Showing papers in "Thunderbird International Business Review in 2019"

The internationalization of African firms: Opportunities, challenges, and risks

Abstract: There has been a marked increase in the internationalization activities of African firms over the last two decades or so, resulting in the emergence of regional challenger firms that are aggressively competing with foreign multinationals in terrains historically dominated by the latter. However, our understanding of this phenomenon is limited as empirical research examining the nature of internationalization of African firms is scarce, and research directly investigating drivers, outcomes and boundary conditions of the internationalization of African firms is lacking. The goal of this Special Issue, therefore, is to contribute to the scholarly understanding of the increasingly prevalent internationalization of African firms. This Guest Editorial provides a summary of the six articles in this Special Issue, and highlights three broad thematic issues: internationalization opportunities for African firms (accelerated private sector development and regional integration, and ability to overcome institutional voids); internationalization challenges (global competitiveness challenges, limited management and cross-cultural capabilities, and overcoming the liability of Africanness); and internationalization risks (losing focus on home markets, and over internationalization).

Corporate social responsibility and competitive advantage: A developing country perspective

Abstract: Corporate social responsibility (CSR) has attracted wider research interests over recent decades. While some studies have examined the impact of CSR activities on firm competitive advantage (CA), the findings so far remain contradictory. Moreover, the role of export orientation, firm strategy, and structure on the association between CSR and CA has not been explicitly examined. Thus, the purpose of this study is to examine the moderating role of export orientation, firm strategy, structure, and firm size on the association between CSR and CA. Using a sample of 179 responses from management staff in organizations across five sectors in a developing country context of Ghana, the study found positive effects of CSR on CA. The study contributes to the resource‐based view (RBV) scholarship by confirming the important complementary effect of export orientation and organizational structure as important resources and capabilities on the CSR–competitiveness relationship. However, no evidence of a moderating effect of firm strategy, or firm size on the CSR–CA relationship was found. These findings are instructive, impactful, and enrich the existing literature on CSR and strategy. Implications for theory and practice are also discussed.

Internal and external determinants of export performance: Insights from Algeria

Abstract: The internationalization of small and medium-sized enterprises (SMEs) has been the focus of numerous studies. However, while the attention has thus far been on SMEs operating in developed countries, firms evolving in a developing context, including Africa, have been largely neglected. To address this, and drawing on a dual resources-based and network-based view, this study simultaneously investigates the importance of internal and external resources for firms’ export performance and regularity in the context of North African SMEs. Using a sample of Algerian exporters, the study reveals the superiority of discrete resources for boosting export performance and export regularity. These findings provide directions to Algerian SME managers and policymakers as to important factors driving the internationalization process in the developing Algerian context.

Application of human resource management's universal model: An examination of people versus institutions as barriers of internationalization for SMEs in a small developing country

Abstract: Although the importance of people and institutions has been highlighted in MNE studies, the association between people, institutions and the internationalization of SMEs is under explored from a small developing country context. We examine theories subsumed under the Universal Model of HRM onto SMEs to study the hypothesized people and institutionally-orientated barriers posed to SMEs’ internationalization. Using quantitative analysis, the impacts of the barriers on internationalization are highlighted with particular attention to employer attractiveness. Following extant literature review, this study has used primary data collected through questionnaires from 212 Bangladeshi SMEs. We developed and validated partial least square based structural equation model (PLS-SEM) to assess the impacts and successfully framed People versus Institutional barriers as a second order hierarchical reflective model which has not been done previously. Given their marginal significance over institutions, people-oriented cultural barriers should be included as an extension of the Universal Model to study SME internationalization

International human resource management in an era of political nationalism

Abstract: In times of the "Brexit" and "America First" policies, several industrialized countries' governments are turning toward more national-oriented migration policies. Simultaneously, societal aversion to immigration is growing. Both trends are sending negative signals to highly skilled employees and making immigrants feel that they are no longer welcome. Consequently, international careers are becoming uncertain, risky, and unpredictable. This new reality in industrialized knowledge-based economies may affect firms' talent pool and the skill set available to a country. To shed light on the new environment of international human resource management, we interviewed Mary Yoko Brannen and David Collings, leading experts in the field, to explore their perspective on how the field is changing. The interviews reported here uncover fascinating insights, including the need to counteract the globalization fears in the West of the predominantly White working and lower-middle class through education. Companies may also rethink their organizational boundaries and the notion of traditional employees by using their agility to counteract the political forces harming their talent pool strategy.

Value co‐creation between foreign firms and indigenous small‐ and medium‐sized enterprises (SMEs) in Kazakhstan's oil and gas industry: the role of information technology spillovers

Abstract: Study related to the extractive sector still plays a limited role in the mainstream international business (IB) and management literature, with even less focus on ongoing liberalisation and digitalisation in the industry. This paper was motivated by the question of how collaboration between foreign and indigenous oil and gas (O&G) companies can support small and mediumsized indigenous technological development. A three-stage qualitative–interpretive method based on interviews with industry experts has been adopted in order to build three case studies. The main contribution of this paper is the development of a model that explains how different actors can cocreate value in the ecosystem of public–private partnership (PPP) in the O&G industry through digital technologies. This paper proposes what companies and the government could do to increase the competitiveness of the local economy, diversify from O&G into high technological industries, and support industrial development through information and communication technologies (ICT).

The internationalization of Nigerian firms: Motivations and location patterns

Abstract: Despite the increased number of studies of the internationalization of emerging‐market multinationals (EMNCs), Latin American and Asian firms have dominated the focus of such studies, while the study of the internationalization process of sub‐Saharan African firms in the international business literature is quite limited. Therefore, this article examines the motivations and location patterns of the internationalization process of four Nigerian firms through a multiple case study approach. The findings show that the internationalization of the Nigerian firms is a recent phenomenon, but the foreign investment pattern reflects a pan‐African investment strategy. However, the findings also reveal that the firm‐specific advantages that had been accumulated in the domestic market, coupled with home‐country factors and regional‐/host‐market factors, were key determinants of the motivations and location patterns in the internationalization process of Nigerian firms.

Mapping the impact of home‐ and host‐country institutions on human resource management in emerging market multinational companies: A conceptual framework

Abstract: While there is a growing literature concerned with multinational companies from emerging markets (EMNCs), it does not contain a robust conception of how institutions shape human resource (HR) practices in such firms. We contribute to filling this gap through developing a framework of how institutions create a range of constraints and opportunities for EMNCs. Specifically, our framework contains three key elements of how MNCs from emerging markets interact with institutions: EMNCs develop approaches that to some extent reflect the perceived strengths and weaknesses of the institutions in the home country (institutional conditioning); the strategies of actors in EMNCs can overcome the weaknesses of the home country by drawing on institutions in other countries (institutional arbitrage); and the actions of EMNCs can reinforce, or create pressures for change in, the institutional context in the countries in which they operate (institutional change / consolidation). By mapping this set of strategies of EMNCs, we contribute to a fuller understanding of the relationship between institutions and HR practices, and we outline how the rise of EMNCs reshapes the global landscape by adding new kinds of firm behavior to capitalist diversity.

Facing complexity, crisis, and risk: Opportunities and challenges in international human resource management

Abstract: International human resource management (IHRM) as a field of practice involves heightened levels of complexity compared to domestic HRM based on the multitude of contexts in which multinational firms operate. As complexity increases, so do levels of risk and the chance the firm must deal with crisis situations. Based on articles presented at the 3rd Global Conference on IHRM, this special issue focuses on how IHRM can contribute to organization success when faced with extreme operating conditions. This editorial provides a backdrop to the articles by describing the challenging economic, political, and social environments impacting organizations, exploring conditions from the recent past and current day such as the global financial crisis, trends toward political nationalism, aging populations, and growing immigrant workforces. The focus lies on exploring how HRM can respond to such challenging external contexts to continue to contribute added value to the firm.

Corporate governance and accounting conservatism in Islamic banks

Abstract: Correspondence Majdi A. Quttainah, Department of Management and Marketing, College of Business Administration, University of Kuwait, P.O. Box 5486, Safat 13055, Kuwait. Email: majdi.quttainah@ku.edu.kw Abstract We examine whether Islamic banks are more likely to be conservative in their financial reporting than conventional banks, as well as how Islamic banks' unique corporate governance system affects accounting conservatism behaviors. Using a large sample of Islamic banks and their matched non-Islamic banks; based on total assets and geographic location, in 15 countries, we find Islamic banks are more likely to deploy accounting conservatism as measured by loss avoidance, abnormal loan loss provisions, and C-score, respectively. Islamic banks are about 95% more likely to be more conservative in accounting practices than their counterparts, depending on different model specifications. In addition, we report several board characteristics, such as size, independence, reputation, tenure, and diversity, are important determinants of accounting conservatism in Islamic banks. This relationship indicates certain board traits lead to greater monitoring roles, consequently reducing unethical behavior and increasing the degree of conservatism in accounting practices.

How different are corporate social responsibility motives in a developing country? Insights from a study of Indian agribusiness firms

Abstract: Against the backdrop of increasing foreign direct investment flows in the developing economies in Asia, the investigation of topical aspects of corporate social responsibility (CSR) in the region increases in importance. We examine the CSR motives of four large indigenous agribusiness firms in India with a view of assessing the validity of the claim that CSR in this country, compared to developed countries, is influenced substantially more by moral, cultural, and religious considerations and less by self-interest and profit seeking. Unlike numerous other investigations of CSR that rely on questionnaires and company reports, our data are drawn from in-depth interviews and theme analysis revealing some intricate motives behind CSR behavior and business conditions that inspire them. Our findings challenge some previously reported results and indicate that the degree to which such a behavior is affected by the state of economic development and cultural differences may be smaller than is often argued.

Explaining autonomy variations across value‐chain activities in foreign‐owned subsidiaries

Abstract: This article is one of the first to combine the asset bundling model and neo-configurational perspective to explain autonomy variations across different value-chain activities in foreign-owned subsidiaries. We develop tentative answers to three research questions based on survey data of subsidiaries located in Taiwan and Thailand. We use fuzzy set qualitative comparative analysis technique to analyze the data. We found that competence bundles in primary and support activities are key for autonomy development across basic and advanced value-adding activities. Strong relationships with local business networks are more important for autonomy development than links to universities or governmental institutions. The global city location plays a lesser role than expected and the geographic distance is a hindrance to autonomy development in basic as well as advanced value-chain activities.

Islamic legal methodologies and Shariah screening standards: Application in the Indonesian stock market

Abstract: This article provides a framework for applying the principles of Islamic legal methodology to determine the optimal Shariah screening standards for Islamic equity markets. It is argued that using maslahah mursalah (unrestricted benefit) is an appropriate method for identifying appropriate financial standards and its principles stipulate that the benchmark that yields the best economic returns to investors should be chosen. The methodological framework is applied to the Indonesia equity market where the economic implications of the Islamic stock screening standards of the Indonesian Islamic Shariah Stock Index and four global indices are assessed. Portfolios are constructed by applying Islamic stock screening standards for each of the indices by using data on 377 stocks listed in the Indonesian stock market for 5 years. The performances measured by the Sharpe ratio, Treynor index, and Jensen alpha reveal that the Dow Jones Islamic Index screening criteria performs the best. Based on the method of maslahah mursalah, the article recommends using the screening standard of this index in the Indonesian stock market to maximize benefits to investors. While the approach used in this article is applied to Islamic equity markets, the methodological framework can also be used for other similar cases in Islamic finance.

The Mabey and Johnson bribery scandal: A case of executive hubris

Abstract: Convicted for paying bribes to secure contracts abroad, Mabey and Johnson (M&J), a UK construction firm, made both legal and international business history. Drawing on hubris as a lens, we examine M&J’s bribery scandal in Ghana and Jamaica. Through a qualitative study of court documents, witness statements, newspaper articles, and internal company emails, we unpack the bribery scheme operated by M&J executives that enabled the firm to illegitimately win major government contracts in Ghana and Jamaica. Fuelled by executive hubris, we found M&J’s practice of bribing foreign officials to secure contracts effectively insulated M&J executives from day-to-day realities. Overtime, the firm’s executives viewed themselves as infallible, exempt from established mores, invincible, and unremorseful for their actions. Building on these findings; we develop a hubris-bribery heuristic framework showing how individual, organizational, and institutional context constitutively fuelled executive hubris to drive bribery at M&J. The implication for theory and practice are examined.

Cross‐border expansion and competitive interactions of indigenous mobile network operators in sub‐Saharan Africa

Abstract: Emerging‐market multinational enterprises (EMNEs) have become major players in the global economy, with an increasing share of global foreign direct investment (FDI). Indigenous mobile network operators (MNOs) in sub‐Saharan Africa (SSA) are not left out in this pursuit, as they seek growth and competitiveness beyond their domestic markets. We investigate the FDI location choices and competitive interactions of the five indigenous SSA MNOs that had internationalized as of 2014 and find that, contrary to the literature, these EMNEs, operating in a key and rapidly developing industry, did not tend to commence their cross‐border expansion in geographically close markets. In addition, the MNOs are more likely to invest in countries with stronger control over corruption and do not appear to engage in heavy head‐to‐head competition with their rivals. These findings contribute to the internationalization literature in the context of the investment and competitive behaviors of the currently underexplored indigenous SSA multinationals.