Showing papers on "Multinational corporation published in 1993"

Knowledge of the Firm and the Evolutionary Theory of the Multinational Corporation

Abstract: Firms are social communities that specialize in the creation and internal transfer of knowledge. The multinational corporation arises not out of the failure of markets for the buying and selling of knowledge, but out of its superior efficiency as an organizational vehicle by which to transfer this knowledge across borders. We test the claim that firms specialize in the internal transfer of tacit knowledge by empirically examining the decision to transfer the capability to manufacture new products to wholly owned subsidiaries or to other parties. The empirical results show that the less codifiable and the harder to teach is the technology, the more likely the transfer will be to wholly owned operations. This result implies that the choice of transfer mode is determined by the efficiency of the multinational corporation in transferring knowledge relative to other firms, not relative to an abstract market transaction. The notion of the firm as specializing in the transfer and recombination of knowledge is the foundation to an evolutionary theory of the multinational corporation

Innovations and Technological Spillovers

Abstract: In this paper we analyze the evidence from a large number of studies on three specific questions pertaining to RD the social rates of return of RD the channels of transmissions have been exports, foreign direct investment, and multinational enterprises' research operations, the latter being the most dynamic agents of technology transfer. With the further globalization of business activities, international technology transfers will be a major source of new R&D spillovers.

Innovations and technological spillovers

Abstract: In this paper we analyze the evidence from a large number of studies on three specific questions pertaining to RD the social rates of return of RD the channels of transmissions have been exports, foreign direct investment, and multinational enterprises' research operations, the latter being the most dynamic agents of technology transfer. With the further globalization of business activities, international technology transfers will be a major source of new R&D spillovers.

Institutionalization Theory and the Multinational Corporation

Abstract: Over the last decade and a half, analyses of the strategy and organization of MNCs have increasingly widened their scope to incorporate detailed institutional portrayals of business environments. Relatively little of this work, however, has drawn on the simultaneously evolving body of sociological theory concerning the relationships between organizations and environments. Indeed, the two fields seemed to moving in different directions. As researchers into multinational enterprises focused their level of analysis on the study of businesses and product lines within the MNC, organization theory increasingly raised the level of analysis above the level of the individual organization to populations or fields. Scholars working on MNC organization tended either to remain within the ‘strategy-structure’ tradition of contingency theory or to move away from the detailed studies of formal structure that had dominated earlier work in favor of an emphasis on strategy and process, whereas macro-organization theory concentrated increasingly on structure (organizational forms, institutionalized patterns, the structure of networks) and paid less and less attention to strategy.

Multinational Firms, Technology Diffusion and Trade

Abstract: Empirical evidence indicates a close association between multinational firms and knowledge capital, a public good within the firm We model a firm which wishes to exploit its knowledge capital abroad, but whose workers learn all the knowledge necessary for production and can defect and produce the good themselves The home firm must then choose between costly exporting and the possible dissipation of its knowledge capital by producing abroad The paper examines the choice between exporting, licensing, and acquiring a subsidiary in this environment We analyze the cost and technology parameters that support the alternative modes of serving the foreign market, and we describe the international equilibrium that jointly determines the pattern of specialization and the market mode(This abstract was borrowed from another version of this item)

The Obsolescence of Capital Controls? - Economic Management in an Age of Global Markets

Abstract: Between the late 1970s and the early 1990s, after decades of trying to limit short-term international capital movements, advanced industrial states moved decisively in the direction of decontrol. What has driven this remarkable policy convergence? The answer lies not in ideological change or shifts in relative political power, but in the prior development of international financial markets and in the increasing globalization of business. In a policy environment fundamentally reshaped by these factors, financial institutions and multinational firms were able to threaten or implement strategies of evasion and exit. Thus, the usefulness of controls declined as their effective costs rose sharply. In this light, the cases of Japan, Germany, Italy, and France are examined. The analysis points to the tightening link between short-term capital movements and foreign direct investment, issues that have long been treated as conceptually distinct. It also underlines the intricate connection between national policies governing capital movements and those aimed at managing international financial markets.

Organization Theory and the Multinational Corporation

Abstract: List of Tables and Figures - Acknowledgements - Notes on the Contributors - Introduction S.Ghoshal & D.E.Westney - Managing DMNCs: A Search for a New Paradigm Y.Doz & C.K.Prahalad - PART 1: ENVIRONMENT AND ORGANIZATION-ENVIRONMENT INTERACTIONS - Institutionalization Theory and the Multinational Corporation D.E.Westney - The Multinational Corporation as an Interorganizational Network S.Ghoshal & C.Bartlett - The European Subsidiaries of American Multinationals: An Exercise in Ecological Analysis J.Delacroix - Learning, or the Importance of Being Inert: Country Imprinting and International Competition B.Kogut - PART 2: ORGANIZATION STRUCTURE AND GOVERNANCE - Control in Multinational Firms: The Role of Price and Hierarchy J-F.Hennart - Information Processing Theory and the Multinational Corporation W.Egelhoff - Assumptions of Hierarchy and Heterarchy: With Applications to the Management of the Multinational Corporation G.Hedlund - Procedural Justice Theory and the Multinational Corporation W.C.Kim & R.A.Mauborgne - PART 3: ORGANIZATIONAL CULTURE AND NORMS - The Reproduction of Inertia in Multinational Corporations M.Kilduff - The Flow of Culture: Some Notes on Globalization and the Multinational Corporation J.V.Maanen & A.Laurent - Index

Competing with integrity in international business

Abstract: The first textbook to address the whole spectrum of multinational business ethics, Richard T. De George's Competing with Integrity in International Business examines moral debates about operating ethically in virtually every major market environment in the world. With examples from a variety of international settings, including the former Soviet bloc, China, Japan, and the European Community, and taking the company of integrity as its objective, this text offers guidelines for multinationals in underdeveloped countries as well as original strategies for corporations competing in corrupt environments. Backed by the distinguished author's wide and varied experience, both as a scholar and as consultant to firms and business institutions around the world, Competing with Integrity in International Business covers cooperation with local government, taxes, respect for and compliance with local society, human rights, national development, and other challenges, as well as responses to immoral adversaries and the use of publicity to expose corrupt actions. With insightful discussion of topics such as corporate culture and corporate virtue and chapter case studies from across the globe, this comprehensive text will prove invaluable for business and philosophy students at all levels.

Environmental Strategies for Industry: International Perspectives on Research Needs and Policy Implications

Abstract: Many large firms and multinational corporations are beginning to develop innovative environmental strategies that acknowledge the fact that sound environmental policies can actually enhance economic competitiveness and increase market share. Rather than simply focusing on regulatory compliance and crisis management, they are moving toward greater internalization of environmental goals. "Environmental Strategies for Industry" explores this transition in depth.

The Globalization of Business : The Challenge of the 1990s

Abstract: Part 1 Challenges for Teaching and Research in International Business: 1 The Study of International Business - A Plea for A More Interdisciplinary Approach Part 2 Challenges for Theorizing about MNEs and MNE Activity: 2 Micro and Macro Organizational Aspects of MNEs and MNE Activity 3 The Changing Dynamics of International Production 4 Global Strategy and the Theory of International Production 5 The Competitive Advantage of Nations Part 3 Challenges to Established Patterns of MNE Activity: 6 Japanese MNEs in Europe and the US - Some Comparisons and Contrasts 7 Transatlantic Investment Flows 8 Technological Strategic Alliances 9 Prospects for Investment in Central and Eastern Europe 10 The Globalization of Service Activity 11 International Direct Investment Patterns in the 1990s Part 4 Challenges to National and Regional Government Policies: 12 Governments, Hierarchies and Markets - Towards a New Balance 13 Governments and Multinational Enterprises - From Confrontation to Co-operation 14 Political Economy of International Business 15 Multinational Investment in the EC

The Management of Multinational R&D: A Neglected Topic in International Business Research

Abstract: Despite the growing involvement of multinational firms in foreign-based R&D during the past fifteen years, little research has been done on why and how firms internationalize their R&D and what effects it might have on firm competitiveness. The present paper calls attention to this neglect and seeks to advance the management of multinational R&D as an area of study for international business scholars. To this end, the paper first examines the key contributing factors to increased foreign R&D investments among multinationals. It then reviews the research literature to find out what we presently know about the management of multinational R&D. Finally, a research agenda is proposed to provide a foundation and stimulus for future investigations. Seven research directions are recommended, with an emphasis on interdisciplinary inquiry and a focus on issues that have both theoretical and practical significance.

The East India Company: A History

Abstract: Preface. 1. England and the East in the sixteenth Century. 2. The Formative Years. 3. The Restoration of the Company and its Trade, 1660-1709. 4. The Company's Expanding University 1709-1763. 5. From Trading Company to Political Power, 1748-1763.6. The Fall from Grace, 1763-1784. 7. The Company Set Adrift, 1784-1813. 8. The Lull and the Storm, 1813-1857. Postscript. Bibliography.

Foreign Subsidiaries and Multinational Strategic Management: An Extension and Correction of Porter's Single Diamond Framework

Abstract: * Porter's single diamond framework holds that a multinational enterprise builds on a home base to achieve international competitiveness. His treatment of foreign-owned subsidiaries in smaller countries is incomplete and misleading. These need access to a triad market and their activities are better explained by a "double diamond" framework. * We extend Porter's flawed work on Canada in order to relate it correctly to the large literature in international business dealing with two way flows of foreign direct investment, parent-subsidiary relationships, and the nature of network activities of MNEs. Key words * There are six types of foreign subsidiaries in non-triad economies, most of which cannot be analyzed with Porter's model. Introduction: Porter's Diamond and Strategic Management The interaction between country specific factors and firm specific factors as sources of global competitive advantage has been the subject of extensive academic and managerially oriented research. The best known conceptual framework in this area is probably the eclectic paradigm, see Dunning (1981, 1988a, 1988b). Three elements determine a multinational enterprise's (MNE) international competitiveness, the geographical configuration of its asset base, and its organizational structure. The three elements are; ownership specific advantages, location advantages and internalization advantages. Most of the micro-economics emphasis in the literature on MNE growth has focused on the characteristics of the ownership and internalization advantages, see Buckley and Casson (1976, 1985), Casson (1987), Hennart (1982, 1986, 1991), Rugman (1981), Teece (1983, 1985). Similarly, a substantial body of research in global strategic management has focussed primarily on firm driven competition to explain successful international performance, see Ghoshal (1987), Levitt (1983), Ohmae (1987), Prahalad and Hamel (1990), Reich (1991). However, a recent study on the competitive advantage of nations, by Porter (1990), attempts to redirect academic and managerial attention toward recognizing the major country specific attributes that stimulate the competitive advantage of particular industries. More specifically, Porter's study attempts to explain why a nation may become the home base for successful international competitors in an industry. In his view, multinational status is a reflection of a company's ability to exploit strengths gained in one nation in order to establish a position in other nations, see Porter (1990, p. 18). In Porter, successful global competition is seen as the result of the characteristics of the MNE's home base. A firm's home base is considered to be the nation where it retains effective strategic, creative and technical control, i.e. it is the source of the MNE's core competencies. In addition, it is considered as central "to choosing the industries to compete in as well as the appropriate strategy", see Porter (1990, p. 599). The relevance of Porter's framework for international trade theory has been discussed by Gray (1991) and its contribution to strategic management theory has been assessed by Grant (1991). Its application to Canada has been criticized by Rugman (1991 and 1992), while its application to New Zealand has been criticized by Cartwright (1992). The key goal of this paper is to challenge Porter's allegation that the core competencies of large MNEs and the innovative processes occurring within these firms necessarily need to depend upon the characteristics of a single home base. Porter's view is that a simple distinction can be made between an MNE's home base, which provides the main source of the firm's competitive advantages, and other nations, which can be tapped into selectively but are certainly not as important as the home base. This viewpoint does not adequately address the complexities of real world global strategic management, especially for MNEs from small nations, such as Canada and New Zealand. …

Organizing for Global Competition

Abstract: Global information technology (i.e., computer hardware, software, and data communications shared across country boundaries) can support the multinational firm as it seeks to coordinate global operations, diffuse innovations worldwide, or provide integrated service to a global corporate customer. The current study uses information processing theory as the basis for examining alternative organizational designs for information technology in a globally competing firm. Mail survey data gathered from information technology managers in 109 multinationals provide evidence that multinational firms use different and distinct ways of organizing their global information technology activities. The survey data also reveal that in nearly half of the organizations, the way information technology activities are organized is inconsistent with the way the organization is reportedly structured. A follow-up interview-based study sought explanations for these misfits. Several contingency variables were identified that may shed some light to the misfits. These included factors from both the firm's internal and external environments.

Assumptions of Hierarchy and Heterarchy, with Applications to the Management of the Multinational Corporation

Abstract: The virtues of hierarchical organization — of matter, of life, of information, of human institutions — are mostly taken for granted. Analysts invoke the supposed virtues of hierarchy without much specification. An example is Galbraith’s (1973) synthesis of the information-processing theory of organization design: the discussion is very detailed on most aspects of design dimensions, but hierarchy is left curiously anonymous. Hierarchical structuring is introduced as one of the first and most fundamental ways of improving the handling of information, but why it is among the first and fundamental is left unexplained.

Managing Across Borders: An Empirical Test of the Bartlett and Ghoshal [1989] Organizational Typology

Abstract: This paper reports an empirical test of the Bartlett and Ghoshal [1989] organizational typology. Some 131 senior executives of corporations with worldwide operations classified their organizations as being multinational, global, international, or transnational in nature and evaluated their organizations' configuration of assets and capabilities, role of overseas operations, and development and diffusion of knowledge. Results provide partial support for the typology. As expected, transnational corporations were least frequently reported by the respondents. The hypothesized practices associated with multinational and global organizations were more consistent with the typology's predictions relative to those of the international and transnational types.

Book Review: John H. Dunning Multinational Enterprises and the Global Economy

Abstract: To quote from page xiii: "This volume is intended to accomplish two main objectives. First, it aims to present a fairly detailed, but broadly based, survey of the history and present day role of multinational enterprises (MNEs) in the global economy. Second, the monograph seeks to couch its descriptive and analytical contents within a uniform and consistent conceptual framework." In terms of these goals the book is quite successful.

British Multinational Banking 1830-1990

Abstract: This is a study of the emergence, growth and performance of British multinational banks from their origins in the 1830s until the present day. British owned banks played leading roles in the financial systems of much of Asia and the Southern hemishere during the nineteenth century and after. In the 1970s and 1980s, they made large investments in California and elsewhere in the United States. They played major roles in the finance of international trade, in international diplomacy, in the birth of the Eurodollar market, and in the world debt crisis. This is the first modern general history of these banks. It is based on a wide range of confidential banking archives in Britain, Australia and Hong Kong, most of which were previously unavailable. Geoffrey Jones places this new empirical evidence in the context of modern theories of multinational enterprise and of competitive advantage. This is a lucidly written and fascinating study, of importance not only to historians but also to anyone concerned with contemporary multinational banking.

Business Ethics: A Managerial, Stakeholder Approach

Abstract: Business ethics defined stakeholder approach and business ethics ethical principles and decision-making guidelines the corporation as stakeholder moral dimensions of strategy, structure, leadership, culture, and self regulation the corporation and external stakeholders managing moral responsibility in the marketplace employee stakeholders and the corporation nations and multinational stakeholders business ethics in the 21st century.

Studies in International Taxation

Abstract: As the global economy continues to evolve, events such as the unification of European markets have prompted economists and policymakers to consider whether the current system of taxing income is inconsistent with the trend toward liberalized world financial flows and increased international competition. To help assess the effectiveness of existing tax policies and incentives, this volume presents new research on how taxes affect the investment and financing decisions of multinationals today. The authors examine international financial management, business investment, and international income shifting. The first three papers focus on financial management. Chapter 1 analyzes how tax and non-tax factors affect the relative importance of portfolio equity investments versus foreign direct investments and finds that the composition of equity flows differs dramatically according to tax differences. The authors of the second chapter look at the impact of U.S. and Canadian tax reforms on the financing of U.S. multinationals operating in Canada. Chapter 3 uses new data from 1986 corporate income tax returns to examine the effects of taxes on decisions by foreign subsidiaries to repatriate dividends to U.S. parent corporations. The next three chapters address international business investment. The authors of Chapter 4 consider why most models fail to show how tax policy affects foreign direct investment, and they offer improved models. Chapter 5 models U.S. tax incentives for the level and location of R&D performed by multinationals, and reveals that changes in the after-tax price of R&D have a significant effect on spending decisions of U.S. multinationals. Chapter 6 offers descriptive evidencefrom a careful field study of location and sourcing decisions in nine U.S. multinational manufacturing corporations. The final two papers examine income shifting. In chapter 7, the authors consider the fact that foreign-controlled companies in the United States pay lower taxes tha

Multinational corporate social responsibility, ethics, interactions and Third World governments: An agenda for the 1990s

Abstract: A critical literature on mulitnational corporate social responsibility has developed in recent years Many authors addressed the issue in the Third World countries This paper reviews the literature, focusing on the relationship between the multinational corporations (MNCs) and Third World governments in fulfilling the social responsibility, based on the underlying ethical imperative There is a growing consensus that both corporations and governments should accept moral responsibility for social welfare and individual interests in their economic transactions A collaborative relationship is proposed where the MNCs share information based on global experiences and offer input into host government developmental policies, and aid their implementation The government, in turn, provides a reasonable regulatory environment This calls for ongoing interactions among officials at all levels of the two institutions, with the local corporate subsidiary playing a pivotal role The desired conduct of the parties is reinforced by international organizations and other constituents, representing common human concerns across cultures These relationships are examined and an agenda for policy and action by the MNCs and the Third World governments is developed The accelerated growth in the number of multinational corporations (MNCs) and their worldwide scope, with concentration of economic and political power draws attention to corporate social responsibility Furthermore, a meeting of the United Nations Conference on Trade and Development (UNCTAD) in 1987, with delegates from 141 developed and developing countries concluded with a major agreement

The Multinational Challenge to Corporation Law: The Search for a New Corporate Personality

Abstract: Since the nineteenth century the structure of commercial organizations has developed from the lone corporate body into corporate groups that defy national boundaries. The challenge of determining the rights and responsibilities of these powerful new entities has confronted many fields of law. Phillip Blumberg documents this revolution and explores its legal consequences in his accessible book, The Multinational Challenge to Corporation Law. His study surveys the pragmatic, though piecemeal, responses that have emerged to accommodate and control the diverse products of corporate conglomeration. The fundamental characteristic of the corporation is that the liability of its owners is restricted to the extent of their investment. Often the owner controlling a corporation is itself a corporate body. In this situation, strict enforcement of limited liability would enable a single organization to construct watertight compartments within itself, shielding the whole from the liabilities of its subsidiary corporate bodies. The challenge to lawmakers has been to develop coherent jurisprudence that preserves the corporate body as an independent legal entity while preventing abuses of attendant qualities such as limited liability. With well placed historicism, Blumberg identifies the origin of this dilemma. Neither limited liability nor the ability to control other corporate bodies was initially amongst the attributes of the corporation. "The English experience," he writes, "leaves no doubt that the extension of limited liability reflected a deliberate political decision in response to commercial pressure to achieve

The internationalization process: Impact of competition and experience

Abstract: The process, or evolution, through which multinational firms have reached their present international position is often referred to as “the internationalization process of the firm.” The most widely accepted theory of this phenomenon explains this slow, and sequential process in terms of organizations’ growth and learning. It is every now and then argued that this approach has lost some of its explanatory value. The purpose of this article is to discuss the validity of this model against the backdrop of assumptions in two key dimensions, namely, firms’ experience of international business and the industry's degree of internationalization.

Effectively Conceiving and Executing Multinationals' Worldwide Strategies

Abstract: This study addresses one of the most compelling questions in the field of international management: How can a multinational simultaneously pursue the double-ended objective of effectively conceiving and executing its worldwide strategy? Here we examine the ways in which the dynamics of the strategy-making process between head office and subsidiary units influence the multinational's ability to achieve these two objectives. Specifically, we introduce the concept of procedural justice, the intellectual root of which is grounded in social psychology and law, into the international management and explore the impact of process fairness on multinationals' ability to conceive and execute effective worldwide strategies. The results of this research are based on a two-phase longitudinal study of the decision making dynamics of nineteen multinationals. They provide support that the exercise of procedural justice is indeed a powerful way to organize the multinationals' strategy-making process. Procedural justice was found to significantly augment multinationals' ability to achieve this double-ended objective.

Cross‐Pacific internationalization of R&D by U.S. and Japanese firms

Abstract: Efforts by MNCs to develop coordinated international R&D networks have taken place from different historical bases of internationalization and in the context of differing trends in the role of R&D within the corporation, as the cross-Pacific R&D investment in leading U.S. and Japanese firms in the electronics industry shows. Japanese firms, although they espouse a strategy of ‘localization’, are establishing wholly-owned R&D centres in the U.S. with highly specialized technology mandates that to be used by the company must be networked with their parent organizations. U.S. firms rely on joint ventures or wholly-owned labs with a wider array of technologies that face strong pulls to a local orientation. The patterns are somewhat out of line with the models of internationalization each side is espousing.

Multinational Firms, Political Competition, and International Trade Policy

Abstract: This paper considers how the presence of multinational firms influences international trade policy that is determined as the outcome of political competition. Multinational firms have plants to protect in all policy jurisdictions and, hence, are more protectionist than national firms that at least have an interest in free trade in export markets. Nonetheless, because of changed incentives for firms to provide political support for free-trade and protectionist candidates, an increased multinational presence via either merger or direct foreign investment has a liberalizing influence on trade policy. Copyright 1993 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

The Effects of U.S. Tax Policy on the Income Repatriation Patterns of U. S. Multinational Corporations

Abstract: U.S. corporations owe taxes to the U.S. Treasury on income earned both inside and outside American borders. This paper examines the incentives created by the U.S. tax system for the legal avoidance of taxes on foreign source income. Using data from 1986 corporate tax returns, we investigate the extent to which U.S. corporations structure and coordinate remittances of income from their foreign subsidiaries to reduce their U.S. and foreign tax liabilities. In contrast to previous work in this area, our estimates of the tax consequences of income remittances from foreign subsidiaries to parent corporations explicitly take into account the ability to use foreign tax credits generated from one source of foreign income to offset the U.S. tax liability generated by other sources of foreign income, withholding tax rates on income remittances, variations in source country corporate income tax systems, and dynamic aspects of the U.S. tax system. Our findings indicate that U.S. multinationals are able to take advantage of the U.S. tax system to avoid paying much U.S. tax on their foreign source income.