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Using Triad-based multinational enterprises as their empirical setting, influential scholars in international management uncovered key organizational characteristics needed to create globally integrated and locally responsive multinationals. They proposed a “modern” theory of multinationals' organization (Hedlund, 1994). But recently, a new generation of multinationals from emerging markets has appeared. Little is known about their organizational choices and some scholars even doubt that they leverage organizational capabilities altogether. Does the “modern” theory still hold in their case? This exploratory study of three emerging-market multinationals (EMNEs) discloses that for reasons related to their origin in emerging economies and to the competitive specificities of these economies, EMNEs approach the global and local conundrum in ways which are both similar – and vastly different – from recommendations of the “modern” theory. We inductively develop a new theory that accounts for the evolution of organizational capabilities in EMNEs to reconcile global integration and local responsiveness. We discuss its implications for the executives of both emerging and Triad-based multinationals.

The purpose of this paper is to examine how the location of a firm’s headquarters and component sourcing impact a firm’s responsiveness in a product-harm crisis in local market.

The authors collected data on 1,251 vehicle recalls from 12 manufacturers, six in the USA, three in Germany, and three in Japan. All of the recalls occurred in the USA between 2002 and 2010. The time the product was first released into the marketplace was used as the starting point while the time the recall was initiated (if at all) was used to record the probability of the product recall over time. Specifically, a survival analysis with an accelerated failure time model was employed to examine the speed with which a product is recalled. The authors examined the impact of foreign composition using information provided by the American Automobile Labeling Act, which lists the proportion of each vehicle that is composed of domestic parts (USA/Canada) and foreign parts. Organizational characteristics (i.e. size, market share, assets, net income, and reputation) and recall size (i.e. number of affected vehicles) that might have an effect on time to recall were controlled for.

The authors found that firms headquartered outside the local market would take longer to issue a product recall than firms that were headquartered in the local market. Firm headquartered outside the local market can reduce the time taken to recall by sourcing parts from the local marketplace, rather than from abroad. Interestingly, even local firms are affected by the location of component sourcing, such that they take longer to issue a recall if they sourced parts from abroad.

Research in international marketing has examined the benefits of integration to firms, but has not studied the risks of integration. By highlighting the challenges of managing institutional differences and integration difficulties, the authors show that location of headquarters and the location from where components are sourced have an effect on firm responsiveness in product-harm crises. Further, the authors build on the global supply chain management literature that has shown the effect of upstream activities (i.e. foreign production) on downstream activities (i.e. product quality). Specifically, the authors show that upstream activities can not only affect product quality, but also the ability of firms to respond to those product qualities in a timely fashion.

This paper explores how key insights from highly cited and well-used frameworks that describe the strategies and structures of MNCs are reflected in the international configurations of US MNCs. After reviewing existing frameworks that highlight different MNC choices regarding the integration, responsiveness, and dispersion of firm value chain activities, I perform a cluster analysis on a comprehensive and confidential database of US MNCs. The results reveal five configurations which both support the importance of key insights from existing frameworks while at the same time highlighting underexplored configuration characteristics, like the low levels of integration in US MNCs, the global sourcing arrangements for accessing foreign inputs and distribution, different approaches to regional expansion, and the limited geographic expansion of US MNCs pursuing product diversification. I argue that these underexplored characteristics suggest directions for future research to better reflect the international configuration choices of MNCs.

As multinational corporations are becoming larger and more complex, it becomes increasingly difficult to balance between the need for overall standardization in the multinational corporation (MNC) and the need for local responsiveness. In order to allow subsidiaries to react on challenges and opportunities within their local markets, they should be granted with a certain level of decision-making autonomy. However, this freedom can facilitate a misalignment of activities among the headquarters and its subsidiaries.

This study suggests that subsidiaries should be granted with the autonomy to pursue own activities. There should, however, be limits to their independence, which should be aligned through a dialogue between the headquarters and the subsidiary. This study finds a positive correlation between strategic and operational autonomy and subsidiary performance when these are combined with a strong intra-organizational network relationship. Furthermore, the study argues that within operational autonomy it is important to distinguish between everyday activities that do not need approval from headquarters, and activities that should be decided in collaboration between the headquarters and the subsidiary. Subsidiaries that are operating in technological complex markets should be granted with the autonomy to take advantage of inter-organizational network relationships in order to exploit local knowledge and capabilities. However, this poses the risk of the subsidiaries losing connectivity to the MNC. In order to reduce this risk, the headquarters should combine such initiatives with a strong collaboration with its subsidiaries.

By establishing a strong intra-organizational network relationship, autonomy can have a positive effect on subsidiary performance.

Multinational enterprises (MNEs) face twin pressures of maintaining a globally integrated brand while remaining responsive to local demands. Previous research has shown that misunderstandings may surface from the way subsidiary employees read corporate messages, particularly if institutional and social distances between corporate headquarters (HQs) and subsidiaries are wide. Employer branding is sometimes used to help resolve such tensions if HQs are sensitive to signals from their subsidiaries in the policy development process. Thus, this paper addresses the question: to what extent does institutional proximity facilitates the creation and maintenance of socially legitimate employer brands in MNE subsidiaries.

The paper uses an interpretive approach in analysing two cases of multinational subsidiaries operating in Pakistan but with divergent HQ institutional distances (Northern Europe and Middle East). A qualitative approach to data collection was taken and ten semi-structured interviews with senior and middle managers and two focus groups of six lower level employees in each case organization were conducted.

The findings suggest that institutional proximity played a secondary role in establishing a legitimate employer brand whereas a receptive and responsive signalling process was of greater importance. The authenticity of the employer brand was stronger in the organization that was more receptive to the incoming signals from local employees compared to the firm that was rather institutionally closer due to shared customs and culture.

Findings point to the significance of the character and intensity of the employment relationship at a micro level as the honesty and credibility of organizational messages and interpreted and re-interpreted at a localized level, thereby bearing serious implications for both global and local managers.

These findings contribute to the IHRM literature on the integration-responsiveness problem, to the debate over institutional proximity, and to the influence of religion on people management.

The rising opportunities in emerging countries have attracted numerous multinational corporations to invest in the new regimes. Knowledge management between headquarters and their foreign subsidiaries, thus, becomes particularly crucial in navigating host country environmental uncertainties. Despite its criticality, how foreign subsidiaries can benefit from effectively managing knowledge remains unclear. This study examines the extent to which market and technological turbulences influence two specific knowledge management platforms, knowledge transfer and knowledge codification, and subsequently, market responsiveness of foreign subsidiaries. Results from a survey of 140 foreign subsidiaries in China show that knowledge transfer and knowledge codification serve as two important platforms to mitigate the effects of environmental turbulence on local market responsiveness.

This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies.

This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context.

The study uses two case studies to explore the integration-responsiveness problem in multi-national enterprises and finds that locally sensitive employer branding and facilitating employee voice can help mitigate global-local tensions in religiously sensitive environments.

The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

The purpose of this paper is to improve the understanding of the dilemma of institutional duality (ID) confronting multinational corporations and to propose a workable solution for this problem.

The author has searched the literature using several terms directly related to the dilemma of ID and multinational firms.

The findings reveal that to attain “legitimacy”, subsidiaries strive to balance institutional pressures stemming from external environments in the host country and their parent organizations. Understanding institutional theories of multinational corporations enables the subsidiaries to manage external pressures. ID impact varies among subsidiaries, depending on institutional contexts and internal strategies of subsidiaries.

An “institutional duality incidence model” portraying how dual institutions make “legitimacy” problematic for subsidiaries is proposed. A framework for identifying factors generating ID dilemma and their management approach is also proposed. It is concluded that a multinational corporation that recognizes ID as a central concern is more likely to achieve and maintain a higher level of harmony with its subsidiaries and host countries.

This paper revisits Bartlett and Ghoshal’s transnational theory of the MNC in relation to multi-domestic MNCs. We argue that the aggregate level of analysis adopted by Bartlett and Ghoshal is unhelpful for identifying significant changes in multi-domestic MNCs at the level of discrete functions. We argue that a more disaggregated level of analysis is required. Our analysis of two cases of multi-domestic MNCs that have undertaken the global integration of their locally distributed purchasing functions indicates that while significant change to the purchasing function has occurred, at the aggregate level both MNCs remain multi-domestic. In both cases the decision to integrate local purchasing was regarded as having more obvious benefits than integrating other functions such as marketing. While both of our case multi-domestic MNCs may in future choose to integrate other functions and develop into full-fledged transnational companies we argue that there is no inevitability to this. Indeed global integration may cease with the purchasing function. A second theme in this paper is that we argue that Bartlett and Ghoshal’s transnational theory has a biased view of what constitutes effective governance mechanisms for achieving global integration, local responsiveness and worldwide learning and that it would greatly benefit from a more balanced application of hierarchical and relational governance mechanisms.

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.