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The purpose of this paper is to respond to the comments by professor Ietto-Gillies on the paper on “The MNE as the Crown of Creation?”
Abstract
Purpose
The purpose of this paper is to respond to the comments by professor Ietto-Gillies on the paper on “The MNE as the Crown of Creation?”
Design/methodology/approach
The authors argue that the key points made in the commentary are broadly complementary to the arguments set out in the “Crown of Creation?”
Findings
The authors agree with the commentary that sources of advantages of multinationality lie “outside the MNE” – through its interactions with national governments and organised labour. However, the authors would caution that the achievement of such advantages may encounter constraints.
Research limitations/implications
The original paper (“The MNE as the Crown of Creation?”) was a critique of mainstream theories of the MNE regarding the assumed superiority of the MNE. The response to the paper makes the argument that any superiority associated with MNE must be sought in its interactions with other actors.
Practical implications
The argument suggests that MNE managers seeking to exploit the advantage of multinationality through production shifting must be aware of the system-wide consequences of such actions.
Social implications
Given the conceptual nature of the argument and the level of abstraction, solid social implications can only be drawn tentatively.
Originality/value
The key novelty in the response paper is the possible negative effect – for MNEs – of unconstrained exercise of production shifting.
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Keywords
The purpose of this paper is twofold: to analyse what theories assume about multinational enterprises (MNEs) when they claim these are superior and to discuss possible…
Abstract
Purpose
The purpose of this paper is twofold: to analyse what theories assume about multinational enterprises (MNEs) when they claim these are superior and to discuss possible explanations for why MNE superiority seems to be dominant in the international business (IB) research field.
Design/methodology/approach
A common theme in mainstream IB theories is that multinational enterprises (MNEs) are superior in terms of cost efficiency and innovativeness compared with other types of organizations. A closer look at transaction cost economics (TCE)/internalization theory, evolutionary theory and dynamic capability theory reveal a bias toward MNE supremacy because of how MNEs are conceptualized as firms and therefore fail to explain the essence of “multinational advantage”. These revelations and the strong dependence on the benevolence to provide unbiased data means that MNE supremacy posited by mainstream IB theories is as much a rationalized myth as an empirical fact.
Findings
Although mainstream theories differ when it comes to the building blocks that constitute MNE supremacy, they have one attribute in common: they are silent as to why MNEs are superior compared with, for example, domestic firms or other types of economic agents. Irrespective of whether the focus is the strength of the hierarchy, the skill of managers or a common identity, nothing in the theories tells us that these factors are more pronounced in MNEs than in other types of economic actors.
Originality/value
The paper deals with the issue of multinational advantage. It claims that mainstream theories of MNEs tend to assume, explicitly or implicitly, that MNEs are superior in terms of cost efficiency and innovativeness compared with other types of economic agents. The analysis demonstrates that this tendency is a consequence of how MNEs are conceptualized as firms in the different theories as well as of the strong dependence in IB research on the benevolence of MNEs to provide unbiased data. It is concluded that MNE supremacy posited by mainstream IB theories is as much a rationalized myth as an empirical fact.
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The paper takes the lead from Forsgren and Yamin (2022), “The MNE as the ‘crown of creation’?: A commentary on mainstream theories of multi-national enterprises”, and accepts that…
Abstract
Purpose
The paper takes the lead from Forsgren and Yamin (2022), “The MNE as the ‘crown of creation’?: A commentary on mainstream theories of multi-national enterprises”, and accepts that the MNE can, indeed, be seen as the “crown of creation” in the world of business. The purpose of the paper is to show that this is due to advantages of multi/transnationality that must be sought outside rather than within the firm itself.
Design/methodology/approach
The paper argues that the advantages of multi-nationality derive from the differences in regulatory regimes between nation-states and, specifically, from laws and regulations regarding the following: labour and social security, industrial policy, taxation and environmental regulations. Some examples are given.
Findings
It is claimed that the transnational company (TNC) has the ability to operate as a unified centre of strategic decision-making, and this gives it an advantage compared to operators it bargains with who do not possess such ability. Three such operators are discussed: labour, governments of nation-states and suppliers. In TNCs’ operations with foreign countries, a distinction is made between the spatial dimension and the regulatory regimes dimension. The interaction between these two dimensions leads to discussions on: regions within nation-states and their regulatory regimes, global value chains (GVCs) and free/investment zones (F/IZs). The conclusions draw policy implications and research agenda implications touching also on issues of TNCs as creator/destructors of social values.
Research limitations/implications
The paper refers to other published work by the author – solo or as co-author – where the arguments are further developed, including the finding of a detailed case study. There are policy implications regarding labour and its trade unions (TUs) as well governments and their taxation and industrial policies. Details of such policies need further development.
Practical implications
There are implications for theory development, policies and for research agendas.
Social implications
Governments of nation-states and institutions within them – such as TUs – should try to co-ordinate rather than compete with each other in their bargaining with transnational companies. The breakaway of regions within nation-states further increases the power of TNCs.
Originality/value
In the development of theories of the TNC, this work shifts the focus from internal characteristics within the firm and its markets to external ones: to the nation-states as jurisdictional loci. The distinction between spatial and regulatory regimes dimensions in dealing with transnational activities allows a novel viewpoint on: regions, GVCs and IZs. A novel viewpoint is also given in relation to the role of TNCs in social value.
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Sven Dahms, Ambika Zutshi and Sandeep Puri
This research investigates performance determinants of service sector foreign-owned subsidiaries located in an emerging market. The focus is on the two dimensions of…
Abstract
Purpose
This research investigates performance determinants of service sector foreign-owned subsidiaries located in an emerging market. The focus is on the two dimensions of organizational networks (Who do you know?) and competencies (What do you know?).
Design/methodology/approach
Data were collected via a large-scale survey of managing directors located in the midrange emerging economy of Taiwan. The data are analyzed using partial least squares structured equation modeling (PLS-SEM) and fuzzy set qualitative comparative analysis (fsQCA) techniques.
Findings
The results show the importance of intraorganizational network strength as a key determinant of subsidiary performance, and that combinations of interorganizational network strength and competencies can determine performance in several subsidiaries.
Originality/value
This article offers new insights by testing a theoretical framework based on network perspective and the competence-based view of the firm in an emerging market context. It also offers an additional twist by employing symmetric (PLS-SEM) and nonsymmetric (fsQCA) methods to test the framework. This allows to arrive at robust conclusions about the complementarity and substitutability of the applied theories. This research also contributes to the current literature by providing fine-grained insights into the nature and impact of competencies and networks. It is also one of the few studies to focus specifically on service sector subsidiaries.
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Su Zhang, Fu-Chieh Hsu and Yang Zhang
This study aims to propose a systematic knowledge management model to explore the causal links leading to the organizational crisis preparedness (OCP) level of integrated resorts…
Abstract
Purpose
This study aims to propose a systematic knowledge management model to explore the causal links leading to the organizational crisis preparedness (OCP) level of integrated resorts (IRs) during the COVID-19 pandemic based on the intangible capital of organizational climate, dynamic capability, substantive capability and commitment.
Design/methodology/approach
The authors use data obtained from IRs in Macau. The Wuli–Shili–Renli (WSR) approach underpins the study. Structural equation modeling following fuzzy-set qualitative comparative analysis (fsQCA) was used for data processing.
Findings
The results showed that organizational climate has an essential role in IRs preparedness for crises and affects their dynamic capacity, substantive capacity and commitment. The fsQCA results revealed that the relationships between conditions with a higher level of dynamic and substantive capability lead to higher OCP scores.
Practical implications
Executives should develop systemic thinking regarding organization preparedness in IRs for crisis management. A comprehensive understanding of the IRs’ business environment and crises is necessary, as they will require different factor constellations to allow the organization to perform well in a crisis. Financial support for employees could ensure their assistance when dealing with such situations. Rapid response teams should be set up for daily operations and marketing implementation of each level of the IRs management systems.
Originality/value
This study contributes to the extant literature on IRs crisis management in the OCP aspect. The authors constructed a systematic composite picture of organization executives’ knowledge management through the three layers of intangible capitals in WSR. Moreover, the authors explored causal links of WSR from symmetric and asymmetric perspectives.
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Seda Aygül, Serkan Yılmazsönmez, Arzu Soyalp and Ayse Aytac
Titanium dioxide (TiO2) has high opacity, high brightness and whiteness, owing to its high refractive index value. It is mainly used in the coating industry and continuous efforts…
Abstract
Purpose
Titanium dioxide (TiO2) has high opacity, high brightness and whiteness, owing to its high refractive index value. It is mainly used in the coating industry and continuous efforts have been made to replace some of the TiO2 in paint with new pigments. This study aims to replace part of TiO2 pigment with various percentages of BaSO4, CaCO3 and kaolin in styrene butyl acrylate-based paint formulations, without changing the properties of paints using only titanium dioxide.
Design/methodology/approach
To determine the optimum use rate of new pigment mixing, opacity, gloss, scrub resistance and weather resistance properties have been investigated in the water-based paint formulation. The morphological properties of these samples were examined by scanning electron microscopy analysis.
Findings
In the total color change (ΔE) measurements, it was observed that the sample coded 85Ti/15Ba produced extremely similar results to the situation when TiO2 was used alone. It was seen that the best results were obtained when 85Ti/15Ba was used instead of TiO2.
Originality/value
Comparison research on the impact of replacing TiO2 with BaSO4, CaCO3 and kaolin on the performance characteristics of water-based styrene butyl acrylate-based paint formulations has not been done in the literature, according to the literature search.
Details