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1 – 10 of over 36000Michael A. Bourlakis and Constantine A. Bourlakis
According to the “classical” school of thought , the implementation of a firm’s strategy can be the result of a deliberate and rational process, or alternatively an emergent and…
Abstract
According to the “classical” school of thought , the implementation of a firm’s strategy can be the result of a deliberate and rational process, or alternatively an emergent and non‐intentional one. The rising importance of logistics in retail strategy, and, in particular, the impact of centralisation of logistical activities upon the development of a retail logistics strategy, necessitates an in‐depth examination of the relevant company actions. This paper identifies which strategic approach is followed by domestic and multinational firms that operate in the Greek food multiple retail sector. The findings point out the major importance of warehousing in multinational firms’ logistics operations and the vital role of logistics in multinational retailers’ strategy. Multinational firms follow a deliberate logistics strategy that leads to increased logistics efficiency when compared to domestic firms that follow the emergent logistics strategy.
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Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some…
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Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.
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The Nature of Business Policy Business policy — or general management — is concerned with the following six major functions:
Past research suggests that a financial crisis event has a dual and ambiguous effect on the exporting strategy of subsidiaries of multinational firms in a value chain and…
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Past research suggests that a financial crisis event has a dual and ambiguous effect on the exporting strategy of subsidiaries of multinational firms in a value chain and offshoring perspective. From a total volume perspective exports are expected to contract due to a decline in demand (demand shock) from other subsidiaries downstream in the value chain. While in a comparative perspective multinational subsidiaries are found to perform relatively better than local firms that are integrated differently (arms’ length) in global production networks (e.g., offshoring outsourcing). This chapter tries to reconcile these findings by testing a number of hypothesis about global integration strategies in the context of the Global Financial Crisis (GFC) and how it affected exporting among multinational subsidiaries operating out of Turkey. Controlling for the impact that exchange rate depreciations and volatility has on firm-level exports the study shows that the particular global event studied had no additional impact on individual firms’ exports. Since multinational subsidiaries are more insulated from these effects they are able to expand rather than contract their global integration strategies throughout the course of the GFC.
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Rangamohan V. Eunni and James E. Post
Based on a review of over 450 articles on multinational enterprises published in leading management journals from 1990‐2000, we identified eighteen issues that had engaged the…
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Based on a review of over 450 articles on multinational enterprises published in leading management journals from 1990‐2000, we identified eighteen issues that had engaged the attention of academic scholarship and evaluated their topical relevance. Ironically, very few of them addressed two of the most pressing issues facing business and society at the turn of the last millennium: terrorism and socio‐economic inequality. These glaring omissions suggest a gap between academic scholarship that focuses on “what is,” and research that speculates as to “what could be.” Suggestions are offered on how to close this important gap in the fi eld of international business.
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Elitsa R. Banalieva, Laszlo Tihanyi, Timothy M. Devinney and Torben Pedersen
Do multinational enterprises evolve differently in emerging and developed economies? Although one camp argues that emerging economy multinationals are different from their…
Abstract
Do multinational enterprises evolve differently in emerging and developed economies? Although one camp argues that emerging economy multinationals are different from their developed country counterparts owing to the underdeveloped institutions in their home countries, another camp counters that they are the same and the existing international business theories can fully explain their strategies. A third camp suggests a more nuanced perspective by finding value in both approaches. In this introductory chapter, we review this debate and offer new perspectives on how to extend existing theories by accounting for four specific aspects of the home country institutional environments of emerging economies: breadth, depth, timing, and duration of exposure to institutional development. We then discuss how the chapters in this volume extend these ideas.
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Daniel A. Szpiro and Tony Dimnik
This paper reports on a field study of capital budgeting and strategy in 23 firms. The objectives of the study were two‐fold: first to develop a classification scheme for overall…
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This paper reports on a field study of capital budgeting and strategy in 23 firms. The objectives of the study were two‐fold: first to develop a classification scheme for overall capital budgeting processes and second to relate the different types of capital budgeting to extant models of strategy. Based on our findings, there are three different types of capital budgeting processes: centralized, decentralized and integrated. In centralized capital budgeting, top management make all important strategic capital budgeting decisions. Operating managers simply “bid” on implementing projects selected by top management. In decentralized capital budgeting operating managers identify and initiate projects that are approved by top management based upon projected financial performance. Integrated capital budgeting has elements of both decentralized and centralized capital budgeting. We found the three types of capital budgeting to have a contingent relationship with Bartlett's (1986) typology of multinational strategy: global, multinational and transnational. Global firms choose to respond to pressures for integration and co‐ordination. Typically these firms are highly centralized and have standardized products which can be sold in multiple markets and produced in large‐scale facilities to take full advantage of economies of scale. Multinational firms, in response to pressure to accommodate regional markets through product specialization, operate in a number of highly differentiated markets with significantly dissimilar requirements. In pursuing economies of scope, these firms operate in a decentralized manner with national or regional managers making key strategic decisions. Transnational firms employ a complex structure that addresses the needs for both product differentiation and global integration. In our study, we found that global firms were more likely to have centralized capital budgeting, multinational firms to have decentralised capital budgeting and transnational firms to have integrated capital budgeting. Capital budgeting is one of the most important of management functions. Through capital budgeting decisions management determines the structural cost drivers of the firm and enacts the strategies that define the way in which a firm competes. Although there is an obvious link between strategy and capital budgeting, that link has not been made in either research or practice (Pinches, 1982). The need to understand the link between capital budgeting and strategy is especially evident in manufacturing firms that must continually invest in new technologies. In a review of some 150 articles on capital budgeting for new manufacturing technologies, Dimnik and Kudar (1991) found frequent criticism of current capital budgeting practices for failing to incorporate strategic issues. The most commonly proposed solution to this problem was to modify project evaluation and selection techniques by using multi‐attribute decision‐making models to quantify strategic issues. This response is typical of much of the literature on capital budgeting, which has traditionally focused on the technical issues of project evaluation and selection (Pinches, 1982). A more complete understanding of the relationship between the capital budgeting process and firm strategy will allow specific suggestions for improvement to be implemented. This paper reports on a field study of capital budgeting and strategy in 23 firms involved in a wide range of manufacturing activities. The objectives of the study were two‐fold: to develop a classification scheme for overall capital budgeting processes, and to relate the different types of capital budgeting to extant models of strategy. We found it necessary to develop a new classification scheme for capital budgeting because the standard model of capital budgeting does not explain practice (Dimnik, 1991). The traditional model of capital budgeting assumes that projects bubble‐up from operating managers for approval by top management and emphasizes the use of discounted cash flow methods of selecting projects. The bubble‐up assumption of capital budgeting can be traced to Bower (1970) and the pre‐occupation with discounted cash flow techniques to Dean (1951). Bower held that: [A] company's top management approves or rejects projects but has little direct influence on how they get defined or on which ones are pushed through the firm's lower levels of decision‐making to become claimants for top‐executive approval…Top management cannot keep the character and composition of the projects that rise for their approval from being coloured by structural context. However, top management can influence that structural context by means of the organization chart…and the measurement and reward system it employs (Caves, 1980, p.76). This bubble‐up assumption is implicit in most capital budgeting research and is incorporated in leading accounting and finance text‐books. For, example, Haka (1987) described the impact of rewards on the path that a “proposal follows from its originator in operations to its approval by top corporate executives”. Principles of Corporate Finance, Brealey et.al., stated that “most firms let project proposals bubble‐up from plants for review by division management, and from divisions for review by senior management”. Accounting: Text and Cases, Anthony and Reece stated that “as proposals for capital expenditures come up through the organization, they are screened at various levels. Only the sufficiently attractive ones flow up to the top and appear in the final capital expenditure budget”. Dean (1951) defined capital budgeting in economic terms and stressed that without systematic acceptance and rejection criteria, the capital budgeting decision has no solid foundation. He recognized that procedural and organizational issues were important in capital budgeting but defined the “problem” of capital budgeting as finding the answers to three questions: (1) How much money will be needed for the expenditures in the coming period? (2) How much money will be available? (3) How should the available money be doled out to candidate projects (p.555)? Dean emphasized discounted cash flow methods and this emphasis is adopted in leading accounting and finance text‐books and colours much of the academic research on capital budgeting (Pinches, 1982). It is especially evident in the many surveys of capital budgeting practices (Oblak and Helm, 1980; Bavishi, 1981; Stanley and Block, 1984; Woods et.al., 1985; Hodder, 1986; Kim, 1986; McLean, 1986; Baker, 1987; Klammer et.al., 1991). The bubble‐up, discounted cash flow model of capital budgeting is inadequate for explaining what is found in actual practice. For example, in a survey of 32 operating managers, Dimnik (1990) found that in some firms operating managers initiated capital budgeting proposals and were very conscious of financial criteria for project approval and aware of the impact of investment decisions on their measures of performance. In other firms, operating managers had little say in investment decisions and little knowledge of financial criteria applied to investment proposals. In these firms, analytical techniques such as discounted cash flow, when used at all, were used only by top management and their staff to justify their decisions. Based on these and other personal observations, we concluded that before we could offer insights into the relationship between capital budgeting and strategy, we had to first develop an understanding of capital budgeting that went beyond the traditional model. The remainder of the paper is organized as follows. In the next section, we define capital budgeting and briefly discuss various frameworks for analyzing strategy. Then we describe our field research and provide a general description of our findings. This is followed by a discussion of a new classification scheme for capital budgeting and the suggestion that capital budgeting is related to a firm's strategy for global competition. The paper ends with a discussion of the shortcomings of the study, the implications of our findings and some suggestions for future research.
The purpose of this paper is to examine the determinants of home-region strategy of the multinational subsidiary and the impact of such a strategy on its performance. The author…
Abstract
Purpose
The purpose of this paper is to examine the determinants of home-region strategy of the multinational subsidiary and the impact of such a strategy on its performance. The author draws upon new internalization theory to develop a theory-driven model and empirically tests the simultaneous relationships between home-region strategy and performance of the subsidiary.
Design/methodology/approach
The author tests the model using a simultaneous equation statistical technique on an original, new data set of publicly listed multinational subsidiaries operating in the ASEAN region, with parent firms’ headquarters across the broad triad.
Findings
There are three significant findings. The first finding is that subsidiary-level downstream knowledge (marketing advantages), and the geographic location of the subsidiary in the same home region as of the parent firm are key antecedents of a subsidiary’s home-region strategy. The second finding is that a subsidiary’s profitability reduces home-region orientation; however, home-region strategy has an insignificant effect on performance. The third finding is that these subsidiaries generate on average 92 per cent of their total sales in the home region (the Asia Pacific).
Originality/value
The author advances the existing literature on the regional nature of parent-level multinational enterprises by demonstrating that their quasi-autonomous subsidiaries also operate mainly on a home-region basis.
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The relationship between diversification and organizational performance has been the subject of numerous studies over the years (Palepu, 1985; Rumelt, 1974). However, strategy…
Abstract
The relationship between diversification and organizational performance has been the subject of numerous studies over the years (Palepu, 1985; Rumelt, 1974). However, strategy scholars have universally defined diversification using a narrow definition, namely that corporate diversification is a function or reflection of the number of products/businesses in a firm's portfolio. The present study argues that such a definition has become outdated given the impact of international market diversification (Kim, Hwang, & Burgers, 1989; Rugman, 1979). Integrating these two views of corporate diversification, we investigate diversification‐performance differences using market‐ and product‐based measures of diversification and an international sample. Results suggest that the traditional model of diversification may not be applicable to all countries and that international differences exist.