Born-Globals and Culturally Proximate Markets

• In this paper we focus on the differences between born-globals and older firms. We compare whether cultural proximity is important for born-globals and older firms and whether international or technological knowledge drives their internationalisation. In addition, we compare whether born-globals and older firms are proactive or reactive in their choice of culturally proximate markets.
• Our research suggests that born-globals tend to internationalise rapidly into markets ready to adopt their technology. This is driven by the need to establish a revenue stream (cash flow) as quickly as possible. These born-globals usually seek larger advanced economies, which are often culturally similar (proximate) and offer economies of scale; reducing risk for inexperienced firms. Indeed, born-global firms are more willing than older firms to move from culturally proximate to culturally non-proximate markets very quickly.
• Utilising an abductive approach based on case studies, our findings show that born-globals use their technological knowledge and networks and are proactive when they enter culturally non-proximate markets. Born-globals must assess a new market for its ability to provide a revenue stream very soon after entry. If the culturally proximate market does not offer this, then they will leverage technological knowledge and networks to move rapidly into nearby non-proximate markets where they perceive better opportunities for building a customer base or new funding alternatives to sustain the firm in their early foreign market forays.
• Our research significantly extends theory in highlighting that born-globals rely more on technological experience and display proactive behaviour more than older firms which can draw on previous international experience.

     

Mode Combinations and International Operations

• An enduring characteristic of extant literature on foreign operation modes is its discrete choice approach, where companies are assumed to choose one among a small number of distinctive alternatives.
• In this paper, detailed information about the operations of six Norwegian companies in three key markets (China, UK and USA) is used as the basis for an exploration of the extent to which, and how and why, companies combine clearly different foreign operation modes. We examine their use of foreign operation mode combinations within given value activities as well as within given countries.
• The study reveals that companies tend to combine modes of operation; thereby producing unique foreign operation mode ??packages?? for given activities and/or countries, and that the packages are liable to be modified over time??providing a potentially important optional path for international expansion.
• The data show considerable variation across cases; ranging from extensive use of mode combinations to a singular focus on a specific mode of operation. The study contributes to a refinement of our understanding of the path of internationalisation, and throws up a number of awkward theoretical questions about the process.

     

Venturing Early or Following Late?

• The concept of the establishment chain has been subject to extensive research during the last decades and has received support as well as criticism. We test this concept for market entries in Central and Eastern European countries. We also evaluate both the impact of following this pattern and the impact of the timing of market entry on the performance in the foreign market.
• We test our hypotheses with empirical data collected in a survey among German manufacturing companies that have entered markets in Central and Eastern Europe. The data covers 524 cases of internationalization from 204 companies.
• We find that most companies start with low-intensity market entry modes and increase their commitment over time. Yet, only a small fraction actually follows the path of internationalization described by the establishment chain. It seems that this pattern is more relevant for companies entering these markets early and loses relevance as foreign competition in the foreign market increases. Levels of performance tend to be higher for companies entering CEE markets early in comparison to later entries. However, we do not discover any performance impact of market entry according to the establishment chain.

     

Diverse Institutional Environments and Product Innovation of Emerging Market Firms

• This study unbundled institutional environment into two distinct aspects: institutional distance (the degree of dissimilarity between the institutional environment of a firm’s home country and an economy into which it expands) and institutional diversity (the variety of all the institutional environments to which a firm is exposed), and related them to product innovation performance of emerging market firms.
• Data on 917 Chinese manufacturing firms in multiple industries over 3 years was analyzed.
• The results show a positive relationship between institutional distance and product innovation success. An inverted U-shaped relationship was found between the institutional diversity of a firm’s foreign markets and its product innovation success.

     

Practicing what We Preach

• With the increasing globalisation of knowledge and management education, it is important that we build on our scanty understanding of trends and levels of geographic diversification in editorial board membership of management journals.
• Our study examines geographic diversity in editorial boards in Management over a 20-year period. It uses secondary data from 57 journals covering approximately 16,000 editorial board members.
• We found that the geographic diversity of editorial boards (EBs) has increased in the last 20 years, but it is still low for most management journals. Further, two factors partly predict the geographic diversity of EBs of management journals: the editor’s country of residence and the field of research.
• Continued active management by editors, professional associations and individual academics alike is necessary to ensure that our editorial boards properly reflect the diverse management community.

     

In at the Deep End of Firm Internationalization

• The purpose of this research is to examine the consequences of top management team (TMT) internationalization: why and under what conditions can TMT nationality diversity be beneficial?
• On the basis of the upper echelons theory from the strategic leadership literature, the relationship between the TMT nationality diversity and firm performance in the strategic context of firm internationalization is investigated in moderated multiple regressions models (MMR) for a sample of Dutch, Swiss, and UK companies.
• The study findings suggest that the TMT nationality diversity becomes advantageous only in firms with high degree of internationalization. Companies have to be strongly committed to foreign markets so that the benefits of the TMT nationality diversity can materialize.
• The arising managerial implication is that the TMT nationality diversity can be a powerful tool in building a firm’s competitive advantage, provided that companies are strongly exposed to the international environment. The study also provides corroborative evidence that the search for moderating and mediating variables in the TMT demography research represents a step in the right direction.

     

How International Firms Conduct Societal Marketing in Emerging Markets

• This study tests the relationship between activities of societal marketing and firms’ CSR legitimacy in terms of corporate social responsibility (CSR). It also examines the effects of the CSR legitimacy on firm performances in marketing. In addition, the study considers the relative importance of different activities of societal marketing.
• Based on data from a large sample of firms operating in both southern and northern China, this study compares the relative importance of three dimensions of societal marketing activities which influence a firm’s CSR legitimacy.
• Different from research findings from developed economies, our data show that the social dimension of societal marketing activities is the most effective when it comes to influencing a firm’s CSR image in an emerging economy. This image, in turn, has a positive effect on its marketing performances.
• This study suggests that, in an emerging economy such as China, firms that pay more attention to the social dimension of societal marketing are likely to be more effective in terms of building CSR legitimacy and achieving good performances.

     

FDI Structure, Investment Specificity, and Multinationality Value under Host Market Uncertainty

• To address mixed results regarding the value of multinationality, we take into account some important but less explored contingent factors related to country and subsidiary asset specificity.
• From our analyses using a panel dataset of Korean FDI, we find that subsidiaries’ local commitment in terms of FDI depth and local sales are negatively associated with multinationality value, whereas their intra-firm trade links to other affiliates are positively associated with the value.
• We conclude from our findings that in addition to dispersed operations across countries, other country- and subsidiary-specific factors moderate the effect of FDI breadth on multinationality value.
• We believe our study contributes to the literature by its fine-grained analysis of the environmental and organizational conditions wherein MNCs’ multinationality generates value.

     

Procedural Justice, Not Absorptive Capacity, Matters in Multinational Enterprise ICT Transfers

• This paper empirically tests the effectiveness of information and communications technology (ICT) knowledge transfer and adoption in the multinational enterprise (MNE) as an issue of critical importance to contemporary MNE functioning. In contrast to mainstream thinking on absorptive capacity, but in line with prevailing international business theory, our research supports the proposition that perceptions of procedural justice, rather than absorptive capacity, determine effectiveness, especially in cases of high tacit knowledge transfers.
• Data was collected from senior ICT representatives in 86 Canadian subsidiaries of foreign owned MNEs. Each of these subsidiaries recently experienced a significant ICT transfer imposed by the parent organization.
• Support was found for the main propositions: Procedural justice significantly predicted successful ICT transfer and adoption, while absorptive capacity was not significant. These findings are consistent even when knowledge tacitness was high.
• The perceived success of the ICT transfer as well as its adoption varied widely across these firms. The potential reasons for this divergence in effectiveness are manifold, but our findings suggest that in situations of substantial knowledge tacitness, a higher level of procedural justice, rather than a higher level of absorptive capacity, is critical to effective transfer and adoption.

     

Global Transfer and Indian Management

• The goal of this paper is to contribute to a better understanding of Indian management and to challenge more generally ahistorical and essentialist notions of indigenous management perspectives.
• Drawing selectively on postcolonial theory, we suggest that a historical hybridity perspective serves as a crucial heuristic device to understand the nature of Indian management and its globalization related transition.
• Discussing the example of the local mismatch and transfer outcome related to a global transfer initiative in a German subsidiary in India, we illustrate the analytical value of a historical hybridity perspective.
• Our paper concludes that the postcolonial notions of ‘hybridity’ or ‘inbetweenness’, are crucial to understand the nature of management in India and in emerging markets more generally as they move us beyond reductionist Eastern vs. Western or indigenous vs. global dichotomies.

     

Political Institutional Change, Obsolescing Legitimacy, and Multinational Corporations

• This paper studies the practice of integration of influential host country actors to a multinational corporation as a strategy to decrease problems of legitimacy to the foreign firm before the host country??s society.
• By developing the concept of obsolescing legitimacy, we argue that this strategy provides legitimacy to the foreign firm only in the absence of institutional changes at the macro-political level in the host country. Once these changes take place, an alliance by the multinational to an elite or a political system no longer ruling the host country will become a liability and will generate problems of legitimacy for the multinational.
• We illustrate our argument with the case of the US multinational United Fruit Company in Central America.

     

Subsidiary Interdependencies and International Human Resource Management Practices in German MNCs

• Using the resource-based view, this paper links the degree of interdependence that exists between subsidiaries of multinational corporations (MNCs) to the use of various International Human Resource Management (IHRM) practices.
• We assume that in many MNCs this interdependence has increased the need for cross-border coordination.
• We analyze to what extent MNCs use IHRM practices in order to enhance their coordination capability across national borders.
• We present a framework that addresses these effects and empirically test it using data from a questionnaire survey among 142 majority-owned overseas subsidiaries of German MNCs.
• The findings show that the degree of interdependence is related to the level of international experience of staff employed in subsidiaries, the use of third-country nationals, the provision of training, the use of cross-cultural management teams, and the choice of employee evaluation and reward methods.
• We conclude by discussing the implications of our findings for IHRM practitioners and scholars as well as the limitations of our study.

     

Indigenous Management Research

• While the last years have witnessed a tremendous economic boom in many emerging markets around the world, the knowledge of management practices in these countries lags behind their growing relevance in the world economy. One reason for this is that concepts, such as guanxi, jugaad, ubuntu, and blat, are not adequately reflected by traditional Western management theories.
• We call for more context-specific research and for drawing on indigenous thought in developing new theories that do not only help to better understand management practices in emerging markets, but contribute to global management knowledge as well.
• Examples of indigenous management concepts are illustrated and adequate context-sensitive research methods, such as locally-meaningful constructs and measures, participatory research, storytelling, and visual ethnography, are discussed. Moreover, we provide an overview of current research and conclude with major implications for indigenous management research.

     

Influence of sand grading,fines content and clay content on properties of sand-gypsum mortar

The paper summarizes a series of tests carried out on gypsumsand mixes—made of crushed dolomitic stone sand and retarded hemihydrate—seeking answers to the following questions:

1. Does the sand grading affect mortar properties?
2. How do the fines (fraction passing No. 100 sieve) affect mortar properties?
3. How does the clay content influence the properties of mortars?

Evaluation criteria for the hardened mortars were: flexural and compressive strength, hardness and linear change.     

Rethinking the Institutional Contexts of Emerging Markets Through Metaphor Analysis

• Recent literature recommends greater analysis of institutional contexts in order to better adapt strategies in emerging market economies. This paper explores cognitive challenges in understanding institutional contexts, and reveals an outdated vernacular around emerging markets. Unwittingly, we may be crafting strategies based on how we would like emerging markets to be, rather than on how emerging markets actually are.
• Institutional context is investigated through metaphor analysis. As conceptual constructions that link the abstract to the concrete, metaphors can yield rich insights when analyzed. The metaphor analysis performed finds powerful cognitive simplifications and preconceptions of emerging markets.
• Eliciting novel metaphors around the labels ??emerging markets??, ??developing countries??, and ??third world?? uncovers a fragmented rather than holistic view of institutional context. Strategies unresponsive to emerging markets may flow from a fragmented view of institutional context.
• In terms of theory, the use of metaphor analysis highlights the importance of considering subjective and even messy elements of institutional context. Prevailing discussions in the international business literature often focus on streamlined, objective measures of institutional context. This paper emphasizes that a complex process of institutionalization is being observed rather than a steady state of objective outcomes.

     

The Impact of Psychic Distance on Chinese Outward Foreign Direct Investments

• The aim of this paper is to investigate the value of the well-known construct of psychic distance, developed to explain the internationalization path of firms from developed countries, for the internationalization of Chinese firms.
• Our research question is: Does psychic distance and its individual stimuli (differences in language, religion, culture, economic development, political systems, education, and geographic distance) explain Chinese investments abroad?
• We test hypotheses on the relation between psychic distance and its stimuli and Chinese outward direct investments with OLS regression analyses.
• We find that Chinese OFDI indeed is influenced by an aggregate construct of psychic distance and by certain psychic distance stimuli, but not by all; in particular, similarities or differences with regard to language and culture, the level of industrialization and the level of democracy relate to Chinese firms’ internationalization.
• Our findings suggest that psychic distance and its stimuli cannot be ignored as explanatory factors for Chinese outward FDI but that the explanatory value of these constructs depends on the context of the phenomenon under study.
• We conclude that it is important to understand how the home country context influences managerial perceptions and thereby patterns of international expansion from different regions.

     

The Impact of National Economic Culture and Country-Level Institutional Environment on Corporate Governance Practices

• We posit that national cultural practices influence the institutional environment, which in turn has an influence on corporate governance practices. We empirically evaluate these relationships using structural equation modeling.
• We utilize measures of national culture from Culture, Leadership, and Organizations: The Globe study of 62 Societies. For the institutional environment, we employ the World Bank Worldwide Governance Indicators. Consistent with theory, we find a strong relationship between these constructs. We further find that the institutional environment mediates the relationship between national culture and corporate governance practices. Corporate governance practices include measures of board accountability, financial disclosure and internal controls, shareholder rights, executive compensation, takeover defenses and ownership base, and corporate accountability and are available from Governance Metrics International.
• As both culture and institutions are linked to corporate governance practices, efforts to change corporate governance practices around the world are best informed by an appreciation of cultural as well as institutional factors.

     

National Culture and International Differences in the Cost of Equity Capital

• Prior literature suggests that national culture influences many facets of business operations including corporate governance, capital structure, managerial compensation, foreign direct investment behavior and accounting systems.
• Extending this line of literature, we examine whether key aspects of national culture are also related to international differences in the cost of equity capital.
• In a cross-country sample of 32 countries during 1992–2006, we find that the cost of equity capital tends to be higher in more individualistic and less uncertainty avoiding societies consistent with their greater risk-taking orientation.
• This finding contributes to the international business and financial literature by identifying national culture as an important institutional variable influencing firms’ cost of equity capital around the world.

     

Management Compensation Systems in MNCs and Domestic Firms

• This is a study of the relationship between institutional settings and managerial compensation systems, based on extensive cross-national survey evidence.
• We compare differences in practices between Multinational Corporations (MNCs) and domestic firms across a range of capitalist archetypes.
• We find that MNCs are more likely to promote compensation systems that incentivise managers in line with organisational performance compared to domestic firms. Our findings also reveal persistent diversity reflecting firm type and institutional setting. We find that the gap between MNCs and domestic firms in terms of the usage of incentive-related compensation is less pronounced in Liberal Market Economies than in other settings. This suggests that it is a combination of being an MNC and the specific home locale that moulds approaches to managerial compensation. This reflects considerable hybridisation of practices within and between settings.

     

Dual-Option Subsidiaries and Exit Decisions During Times of Economic Crisis

• This study examines the dual implications of dual-option subsidiaries on exit decisions during times of economic crisis. Retaining dual-option subsidiaries in crisis-stricken countries means leaving a shadow option open for future growth once a crisis ends. However, MNCs may encounter problems pursuing either option due to challenges in managing dual-option subsidiaries with clashing strategic mandates.
• The equivocal nature of dual-option subsidiaries points to the possibility of another factor playing an important moderating role in exit decisions—subsidiary performance—which has been rarely considered in the MNC real options literature. Our primary argument is that lower subsidiary performance increases the influence of shadow option value embedded in dual-option subsidiaries.
• Analyzing a sample of 703 Korean overseas manufacturing subsidiaries in Asian countries, we find that when profitability falls, subsidiaries with dual options are less likely to be exited than those with single options.