Purpose: This paper discusses partial least squares path modeling (PLS), a powerful structural equation modeling technique for research on international marketing. While a significant body of research provides guidance for the use of covariance-based structural equation modeling (CBSEM) in international marketing, there are no subject-specific guidelines for the use of PLS so far.Methodology/approach: A literature review of the use of PLS in international marketing reveals the increasing application of this methodology.Findings: This paper reveals the strengths and weaknesses of PLS in the context of research on international marketing, and provides guidance for multi-group analysis.Originality/value of paper: The paper assists researchers in making well-grounded decisions regarding the application of PLS in certain research situations and provides specific implications for an appropriate application of the methodology.

The Use of Partial Least Squares Path Modeling in International Marketing

Advances in causal modeling techniques have made it possible for researchers to simultaneously examine theory and measures. However, researchers must use these new techniques appropriately. In addition to dealing with the methodological concerns associated with more traditional methods of analysis, researchers using causal modeling approaches must understand their underlying assumptions and limitations.

Most researchers are well equipped with a basic understanding of LISREL-type models. In contrast, current familiarity with PLS in the strategic management area is low. The current paper reviews four recent studies in the strategic management area which use PLS. The review notes that the technique has been applied inconsistently, and at times inappropriately, and suggests standards for evaluating future PLS applications. Copyright © 1999 John Wiley & Sons, Ltd.

Use of partial least squares (PLS) in strategic management research: a review of four recent studies

In order to determine the status quo of PLS path modeling in international marketing research, we conducted an exhaustive literature review. An evaluation of double-blind reviewed journals through important academic publishing databases (e.g., ABI/Inform, Elsevier ScienceDirect, Emerald Insight, Google Scholar, PsycINFO, Swetswise) revealed that more than 30 academic articles in the domain of international marketing (in a broad sense) used PLS path modeling as means of statistical analysis. We assessed what the main motivation for the use of PLS was in respect of each article. Moreover, we checked for applications of PLS in combination with one or more additional methods, and whether the main reason for conducting any additional method(s) was mentioned.

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The use of partial least squares path modeling in international marketing

The Social Psychology of Organizations.

The Uppsala internationalization process model is revisited in the light of changes in business practices and theoretical advances that have been made since 1977. Now the business environment is viewed as a web of relationships, a network, rather than as a neoclassical market with many independent suppliers and customers. Outsidership, in relation to the relevant network, more than psychic distance, is the root of uncertainty. The change mechanisms in the revised model are essentially the same as those in the original version, although we add trust-building and knowledge creation, the latter to recognize the fact that new knowledge is developed in relationships.

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The Uppsala Internationalization Process Model Revisited: From Liability of Foreignness to Liability of Outsidership

We investigated contextual organizational ambidexterity, defined as the capacity to simultaneously achieve alignment and adaptability at a business-unit level. Building on the leadership and organization context literatures, we argue that a context characterized by a combination of stretch, discipline, support, and trust facilitates contextual ambidexterity. Further, ambidexterity mediates the relationship between these contextual features and performance. Data collected from 4,195 individuals in 41 business units supported our hypotheses. A recurring theme in a variety of organizational literatures is that successful organizations in a dynamic environment are ambidextrous—aligned and efficient in their management of today’s business demands, while also adaptive enough to changes in the environment that they will still be around tomorrow (Duncan, 1976; Tushman & O’Reilly, 1996). The simple idea behind the value of ambidexterity is that the demands on an organization in its task environment are always to some degree in conflict (for instance, investment in current versus future projects, differentiation versus low-cost production), so there are always trade-offs to be made. Although these trade-offs can never entirely be eliminated, the most successful organizations reconcile them to a large degree, and in so doing enhance their long-term competitiveness. Authors have typically viewed ambidexterity in structural terms. According to Duncan (1976), who first used the term, organizations manage trade-offs between conflicting demands by putting in place “dual structures,” so that certain business units—or groups within business units—focus on alignment, while others focus on adaptation (Duncan, 1976).

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The antecedents, consequences and mediating role of organizational ambidexterity

Organizational Ambidexterity: Antecedents, Outcomes, and Moderators

Organizational ambidexterity has emerged as a new research paradigm in organization theory, yet several issues fundamental to this debate remain controversial. We explore four central tensions here: Should organizations achieve ambidexterity through differentiation or through integration? Does ambidexterity occur at the individual or organizational level? Must organizations take a static or dynamic perspective on ambidexterity? Finally, can ambidexterity arise internally, or do firms have to externalize some processes? We provide an overview of the seven articles included in this special issue and suggest several avenues for future research.

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Organizational Ambidexterity: Balancing Exploitation and Exploration for Sustained Performance

There has been a profound evolution in thinking about multinational corporations (MNCs) [since the late 1980s]. Traditionally, in academic models researchers assumed that ownership-specific advantages were developed at the corporate headquarters and leveraged overseas through the transfer of technology to a network of foreign subsidiaries (Vernon, 1966; Dunning, 1981). As these overseas subsidiaries grew in size and developed their own unique resources, however, it became apparent to many researchers that corporate headquarters was no longer the sole source of competitive advantage for the MNC. Scholars developed models such as the heterarchy (Hedlund, 1986) and the transnational (Bartlett and Ghoshal, 1989) to reflect the critical role played by many subsidiaries in their corporations’ competitiveness, and research attention began to shift toward understanding the new roles played by subsidiaries.

https://www.jstor.org/stable/pdfplus/259062.pdf

Multinational Subsidiary Evolution: Capability and Charter Change in Foreign-Owned Subsidiary Companies

This publication contains reprint articles for which IEEE does not hold copyright. Full text is not available on IEEE Xplore for these articles.

Julian Birkinshaw

Papers

The antecedents, consequences and mediating role of organizational ambidexterity

Organizational Ambidexterity: Antecedents, Outcomes, and Moderators

Organizational Ambidexterity: Balancing Exploitation and Exploration for Sustained Performance

Multinational Subsidiary Evolution: Capability and Charter Change in Foreign-Owned Subsidiary Companies

Management innovation