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The chapter examines how distance, integration mechanisms, and atmosphere influence the level of organizing costs and subsidiary initiatives in headquarter–subsidiary relationships. Survey data were collected at the subsidiary level in one major Norwegian multinational company. Empirical analyses were based on regression and partial correlation analyses. Organizing costs are driven by distance to headquarters as well as the integration mechanisms and the atmosphere that exists in subsidiary–headquarter relationships. Another important insight gained by this study is that integration mechanisms influence subsidiary initiatives.

In this paper, we offer insights that combine a network perspective of the multinational company (MNC) with an analysis of different types of interdependencies. We develop and illustrate our arguments with a company case (LIMO) and argue that types of interdependencies have consequences for the orchestration of MNC activities. The experience from LIMO suggests that extreme organizational designs, where orchestration is either purely local or mostly global, fail to capture the nuances necessary to ensure efficiency and profitability. The main theoretical contribution in this paper is to show that the search for orchestration through an organizational design must involve the combination of several perspectives of activity combinations and their interdependencies. Simply optimizing through a tight network or looking at the firm as a loose federation is too simple to understand the complex trade-off facing modern MNCs.

The purpose of this paper is to investigate perceptions of fairness of a standardized performance appraisal in a multinational enterprise. The paper looks at the first step in understanding fairness perceptions by examining whether national culture influences the view on standardization itself and by comparing China, Lithuania, and Norway.

An experiment using a scenario that outlined a performance appraisal tool in a multinational company is conducted. National culture and individual cultural values are the independent variables and the perception of fairness of the practice is the dependent variable. A sample of 80 management respondents from Lithuania, China, and Norway is taken.

The findings suggest that national culture influences perceptions of fairness of a standardized performance appraisal tool. Employees from countries undergoing profound economic and political change, that score low on the cultural dimension of self‐expression, tend to see the standardized tool as more fair than employees from a stable country high on self‐expression. Differences in fairness perception at the individual level are found, where respondents high on power distance had higher perceptions of fairness of a standardized tool. Both national and individual levels measures of culture affected perceptions.

The sample is small; however, the differences are strong and indicate that perceptions of fairness vary. The experimental design allows good control, although it can limit generalizability to the field.

Multinational companies must understand that before analysis and choice of specific human resource practices it is important that they are aware of national and individual cultural differences towards standardization itself. Cultural differences affect reactions not only to the specific human practice but also to the standardization. Companies can use dimensions such as power distance and the survival/self‐expression dimension to understand the response of their employees. Being aware of this challenge may lead multinationals to pursue more fine‐tuned ways of communicating and implementing a standardized practice.

Using experiments to understand the implementation of practices in multinational organizations it is identified that, before deciding whether a practice should be locally adapted or standardized, the first step is to find out how standardization itself is perceived.

This chapter analyzes the efficiency levels of a circular economy (CE) with an emphasis on transaction costs. It examines the governance aspect of CE activities in comparison to the predominant linear value creation. Extant CE research in business studies tends to be descriptive and lacks a theoretical foundation, particularly in understanding CE management. Transaction cost theory explains efficiency in economic organizing, lending itself to the study of arrangements that maximize resource efficiency at continued economic virtue. The conceptualization proposes that CE transaction costs are greater than those within the linear economy (LE), primarily due to the uncertainties about reciprocal dependencies, looping material complexities, exchanging novel information, and increased contracting efforts. Geographically bounded and institutionally homogeneous CE initiatives may curb these rising costs. By bringing efficiency concerns into CE analysis, the chapter demonstrates the applicability of transaction cost theory and highlights CE relevance to international business by pointing out spatial choice implications.

Distances between contexts that a multinational enterprise (MNE) is familiar with and those that it is not familiar with do not hinder the MNE from becoming global. In this sense, distance serves as a barrier between an MNE’s global intentions and its regional realizations. (Multi)regional strategies are a possible expression of an MNE’s inability to approach distances. Considering the managerially relevant distances is essential to analyze the internationalization and the resulting (multi)regional strategies. A deeper understanding of how distance works requires linking distance to micro-foundations. Besides bounded rationality, bounded reliability opens the conceptual pathway toward a deeper understanding of internationalization and (multi)regional strategies.

To what extent, why and where do multinational companies locate divisional headquarters (DHQs) abroad? This study of 30 of the largest listed companies in Norway over the 2000–2006 period shows that foreign-located DHQs have become relatively commonplace. A majority of DHQs located abroad are outcomes of foreign acquisitions, which suggests that obtaining legitimacy from local stakeholders such as customers, employees and investors is an important motivation. We also find that Norwegian companies emphasize efficiency and value creation in their location choices, as they tend to prefer other advanced and competitive countries as hosts for their DHQs. Distance from Norway is not significant. The off-shoring of strategic units such as DHQs is a phenomenon that occurs in advanced phases of companies' internationalization, beyond the point when familiarity and proximity still are key decision-making factors.

Why is it that, despite repeated claims that digital-content firms and internet-based businesses can internationalize everywhere almost instantly, many seem unable to profitably expand outside their home markets? Why have emerging market firms (EMNEs) caught up with established developed-country multinationals (DMNEs) so much faster than expected? In this chapter, the author argues that the clue to these two puzzles lies in the realization that, contrary to the dominant view in the international business (IB) literature that focuses only on the intangibles exploited by DMNEs and assumes that these firms are free to unilaterally decide on their mode of entry and operation, doing business in a foreign country is only possible if intangibles are bundled with complementary local resources, usually held by local firms. Taking into account these complementary local resources and their owners makes it clear that DMNEs are not always free to choose their entry mode but must enlist the cooperation of local resource owners. The need of digital-content and internet-based firms for local complementary resources also explains why they sometimes experience problems when expanding abroad. Lastly, control of complementary local resources provides EMNEs with a home advantage against DMNEs competing with them in their home market. The author shows how EMNEs can capitalize on this advantage to obtain the intangibles they lack and need. The fact that these advantages are available on efficient global markets, while complementary local resources are not, explains the surprising speed of EMNE catch-up.

Alain Verbeke is one of the world’s leading thinkers on international business (IB) and globalization, a renowned scholar and educator who contributes to creating a better global business environment by addressing some of today’s most critical challenges. He was one of the first scholars to advance a theoretically rigorous and practically significant perspective on international corporate social responsibility (CSR). Verbeke’s work on international CSR is particularly impactful because it is rooted in IB theory and based on a realistic set of assumptions about the behavior of managers, policymakers, and other market and nonmarket stakeholders. In this chapter, the authors apply theoretical principles central to Verbeke’s research – most notably behavioral assumptions of bounded rationality and bounded reliability – to analyze businesses’ and societies’ pace of progress in relation to stated environmental, social, and governance (ESG) goals. The authors argue that bounded rationality and reliability challenges create misalignment between stated/imposed commitments toward ESG performance, and economic actors’ ability to deliver on these commitments. The authors discuss examples of such misalignment, focusing on tensions among stakeholders, between stakeholder organizations and firms, and within firms. The authors propose that to be relevant for policy and practice, the sustainability research should be based on realistic microfoundational assumptions.