere to conceptual literality. In other words, these MNCs promote a classical one-way model of communication and fail to make use of the dialogue-like qualities of the medium.

Research limitations

We analyzed a small number of organizations and we restricted our study to MNCs and NGOs in the German-speaking world. Furthermore, Twitter only allows for short messages with a maximum of 140 letters or signs. This, in turn, renders questionable whether the medium is suited to establish deliberative dialogues between MNCs and NGOs that are based on more elaborate arguments which can be expressed in the short format.

Originality/value

Our study addresses the lack of research regarding new possibilities for stakeholder communication in the age of social media. Moreover, the study methodologically contributes to the study of social media in the context of corporate communication by applying the scale of “conceptual orality or literality” to MNCs’ and NGOs’ Twitter usage.

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Communicating Corporate Social Responsibility: Perspectives and Practice
Type: Book
ISBN: 978-1-78350-796-2

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Book part
Publication date: 12 November 2010

Joachim Wolf and William G. Egelhoff

Purpose – The purpose of this conceptual chapter is to discuss the limitations of the network organization in multinational corporations (MNCs). Since many IB/IM…

Abstract

Purpose – The purpose of this conceptual chapter is to discuss the limitations of the network organization in multinational corporations (MNCs). Since many IB/IM publications concentrate on the advantages of this organizational form, the focus of the chapter is on identifying the limitations that MNCs need to be aware of when they use network organizations.

Methodology – The analysis is based on a sound review of the literature that refers to the network organization in general and its application in MNCs.

Findings – The chapter shows that MNCs present a context that can aggravate the problems of a network organization. Four types of problems are identified: (1) knowledge transfer between MNCs’ subunits, (2) trust-building and corporate culture within MNCs, (3) subsidiary development and subsidiary managers’ stress, and (4) additional problems of a more general nature.

Practical implications – As a result of these problems, it is expected that the formal, hierarchical structure will remain an important organizational instrument for MNCs. The chapter specifies in which ways the formal organizational structure can help to reduce the limitations of the network organization. Finally, the chapter argues that, among the formal organizational models, the matrix structure should be considered more intensively in the future.

Originality/value of chapter – Since existing discussion of the network organization in MNCs tends to ignore the limitations and downsides of this organizational form, the chapter contributes to a more balanced understanding of the network organization.

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Reshaping the Boundaries of the Firm in an Era of Global Interdependence
Type: Book
ISBN: 978-0-85724-088-0

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Book part
Publication date: 8 July 2008

Mary Mathew and Harish C. Jain

The information technology (IT) sector has gained prominence since 1990. However, studies on the human resource management (HRM) policies and practices of multinational…

Abstract

The information technology (IT) sector has gained prominence since 1990. However, studies on the human resource management (HRM) policies and practices of multinational corporations (MNCs) have been few and far between. In this paper we study the Indian IT sector using both qualitative and quantitative approaches. For the quantitative research design, we used structured measurement tools developed by the Global HRM Project. Data were collected from 36 IT MNCs of Indian and foreign origin (U.S. and European) located in Bangalore and Hyderabad in India. We tested four hypotheses that were verified using the Mann–Whitney test of mean rank. We assessed the flow of HRM practices and the differences in HR practices between Indian and foreign MNCs. For the qualitative design we used an unstructured approach to gather secondary data sources and used anecdotal data gathered over a decade through our interactions with the Indian IT industry. We used the narrative style to show past and current Indian business culture, level of technology, and implications for foreign direct investment in the Indian IT sector. We state two qualitative hypotheses for this part of the research study. We find the current business culture and level of technology of Indian IT MNCs moderately similar to those of foreign MNCs, and more so U.S. MNCs. We find no differences between Indian and foreign MNCs in HRM practices. We assume that the unexpected similarity in international human resource management (IHRM) practices is probably due to: (1) the nature of information technology, (2) closing levels of R&D between Indian and foreign MNCs, and (3) similar business cultures of Indian and foreign MNCs. IT-intensive global organizations are likely get a step closer to global IHRM standardization.

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The Global Diffusion of Human Resource Practices: Institutional and Cultural Limits
Type: Book
ISBN: 978-0-7623-1401-0

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Book part
Publication date: 11 April 2009

Patrick Gunnigle, Jonathan Lavelle and Anthony McDonnell

This paper examines the use of “double breasting” as a means of union avoidance among multinational companies (MNCs). Double breasting refers to the practice whereby…

Abstract

This paper examines the use of “double breasting” as a means of union avoidance among multinational companies (MNCs). Double breasting refers to the practice whereby multi-establishment organizations simultaneously operate establishments on both union and non-union bases. Using survey data from the largest and most representative empirical investigation of employment practice in MNCs in Ireland, supplemented by qualitative data gathered from case-based investigations in the subsidiary operations of American-owned MNCs, we profile the incidence and pattern of this particular form of union avoidance as well as providing insights on management's rationale for so doing. Our findings suggest that a substantial and increasing number of unionized MNCs in Ireland are engaging in double breasting. This phenomenon is most evident among U.S. MNCs. We also find that employers, at both local and global levels, have proactively initiated double breasting as a strategic ploy to increase management prerogative and better position subsidiary operations to attract new investment from corporate levels.

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Advances in Industrial & Labor Relations
Type: Book
ISBN: 978-1-84855-397-2

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Book part
Publication date: 1 January 2006

Jean-Marc F. Blanchard

There are two leading paradigms about the power balance between multinational corporations (MNCs) and states. The MNCs in Command approach takes the perspective that MNCs

Abstract

There are two leading paradigms about the power balance between multinational corporations (MNCs) and states. The MNCs in Command approach takes the perspective that MNCs dominate states. The States in Command perspective assumes that states lord over MNCs. Each perspective suffers from noteworthy flaws. I advocate a modified bargaining power (MBP) approach to understanding the relative power of MNCs and states. I test the value of this approach by examining Microsoft's experience in China between 1987 and 2004. My study shows that that a MBP approach sheds considerable light on the aforementioned case, whereas the two leading paradigms do not.

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Value Creation in Multinational Enterprise
Type: Book
ISBN: 978-1-84950-475-1

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Book part
Publication date: 24 November 2017

Alexander Bulatov, Alexey Kuznetsov, Yuri Kvashnin, Alice Maltseva and Ninel Seniuk

Russia is one of the leaders in outward FDI from emerging market economies and at the same time Russian MNCs have their specific features. The purpose of this chapter is…

Abstract

Purpose

Russia is one of the leaders in outward FDI from emerging market economies and at the same time Russian MNCs have their specific features. The purpose of this chapter is to analyze characteristics of Russian MNCs by researching relationship between specificities of Russian economic and political model, on the one hand, and specific features of Russian MNCs, on the other hand.

Methodology/approach

For these researches, traditional instruments of neoclassical theory are basically used.

Findings

The principal finding is that specific characteristics of Russian MNCs reflect specificities of Russia’s economic and political model. To some extent, they correlate with characteristics of MNCs of other two leading emerging economies – China and India.

Research limitations/implications

Russian MNCs operate in line with principal theories of FDI, that is, on the basis of their country and firms’ comparative advantages. However, they possess specific features: many of them are state-controlled MNCs; private MNCs are controlled by oligarchs; all of them have tight relations with offshores and offshore conduit countries. The comparison with China and India shows that some of these specific features are typical of Chinese and Indian MNCs to more or less extent.

Practical implications

The empirical part of the chapter analyzes scope, industrial and geographical profiles of Russian MNCs, their motivation and management, impact on Russian economy and regional integration.

Social implications

National MNCs with their offshore affiliates are the leading tax evasion economic agents in Russia. Moreover, stable FDI outflow reduces gross capital formation in Russia which is insufficient (19–25% of GDP) for substantial economic growth by standards of emerging economies in this decade (from 4.3 to −3.8 in Russia, from 6.8 to 9.5 in China, from 5.1 to 7.3 in India).

Originality/value

The principal value (originality) of the chapter is its comparatively detailed review of main aspects of Russian MNCs’ worldwide activity made from the point of view of its connection to Russia’s economic and political model.

Details

The Challenge of Bric Multinationals
Type: Book
ISBN: 978-1-78635-350-4

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Book part
Publication date: 8 July 2008

Tony Edwards and Miao Zhang

Do multinational companies (MNCs) transfer employment practices across their operations in different countries? In other words, are they innovators in national systems of…

Abstract

Do multinational companies (MNCs) transfer employment practices across their operations in different countries? In other words, are they innovators in national systems of employment relations or do they adapt to them? This question lies at the heart of much research in the field of international HRM, yet the debate is characterized by two quite different approaches to this question – the “global – local” perspective and the “segmentation” thesis – that have not engaged satisfactorily with one another. Drawing on data from a case study of an American multinational in China, we argue that analysis must be sensitive to the sector-specific conditions that create variation between MNCs in this respect. Specifically, the way that multinationals build international processes of production and service provision is a crucial factor in shaping whether they look to transfer practices and, therefore, whether they are innovators or adapters.

Details

The Global Diffusion of Human Resource Practices: Institutional and Cultural Limits
Type: Book
ISBN: 978-0-7623-1401-0

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