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Book part
Publication date: 25 October 2014

Alain Verbeke, Rob Van Tulder and Sarianna Lundan

This chapter provides an overview of various new streams in international business (IB) research that will have an important impact on IB studies in the years to come…

Abstract

Purpose

This chapter provides an overview of various new streams in international business (IB) research that will have an important impact on IB studies in the years to come, both from a conceptual and a methodological perspective.

Methodology/approach

The authors discuss a set of 18 chapters, all included in this research volume, and highlight both the key intellectual contributions and the challenges identified that will need to be taken into account in future research.

Findings

The findings of the studies discussed are manifold and profound. Some of the main findings include the following: (1) multinational enterprise (MNE)-centric empirical research studies should be avoided. Resource recombination typically requires taking into account the resource base and the strategies of at least two economic actors. (2) IB studies, almost by definition, need to take into account “distance,” but most prior empirical research has not done a particularly good job in including relevant distance parameters in a methodologically sound way to assess their impact on MNE strategy, operational functioning or performance. (3) Nonbusiness institutions can be very helpful in promoting MNE expansion but include “dark side” institutions that sometimes appear very effective in particular situational contexts. (4) Institutional diversity matters: it can make international knowledge transfers difficult, it can lead to discrimination against firms from specific nationalities, it certainly suggests that there is no generalizable multinationality–performance relationship, and it raises the question whether new theory is needed to accommodate previously neglected institutional contexts.

Practical implications

This overview of several recent IB studies confirms that managing the international innovation chain in its entirety is fraught with difficulties. MNE senior management must economize on bounded rationality (meaning: improving information quality and information processing) and bounded reliability (meaning: making sure that economic actors make good on open-ended promises, whether implicit or explicit). Any IB transaction by definition entails new resource recombination. Doing so effectively requires correct information, reliable partners and a recombination outcome that supports value creation for the MNE. Multiple, practice-driven puzzles in the IB context are proposed to the reader, and the outcomes are often unexpected.

Originality/value

A variety of new concepts and methodological approaches are proposed to improve the quality of future IB research.

Details

Multinational Enterprises, Markets and Institutional Diversity
Type: Book
ISBN: 978-1-78441-421-4

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Book part
Publication date: 25 October 2014

Rebecca Piekkari and Susanne Tietze

In this chapter, we align two approaches on the multinational enterprise (MNE), that is, research on languages and international business, and micropolitics, in order to…

Abstract

Purpose

In this chapter, we align two approaches on the multinational enterprise (MNE), that is, research on languages and international business, and micropolitics, in order to establish the language-based underpinnings of micropolitical behavior in the MNE.

Design/methodology/approach

This theoretical chapter departs from a social, relational perspective on power relationships in the MNE. Power relationships are constituted in multilingual encounters between different language users.

Findings

Our analysis builds on the assumption that the mandated corporate language in the MNE, which often is English, results in a language hierarchy. This hierarchy creates inequality and tension between the languages in use in the MNE. However, language agents, that is, headquarters, foreign subsidiaries, teams, managers, and employees can – individually or collectively – change, challenge, and disrupt this hierarchical order. Their micropolitical behavior is essential for action as it redraws organizational structure, alters the degree of foreign subsidiary autonomy and control, redefines the privileged and the disadvantaged groups in the MNE, and reinforces subgroup formation and dynamics in multilingual teams.

Research implications

We highlight the important role played by language agents who sit at the interstices of organizational networks in the MNE. The interplay between their actions and motivations and their historical and situational contexts represents an underexplored and undertheorized area of study.

Practical implications

Senior managers in MNEs are frequently very competent or native users of the English language. Appreciating the continued existence of various languages has implications for how different MNE units can effectively connect and operate as an overall entity.

Originality/value

This chapter highlights the languages-based mechanisms that underpin power relationships in the MNE.

Details

Multinational Enterprises, Markets and Institutional Diversity
Type: Book
ISBN: 978-1-78441-421-4

Keywords

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Book part
Publication date: 14 October 2015

Mary M. Maloney, Mary Zellmer-Bruhn and Priti Pradhan Shah

In this chapter we develop a conceptual model describing how global teams do more than accomplish discrete tasks, and create “spillover coordination” effects by…

Abstract

Purpose

In this chapter we develop a conceptual model describing how global teams do more than accomplish discrete tasks, and create “spillover coordination” effects by influencing the amount of work-related direct contact among team members outside the task boundaries of the team. We theorize that spillover coordination is the result of relational and cognitive social capital developed through team interaction. We also propose that the design of the team and the context in which it operates influence the degree to which social capital develops.

Methodology/approach

We develop a conceptual model including propositions that can be tested empirically. We suggest avenues for future research.

Practical implications

Our model proposes that teams are a more powerful cross-border integration mechanism than originally thought in existing literature in international management and organizational behavior, since they affect social capital that can benefit the broader MNE beyond scope of the task and after the team disbands. Our approach suggests that MNE managers should be mindful of global team spillover effects and intentional in the way they design global teams if those benefits are to be achieved.

Originality/value

Most research on global teams, and teams in general, does not look past the task and time boundary of the team. We expand the view of team effectiveness to encompass those dimensions.

Details

The Future Of Global Organizing
Type: Book
ISBN: 978-1-78560-422-5

Keywords

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Book part
Publication date: 23 November 2017

Desislava Dikova, Ahmad Arslan and Jorma Larimo

We investigate the effect of distance – political, economic, cultural and spatial, on developed-economy multinational enterprises’ (MNEs’) ownership decisions in…

Abstract

We investigate the effect of distance – political, economic, cultural and spatial, on developed-economy multinational enterprises’ (MNEs’) ownership decisions in cross-border (CB) acquisitions. We start with the premise that distance discourages full and majority ownership in CB acquisitions, and further investigate the moderating role of distance-reducing factors. We examine how the relationship between distance and acquisition ownership decision is moderated by firm-specific characteristics, such as firm size, general international experience, and specific host country experience. Our data sample consists of 1,041 CB acquisitions under taken by Finnish MNEs in 58 countries during the time period 1990–2010. We find substantial support for all our hypotheses and conclude that the negative effects of distance on CB acquisition equity stake are positively moderated by the three firm-specific resources but their individual importance is conditional on the host country type (developed or emerging).

Details

Distance in International Business: Concept, Cost and Value
Type: Book
ISBN: 978-1-78743-718-0

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Book part
Publication date: 8 June 2012

Wei Shi and Robert E. Hoskisson

The liability of foreignness has long been acknowledged as a key concept in international business research. Departing from the cost side of foreignness, this chapter…

Abstract

The liability of foreignness has long been acknowledged as a key concept in international business research. Departing from the cost side of foreignness, this chapter explores intangible benefits of foreignness exclusive to multinational enterprises in a host country in addition to tangible benefits such as preferential tax policies. Intangible benefits of foreignness are defined as advantages of foreignness so as to distinguish from assets of foreignness – tangible benefits of foreignness. Drawing on institutional theory and social comparison theory, we propose that advantages of foreignness can lead to important firm-specific performance-related outcomes, which have been generally underestimated in the international business literature.

Details

Institutional Theory in International Business and Management
Type: Book
ISBN: 978-1-78052-909-7

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Book part
Publication date: 14 December 2017

Christopher Williams and Wendelien van Eerde

Prior research into multinational enterprises’ (MNEs) entrepreneurial initiatives has drawn from various theoretical bases, including entrepreneurial cognition…

Abstract

Prior research into multinational enterprises’ (MNEs) entrepreneurial initiatives has drawn from various theoretical bases, including entrepreneurial cognition, knowledge-based view, and management control theory. Empirical studies and cases have consistently pointed to the temporal dimension, highlighting the dynamic elements of learning, capability development and evolution, and consequences of conflict. By incorporating theory on time use into the analysis, we develop a new theoretical insight regarding the temporal dimension of MNE entrepreneurial initiatives. Our analysis offers a basis for a more explicit focus on time use in studies of entrepreneurial initiatives in MNEs than has been offered to date. Implications for research and practice are discussed.

Details

Global Opportunities for Entrepreneurial Growth: Coopetition and Knowledge Dynamics within and across Firms
Type: Book
ISBN: 978-1-78714-502-3

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Book part
Publication date: 15 July 2009

Volker Mahnke, Torben Pedersen and Markus Venzin

This empirical study explores knowledge outflows from MNE subsidiaries and its impact on subsidiary performance. We develop hypotheses derived from literature on MNE

Abstract

This empirical study explores knowledge outflows from MNE subsidiaries and its impact on subsidiary performance. We develop hypotheses derived from literature on MNE knowledge flows integrated with an organizational economics perspective on knowledge-creating MNE subsidiaries. The hypotheses are tested using a simultaneous equation model applied to a unique data set encompassing a German MNE, HeidelbergCement. Enablers and impediments of knowledge outflows are assessed to explain why subsidiary managers share their knowledge with other MNE units. Our findings suggest that knowledge outflows increase a subsidiary's performance only up to a certain point and that too much knowledge sharing is detrimental to the contributing subsidiary's performance.

Details

Managing, Subsidiary Dynamics: Headquarters Role, Capability Development, and China Strategy
Type: Book
ISBN: 978-1-84855-667-6

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Book part
Publication date: 26 July 2007

Walid Hejazi

It has been demonstrated by Rugman and his colleagues that a majority of the activities undertaken by the world's largest 500 MNEs, such as sales, assets, and employment…

Abstract

It has been demonstrated by Rugman and his colleagues that a majority of the activities undertaken by the world's largest 500 MNEs, such as sales, assets, and employment, are regional in nature. This evidence has also been extended to trade and FDI patterns of OECD countries. Given the costs associated with doing business in foreign and distant markets, one may expect there to be a regional concentration in such activities. That is, the concentration of MNE activities in regional markets may be consistent with a transactions cost model. The objective of the analysis undertaken in this paper is to measure the extent to which the concentrations of OECD MNE activities can be explained by a formal transactions costs model (the gravity model in this case). These results are important for two main reasons. To the extent the concentrations are consistent with a formal model, then, first, this would provide further theoretical arguments in support of Rugman's hypotheses, and second, this would indicate that MNE managers have it right – that is, the activities of the corporations they manage are as global as they should be. On the other hand, if the activities are not fully explainable by atransactions cost model, the implications would be quite different. Theresults indicate that although some activities can be explained by a gravity model, many dimensions of OECD MNE activities, especially within the EU, are not explainable using a gravity model. That is, many of the activities of EU MNEs are more regionally concentrated than would be predicted by transactions costs.

Details

Regional Aspects of Multinationality and Performance
Type: Book
ISBN: 978-0-7623-1395-2

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Book part
Publication date: 30 May 2013

Alain Verbeke and Jenny Hillemann

We discuss Professor Jean-François Hennart’s key contributions to international strategic management theory, with a special focus on his integrative, 2009 Journal of…

Abstract

We discuss Professor Jean-François Hennart’s key contributions to international strategic management theory, with a special focus on his integrative, 2009 Journal of International Business Studies article, ‘Down with MNE-centric theories! Market entry and expansion as the bundling of MNE and local assets’. In Hennart’s (2009) model, complementary assets co-determine the MNE’s initial entry mode choice and the subsequent evolution of the MNE foreign operations’ governance. Hennart (2009) describes this perspective on MNE governance as one based on asset bundling. We focus on the paper’s conceptual insights and discuss how Hennart’s model of foreign market entry informs managerial practice in the realm of international strategy.

Details

Philosophy of Science and Meta-Knowledge in International Business and Management
Type: Book
ISBN: 978-1-78190-713-9

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Book part
Publication date: 30 May 2013

Brent Burmester

Setting the multinational enterprise (MNE) apart on the basis of a weakly specified idea of foreignness may impede progress in international business (IB). The discipline…

Abstract

Setting the multinational enterprise (MNE) apart on the basis of a weakly specified idea of foreignness may impede progress in international business (IB). The discipline lacks a paradigm to assimilate the idea of foreignness as an incident of internationality, a global condition describing the political context within which the MNE functions and which confers uniqueness on that institution. However, a plausible re-imagining of the MNE is possible and useful, and here a candidate for such an ontological shift is proffered. Rather than a firm struggling in one or more foreign contexts, the MNE is reconstructed as a foreigner contending with the responsibilities of a firm. The proposed re-imagining of the MNE is experimentally substituted for the received ontology in different IB research contexts. It transpires that this ontological revision maintains intelligibility in those contexts while usefully exposing new directions in which to pursue knowledge. In consequence of re-imagining the MNE, that institution may be situated more precisely amid the international system’s primal constituents, and links may be more effectively established with other bodies of research addressing the functioning of the international political economic system.

Details

Philosophy of Science and Meta-Knowledge in International Business and Management
Type: Book
ISBN: 978-1-78190-713-9

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