Abstract

When foreign MNC subsidiaries commercialize their products and services on foreign markets, they oftentimes rely on new marketing approaches such as a new pricing model adapted to local customers and competitors. Since MNC subsidiaries typically suffer from “liabilities of foreignness”, they depend on skilled marketing professionals who possess a deep understanding of host country markets to implement these marketing innovations. However, the value that these individuals can create for MNC subsidiaries vis-à-vis domestic firms and under which host country market conditions their B2B marketing skills are most valuable is poorly understood. We integrate mechanisms from research on value creation through marketing innovation in MNC subsidiaries into strategic human capital theory and predict higher value creation to translate into salary premiums for these individuals compared to when they would work for domestic firms. Moreover, we argue that these salary premium effects depend on the innovativeness of the host country competition which challenges MNC subsidiaries and makes marketing innovation even more salient. We test and support our hypotheses using employer-employee data for 25,374 marketing professionals from 2010 to 2012 in Denmark. The findings have broad relevance for the management of strategic human capital management in the creation of marketing innovation.

Introduction

Marketing capabilities are foundational for the international success of industrial firms since they enable them to find, attract and maintain customers outside of their home countries (Samiee, Katsikeas, & Hult, 2021). A central pillar of such marketing capabilities are skilled marketing professionals who can design, deploy and refine successful marketing strategies (Moorman & Day, 2016). Particularly in foreign subsidiaries of Multinational Corporations (MNCs) that seek to commercialize their products and services abroad, marketing professionals help to accumulate specific knowledge about host country markets and to build professional networks with industrial firms through which they can channel this knowledge to decision makers at MNC headquarters. As these products and services constitute new offerings on host country markets with different degrees of novelty vis-à-vis domestic competitor offerings, marketing professionals help to build three essential B2B marketing capabilities (Mora Cortez & Hidalgo, 2022): market segmentation and targeting (e.g., Ulaga & Chacour, 2001), adaptation of the marketing mix, for example by implementing a new pricing model that fits with host country customs (e.g., Grimpe, Sofka, Bhargava, & Chatterjee, 2017), as well as development and selection of new products to be marketed abroad (e.g., Cooper & Kleinschmidt, 1987).

Conclusion

The scope of the research presented here is broader than what fits into a single study, suggesting promising avenues for new research projects. These opportunities occur in several areas.

First, we establish that marketing professionals create value, particularly for foreign subsidiaries, and that this value translates into salary premiums. While our focus on marketing professionals is useful to build a theoretical rationale that connects the human capital that these individuals hold with the resources and specific requirements of foreign subsidiaries versus domestic firms, it conceals the heterogeneity in marketing professionals’ tasks and competences. Specifically, some subsidiaries may be particularly reliant on the individuals’ skills and expertise in local customer interaction while others are especially challenged to coordinate the local marketing approach with the global headquarters. We believe that dedicated research could better uncover many of the processes that underpin various forms of value creation.

Second, our empirical analysis predicts higher salaries as a reflection of higher value that marketing professionals can create when they work for the subsidiary of a foreign MNC subsidiary vis-à-vis a domestic firms. We are however limited in the extent we can actually observe the processes leading to value being created. Future research could look in more detail into these processes which create value for firms, particularly when individuals are newly hired. Relevant aspects would include mechanisms at the level of the organization related to the flow of knowledge or the composition of teams but also the career trajectories of individuals when it comes to promotion or retention.

Third, our analysis relies on a matching approach for isolating the salary effects of working for a foreign subsidiary vis-à-vis a domestic firm. While the matching approach accounts for the selection of employees into MNC subsidiary employment, it would be interesting to better understand, which factors lead marketing professionals to consider an MNC employer in the first place and what role the host country industry contingencies play for the decision of individuals to work for the subsidiary of a foreign MNC or a domestic firm.

Abstract

This study includes economic policy uncertainty measures and the magnitude and frequency of Asia pacific multinational business Mergers and acquisitions in 11 countries from 2009 to 2019 to evaluate the impact of uncertainty in economic policies (E.P.U) of global organizations mergers and acquisitions (M&A). To demonstrate that uncertainty in the home nation’s economic policy significantly restricts multinational enterprise Mergers and acquisitions, uncertainty in the nation’s economic policy significantly enhances Mergers and acquisitions, and that when the economy is in a pro-cyclical phase, these effects are reduced. Furthermore, the economic crisis has different effects of the country’s uncertain economic policies on worldwide firm M&As. There is a significant negative correlation between the country’s economic policy uncertainty and multinational firm Merger and acquisitions. Third, multinational firm Mergers and acquisitions are significantly impacted by economic policy uncertainties in the ASEAN (Association of Southeast Asian Nations) but not much in emerging countries. The size of M&A is considerably positively connected with foreign market expansion and variations in uncertainties.

Introduction

Foreign direct investment (FDI) in ASEAN mostly involves investment and acquisitions and mergers of international corporations (M&As). And over half of Asian’s total OFDI in 2016 came from multinational firm M&A deals, exceeding financing strategy. Economic policies were in flux due to the European financial crisis, the American fiscal deficit, Political uncertainty, a tariff war between Asia pacific and the US, and other developments, which have increased economic and financial instability. The EPU Measure created by Khojasteh et al. (2018) shows that it was in a reasonably steady condition before the global economic crisis of 2008, and that it climbed significantly in the wake of the crisis. Many things happened during this period that significantly reduced the scope and intensity of international M&As globally, increasing dangers to the global economy and impeding foreign investment from other nations. Asian, which has the sec largest economy, also has been impacted, and its degree of general economic unpredictability is above the average for the globe. Hence, it is necessary and important to study on the risk and the synergy of multinational enterprise mergers and acquisitions under the background of the COVID-19 pandemic.

In this study, we examine if there is a correlation between EPU within the nations and the transnational corporation M&A. Data used from the Asia pacific EPU and multinational enterprise M&As. Its contribution to the literature is as follows. Tian et al. (2022) determine if their impacts change depending on the situation, which will assist Asian’s businesses in adjusting their investment philosophies in developing nation and has a rising economy. Therefore, it has many of the same problems with employment, economic growth, and sustainable growth as other developing nations. East Asia is becoming more interested in foreign investments, and Asian’s (Nanayakkara and Colombage, 2019) worldwide firm Mergers and acquisitions (economic and financial uncertainties significantly impact m&a (Fang et al., 2020)). The majority findings of the current research is based on wealthy nations.

Conclusion and policy implications

EPU’s influence on Asean enterprises’ multinational company M&As was statistically analyzed​ using cross-sectional data from 11 countries from 2009 to 2019. Asean’s EPU promotes firms to buy multinationals since the home country’s economic policy is uncertain. ASEAN firms may not be able to engage in cross-border mergers and acquisitions owing to the host country’s unclear economic policies and low EPU factor. ASEAN enterprises’ overseas M&A is driven by rising home country EPU and dropping host country EPU, which lowers the host country’s EPU in a pro-cyclical sector. It implies macroeconomic policies and internal organizational factors effect international corporate mergers and acquisitions. The purpose of M&As should be to enhance public understanding of a country’s fiscal policies, comprehend the dynamic character of its economic strategy, and alter foreign direct investment and financing choices in response to evolving economic priorities. Second, unlike the overall regression, the time-divided subsample suggests that the host country’s economic plan was unpredictably good before the global crisis. The overall decline supports the host nation’s less unpredictable economic approach since the global crisis. The relevance of each variable matches the overall regression in rich nations after segmenting the data by country type. The home country’s economic strategy’s uncertainty is positive, whereas the host country’s uncertainty is negative.

Abstract

Introduction

     Innovation and international business are essential to achieve competitive advantages in currently unforeseen business environments. Today’s company seeks innovation in its country of origin and abroad in order to compete globally. Thus, incorporating this concept into international companies’ strategies is a main issue nowadays.

Purpose

     The aim of this systematic study is to improve the current knowledge on the relationship between innovation and international business, as well as identifying innovation tendencies for corporations to acknowledge the opportunities and challenges of this area’s development in the international business context.

Methodology

     Despite the abundance of innovation and international business reviews, joint reviews of both of them cannot be found. This study is the first to combine the scholarly research on both topics with the systematic literature review of academic literature of 28 years, following the PRISMA guidelines and flowchart. A search was carried out in Web of Science database; 847 initial documents were obtained and, after reviewing multiple documents according to the inclusion/exclusion criteria, the results for this research work were reduced to 236 articles.

Results

     The results of this research provide an overview of the knowledge structure of innovation and international business. As the main contribution, the results highlight four themes of investigation within a comprehensive and multidimensional framework: Innovative activities of multinational corporations, Global value chains, Innovation in emerging economies, and Cross-border knowledge. With an international perspective, insights from how to face innovation development in the international business context are presented.

Conclusions

There is a strong relationship between innovation and international business. These four research trends highlight the strategic importance of innovation in the international business field. Finally, the most interesting paths for future research are identified, targeting opportunities for improvement in both areas. This systematic literature review is expected to make significant contributions to both theory and practice in the field of innovation and international business.

Introduction

     Innovation, knowledge and technology are relevant concepts in the international business field [[1]] and both areas are essential to achieve competitive advantages in current business environments [[2]]. Cantwell [[3]] adds that innovation and internationalization processes have been increasingly interlinked as key drivers of development since the first industrial revolution, all the way to today’s information age.

     Innovation is the cornerstone of growth and sustains organizations to counter marketplace fluctuations and prepares them for long-term growth [[4]]. Business model innovation, although it is very difficult to achieve [[5]], can itself be a pathway to competitive advantage if the model is sufficiently differentiated and hard to replicate for incumbents and new entrants alike [[6]]. New models of innovation have encouraged many innovative firms to change the way they search for new ideas, adopting open search strategies that involve the use of a wide range of external actors and sources to help them achieve innovation [[7]].

     The field of international business studies came to prominence in the 1980s and early 1990s with the growth of multinational corporations [[8]]. In this framework, two theoretical models are extremely relevant; on the one hand, gradual internationalization or Uppsala model, according to which internationalization is seen as an incremental process that begins in foreign markets, being in closer proximity to the domestic market in terms of physical distance [[9],[10]] and, on the other hand, born global firms, that is to say, companies that internationalise at or near their founding, on an average period of three years of founding, generating at least twenty five percent of their total sales from foreign countries [[11]]. There is an extensive literature about this issue [12, 13, 14].

Conclusions 

     Nowadays, companies seek innovation in their countries of origin and abroad in order to compete globally. Therefore, innovation is a key factor for entering into international markets. This systematic literature review shows that there is indeed a strong relationship between innovation and international business; four themes of investigation within a comprehensive and multidimensional framework are found: Innovative activities of multinational corporations, Global value chains, Innovation in emerging economies, and Cross-border knowledge. These four research trends highlight the strategic importance of innovation in international business. Nevertheless, even when the number of articles addressing such topics is growing, this research work underlines that there is still a great opportunity for studying the relationship between those concepts. Thus, incorporating innovation into internationalized companies’ strategies is a main issue in current times, even more considering the changing and challenging world that we live in.

Abstract

The aim of this study is to demonstrate the importance of Cultural Intelligence (CQ) in management performance through measurable performance assessment. In an empirical study, “Cultural Intelligence and Management Competencies”, managers provided a self-assessment and their subordinates also reported on their performance. Correlation analysis of the results of this study was used to examine the relationship between managers’ CQ and their Management Competencies. Among the factors examined (CQ, gender, origin, age, work experience, position and education), the level of CQ of managers correlates significantly with their management competencies. Our findings indicate that managers with higher CQ are more effective in their leadership roles, and we conclude that the CQ of leaders contributes to a more positive perception of leadership performance in teams that are characterized by significant cultural diversity.

Introduction

Cultural Intelligence, a 21st century concept, determines the extent of workers’ success in foreign cultures, but also provide an answer to why dealing with issues that arise from cross-cultural problems can cause failure or success. The name used for this concept is Cultural Intelligence, which was abbreviated by Ang as CQ, “short for cultural intelligence quotient” [1]; both forms (Cultural Intelligence and CQ) are used in research and the literature equally for the cultural intelligence model itself and the measured level of cultural intelligence, which can be confusing. In this study, the CQ abbreviation is used for both.

The individual relationships of a person living in a foreign culture have an impact on their life, their resilience and, of course, their performance in the workplace. The ways in which people can be successfully encouraged to work better vary from nation to nation and culture to culture. For all these reasons, there is a growing need for more and more people—whether managers or subordinates—to excel in their professions and to successfully overcome intercultural barriers, whether at home or in cultures and countries other than their own [2].

 Results

4.1. Results of RQ1

To assess the CQ of the managers, the scores given by the subordinates filling in the CQS were used. The first step to investigate the possibility of measuring CQ was to test the validity of the CQS. This was followed by an examnation of the scores obtained based on the different characteristics of the managers (i.e., gender, age, educational level, position).

4.1.1. Checking the Validity of the CQ Scale

For the research, the Cultural Intelligence Center’s Cultural Intelligence Scale (CQS) was used. The scores received were then used to check the validity of the CQS questions and corresponding dimensions. To check this, principal component analysis was performed on the questions of the scales and the internal consistency of the resulting sets of questions was examined using Cronbach’s alpha analysis.

Abstract

     This study integrated multiple objective decision-making approaches including data envelopment analysis (DEA), rough set theory and TOPSIS method for exploring the competitiveness of pharmaceutical multinational enterprises. Firstly, this study applied an advanced two-stage network DEA to measure the R&D efficiency and business performance of pharmaceutical multinational enterprises (PMNEs) listed in the Forbes Global 2000 and ranked these PMNEs by using rough set theory, DEA and TOPSIS method. In addition, differences in environmental, social, and governance (ESG) performance across three continents were investigated. Findings show that North America is significantly the best (worst) region in terms of business performance (R&D efficiency) while Europe is significantly the best (worst) region in terms of R&D efficiency (business performance). Alfresa Holdings Corporation, a PMNE from Japan, is the only PMNE that is efficient from both an R&D and business performance perspective. European PMNEs have significantly better environmental and social performance than other regions, however, they have the worst governance performance. Overall, this study provides insights to managers and investors into the application of various methods for accurately measuring performance and ranking multinational enterprises.

Introduction

     The pharmaceutical industry is one of the most important and competitive industries in the world, it not only has a critical role in the health maintenance of individuals but also in economic growth (Sharma & Modgil, 2019). Pharmaceutical firms have spent a substantial proportion of their time and investment in research and development (R&D) (Rao, 2020). In 2018, R&D expenditure in the pharmaceutical industry was 179 billion U.S. dollars globally (Mikulic, 2020). A correct grasp of the R&D efficiency of the industry is required to improve resource allocation and thereby prevent either excess or shortage of resource inputs (Liu & Lyu, 2020). According to Lu et al. (2019), evaluating multiple indicators simultaneously is useful for appropriate decision-making. An overall efficiency can be decomposed into two stages of efficiencies (Kao & Hwang, 2008), suggesting that we should also evaluate the sub-processes of a firm (Kao & Hwang, 2011). That is, managers should evaluate their firm performance not only from a multidimensional perspective but also from those of its internal processes. As mentioned in the research of Sharma and Modgil (2019), business performance additionally depends on cost reduction of manufacturing operations and improving the firm’s innovative ability. Recently, Hsieh et al. (2020) have applied two-stage data envelopment analysis (DEA) to investigate organizations’ innovation and business performance by investigating the network structures of decision-making units (DMUs).

Conclusion

     This study measures the firm performance of 41 PMNEs from a two-stage perspective, namely R&D efficiency and business performance, by integrating a two-stage network DEA and SOCP technique. Moreover, this study integrates the DEA approach and rough set theory to rank PMNEs. The findings of this research can serve as a reference for managers of PMNEs in their decision-making process. Besides, we examine differences in the ESG scores of the PMNEs among different geographic regions (America, Asia, and Europe). This acts as a guide for investors, managers, and other stakeholders when attempting to move their ESG initiatives further.

     R&D performances in the operation of the observed PMNEs are not attracting enough attention. Alfresa Holdings Corporation is the only efficient PMNE for both R&D efficiency and business performance. North America is significantly the best (worst) region in terms of business performance (R&D efficiency) while Europe is significantly the best (worst) region in terms of R&D efficiency (business performance). From the perspective of ESG performance, European PMNEs significantly have better environmental and social performance than other regions whereas they are the worst concerning governance performance.

Introduction

Literature review and hypotheses development

Methods of study

Results

Discussion

Theoretical implications

Limitations and future research directions

Conclusions

References

Abstract

Purpose – This study aims to examine the adoption and efficacy level of progressive human resource management (HRM) practices in various organizations operating in India. Design/methodology/approach – Primary data based on 615 respondents from 103 domestic firms and 116 foreign multinational corporations (MNCs) operating in India were gathered and analyzed using statistical techniques like t-test, confirmatory factor analysis and structural equation modeling. Findings – The results reveal that the adoption of progressive HRM practices in form of self-managed teams, flexibility to work flexible hours, use of online mediums to invite applicants, selection of candidates using assessment center and integrity test, performance based incentives, flexible benefits, facility of e-learning and innovative management development programs is positively related to firm performance in Indian context. Using institutional and cultural perspective, the findings have also demonstrated that their exist differences in adoption of progressive HRM practices between foreign MNCs and domestic firms. Practical implications – Domestic firms in India are needed to learn some important managerial lessons from the foreign MNCs, especially when their adoption of progressive practices results in more increase in firm performance. These are suggested to implement a broad range of innovative HR practices like MNCs to improve growth potential, instead of focusing on two or three practices. Originality/value – By exploring the differences between domestic and foreign MNCs, this study has offered some key insights on the extent of adoption and operationalization of progressive HRM in current Indian business environment.

Introduction

Since the triggering of liberalization and economic restructuring programs in 1990s, India has witnessed a remarkable growth (Som, 2008). With this outstanding progress, the issues pertaining to increased globalization, ever changing customer and investor demands, and heightened competition to generate innovative products and services have become the standard backdrop for the organizations operating in India (Budhwar, 2012). Organizations have now realized that to manage these issues, they have to constantly increase their performance through reduction in various costs, improvement in quality of products, and differentiation in their products and services. In the opinion of Subramaniam and Youndt (2005), an organization’s ability to improve its performance while developing continuously very much depends upon its “human capital”. Further, Bhatnagar (2006) has opined that organizations in India are increasingly becoming aware of “human capital” as their most important asset in contrast to the technology, IT infrastructure, and the large-scale operations that can no longer be considered as effective tools for gaining an edge over competitors for a long time. This shifted focus on “human capital” has directly impacted the functioning of HR departments in Indian organizations which, in turn, have responded back with development of a domestic workforce proficient in facing the challenges brought forth by the entry of foreign multinational corporations (MNCs) in Indian market (Budhwar and Bhatnagar, 2009).

1- BHR: a brief overview

2- IB, responsible business, and human rights

3- The value-added of a human rights perspective

4- Bringing IB and BHR together

5- Conclusion

References

Abstract

The discussion on business responsibilities for human rights is thriving – although, surprisingly, predominantly outside of the International Business (IB) field. This article introduces business and human rights (BHR) as a research area with great potential for IB scholars. IB scholarship has much to offer when it comes to better understanding the relation between multinational enterprises (MNEs) and human rights. BHR, on the other hand, is a field that can no longer be ignored by IB research if the field is to remain at the forefront of scholarship in globalization-related issues concerning MNEs. Therefore, this perspective article aims at providing guidance to IB scholars interested in engaging in BHR research by tracing common themes and overlaps, and outlining a research agenda that addresses some of the research gaps and open questions in both fields.

BHR: a brief overview

Granted that human rights have traditionally been thought to relate exclusively to government conduct, there has been a thriving discussion on the respective responsibilities of business since the mid-1990s (Wettstein, 2012) (see Table 1 for a timeline of the discussion). Already in the 1970s, the UN and OECD had launched parallel initiatives to regulate the business activities of MNEs through international codes of conduct. Both the UN Draft Code, drafted by the then newly-established Center for Multinational Corporations, and the OECD Guidelines for Multinational Enterprises contained a paragraph connecting corporate conduct with human rights. While the UN Draft Code was never adopted and the UN Center dissolved in the 1990s, the OECD Guidelines have become one of the most important global codes on corporate responsibility and contain a full chapter on corporate human rights responsibility today, modeled on the 2011 UN Guiding Principles on Business and Human Rights – UNGPs – a soft-law initiative identifying the responsibility of companies to respect universal human rights as they operate locally or globally (Ruggie, 2011). The context and experience of Western MNEs operating in apartheid South Africa during the 1970s and 1980s influenced both codes of conduct and their outlook on human rights and business relations with authoritarian and racist regimes. It also inspired some first academic writings on the connection between corporations and human rights in the late 1980s (see, e.g., Donaldson 1989). However, despite such contexts, initiatives and early writings, a systematic debate on BHR started to emerge only during the mid-1990s against the background on the one hand of the involvement of Western oil companies – among them particularly Shell – in large-scale environmental destruction and human rights abuse in Nigeria, and on the other hand of breaking stories concerning sweatshop conditions and child labor in the production facilities of the suppliers of major Western sporting firms like Nike. BHR is to be seen as distinct from the broader CSR discussion. One of the most striking differences between the two is that BHR emerged predominantly from legal scholarship, while CSR has its root in management studies (Ramasastry 2015). Accordingly, the early BHR debate in the late 1990s and early 2000s was focused predominantly on clarifying potential bases of legal human rights accountability of corporations (Frey 1997; Ratner 2001) and non-state actors more generally (Clapham 2006), their status under international human rights law (Muchlinski 2001), and forms and foundations of corporate complicity (Clapham and Jerbi 2001).

1- Introduction

2- Methods of data collection and analysis

3- Key findings

4- Research on HRM in MNCs: the state of key debates

5- Discussion and avenues for future research

6- Conclusions

References

Abstract

This article reviews the present state of research on multinational corporations (MNCs) in the international human resource management (IHRM) literature. Drawing on 342 articles from 39 English journals in the business and management field published over the period of 2000–2014, we identify three key strands within this section of the IHRM scholarly field (MNC country of origin/domicile effects; expatriate management; and, intra-organizational knowledge and strategy flows). Building up on our detailed assessment of trends in the literature based on a systematic review, we propose areas where the field could be developed and extended through drawing on insights from, and building synthesis with, cognate fields. We conclude that major developments on the ground – the increasing numbers of unskilled expatriate workers, the rise of MNCs from emerging markets, and the growth of transnational alternative investors – have the potential to transform the field of enquiry, yet are only starting to appear in the IHRM literature. In developing new major areas of enquiry – and in extending existing ones – insights may be drawn from the literature on comparative institutional analysis to take fuller account of trans-national actors.

Introduction

There is now a substantial body of research on human resource management (HRM) in multinational corporations (MNCs) as a result of individual and collective efforts from scholars in the field of international HRM (IHRM) since the mid-1980s. A number of review studies have also been conducted by leading scholars that provide insightful evaluations of the field in terms of thematic foci, analytical approaches and research gaps (e.g., Björkman & Welch, 2015; Brewster, Mayrhofer, & Smale, 2016; Cooke, Veen, & Wood, 2017; De Cieri, Cox, & Fenwick, 2007; Schuler, Budhwar, & Florkowski, 2002; Scullion & Paauwe, 2004). A major critique from earlier scholarly reviews is that research in IHRM, or more specifically, HRM in MNCs, has for too long focused rather narrowly on expatriate management (e.g., De Cieri et al., 2007). Other key concerns in the literature have been the effect of contextual circumstances (culture and institutions), and intra-organizational ties and knowledge flows. An emerging and open-ended challenge is broadening the scope of the traditionally quite closely circumscribed debates, opening the potential for more holistic and integrated accounts. However, the majority of the scholarly reviews of HRM in MNCs studies were based on the rich knowledge of the authors in the field or focused on particular aspects, often certain HRM functions, as the main focus of the review (see Table 1 for a summary).

The Fourth Industrial Revolution poses significant challenges to manufacturing companies from the technological, organizational and management points of view. This paper aims to explore how top executives interpret the concept of Industry 4.0, the driving forces for introducing new technologies and the main barriers to Industry 4.0. The authors applied a qualitative case study design involving 26 semi-structured interviews with leading members of firms, including chief digital officers and chief executive officers. Company websites and annual reports were also examined to increase the reliability and validity of the results. The authors found that management desire to increase control and enable real-time performance measurement is a significant driving force behind Industry 4.0, alongside production factors. Organizational resistance at both employee and middle management levels can significantly hinder the introduction of Industry 4.0 technologies, though these technologies can also transform management functions. Multinational enterprises have higher driving forces and lower barriers to industry 4.0 than small and medium-sized companies, but these smaller companies have good opportunities, too.

Introduction

The Fourth Industrial Revolution, which is currently taking place, sets a number of challenges for manufacturing companies from the technological, organizational and management points of view. With the application of new technologies and the transformation of processes, significant changes are expected in the field of work, and future production systems demand new competencies from employees. Work organization is expected to become more flexible in time and space, with workflows becoming more transparent, decentralized, and less hierarchical (Münchner Kreis, 2013; Picot and Neuburger, 2014). The exact risk of digitization is difficult to forecast, but nowadays it is becoming clear that workers in some countries are more defenseless than others. For example, in some regions, more than 25% of jobs are at high risk of automation (Segal, 2018). In the world of future production systems, some processes are expected to be simplified, and others to become much more complex and embedded. This is likely to lead to an increase in the number of higher skilled jobs and a reduction in jobs requiring lower qualifications (Brühl, 2015; Spath et al., 2013). Industry 4.0 will therefore have a significant impact on both the labour market and society. According to Kovács (2017b), the success of Industry 4.0 will be a function of both technical feasibility and the social acceptability of the whole transformation process. Vacek (2017) emphasized that if technological changes are not accompanied by significant changes in socio-economic systems, social cohesion may weaken. Industry 4.0 is therefore both a technological and socio-economic phenomenon (Szabó et al., 2019).

Introduction

Discussion

Conclusions and suggestions for further studies

References

Abstract

Purpose – The purpose of this paper is to introduce a new research construct to depict more accurately organisational structure and the direction of organisational changes in large multinational corporations (MNCs).
Design/methodology/approach – The paper presents an overview of the existing literature on the phenomenon of anisotropy in natural sciences and the organisation of large corporations, and transforms an identified phenomenon into a research construct of organisational theory.
Findings – This paper demonstrates that anisotropy, that is, the differences in the speed and conductivity of the movement of capital (money), products (goods and services), ideas (knowledge) and talent (people) in different directions within the corporation ( from the centre to the subsidiaries, from the subsidiaries to the corporate centre and between subsidiaries) is the normal state of the internal space of the MNC. Anisotropy is increasing with the on-going restructuring of the global economic order. This leads to the divergence of business units in MNCs into the core and the periphery.
Research limitations/implications – The paper outlines a series of promising research avenues in organisational studies.
Originality/value – The paper provides a novel treatment of the composition of MNCs.

Introduction

It has become increasingly clear that a restructuring of the economic order has been taking place and, in particular, has affected multinational corporations (MNCs) and others doing business across borders. For example, after the 2008 crisis, capital flows between countries and trade in goods and services have retreated significantly to levels not seen in a quarter of a century (Sharma, 2016, p. 2). The evidence of a new era of “anti-globalisation” became evident to practitioners, policy analysts (Ludeña, 2017) and academics (Kobrin, 2017; Globerman, 2017; Meyer, 2017). The new economic order means costlier capital, an expanded government role, reinvented trade barriers, restriction of workforce movement between countries and a much larger regulatory and taxation burden as firms find it more difficult to shift activities and park funds in the most favourable locations. Our essay points out that the “new economic order” is merely a partial restoring of the state of the global economy which existed prior to 1992 and which was characterised by high anisotropy of the economic space that affected the structure and functioning of the (western) MNCs. We introduce the research construct and properties of anisotropy in the corporate space, and outline promising research avenues for organisational studies, especially research related to the changes in the organisation and functioning of large MNCs.

1- Introduction

2- Context, theory and hypotheses

3- Research methods

4- Data analysis and results

5- Discussion and conclusions

References

Abstract

In much of the developing world, families represent the dominant form of firm ownership. This study investigates how this influences equity ownership strategies when firms venture abroad. Drawing on agency theory and institutional theory, we investigate the direct effect of board composition and family ownership on the equity-based ownership strategies of multinational enterprises (MNEs) in their affiliates, and how institutional distance may moderate this. Examining foreign affiliates of listed Turkish MNEs, we find that a high ratio of independent directors is negatively linked to levels of equity ownership of MNE affiliates. We also find that a high ratio of inside directors on the board is positively associated with the equity stake of MNEs in their affiliates. The significant interaction effect between board composition, family ownership and institutional distance helps explain the unexpectedly weak effects of institutional distance.

Introduction

How do families impact the internationalization activities of firms in which they hold a significant stake? This study investigates the effects of board composition and family ownership on the equity ownership strategies of multinational enterprises from emerging markets (EM MNEs) in their affiliates. Further, we assess the moderating effect of institutional distance on this relationship. MNEs may be subject to pressures from a range of different institutional regimes, reflecting both investor country of origin and where the foreign operations take place. There is an extensive literature on how MNEs behave abroad (Almond et al., 2005; Brewster, Wood, & Brookes, 2008), which has tended to concentrate on the relative infusion of policies and practices from the country of origin. Less attention has been accorded to the association between the MNE’s internal corporate governance mechanisms and foreign equity ownership (e.g. Rhoades & Rechner, 2001; Filatotchev, Strange, Piesse, & Lien, 2007; Musteen, Datta, & Herrmann, 2009; Filatotchev & Wright, 2011). Internal corporate governance reflects both institutions, and the strategies dominant owner interests adopt in response to them. When formal regulation is weak or uncertain, the nature of the latter is vested with particular importance. Whilst weaker institutional coverage may be associated with greater agency problems (La Porta, Lopez-de-Silanes, Shleifer, & Vishny, 2000), this does not preclude actors from improvising solutions that secure the best returns possible under the circumstances (Lane & Wood, 2012). Within an emerging market (EM) context, we explore how international investment strategies may be molded by corporate governance realities and dominant ownership forms. This study makes extensive use of recent advances in institutional theory and develops insights into the implications of family capitalism for key players. It further evaluates how internal corporate governance mechanisms intersect with external ones in imposing a specific agenda on the firm.

Analyzing controls

Formal control mechanisms and their enactment

Additional controls: the relevance of social mechanisms

How do self-managing, team-based organizations evolve through controls?

Discussion

Key takeaways

Conclusion

Selected bibliography

Introduction: controls in a post-bureaucratic era

Innovative firms in global markets have grown aware of the importance to keep the ideas alive and to renew their learning and innovation capabilities, while focusing on reaching high quality and low cost and responding to customers’ needs. To achieve these objectives a growing number of firms have embraced the conversion to the so-called “post-bureaucratic” organizational structures, transforming from hierarchically-based to flat organizations built around self-managed teams. So, they moved from a coercive form of organization – abrogating individual autonomy and focusing on the typical technical efficiency of bureaucracy – to a context where individuals are provided with broader information and pushed to interact creatively, master their tasks, and assess their performance against their historical standards (conceived as valuable resources for both performance optimization and identification of opportunities locally and systemically). Indeed, bureaucratic organizational forms, based on fixed boundaries and hierarchical, top-down, control and authority were not fit to face the volatility of market and the high level of environmental dynamism and uncertainty. Therefore, a “horizontal shift” has occurred, reducing the level of vertical differentiation of hierarchical forms. In order to improve the organization readiness to change, cross-functional processes were implemented, delayering, giving empowerment and delegating the decision power closer to knowledge and information. Self-managing teams, working cross-functionally, represent the basis of post-bureaucratic organizational structures, promoting authority decentralization and employee empowerment. Network relations and crosscutting links between members supposedly create favorable conditions for organizational learning, fostering innovation and flexibility. We define innovation as the adoption of any process, product or service previously foreign to the focal organization. Indeed, past research has stressed the relevance of individual, organizational, and environmentalfactors as correlates ofinnovation, while others have viewed innovation as a function of all three factors. Nonetheless, experience proves that it is more difficult than expected to uncover ideas or to make use of internal capabilities for learning and innovation purposes. Despite the wide adoption of the team-based organizational structure, there are still challenges to address to be able to lead teams towards the achievement of a good balance between learning, innovation and performance goals. For example, understanding the proper role for team executives and leaders, and the effect of organizational controls in shaping team behaviors and values. These challenges still do not find appropriate responses due the difficulty to match proper managerial interventions with specific internal team characteristics and configuration. Internal and external contextual factors can have multiple and unexpected conflicting influences on team learning capability and performance. This is the case of the focal multinational corporation in the telco industry that we analyzed. This article focuses on organizational controls acting atthe individual,team and organizational level, unexpectedly causing the decline of learning and innovation performance. We describe their combination and their effects on the achievement of organizational learning and innovation goals (Fig. 1).

1- Introduction

2- The importance of corporate values for MNCs

3- Theory

4- Hypotheses development

5- Method

6- Discussion and conclusion

References

Abstract

We argue that a perceived misalignment between a multinational corporation’s espoused values and how those values are lived in the subsidiary has detrimental effects on group outcomes, specifically groups’ affective organizational commitment. Using data from 1760 work groups in the foreign subsidiaries of a large European MNC, we find support to our hypotheses and show that when there is a misalignment between a particular espoused value and the lived value, and the value at stake is central to the value system of the country in which the subsidiary is located, the detrimental effect on the group’s outcomes is more pronounced.

Introduction

Given the geographic spread of multinational corporations (MNCs) and the diversity of their employees, shared values serve as a common thread in guiding and achieving integration across foreign subsidiaries (Grøgaard & Colman, 2016). MNC headquarters (HQ) rely heavily on corporate values to establish and maintain behavioral norms, achieve global integration across subsidiaries, and facilitate knowledge sharing and creation (Chen, Paik, & Park, 2010; Harzing, 2001; Zander, Jonsen, & Mockaitis, 2016). As companies become increasingly globalized, shared values act as the “glue that holds an organization together as it grows, decentralizes, diversifies and expands” (van Rekom, van Riel, & Wierenga, 2006, p. 175). To act like a common glue requires the company’s core values to be “lived” throughout the MNC (Michailova & Minbaeva, 2012; Zander et al., 2016). The difference between espoused and lived values is critical in this context. Espoused values are “the articulated, publicly announced principles and values that … [an organization] claims to be trying to achieve” (Schein, 1992, p. 9). These values emerge from the underlying principles to which (most) members of the organization are expected to subscribe (Grøgaard & Colman, 2016). Although these values may predict what people say, they may differ widely from what people actually do (Argyris & Schon, 1996). On the other hand, lived values involve a theory-in-use that explains actual behavior (Argyris & Schon, 1996; Argyris, 1999; Kabanoff & Daly, 2002). Organizational values become “lived” only if they are internalized by individuals. Alignment between espoused and lived values is advantageous (Zander et al., 2016) but can be difficult to achieve, especially in MNCs organized as transnational, differentiated networks or as heterarchies (Bartlett & Ghoshal, 1989; Hedlund & Rolander, 1990; Nohria & Ghoshal, 1997). In such global networks of geographically dispersed subsidiaries, there are often notable differences between the values embraced by the HQ (espoused values)—manifested in mission statements, codes of conduct, corporate communications, and so on—and how they are practiced within the subsidiaries (lived values) (O’Reilly, 1989). These differences may result in value incongruence (Schein, 1992), and complicate shared interpretation and understanding of the MNC’s underlying value system (Kwantes, Arbour, & Boglarsky, 2007). In turn, this can violate the established psychological contract and “create cynical and dispirited employees … and undermine managerial credibility” (Lencioni, 2002, p. 5) to the extent that the commitment of foreign subsidiary employees and work groups is affected negatively (Howell, Kirk-Brown, & Cooper, 2012; Ortega-Parra & Sastre-Castillo, 2013; Simons, 2002).