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This paper aims to use the institutional and information-processing perspectives to explore their association with between internationalization and the Penrose effect phenomenon for business groups (BGs).

The authors use ordinary least squares regression models to test arguments about data pertaining to 101 Taiwanese BGs’ foreign direct investments.

The results indicate that greater levels of depth and scope in the process of internationalization during one period may negatively affect rates of growth in the following period. The results further demonstrate that institutional distance moderates the relationship.

Using the perspective of information-processing demands, the authors provide alternate explanations regarding the relationship between the process of internationalization (depth, scope and rhythm) and the Penrose effect.

Owners and managers should focus on both the depth and the scope of internationalization. BGs are likely to incur high dynamic adjustment costs, which then limit the rate of BGs’ growth. Managers should balance international market uncertainty with current managerial resources when determining how deeply and broadly to expand internationally and where to enter. In addition, as recent major panel studies suggest, management capabilities and practices can improve significantly, which has a positive effect on firm growth and performance. This does require the careful development and acquisition of the managerial resources needed for internationalization.

Ownership issues are an important feature of corporate governance when firms focus on global expansion in multiple and diverse regions. Drawing on resource dependence theory (RDT), the purpose of this paper is to address the phenomenon regarding the extent to which international market distance affects equity stakes in group-affiliated firms held by business group headquarters.

This study uses longitudinal data on foreign direct investments by 106 business groups (BGs), including 561 group-affiliated firms, from Taiwan over a five-year period from 2006 to 2010.

The results show that the equity stakes of the BG headquarters in the group-affiliated firms in foreign markets were positively associated with the geographic distance between the country of the BG headquarters and the host country of the foreign group-affiliated firms, the cultural distance between the country of the BG headquarters and the host country of the foreign group-affiliated firms and institutional distance between the country of the BG headquarters and the host country of the foreign group-affiliated firms.

Most studies of corporate governance and international business are based on a transaction cost economics approach, a resource-based perspective and agency and institutional theories. In contrast, this study, by using RDT, provides an alternative explanation regarding the factors that affect the equity stakes of parent firms in group-affiliated firms.

This study presents two basic pieces of advice for consideration. First, at the managerial level, group-affiliated firms should develop their own resources and capabilities in order to become more autonomous in pursuing advantageous international activities that the parent firms may not foresee. Second, and again at the managerial level, business group headquarters should adopt a strategy to balance the dependency relationship between group-affiliated firms and business group headquarters.

This study provides the most finely grained analysis, to date, regarding how international market distance affects business group headquarters from newly industrialized economies in terms of diverse equity stakes in foreign affiliates, the unique attributes of BGs and international market distances’ relationship with both the operations and the expansion opportunities of BGs.

The purpose of this paper is to examine the effects of the compensation level and the gap between the chief executive officer (CEO) and the top management team (TMT) with respect to the rhythm of firm internationalization.

The approach takes the form of an empirical analysis. The authors use longitudinal data (1997-2006) of a sample of 345 publicly-listed firms in Taiwan.

The results show that higher CEO compensation will lead to regular foreign expansion. The CEO–TMT compensation gap has a curvilinear effect on the rhythm of firm internationalization.

These findings highlight that the compensation structure has a significant influence on a firm ' s internationalization strategy. This research contributes to the literature linking strategic human resource management and corporate strategy in terms of firm internationalization.

When firms consider regular foreign expansion, the compensation committee should design a high total compensation level and appropriate the compensation gap between the CEO and TMT members.

This study sheds light on how the compensation of the upper echelons determines whether the internationalization rhythm is regular or irregular. Moreover, the study examines how internal contingencies, such as performance, moderate the relationship between the upper echelons’ compensation and the internationalization rhythm.

The purpose of this paper is to draw the perspective of dynamic adjustment costs, the author developed hypotheses regarding the relationships between the internationalization of business groups and first, key leaders of business groups who helped found the groups (i.e. founder-key leaders); second, business groups’ group-level decision teams where the majority of positions are held by members of the founding family (i.e. family-dominated decision teams); and third, business groups’ group-level decision teams where strong ties exist among these teams (i.e. strong-tie decision teams) because group-level top managers are simultaneously top managers of group affiliates.

This study used generalized least squares fixed-effects models to test its arguments about longitudinal data pertaining to 173 Taiwanese business groups’ foreign direct investments over a period of five years (2004-2008).

The results show that the presence of a founder-key leader and strong-tie group-level decision teams in a business group can positively affect the internationalization of business groups. However, family-dominated group-level decision teams in a business group can adversely affect the internationalization of business groups.

Using a dynamic managerial-capacities perspective, this study provides alternative explanations regarding the degree of business groups’ internationalization to demonstrate the links among business groups’ key leaders, group-level decision teams, and internationalization.

When deciding whether to expand abroad, managers at a given business group should carefully consider the characteristics of the group's management team because business groups engaging in such expansion are likely to incur dynamic adjustment costs. In this case, the dynamic managerial capacities of a business group play an important role in enabling the group to decrease dynamic adjustment costs. The differences among a group-level key leader's traits, a family-dominated group-level decision team's traits, and a strong-tie group-level decision team's traits will lead to distinct levels of dynamic managerial capacities within the group.

Given the increasing number of business groups entering international markets, this paper rests on the perspective of dynamic managerial capabilities and uses group-level evidence to clarify how the characteristics of key leaders and the characteristics of group-level decision teams in business groups affect the groups’ international expansion.

Prior studies examine the relationship between knowledge management (KM) enablers and KM effectiveness. However, the critical role of business process outcome is neglected. The purpose of this paper is to understand the mediating effect of business process outcomes. Based on knowledge-based view (KBV), two KM enabler variables, KM infrastructure (KMI) and KM capabilities (KMC), and one KM effectiveness variable, market relationships, are included.

A survey was conducted. The sampling frame was obtained from the database of the Bureau of National Health Insurance and Financial Supervisory Commission in Taiwan. After unusable questionnaires excluded, the usable respondents were 256 which are from 63 hospitals and 93 financial firms. Structural equation modeling was used to analyze the relationships among KMI, KMC, business process outcome, and market relationships.

The findings indicated that both KMI and KMC have positive influences on market relationships through business process outcome. The authors also demonstrate how KMI and KMC improve market relationships through business process outcome to deliver the value of KM.

Based on KBV, KMI and KMC are as KM enablers to facilitate KM activities. In the light of professional service industries (i.e. hospitals and financial firms), the study highlights the mediating effect of business process outcomes between KM enablers and KM effectiveness. It furthers the understanding of how KM enablers can improve KM effectiveness.