Showing papers in "Journal of International Business Studies in 2011"

Theorising from Case Studies: Towards a Pluralist Future for International Business Research

Abstract: The literature on case studies, both in the field of international business (IB) and in the social sciences more generally, has tended to focus on the methods of data production and analysis suited to this research strategy. In contrast, in this paper we investigate methods of theorising from case studies. We seek to understand how case researchers theorise, and how future IB research might utilise case studies for theorising. By means of a qualitative content analysis of case studies published in Journal of International Business Studies, Academy of Management Journal and Journal of Management Studies, we construct a typology of theorising from case studies. Two dimensions of the case study, namely causal explanation and contextualisation, form the basis for our typology. We distinguish four methods of theorising – inductive theory-building, interpretive sensemaking, natural experiment and contextualised explanation – only the first of which has been widely used in JIBS in the period that we investigate. On the basis of our own qualitative analysis, we show the limitations of inductive theory-building, and argue that greater utilisation of the other methods of theorising would enhance the case study's explanatory power and potential for contextualisation. We argue for a more pluralist future for IB research.

From a distance and generalizable to up close and grounded: Reclaiming a place for qualitative methods in international business research

Abstract: journal of International Business Studies (2011) 42, 573-581. doi: 10.1057/jibs.2011.19 It is exhilarating to write the introduction to this Special Issue as it presents an important opportunity for qualitative research to reclaim its position as an integral part of international business (IB) research. The field of IB was founded on a rich qualitative research legacy (e.g., Bartlett, 1979; Crozier, 1965; Fayerweather, 1969; Johanson & Vahlne, 1977; Kindleberger, 1956; Prahalad, 1975; Wilkins, 1970, 1974). Over time, however, such methods have been progressively marginalized in our field as quantitative methods have become the norm. This shift in emphasis has mirrored the broader trend toward more positivistic empirical methods in the social sciences. The field of IB is "multidisciplinary in scope, and interdisciplinary in content and methodology" (statement of JIBS editorial policy). However, as our respective home disciplines came under growing pressure to solidify their legitimacy as scientific endeavors that merit scholarly attention, it is not surprising that we began to take on the norms propagated within our own academic communities that typically equated quantitative data with "hard science". While there are clear merits associated with quantitative methods, the multi-cultural, multi-dimensional and dynamic nature of the field of IB lends itself to a broad range of research methodologies, qualitative methods being one of them. In order to understand the complexities of emergent and evolving phenomena scattered over distance, and the differentiated contexts typical to many topics under investigation in IB, it is often inappropriate to engage in large-scale, cross-sectional studies or reductionist methods in the absence of well-developed theory. Rather, thick description, exploratory research and comparative case analysis that focus on inductive theory building and hypotheses generation may be more suitable.

Innovation and internationalization through exports

Abstract: Successful product innovation leads to the decision by small and medium enterprises (SMEs) to enter the export market. We argue that in addition to a direct effect of innovation on exports, product innovation, through its effect on firm productivity, increases the likelihood of the firm entering the export market. Using a panel of Spanish manufacturing firms, we show that the strong positive association found between firm productivity and exports in the literature relates to the firm’s earlier innovation decisions, and that, when controlling for product innovation, the relationship between productivity and exports vanishes for these innovating firms.

Social ties and international entrepreneurship: Opportunities and constraints affecting firm internationalization

Abstract: International entrepreneurship involves the identification and exploitation of opportunities for international exchange. Yet little is known about the entrepreneurial methods used for opportunity recognition. While previous work emphasizes effects operating at the level of the business network, I propose that the recognition of exchange opportunities is a highly subjective process, shaped by entrepreneurs’ existing ties with others. Based on interview data collected from 41 managers, I develop a comprehensive measure for classifying different methods of opportunity recognition. I then use this measure to classify 665 international exchange ventures set up by entrepreneurs in four Chinese cities. In contrast with past research I find virtually no role for blind luck. Although the majority of exchange opportunities were discovered rather than sought, these discoveries were intentional rather than accidental. I also find that entrepreneurs’ idiosyncratic connections with others both promote and inhibit international exchange. Tie-based opportunities lead to higher-quality and more valuable exchanges that are constrained in terms of geographic, psychic and linguistic distance. From this I conclude that entrepreneurial networks have distinct opportunity horizons that limit the reach of tie-based exchanges and potentially lead to sub-optimal internationalization trajectories.

Qualitative research for international business

Abstract: Qualitative research in international business has been rare, the main research streams of the field relying more on quantitative methods. This paper first outlines why qualitative research has been scant. It then presents areas, such as theory building, where qualitative research could make a substantial contribution. Third, it reviews approaches to high standards of qualitative research and criteria for evaluating qualitative research. Finally, some possible research areas where qualitative research might prove fruitful are suggested.

Exploring the complementarity between innovation and export for SMEs’ growth

Abstract: In this paper, we advance and test the idea that innovation and export are complementary strategies for SMEs’ growth. We argue that innovation and export positively reinforce each other in a dynamic virtuous circle, and we identify and describe the process through which this complementarity relationship takes place. Participating in export markets can promote firms’ learning, and thus enhance innovation performance. At the same time, through innovation, firms can enter new geographical markets with novel and better products, therefore making exports more successful, and, by the same token, they can also improve the quality – and consequently increase the sales – of the products sold domestically. We test our theory using an unbalanced panel of Spanish manufacturing firms over the period 1990–1999. We find robust empirical support for our hypothesis: consistent with the presence of complementarity, we show that the positive effect of innovation activity on firms’ growth rate is higher for firms that also engage in exports, and vice versa. Furthermore, we show that, Ceteris paribus, firms’ adoption of one growth strategy (e.g., entering export markets) positively influences the adoption of the other (e.g., innovation).

Country of origin effects in developed and emerging markets: Exploring the contrasting roles of materialism and value consciousness

Abstract: Despite growing evidence about differences in the attitudes and behaviors of consumers in emerging and developed markets, there is little research on the differences in country of origin (COO) effects on their evaluation, behavioral intentions (BIs), and actual purchase of imported products. This paper introduces a new conceptual framework incorporating consumer ethnocentrism (CET), materialism (MAT), and value consciousness (VC) to hypothesize several differences in the influence of COO effects on consumers from developed and emerging markets. A web-based study with 1752 consumers in four countries representing two developed markets (the UK and the USA) and two emerging markets (China and India) shows significant differences in the moderating influence of CET, MAT, and VC on the effects of COO on the evaluations and BIs for a fictitious passenger car brand, and on the actual choice of car brands owned by them. The findings highlight the importance of looking beyond CET at other relevant psychographic variables to understand the differences in motivations underlying consumer perceptions and behavior towards imported products.

Offshoring of R&D: Looking abroad to improve innovation performance

Abstract: The offshoring of knowledge services has become a phenomenon of increasing importance for firms, but many of its implications are yet to be discussed thoroughly. This paper analyzes whether R&D offshoring contributes to enhancing firms’ innovation capabilities. Specifically, the study distinguishes between two governance models of offshoring – captive offshoring and offshore outsourcing – and two types of innovation outcomes – product and process innovations. We suggest that R&D offshoring has different impacts, depending on the innovation results and governance models considered. The study empirically tests these relationships using the Spanish Technological Innovation Panel. This survey contains information on a large sample of firms from diverse sectors for the period 2004–2007. The empirical findings allow us confirm our hypotheses, and highlight the strategic importance of R&D offshoring. The empirical evidence reveals a positive relation between offshoring and innovation performance, with a greater effect on product than on process innovations. The results for different governance models show that captive offshoring has a greater effect on innovation outcomes than offshore outsourcing. These findings lead us to conclude that firms that look overseas can benefit from location-specific and specialization advantages to improve innovation performance.

Predicting stakeholder orientation in the multinational enterprise: A mid-range theory

Abstract: As the reach of corporations increasingly extends across borders, a key research question is whether overseas subsidiaries adopt a shareholder-centric orientation, centered on maximizing shareholder wealth, or a stakeholder-centric orientation, centered on creating value for a broader range of stakeholders. Existing theories, addressing the corporate level of analysis, focus on forces exogenous to the firm: local resource pressures, and institutional norms. Using a combination of induction and fuzzy-set analysis, I draw on documentary evidence and 298 interviews with managers and stakeholders to build theory about the conditions that shape subsidiaries’ stakeholder orientations. Two major findings emerge. First, although theory emphasizes external stakeholders’ control over resources, internal control through the corporate parent can crowd out the voices of local stakeholders. Second, although institutional theory proposes isomorphism with local norms and standards, some corporations are subject to scrutiny by global stakeholders, and their subsidiaries face higher requirements for social engagement than their peers. These findings are the foundation of a mid-range theory that combines conventional explanations, focused on environmental factors, and an internal-stakeholder perspective, based around the roles of the parent corporation as owner and resource provider, to predict stakeholder orientation.

Extending the internationalization process model: Increases and decreases of MNE commitment in emerging economies

Abstract: The internationalization process model suggests that firms internationalize by building positions in foreign markets and networks, following iterative cycles of learning and changes in commitment. However, as subsidiaries evolve, commitments may be decreased as well as increased, a phenomenon that has rarely been studied. Moreover, it remains an open question why strategic intentions at the outset of an investment project differ from the actual operations established. We address these questions by extending the model and combining it with Mintzberg and Waters’ framework of strategy formation. Specifically, we suggest that commitment decisions correspond to statements of intended strategy, while network positions correspond to realized strategies. The processes of learning, opportunity creation and trust building triggered by commitment decisions are, however, moderated by institutional influences that lead to divergences between realized and intended strategies. We test propositions derived from this framework on a survey data set of subsidiaries of multinational enterprises in Hungary, Lithuania and Poland, and find that institutional voids and institutional uncertainty affect subsidiary strategy implementation, but in opposing directions. Under high institutional uncertainty, investors prefer low commitment but flexible modes that enable later commitment increases, whereas institutional voids increase up-front information search and adaptation costs that reduce the likelihood of early post-entry adjustments. Our analysis reinforces the need for more differentiated theoretical analyses of how institutions affect business strategies over time.

Microlending in emerging economies: Building a new line of inquiry from the ground up

Abstract: The world's poor may be the last great frontier in international business. International microlenders are increasingly tapping into this emerging opportunity by extending small business loans to millions of borrowers. However, to date, there is very limited understanding of this domain from an international business perspective. Using qualitative case studies developed in Guatemala and the Dominican Republic we probe the causes and consequences of high performance and business failure for microloan recipients. The analysis of these cases led to the development of six testable propositions focused on the behavior of borrowers whose loans populate the portfolios of international microlenders. Our research aims to lay a foundation in international business for future research on microlending.

Country-of-origin and industry FDI agglomeration of foreign investors in an emerging economy

Abstract: Foreign investors access local knowledge by co-locating with other foreign direct investment (FDI) firms. However, different aspects of local knowledge can be obtained from different local businesses. Thus some foreign investors co-locate with FDI firms from the same country of origin, while others co-locate with foreign industry peers. We argue that, relative to industry FDI agglomeration, country-of-origin agglomeration provides an effective channel for the sharing of sensitive and tacit knowledge about local business environments. Therefore foreign investors in need of such local knowledge are more likely to locate in country-of-origin agglomerations. Empirical evidence based on FDI in Vietnam indicates that foreign investors who perceive local institutions as particularly weak, and those with a high degree of outsidership in the local environment, are more likely to seek country-of-origin agglomerations than industry FDI agglomerations.

Rapid FDI expansion and firm performance

Abstract: Today, more firms are expanding rapidly into foreign markets to reach global scale quickly, and to capture or nullify first-mover advantages. These trends run counter to the conventional theory of gradual internationalization, which suggests that firms maximize the benefits of learning from prior experience, thereby minimizing the hazard of failure. We argue that this conventional wisdom does not consider the risk of being a perennial late mover in the face of increased global competition. This study explores the circumstances under which rapid FDI expansion, a strategy of undertaking FDI expansion at an accelerated speed, can be a viable strategy. Using data on Korean firm expansion, we find that rapid FDI expansion enhances firm performance in industries where globalization pressures are high, and when it is done by firms with superior internal resources and capabilities.

Individualism-Collectivism in Hofstede and GLOBE

Abstract: This paper examines the Individualism–Collectivism (I-C) dimension of national culture in the Hofstede and GLOBE models. We identify major contradictions between the two culture models, which result in contradictory relationships with external variables such as economic prosperity. We critically evaluate the content validity of the items used to measure this construct in both models. Based on our analysis, we suggest that Hofstede's Individualism–Collectivism index be relabelled as Self-orientation vs Work-orientation and GLOBE's In-group collectivism as Family Collectivism. We demonstrate how the proposed alternative conceptualizations of the Individualism–Collectivism dimensions in both the Hofstede and GLOBE models can help reconcile the anomalous relationships between these two models of national culture, and between their dimension scores and other external variables of interest to researchers. We recommend a way forward for future research incorporating the collectivism dimensions that identifies which of the Hofstede/GLOBE scores is appropriate for differing purposes. This will help to make future research findings clearer, and to reduce contradictions and anomalies. Implications drawn from such research should also be clearer as a result.

Home-region focus and performance of family firms: The role of family vs non-family leaders

Abstract: Do family firms benefit more from a regional or a global geographic scope? We suggest it depends on their family leadership type – family vs non-family leadership. We offer a nuanced view of agency and stewardship theories to hypothesize that family leaders are most beneficial when pursuing a regional strategy (i.e., high home-region focus (HRF)), whereas non-family leaders are more advantageous when pursing a global strategy (i.e., low HRF). Utilizing a sample of 202 Western European firms from 1996 to 2006, we find support for this central hypothesis. Thus family leadership influences the degree to which family firms benefit from HRF.

Foreign locals: A cautionary tale on the culture of MNC local employees

Abstract: Multinational corporations (MNCs) rely heavily on local employees when conducting their international operations, yet the international business literature provides few instances of true focus on these employees. The commonly used label “host-country nationals” (HCNs) confers them an identity strongly related to the culture of their country, prompting both researchers and practitioners to “know” them through the knowledge about the local culture. This paper provides evidence that a more sophisticated view of the culture of HCNs is needed: through an ethnographic exploration of HCNs working in local subsidiaries of American MNCs in Romania, I reveal that HCNs are not always culturally interchangeable with the rest of the host-country population. HCNs can display a variety of cultural profiles more or less reflective of the national culture, depending on their enacted stance towards the native culture and the cultural landscape of the MNCs themselves. The findings call for further specification of theories relying on the assumed localness of HCNs, and should contribute to the ongoing conversation on the interplay between the cultures specific to the MNC and its host countries.

International expansion through flexible replication: Learning from the internationalization experience of IKEA

Abstract: Business organizations may expand internationally by replicating a part of their value chain, such as a sales and marketing format, in other countries. However, little is known regarding how such “international replicators” build a format for replication, or how they can adjust it in order to adapt to local environments and under the impact of new learning. To illuminate these issues, we draw on a longitudinal in-depth study of Swedish home furnishing giant IKEA, involving more than 70 interviews. We find that IKEA has developed organizational mechanisms that support an ongoing learning process aimed at frequent modification of the format for replication. Another finding is that IKEA treats replication as hierarchical: lower-level features (marketing efforts, pricing, etc.) are allowed to vary across IKEA stores in response to market-based learning, while higher-level features (fundamental values, vision, etc.) are replicated in a uniform manner across stores, and change only very slowly (if at all) in response to learning (“flexible replication”). We conclude by discussing the factors that influence the approach to replication adopted by an international replicator.

Effects of national culture on earnings quality of banks

Abstract: We examine the relation between four dimensions of national culture and earnings quality of banks using a sample of banks from 39 countries. Our main analysis, which focuses on the pre-financial crisis period 1993–2006, indicates that banks in high individualism, high masculinity, and low uncertainty avoidance societies manage earnings to just-meet-or-beat the prior year's earnings. In tests of income smoothing through loan loss provisions, we find that banks in high individualism, high power distance, and low uncertainty avoidance societies report smoother earnings. Our exploratory analysis of the effects of national culture on accounting outcomes during the financial crisis period 2007–2008 indicates that cultures that encourage higher risk-taking experienced more bank troubles in the form of larger losses or larger loan loss provisions.

Sequencing the expansion of geographic scope and foreign operations by "born global" firms

Abstract: “Born global” firms are not actually “born” global, but rather internationalize rapidly from their inception by expanding their geographic scope and extent of foreign operations. However, it remains unclear whether such firms: (1) simultaneously expand along both dimensions; (2) focus on expanding along a single dimension at a given time, and switch interchangeably between expanding geographic scope and extent of foreign operations in subsequent periods; or (3) stick solely to a specific internationalization path over several subsequent periods. This study theorizes and empirically demonstrates that born global firms stick to a dominant internationalization path over subsequent periods. Arguably, this phenomenon reflects managerial efforts to reduce the perceived risk of internationalization, and their preference to develop and leverage capabilities that are specific to either of the internationalization paths until the economies of further expanding this path are exhausted.

Selling, resistance and reconciliation: A critical discursive approach to subsidiary role evolution in MNEs

Abstract: Studies of political dynamics between multinational enterprise (MNE) parents and subsidiaries during subsidiary role evolution have focused largely on control and resistance. This paper adopts a critical discursive approach to enable an exploration of subtle dynamics in the way that both headquarters and subsidiaries subjectively reconstruct their independent-interdependent relationships with each other during change. We draw from a real-time qualitative study of a revealing case of charter change in an important European subsidiary of an MNE attempting to build closer integration across European country operations. Our results illustrate the role of three discourses – selling, resistance and reconciliation – in the reconstruction of the subsidiary–parent relationship. From this analysis we develop a process framework that elucidates the important role of these three discourses in the reconstruction of subsidiary roles, showing how resistance is not simply subversive but an important part of integration. Our findings contribute to a better understanding of the micro-level political dynamics in subsidiary role evolution, and of how voice is exercised in MNEs. This study also provides a rare example of discourse-based analysis in an MNE context, advancing our knowledge of how discursive methods can help to advance international business research more generally.

Historical ties and foreign direct investment: An exploratory study

Abstract: Recent research suggests that the distance between countries in terms of culture, institutions, geographic proximity, and economic development matters in the foreign direct investment (FDI) decisions made by firms. This study focuses on the historical ties between countries as an additional factor affecting such decisions. In particular, it examines three major historical factors that affect cross-country ties with Vietnam, namely, Chinese occupation and conflict, French colonization, and socialist ideology, and examines the ways in which these historical ties have influenced FDI. The database consists of 631 wholly owned subsidiaries and 1215 joint ventures formed in Vietnam by multinational enterprises from 35 countries and regions between 1989 and 1999. The results indicate that firms from Hong Kong, Taiwan, France, and former and current socialist countries tended to be early movers in Vietnam, whereas firms from Mainland China tended to be late movers. Using the example of Vietnam, this study clearly shows that historical ties can provide additional explanatory power regarding FDI decisions beyond the conventional distance variables.

Bridging history and reductionism: A key role for longitudinal qualitative research

Abstract: Longitudinal qualitative research combining grounded theorizing and insights from modern historical methods can generate novel conceptual frameworks that establish theoretical bridges between historical narratives and reductionist quantitative models. To capitalize fully on this potential theory-bridging role, qualitative scholars should seek to study social systems characterized by complexity and nonlinear causation. Effectively serving this theory-bridging role provides a basis for securing a distinctive place for qualitative research in the social sciences in general, and for international business research in particular.

Boundary work: An interpretive ethnographic perspective on negotiating and leveraging cross-cultural identity

Abstract: The complexity of global organizations highlights the importance of members’ ability to span diverse boundaries that may be defined by organization structures, national borders, and/or a variety of cultures associated with organization, nation-based societal and work cultures, industries, and/or professions. Based on ethnographic research in a Japan–US binational firm, the paper describes and analyzes the boundary role performance of the firm's Japanese members. It contributes toward theory on boundary spanning by introducing a “cultural identity negotiation” conceptual framework. We show boundary spanning as a process shaped through the interplay of the contextual issues that make a boundary problematic; an individual's multiple repertoires of cultural knowledge; and the individual boundary spanner's “negotiation”, through interaction with others, of his/her cultural identities – the sense of “who I am” as a cultural being that is fundamental to an individual's self-concept. At the same time, we make transparent the epistemological and methodological foundations of an interpretive ethnographic approach, demonstrating its value for understanding complex organizational processes. Research findings have practical implications for the selection and training of an organization's employees, particularly of persons who may be considered “bicultural”.

The cost of pride: Why do firms from developing countries bid higher?

Abstract: Using an extensive panel of cross-border M&A transactions between 1990 and 2007, we find that firms from developing countries (versus those from developed countries) bid higher on average to acquire assets in developed countries. We are interested in why these higher bids occur. We find that bids of firms from developing countries are higher in cases where the transaction displays “national pride” characteristics, where national pride is identified through a manual examination of media articles. These results, which are robust to numerous specifications and control variables, highlight a source of pride beyond personal hubris which potentially influences corporate decision makers.

The impact of country-level corporate governance on research and development

Abstract: We investigate the process through which country-level corporate governance facilitates firm-level investment in research and development (R&D). Taking cash flow as one of the main determinants of R&D, we derive an econometric model that introduces a number of corporate governance factors (legal protection, financial system, and control mechanisms) to analyze their impact on R&D-cash flow sensitivity. Using data from nine European Union countries, Japan, and the United States, we show that R&D at the firm level is less sensitive to internal cash flow in countries with effective investor protection, developed financial systems, and strong corporate control mechanisms. Specifically, our analysis suggests that the characteristics of the corporate governance system that facilitate R&D are a common law legal environment, minority shareholder protection, strong law enforcement, a bank-based financial system, effective board control, and a strong market for corporate control. This evidence points to corporate governance as a key element in R&D investment, and contributes to the debate on whether country-level corporate governance systems can facilitate R&D projects and, indirectly, promote economic growth.

What goes around, comes around: Effects of offshore outsourcing on the export performance of firms

Abstract: We examine the effect of offshore outsourcing on the export performance of firms. Building on the theories of international business, the resource-based view and transaction cost economics, we argue that offshore outsourcing helps firms – directly or indirectly – to export more. It may reduce their production costs and enhance their flexibility. It may also provide them with new resources and market knowledge. However, the impact of offshore outsourcing depends on the resources and capabilities of firms to manage a network of foreign suppliers, and to absorb foreign knowledge. Using a database of around 2000 manufacturing MNEs in France in 1999, we find that offshore outsourcing increases export performance, the effects being stronger in the export markets where firms import intermediate goods. We also show that the firm size, the organization of intra-firm imports and the export experience moderate the effects of offshore outsourcing positively. These findings have implications for firms and policymakers. Journal of International Business Studies (2011) 42, 334–344. doi:10.1057/jibs.2010.26

Immigrant Remittances and the Venture Investment Environment of Developing Countries

Abstract: Despite the increasing importance of financial and social remittances to developing countries, their impact on home-country venture-investing environments has been largely overlooked. I develop a framework grounded in transaction costs economics and social knowledge theories to investigate relationships between remittances and home-country (1) capital availability, (2) new business creation, and (3) economic internationalization. My framework also accounts for individual and collective immigrant attributes that may moderate the impact of remittances on these alternative indicators of the venture investment environment. Analyses of immigrant remittances to 61 developing countries from 2002–2007 indicate that they increase general and more narrowly defined venture capital availability as well as broader openness to international trade. Remittances also increase new business start-up rates when the developing country’s public sector is sufficiently small. Positive venture-funding effects of remittances are magnified when coming from immigrants living in highly concentrated communities, but are diminished when coming from highly educated immigrants. Overall, results suggest that developing-country immigrants of varying backgrounds play an important role in venture funding, founding and integration with the world economy.

Why do international assignees stay? An organizational embeddedness perspective

Abstract: We apply an organizational embeddedness perspective to examine international assignees’ retention with the organization. Specifically, we hypothesize that assignees’ social ties within and their perceived fit with the host unit positively relate to two sacrifices on leaving the organization: their firm-specific learning during the assignment, and their perceived career prospects in the organization. Perceived career prospects are expected to predict subsequent retention, moderated by firm-specific learning. These hypotheses are tested using a sample of 143 inpatriates in 10 German multinationals, with retention measured 2 and 4 years later. We show that inpatriates’ trusting ties with HQ staff and their fit with the HQ positively relate to their firm-specific learning and their perceived career prospects, and that the latter predicts their retention 2 and 4 years later. Perceived career prospects mediate the direct relationship between inpatriates’ fit with the HQ and inpatriate retention, and the indirect relationship between inpatriates’ trusting ties with HQ staff and their retention. Furthermore, inpatriates’ firm-specific learning mitigates the effect of perceived career prospects on retention decisions 2 years later. We contribute to the organizational embeddedness, careers, and international business literatures by explaining when and how facets of organizational embeddedness relate to assignee retention.

Rationality vs Ignorance: The Role of MNE Headquarters in Subsidiaries’ Innovation Processes

Abstract: It has been recognized that innovation processes in multinational enterprises (MNEs) are largely context-specific, local activities carried out at the subsidiary level (e.g., Andersson, Forsgren, & Holm, 2007; Asakawa, 2001; Birkinshaw & Hood, 1998; Doz & Prahalad, 1981; Ghoshal & Bartlett, 1988; Hedlund, 1986; Rugman & Verbeke, 2001). As a consequence, the ability of corporate headquarters (HQ) to influence these widely dispersed processes has become a major issue in contemporary research on MNEs. What is the role of HQ in these processes? To what extent can it participate in and play an active role in specific innovation processes? What are the performance implications when it gets involved? These questions, which have not yet established answers, warrant further research. In addition, studies aimed at finding the answers have not yet debated the validity of alternative perspectives related to the knowledge asymmetry between the potential participants in innovation processes.

Small firm internationalisation unveiled through phenomenography

Abstract: Phenomenography is proposed here as a qualitative methodology for investigating how owner-managers practise internationalisation in small firms, and it is applied in an empirical study of internationalising owner-managed small Australian wineries. The findings show a common internationalisation activity cycle but four qualitatively different ways in which these owner-managers practise internationalisation. We reveal that this variation in owner-manager internationalisation practices is determined by their understandings of internationalisation, which produce differences in the ways activities within their internationalisation activity cycle are orchestrated. In particular, phenomenography has enabled new insights into the multiplicity of firm internationalisation practices not able to be captured through other qualitative methodologies such as ethnography or semiotics, as they are not designed to capture such variation. Based on our findings, we propose an understanding-based theory to explain the idiosyncratic nature of owner-managed small firm internationalisation. Furthermore, we suggest that phenomenography, used independently or in conjunction with other qualitative methodologies, also has potential to reveal the varying practices of internationalising large MNEs by enabling an investigation of the collective or shared understanding of firm internationalisation within MNEs. Finally, we point out how phenomenography can be extended beyond firm internationalisation practices to investigate other topics within international business.