Showing papers in "Journal of International Business Studies in 1994"

Toward a theory of international new ventures

Abstract: The formation of organizations that are international from inception—international new ventures—is an increasingly important phenomenon that is incongruent with traditionally expected characteristics of multinational enterprises A framework is presented that explains the phenomenon by integrating international business, entrepreneurship, and strategic management theory That framework describes four necessary and sufficient elements for the existence of international new ventures: (1) organizational formation through internalization of some transactions, (2) strong reliance on alternative governance structures to access resources, (3) establishment of foreign location advantages, and (4) control over unique resources

Measuring the Degree of Internationalization of a Firm

Abstract: In spite of both positivistic and instrumental research, the reliability of measuring the degree of internationalization of a firm remains speculative. We collected data on nine attributes of seventy-four American manufacturing MNCs. Alpha, factor, and frequency analyses revealed a linear combination of five variables with a reliability coefficient of .79 as a measure of the degree of internationalization of a firm. We discuss the statistical and conceptual properties of the scale and their implications for content and construct validity.

Influences on Human Resource Management Practices in Multinational Corporations

Abstract: A study of human resource management practices in 249 U.S. affiliates of foreign-based multinational corporations (MNCs) shows that in general affiliate HRM practices closely follow local practices, with differences among specific practices. The degree of similarity of local practices is significantly influenced by the method of founding, dependence on local inputs, the presence of expatriates, and the extent of communication with the parent. In addition, sharp differences are revealed among affiliates of Canadian, Japanese and European MNCs, suggesting strong country effects. Together, these findings support the view of MNCs as composed of differentiated practices, which in turn are shaped by forces for local isomorphism and for internal consistency.

Customer Evaluation of Products in a Global Market

Abstract: Marketing scholars' interest in the influence of source countries on product evaluations has intensified during the past twenty-five years. As this research tradition has evolved, the literature has gradually gained more depth and sophistication. Nevertheless, research in this area lacks a common conceptual framework. Furthermore, research priorities with regard to the role of this area of inquiry within the broader field of consumer behavior, marketing and general business decisions have not been made clear. This article rationalizes the buying decision processes within the context of source-country influences and offers a conceptual framework for further development. In addition, it links country-level considerations to firm-level decisionmaking, thus providing a foundation for meaningful managerial decisions.

Ownership-Based Entry Mode Strategies and International Performance

Abstract: This study examines the relationship between ownership entry modes and performance. The ownership entry modes examined are the wholly owned modes of acquisition and new venture entry, and the non-wholly owned mode of joint venture entry. A theoretical relationship is developed for international entry modes that is based on the contingency characteristics of resource requirements and organizational control factors. This model suggests that different entry modes have different performance outcomes based upon their resource and organizational control demands. The theoretical model, although developed using the eclectic theoretical approach, is based largely on concepts and relationships previously delineated in contingency theory. Our hypotheses suggest that new ventures should outperform joint ventures, and joint ventures should outperform acquisitions. An empirical test using a sample of 321 Japanese firms entering the North American market provides supporting evidence.

The Relationship Between Firm Size and Export Behavior Revisited

Abstract: Many academic studies and government leaders are asking small- and medium-sized firms to become more involved in exports. Unfortunately, the role that can be played by smaller firms is unclear. Despite the vast number of studies on size and export behavior, discrepancies in study findings and the absence of variance statistics prevent researchers from understanding the importance of size. This study has sought to examine the direct and indirect effects of firm size by examining three dimensions of export behavior: propensity of export, countries exporting to and export attitudes for 14,072 Canadian manufacturers. The results indicate that while firm size is positively related to all dimensions of export behavior, its importance is limited as the amount of variance explained is modest.

Fostering Corporate Entrepreneurship: Cross-Cultural Comparisons of the Importance of Individualism Versus Collectivism

Abstract: This study reports on results of a cross-cultural, empirical investigation designed to assess the impact of individualism/collectivism upon organizational entrepreneurship. The findings indicate individualism/collectivism is an important factor in understanding entrepreneurial behavior in the firm. Implications of these findings are discussed.

Shareholder Benefits from Corporate International Diversification: Evidence from U.S. International Acquisitions

Abstract: Do international acquisitions—in contrast to their domestic counterparts—create value for the acquiring firms' shareholders? This study examines the valuation consequences of 276 U.S. international acquisitions made in the period 1975–1988, and provides direct evidence on the effect of international acquisitions on the market value of U.S. bidding firms. It is shown that, on average, international acquisitions create value for the acquiring firms. The study also finds that the value created is a function of the nature of the acquisition (e.g., related or unrelated); the nature of the bidding firm's industry (e.g., its concentration level and advertising intensity); the nature of the acquiring firm (e.g., its prior international experience and its current profitability); and the nature of the macroeconomic environment (e.g., tax regulations and the relative strength of the U.S. dollar).

A Managerial Decision Model of International Cooperative Venture Formation

Abstract: This paper develops a model of international cooperative venture formation that is centered on the decisionmaking process of MNE executives. Central issues for managerial decisions are developed from the organizational studies literature. A framework delineating the sequence and criteria used in the decision to form international cooperative ventures is developed from these defined issues and from existing models. Propositions pertaining to the venture formation decision process are outlined.

Cultural Differences in Conducting Intra- and Inter-Cultural Negotiations: A Sino-Canadian Comparison

Abstract: A study on conflict resolution strategies of Canadian and Chinese (Peoples Republic of China) executives was conducted. Responses to two types of joint project conflicts—task-related and person-related with potential partners from their own culture or from the other culture—were examined. Neither group of executives altered its strategy when negotiating across cultures. Chinese executives were more likely to avoid conflicts but recommended more negative strategies (discontinue negotiation; withdraw negotiation) when conflict emerged. Person-related conflicts were found to generate more negative responses than task-related conflicts, especially for Chinese executives. Both Canadian and Chinese executives preferred to negotiate with Canadians than with Chinese.

Trends in International Business Research: Twenty-Five Years Later

Abstract: International business (IB) research has made enormous strides in the quarter century since JIBS was inaugurated. This article reflects upon the development of IB research during that period. It first reviews the findings and recommendations of a comprehensive survey of the embryonic field of IB research, conducted twenty-five years ago. Several early trends identified then are discussed: the astonishing acceleration in the pace of IB research; the broadening of research activity across a greater range of functional areas; and an expanding geographic base of research outside of North America, especially in Europe. We then discuss the evolution of IB research since that formative period: growing breadth and diversity; greater methodological sophistication; a move toward research transcending traditional functional boundaries; development of new research areas such as management information systems and international coalitions and alliances; research on the phenomenon of transnational firms as complete systems; and the continued broadening of the geographic base of research. Emerging research areas such as international entrepreneurship and small business, and the greening of business, are identified. The article concludes with calls for more research collaboration across national boundaries, and for greater synthesis of research into broader, more integrative frameworks.

The Transfer of Japanese-Style Management to American Subsidiaries: Constraints, and Competencies

Abstract: This paper first reviews the theories of the transfer of Japanese management practices overseas. The paper then outlines a contingency theoretical model that specifies the factors which are hypothesized to impact the transfer of Japanese-style HRM practices to overseas subsidiaries. Qualitative data from a field study of ten Japanese subsidiaries in the U.S., five in the service industry and five in manufacturing, are used to illustrate the concepts presented in the theoretical discussion.

The Demise of Expropriation as an Instrument of LDC Policy 1980–1992

Abstract: This paper reports data collected on expropriation activity by developing countries from 1980–1992, extending previous work by Kobrin [1984]. Kobrin's assumption that expropriation activity would continue to decrease over time, and his reasons for this assumption, are supported. The paper introduces recent phenomena which further indicate that expropriation is unlikely to resurface in the near future as a source of multinational corporation-developing country contention. Many developing countries now protect foreign direct investors from expropriation. The broad-scale movement in developing countries to privatize state-owned enterprises also indicates that governments will not be eager to replace private-sector activity with state ownership.

Is There a Relationship Between a Geocentric Mind-Set and Multinational Strategy?

Abstract: This paper operationalizes and tests relationships between a geocentric managerial mind-set, geographic scope and the structural and strategic characteristics of firms and industries. Relationships are tested using data from a survey of senior corporate international HRM managers of large, U.S.-based, manufacturing multinationals. An index of a geocentric mind-set is found to correlate with geographic scope and various aspects of IHRM policy and practice; however, no relationship is found with measures of multinational strategy or organizational structure. The paper concludes with a speculative hypothesis: development of a geocentric mind-set may relate to the information or knowledge intensity of the firm rather than its position on the strategic continuum.

Negative Country-of-Origin Effects: The Case of the New Russia

Abstract: With the political and economic changes in Eastern Europe, there is an increasing need to market successfully products from these countries in the industrialized world. This paper explores the extent to which the risk attitudes, political convictions, and country-of-origin associations of individuals affect the buying decision of a product from a controversial source country. On a theoretical level, it is investigated where in the decision-making process political convictions and country-of-origin effects emerge most forcefully. Hypotheses are tested empirically against survey data on farmers' evaluations of tractors from several countries, including the Russian-made Belarus. The data analysis involves the specification of a recursive system encompassing the steps the buyer goes through from product evaluation to purchase. The effects of political convictions, risk attitudes, and the country-of-origin connection are evaluated at each stage in the process. Implications are derived for potential strategies on the part of Russian manufacturers.

The Impact of Journals and Authors on International Business Research: A Citational Analysis of JIBS Articles

Abstract: In this paper we use citational analysis to examine the influence of individuals and disciplines on international business research. We collected citational data over the ten-year period 1984 to 1993 from every issue of the Journal of International Business Studies. We found that management, economics, marketing, and finance disciplines have had significant influence on international business research and identified researchers such as Dunning, Porter, Vernon, Casson, Rugman, and Hofstede as having made significant contributions to international business research.

An Analysis of Twenty-Five Years of Research in the Journal of International Business Studies

Abstract: The article analyzes the twenty-five years of research published in the Journal of International Business Studies (JIBS) since its inception in 1970. The article reviews the authors, their institutional affiliations, and the discipline content of the published articles.

Social Knowledge as a Control System: A Proposition and Evidence from the Japanese FDI Behavior

Abstract: Building upon the concept of clans, this paper introduces the value of social knowledge as a control mechanism available for an MNC to manage its foreign subsidiaries Social knowledge is defined as one's ability to understand and predict others' general patterns of behavior The hypotheses are empirically tested with Japanese FDI data into four host countries, the United States, Singapore, Taiwan, and Korea The results offer broad support for the proposition that for MNCs with social knowledge, the need to resort to ownership for control purposes is reduced

The State as Strategist in International Business Research

Abstract: No matter what strategy managers choose, cross-national differences in states' strategic capabilities and objectives affect multinational corporations' capabilities to manage interdependent operations. In this paper, we develop four attribute dimensions along which states' strategic economic capabilities vary. We then apply these dimensions to show how they contribute to familiar international business models of managerial process, MNC strategy and organizational structure, and country competitiveness.

Determinants of Export Orientation of Foreign Production by U.S. Multinationals: An Inter-Country Analysis

Abstract: This paper examines the role of structural and policy factors in explaining a country's attractiveness as a base for export-oriented production by U.S. MNEs. Empirical analysis finds wage rates and industrial capability to be important determinants of export-oriented production attracted by a country. Exports generated by relocation are found to be dependent upon intra-firm imports. U.S. MNEs are found to be using their hosts as export bases more selectively.

A Global Survey of International Business Education in the 1990s

Abstract: This article presents the major findings of the fifth global curriculum survey of the Academy of International Business (AIB)—an examination of the status and trends in international business education around the world as of the early 1990s. The survey's findings, based on responses from more than 500 business schools, encompass different goals and methods of internationalization, international linkages and experiential activities, organizational issues, amounts of internationalization progress achieved, and degrees of administrative satisfaction with progress achieved. The overall conclusion is that considerable progress has been made, but much more remains to be accomplished.

Offshore Sourcing: Reaction, Maturation, and Consolidation of U.S. Multinationals

Abstract: The authors conducted a quasi-longitudinal investigation of U.S. multinationals' R&D, manufacturing, offshore sourcing strategies, and resultant global market performance implications, utilizing comprehensive data collected by the 1977, 1982 and 1989 benchmark surveys of U.S. direct investment abroad. Hypotheses were tested in a path analytic framework. Despite increased competition at home and abroad causing their global market share positions to weaken in recent years, U.S. multinationals have maintained, and even may have improved, their global consolidated profitability levels by skillfully exploiting their technological prowess through technology transfer and off-shore sourcing. Rapidly changing roles of U.S. parent firms and their foreign affiliates in technology development and global sourcing relationships portend a maturing, yet arduous, shift toward a global rationalization.

International Strategy and Environment: An Assessment of the Performance Relationship

Abstract: This study develops a classification of international business-level strategies built on the dimensions of segment differentiation and geographic scope. In addition, performance outcomes associated with specific international environment and business-level strategy matches are suggested. Using information from firms competing in both global and multidomestic industries, the study finds that geographic scope and segment differentiation can be used to distinguish four international strategies, the effectiveness of which is a function of the environments in which firms compete.

Multinational Investment under Uncertainty in the Chemical Processing Industries

Abstract: This study uses a sample of chemical processing industries to evaluate the effect of two types of uncertainty on the decision to invest in an industry. It analyzes the effects of relative price uncertainty, through exchange rates and input prices, and demand uncertainty on the probability of expansion in a particular country. The study then focuses on the behavior of individual companies, and distinguishes companies by whether or not they are multinationals in the production of the product. The results confirm previous evidence that exchange rate uncertainty has a negative effect on capacity expansions by domestic corporations and no effect on investment by multinational corporations. Finally, the study also shows that expansions of production capacity in this industry are more likely to occur in those countries where capacity utilization is higher.

The Globalization of our Mental Maps: Evaluating the Geographic Scope of JIBS Coverage

Abstract: This article analyzes patterns of country coverage in the Journal of International Business Studies during the twenty-five years of its existence. The analysis shows a substantial expansion in the journal's geographic reach over the years, but also a somewhat narrow “mental map,” with many countries and areas receiving only minimal coverage. Explanations for country preferences among researchers are explored and implications for the future are discussed.

Contributing to an International Business Curriculum: An Approach from the Flank

Abstract: I have an uneasy feeling that, in responding to the invitation of JIBS' editors to recount how I stumbled into the field of international business, I am providing very sparse fare for many of JIBS' readers, particularly for those who want to gain hints of what it takes to make a success in the teaching of international business. But I could not resist the editors' challenge to look back at my years as a teacher of international business from 1959 to 1978, in order to learn perhaps for the first time what the experience may have taught me.

The Importance of International Business to The Strategic Agenda of U.S. CEOs

Abstract: The growth of international business (IB) and concerns about the relevance of IB research indicate the need for managerial input on the topic. A survey of 108 U.S. CEOs reveals that IB issues are an important part of their strategic agenda. Four types of IB issues are identified which reveal that American CEOs appear to be taking a proactive stance regarding the international arena. The CEOs were also found to hold diverse perceptions of IB issues. The implications of these findings are discussed

Strategic Control Systems for Quality: An Empirical Comparison of the Japanese and U.S. Electronics Industry

Abstract: Management control systems should be designed to complement the strategies pursued. Few empirical studies, however, have focused on management control systems for quality control and zero-defect strategies. This study compares quality strategies and their relationships with management control systems in the Japanese and U.S. electronics industry. The results indicate that the quality strategies of U.S. manufacturing managers reflect adherence to zero-defect philosophies more than those of the Japanese managers. However, fewer U.S. managers receive management control information to support these zero-defect strategies. Tests linking quality strategies to management control information provide limited evidence that those U.S. managers who have adopted zero-defect strategies are more likely to receive modified management control information than U.S. managers who have not adopted zero-defect strategies. In contrast, the data suggest that Japanese managers are provided with goal-setting and feedback information about quality performance regardless of their adherence to a zero-defect versus a traditional quality management strategy, thus focussing workers' attention on continuous quality improvement.