Showing papers in "Journal of International Business Studies in 1984"
TL;DR: The relationship between percent equity ownership and subsidiary success from the TNCs' viewpoint, however, was J-shaped as discussed by the authors, indicating that high and low levels of equity ownership were associated with high levels of success.
Abstract: As the bargaining power of the transnational corporations (TNCs) in the sample increased relative to the bargaining power of the host country, and as the desire of the TNCs for a high level of equity ownership increased, the percent equity ownership of the TNCs in their subsidiaries increased. The relationship between percent equity ownership and subsidiary success from the TNCs' viewpoint, however, was J-shaped. High and low levels of equity ownership were associated with high levels of success. Control of critical operational variables by the TNC was directly related to success.
398 citations
TL;DR: In this paper, a conceptual model is developed to assist multinational corporation managers in selecting appropriate control systems and determining the extent of delegation to be provided to subsidiary managers, and the authors suggest directions for future research.
Abstract: The paper has 2 major objectives: first, to identify control and delegation issues confronting multinational corporation managers; second, to develop a conceptual model to assist multinational corporation managers in selecting appropriate control systems and determining the extent of delegation to be provided to subsidiary managers. Finally, the paper suggests directions for future research.
378 citations
TL;DR: The management of multinational operations is often required to balance conflicting priorities between responsiveness at the national subsidiary level and central coordination for global competitiveness as mentioned in this paper, which requires that relevant data be brought to bear on decisions, that consensus be created among key managers, and that relative power among them be carefully balanced.
Abstract: The management of multinational operations is often required to balance conflicting priorities between responsiveness at the national subsidiary level and central coordination for global competitiveness. Such balancing requires that relevant data be brought to bear on decisions, that consensus be created among key managers, and that relative power among them be carefully balanced. In large complex MNCs the balancing process can be institutionalized through the structuring of relationships between headquarters and subsidiaries.
277 citations
TL;DR: In this paper, the integration of French and British subsidiaries into US-based multinationals is examined, and a theory linking the use of control and coordination mechanisms to the need for predictability, flexibility, and the cost of achieving them is investigated by relating organizational structure, technology, foreign commitment, financial performance, and nationality to use of coordination and control.
Abstract: The integration of French and British subsidiaries into US-based multinationals is examined A theory linking the use of control and coordination mechanisms to the need for predictability, flexibility, and the cost of achieving them is investigated by relating organizational structure, technology, foreign commitment, financial performance, and nationality to the use of coordination and control
211 citations
TL;DR: In this paper, a review of empirical research in international marketing published during the period 1976-82 is presented, focusing on what has been researched and how the research has been conducted.
Abstract: This paper reviews empirical research in international marketing published during the period 1976–82 The review focuses on what has been researched and how the research has been conducted This research is evaluated; a cooperative, multidisciplinary empirical research program in international marketing is then proposed
207 citations
TL;DR: The authors examined the type and level of control exercised by the parent headquarters of 50 U.S., UK, and European multinational corporations over their foreign subsidiaries, and found that patterns of control in the three national groups differ in significant ways, and these differences seem to have important implications for other characteristics of a company's organization design and managerial style.
Abstract: This paper examines the type and level of control exercised by the parent headquarters of 50 U.S., UK, and European multinational corporations over their foreign subsidiaries. Patterns of control in the 3 national groups differ in significant ways, and these differences seem to have important implications for other characteristics of a company's organization design and managerial style.
203 citations
TL;DR: In this article, the authors address theoretical and conceptual issues in political risk assessment, focusing on the interrelationship of strategies, goals, and capabilities of key actors, as well as the impact of different environments on the formation of political risk.
Abstract: One of the fastest growing areas of research in international business has been political risk assessment. Concerned primarily with the identification, analysis, and management of sociopolitical and governmental restraints on foreign investment, the discipline has flourished in the wake of the international turmoil of recent years. An integral stage in the development of any new field is the establishment of a theoretical base upon which further research can build. This paper thus addresses itself to theoretical and conceptual issues in political risk assessment, focusing on the interrelationship of strategies, goals, and capabilities of key actors, as well as the impact of different environments on the formation of political risk. In order to demonstrate the feasibility of the approach set forth in this paper, political risk in the Republic of South Africa is examined.
181 citations
TL;DR: The authors argue that global strategies succeed by creating certain economies along and the between value-added chains and by designing marketing programs that adapt products to national needs and yet exploit these upstream economies.
Abstract: The formulation of strategy can be fruitfully viewed as placing bets on certain markets and on certain links of the value-added chain. The key to understanding a global strategy is to locate how competitive positions in one national market change the economics for entry into other countries and into other product lines. This article argues that global strategies succeed by creating certain economies along and the between value-added chains and by designing marketing programs that adapt products to national needs and yet exploit these upstream economies. Two major conclusions are that a company can compete in different strategic groups across countries and that a hallmark feature of a global strategy is the creation of operational flexibility to benefit from uncertainty.
157 citations
TL;DR: In this paper, the conditions under which an international firm would expand overseas via the transfer of technology and rights to its own controlled equity affiliates, as opposed to resorting to the "market" by selling its technology to independent foreign licensees.
Abstract: This paper focuses on the conditions under which an international firm would expand overseas via the transfer of technology and rights to its own controlled equity affiliates, as opposed to resorting to the “market” by selling its technology to independent foreign licensees. The relative propensity of U.S. firms to use licensing versus equity investment is then examined statistically in regression models using data of the Department of Commerce. A second paper in this series (forthcoming in the Summer 1985 issue) will examine strategic and negotiation issues involved in combining equity investment, licensing and intra-firm trade into one agreement.
145 citations
TL;DR: In this paper, the authors argue that human power is a key ingredient to the successful operation of a multinational, without which all the other aforementioned resources could not be effectively and efficiently utilized or transferred from corporate headquarters to the various subsidiaries in the world.
Abstract: The efficient operation of a multinational corporation is contingent upon the availability of numerous—technology, capital, know-how, and people. In this paper, the argument is made that human power is a key ingredient to the successful operation of a multinational, without which all the other aforementioned resources could not be effectively and efficiently utilized or transferred from corporate headquarters to the various subsidiaries in the world. Hence, there is a need for multinationals to devote more attention to human resource planning, which is viewed as part of the overall planning and control process in a firm. The paper compares and contrasts the human resource development programs between a sample of U.S. and Japanese multinationals, and discusses the implications for U.S. multinationals.
78 citations
TL;DR: This article showed how differences across countries of 1) inflation rates, 2) consumption baskets of investors, and 3) investment opportunity sets of investors matter when one applies capital asset pricing models in an international setting.
Abstract: This paper shows how differences across countries of 1) inflation rates, 2) consumption baskets of investors, and 3) investment opportunity sets of investors matter when one applies capital asset pricing models in an international setting. In particular, the fact that countries differ is shown to affect the portfolio held by investors, the equilibrium expected returns of risky assets, and the financial policies of firms.
TL;DR: In this article, the authors examined the relationships between increasing manufacturing interdependence with the use of four coordination modes, i.e., impersonal methods, use of organization members who have a system sensitive outlook, executive compensation systems based on a subsidiary's performance, and personal communication.
Abstract: Many companies have recently adopted global manufacturing rationalization programs. In order to realize the full benefit of these internationally integrated manufacturing strategies, however, companies need to overcome the problem of coordinating operations where interdependence exists among subsidiaries. This article, which is based on a field study of 25 multinational companies, provides insights on how manufacturing interdependence among country subsidiaries is coordinated. Specifically, the study examined the relationships between increasing manufacturing interdependence with the use of 4 coordination modes—impersonal methods, use of organization members who have a system sensitive outlook, executive compensation systems based on a subsidiary's performance, and personal communication—and with the use of 3 communication patterns—communication between managers of different country subsidiaries, communication with top management, and communication with a central manufacturing staff group. Findings suggest that although there is an extensive use of impersonal methods of coordination, with increasing interdependence there is a change in coordination mix towards greater use of system-sensitive members and personal communication. Increasing interdependence is also significantly associated with greater communication among country-subsidiary managers and greater communication with a central manufacturing staff group. Although the relationships between increasing interdependence and communication with top management through the formal hierarchy was not found to be statistically significant, interviews with managers suggested the importance of this channel when communication among country-subsidiary managers and communication with the central manufacturing staff group are inadequate for managing the manufacturing interdependence. Implications are drawn for companies planning to increase the international integration of their manufacturing operations.
TL;DR: In this paper, the authors explored the development of the overseas manufacturing direct investment by Korean firms and the relationship between parent firms and overseas affiliates, and three main issues are discussed: the ownership-specific assets, location-specific factors, and government policies.
Abstract: As an extension of the export-led growth of national economy overseas, direct investment by Korean multinationals has been rapidly increasing. This article explores the development of the overseas manufacturing direct investment by Korean firms and the relationship between parent firms and overseas affiliates. Three main issues are discussed: the ownership-specific assets, location-specific factors, and government policies are the important sets of variables that help to explain the internationalization of the Korean firms in the manufacturing sector, the nature of technology transfer by Korean multinationals to their subsidiaries, and the benefits as a result of its overseas investment to Korean. The data for this study were gathered through structured interviews with the parent companies of 18 out of 21 manufacturing overseas subsidiaries and joint ventures formed by Korean firms.
TL;DR: In this paper, the characteristics of the major strategic levels and tasks in a multinational corporation are identified, along with their implications for strategic human resource management, and the process by which human resources have gained a place in strategic management is examined.
Abstract: Strategy is implemented by people; this article emphasizes this fundamental notion throughout. The characteristics of the major strategic levels and tasks in a multinational corporation (MNC) are identified, along with their implications for strategic human resource management. Through observations within 4 Swedish MNCs, the process by which human resources have gained a place in strategic management is examined. The experience of these firms in matching strategy and human resources is analyzed, concluding with suggestions regarding the implications of all this for practitioners and researchers.
TL;DR: In this paper, a case study of four firms and a questionnaire survey of 52 companies show that the mother-daughter structure prevalent in Swedish MNCs is changing and the control style is changing in the direction of slightly more formal performance evaluation. And the changes can be understood as adaptations to growing size of the firms, increased product diversity, acquisitions of foreign companies, technological maturity, entry of new managers, and slower demand growth.
Abstract: In-depth case studies of 4 firms and a questionnaire survey of 52 companies show that the mother-daughter structure prevalent in Swedish MNCs is changing. Firms tends to adopt organizational structures ‘in between’ a pure mother-daughter one and one divided along product or technology lines. Rather than introducing formal matrix structures, relatively simple organizational forms are complemented by changes in information systems, budgeting procedures, rotation of personnel, and so forth. The control style is changing in the direction of slightly more formal performance evaluation. The changes can be understood as adaptations to growing size of the firms, increased product diversity, acquisitions of foreign companies, technological maturity, entry of new managers, and slower demand growth.
TL;DR: The Foreign Corrupt Practices Act (FCPA) was found to have no negative effect on the export performance of American industry as mentioned in this paper and no differences were discovered in the U.S. market share in other countries where the FCPA is reported to be an important trade disincentive.
Abstract: The Foreign Corrupt Practices Act (FCPA) was found to have no negative effect on the export performance of American industry. Market share of U.S. industry in countries where the FCPA is reported to be an important trade disincentive was compared with U.S. market share in other countries. No differences were discovered.
TL;DR: In this article, the authors show the distorting effects of different tax regulations on the effective absolute and relative costs of long-term borrowing in different currencies. In particular, if expected borrowing costs are equal before tax, then the process of minimizing expected after-tax borrowing costs generally involves borrowing the weakest currency.
Abstract: This paper shows the distorting effects of different tax regulations on the effective absolute and relative costs of long-term borrowing in different currencies. In particular, if expected borrowing costs are equal before tax, then the process of minimizing expected after-tax borrowing costs generally involves borrowing the weakest currency.
TL;DR: This article reviewed and synthesized the emergence and growth of U.S., Western European, and Japanese MNCs in the postwar environment, the growing role of state enterprises, and the recent emergence of Third World MNC.
Abstract: This article reviews and synthesizes the emergence and growth of U.S., Western European, and Japanese MNCs in the postwar environment, the growing role of state enterprises, and the recent emergence of Third World MNCs. While U.S. foreign direct investments have expanded and continue to be highly significant, some important recent developments are the more rapid growth of Western European and Japanese MNCs, the increased role of the U.S. as a host country for investments, the emergence of multibusiness by MNCs, the more numerous actors involved in global business, and the dramatic, more rapid changes in the world environment. This article explores developments in host- and home-country policies, some of the other major actors in international business, “newer” forms of international participation along with some hypotheses, and concludes by analyzing a few major changes in global environments and multinational management.
TL;DR: In this article, the feasibility of adding international business to the business core by using a multinational business simulation game in the capstone policy course was investigated, and the simulation game is not intended to replace an introductory course or substitute for other approaches.
Abstract: This study reports on the feasibility of adding international business to the business core by using a multinational business simulation game in the capstone policy course. The simulation game is not intended to replace an introductory course or substitute for other approaches. It is intended to provide a minimal introduction where none currently exists and perhaps to aid in overcoming the inertia with regard to relevant curriculum changes that are needed to comply with American Assembly of Collegiate Schools of Business (AACSB) guidelines.
TL;DR: The Academy of International Business members were surveyed to elicit their opinions of the relative quality of international business programs in American schools as discussed by the authors, and they were also asked for their criteria for their evaluation.
Abstract: The Academy of International Business members were polled to elicit their opinions of the relative quality of international business programs in American schools. They were also asked for their criteria.
TL;DR: In this paper, the authors report on the strategic adjustments undertaken by the larger firms of 5 European, 3 Asian Pacific, and the U.S. textile mill products companies during the 1960s and 1970s, and examine several of the underlying reasons for the gradual decline in the U.,S. industry's international competitiveness.
Abstract: This article reports on the strategic adjustments undertaken by the larger firms of 5 European, 3 Asian Pacific, and the U.S. textile mill products companies during the 1960s and 1970s, and examines several of the underlying reasons for the gradual decline in the U.S. industry's international competitiveness. The study's basic conclusions are that the majority of the foreign textile industries view customer markets differently than the U.S. industry; that they place different emphasis on technology, production, marketing, and strategic planning; and that they have different relationships with their governments than U.S. firms do. The implications of these findings are discussed, and corporate strategy recommendations that are designed to enhance the future international competitiveness of the U.S. industry are presented.
TL;DR: In this paper, the implications of transnational data flow constraints for international business are examined and the need for a free flow of information across national boundaries is discussed, facilitating international business and reducing costs for multinational corporations.
Abstract: This article examines the implications of transnational data flow constraints for international business. The need for a free flow of information across national boundaries—facilitating international business and reducing costs for multinational corporations—is discussed. Although both large and small firms are affected by transnational data constraints, companies that are managed in a decentralized fashion are affected to a lesser degree. Economic protectionism has emerged as a major reason for regulating transnational data flow by nation states.
TL;DR: In this paper, two time-series discriminant models were developed for classifying each of the 18 years according to the occurrence of such action, finding that adverse government action was more likely to occur following years of economic decline and periods when U.S. companies earned high profits from petroleum investments in Venezuela.
Abstract: In 9 of the years between 1961 and 1978, Venezuelan regimes took actions adverse to the profitability of U.S oil companies' local production operations. In this study 2 time-series discriminant models were developed for classifying each of the 18 years according to the occurrence of such action. In the first model, adverse government action was found more likely to occur following years of economic decline and periods when U.S. companies earned high profits from petroleum investments in Venezuela. In the second model, government action tended to occur after periods of relative deprivation experienced by Venezuelans. To illustrate the use of discriminant models in forecasting political risks, hypothetical scenarios were formulated from which projections were made through 1985 of the likelihood of government action against those U.S. oil companies' operations remaining since the nationalization of petroleum.
TL;DR: The following article is based on the Presidential Address delivered by Robert G. Hawkins of Rensselaer Polytechnic Institute at the 19 October 1984 meeting of the Academy of International Business in Cleveland, Ohio as mentioned in this paper.
Abstract: The following article is based on the Presidential Address delivered by Robert G. Hawkins of Rensselaer Polytechnic Institute at the 19 October 1984 meeting of the Academy of International Business in Cleveland, Ohio. Dr. Hawkins assesses the success (and failure) of the field of international business study in its 3 objectives—education, research, and the ability to influence policy making—and comes to conclusions and recommendations for the future.
TL;DR: In this article, the authors developed a comprehensive, dynamic model of strategic planning for multinational corporations, which depicts many aspects in MNC strategic planning systems, while recognizing that many variations exist among companies.
Abstract: This article develops a comprehensive, dynamic model of strategic planning for multinational corporations. The model depicts many aspects in MNC strategic planning systems, while recognizing that many variations exist among companies. Within the context of the model and experience of companies, certain approaches to competitive assessment, focusing on strategic issues, portfolio planning, and threat/opportunity analysis, are emphasized. Finally, the article examines recent ways in which MNCs have been fine-tuning their strategic planning to deal with rapidly changing global environments, to meet new competition, and to achieve profitability and other goals.
TL;DR: A comparison of the balance sheet structure of the largest U.S. and Japanese firms for 1979 shows that Japanese firms significantly differ from U.,S. firms in their greater reliance on bank-funded short-term debt, low levels and composition of net working capital, parsimonious use of stockholder's equity, and greater commitment to long-term investments in other corporations as mentioned in this paper.
Abstract: A comparison of the balance sheet structure of the largest U.S. and Japanese firms for 1979 shows that Japanese firms significantly differ from U.S. firms in their greater reliance on bank-funded short-term debt, low levels and composition of net working capital, parsimonious use of stockholder's equity, and greater commitment to long-term investments in other corporations.
TL;DR: The authors compared and contrasted group planning practices of leading American and Australian manufacturing firms and found that a broad pattern of similarity emerges across many elements of the planning systems, despite some differences in the planning practices.
Abstract: Group planning practices of leading American and Australian manufacturing firms are compared and contrasted. Despite some differences, a broad pattern of similarity emerges across many elements of the planning systems.