Showing papers by "John M. Luiz published in 2017"

Institutional Complementarity and Substitution as an Internationalization Strategy: The Emergence of an African Multinational Giant

Abstract: Research Summary: We examine the internationalization decisions made by one of Africa's most successful companies, South African Breweries, as it underwent a period of aggressive expansion. We see processes of both institutional complementarity and substitution at different phases and with different motives. At first it sought countries that played to its strength, namely the knowledge of doing business in environments of institutional uncertainty, but later it pursued an institutional diversification strategy whereby it attempted to minimize its institutional risk exposure. As it became larger, its aspirations increased too, and its over-exposure to emerging market institutional risk saw it engage in institutional substitution into advanced countries. Through this phased international process, it was able to develop its internal assets, and this enabled the moves into developed markets. Managerial summary: We demonstrate that firms can exploit their knowledge of ‘weak’ institutional settings and turn it into a source of advantage as they internationalize into locations with similar institutional ‘weaknesses.’ Using the case of one of Africa's most successful multinational enterprises, we illustrate the value gained from initially capitalizing upon institutional complementarity (utilizing the comparative advantage linked to institutional know-how) by exploiting the experience of the home country's environment into similar settings. Over time and through learning-by-doing, pressure arose to diversify the risk linked with over-exposure to institutional uncertainty and country risk, and this was associated with the process of institutional substitution into more advanced countries. We see emerging multinational learning and building its capabilities by leveraging its understanding of its home country institutional environment.

The impact of multinational enterprises on public governance institutions in areas of limited statehood

Abstract: We explore the interaction between MNEs and public governance institutions in regions of limited statehood by focusing on three areas of inquiry: firstly, the impact of MNEs in these environments; secondly, the mechanisms and levels through which MNEs engage with external governance processes; and lastly, the strategic motivation for the mode and level of engagement. We follow an applied qualitative research approach, drawing on the principles of case study design, through interviews with executives that were involved in setting up four MNEs in Afghanistan. The results reveal a relationship between the depth of country embeddedness and the level of engagement of MNEs with public institutions and this is related to issues around risk mitigation and time horizons. Deeper embeddedness in the local markets brings greater exposure to risk leading to more and wider engagement in governance processes and cross sector partnerships in order to influence these concerns. The research contributes to institutional theory and demonstrates the interplay between organizations and the institutional surroundings. MNEs in Afghanistan are deeply affected by institutional weakness which contribute towards greater uncertainty and impact their behavior, but MNEs also have a direct bearing on institutions. In fragile and conflict affected states MNEs can contribute towards peace- and institution-building and reinforce cycles of positive development, or they can further pathological behavior and contribute to conflict. MNEs are increasingly going to be expected to step into the gaps associated with institutional voids and this will require a different approach to doing business and their choice of approach will have a direct bearing on social outcomes in host countries. We reveal two models of MNE engagement in these areas of limited statehood, namely an embedded versus autonomous model and examine their implications.

Framing preventive care messaging and cervical cancer screening in a health-insured population in South Africa: Implications for population-based communication?:

Abstract: The impact of health message framing on cervical cancer screening uptake is poorly understood. In a prospective randomized control study with 748 females, aged 21-65 years with no Pap smear in the previous 3 years, they randomly received a loss-framed, gain-framed, or neutral health message (control) regarding cervical cancer screening by email. Screening rate in the control group was 9.58 percent (CI: 9.29%-9.87%), 5.71 percent (CI: 5.48%-6.98%) in the gain-framed group, and 8.53 percent (CI: 8.24%-8.81%) in the loss-framed group. Statistically there was no difference between the three screening rates. Framing of health messages may not be a significant consideration when communicating through emails.

The impact of home and host country institutions in the internationalization of an African multinational enterprise

Abstract: We demonstrate that firms can exploit their knowledge of ‘weak’ institutional settings and turn it into a source of advantage as they internationalize into locations with similar institutional ‘weaknesses.’ Using the case of one Africa’s most successful multinational enterprises we illustrate the value gained from initially capitalizing upon institutional complementarity (utilizing the comparative advantage linked to institutional know-how) by exploiting the experience of the home country’s environment into similar settings. Over time and through learning-by-doing, pressure arose to diversify the risk linked with over-exposure to institutional uncertainty and country risk, and this was associated with the process of institutional substitution into more advanced countries. We see an emerging multinational learning and building its capabilities by leveraging off its understanding of its home country institutional environment.