Showing papers on "Multinational corporation published in 2001"

The Rise of "The Rest": Challenges to the West from Late-Industrializing Economies

Abstract: After World War II a select number of countries outside Japan and the West-those that Alice Amsden calls "the rest"-gained market share in modern industries and altered global competition. By 2000, a great divide had developed within "the rest", the lines drawn according to prewar manufacturing experience and equality in income distribution. China, India, Korea and Taiwan had built their own national manufacturing enterprises that were investing heavily in R&D. Their developmental states had transformed themselves into champions of science and technology. By contrast, Argentina, Brazil and Mexico had experienced a wave of acquisitions and mergers that left even more of their leading enterprises controlled by multinational firms. The developmental states of Mexico and Turkey had become hand-tied by membership in NAFTA and the European Union. Which model of late industrialization will prevail, the "independent" or the "integrationist," is a question that challenges the twenty-first century.

Globalization and the environment: Determinants of firm self-regulation in China

Abstract: Critics assert that globalization is detrimental to the environment because it encourages location of polluting industries in countries with low environmental regulations. We suggest that globalization might also have positive environmental effects because global ties increase self-regulation pressures on firms in low-regulation countries. Using survey data from firms in China we find that multinational ownership, multinational customers, and exports to developed countries increase self-regulation of environmental performance.

Bundling Human Capital with Organizational Context: The Impact of International Assignment Experience on Multinational Firm Performance and CEO Pay

Abstract: We develop resource- and dynamic capability-based arguments that CEOs with international assignment experience create value for their firms and themselves through their control of a valuable, rare,...

Institutions, Transaction Costs, and Entry Mode Choice in Eastern Europe

Abstract: The process of change from a centrally planned system to a market economy generates an institutional framework that is only partially reformed, and therefore inconsistent and unstable. This leads to high transaction costs for economic agents. Multinational enterprises entering transition countries have to adapt their strategies to the local institutions and reduce exposure to highly imperfect markets. This paper analyzes how the costs of organizing business in transition environments influence entry mode choice. The empirical results show that host country institutions in transition economies, have an impact on the choice of entry modes. Moreover, different mechanisms determine the internalization of managerial and technological knowledge.

Introduction: Globalisation, Value Chains and Development

Abstract: Globalisation has become a catchword for the international economy at the beginning of the twenty-first century. The increasing importance of export-oriented industrialisation has made integration into the global economy virtually synonymous with development for a number of nations. However, there is an acute awareness that the gains from globalisation are very unevenly distributed within as well as between societies. A growing body of work analyses globalisation processes from the perspective of ‘value chains’; that is that international trade in goods and services should not be seen solely, or even mainly, as a multitude of arm’s-length market-based transactions but rather as systems of governance - involving multinational enterprises - that link firms together in a variety of sourcing and contracting arrangements. Understanding how these value chains operate is very important for developing country firms and policymakers because the way chains are structured has implications for newcomers trying to participate in the chain and to gain access to necessary skills, competences and supporting services. Most of the papers in this Bulletin build on the results of a workshop in Bellagio, Italy in September 2000, where all these issues were discussed.

From Global to Metanational: How Companies Win in the Knowledge Economy

Abstract: From the Publisher: Becoming a global company once meant penetrating markets around the world. But the demands of the knowledge economy are turning this strategy on its head. Today, the challenge is to innovate by learning from the world . This book provides a blueprint for companies ready to embrace this new globalization challenge. In From Global to Metanational , international business and strategy experts Yves Doz, Jose Santos, and Peter Williamson introduce a radically different kind of company-the metanational-defined by three core capabilities: being the first to identify and capture new knowledge emerging all over the world; mobilizing this globally scattered knowledge to out-innovate competitors; and turning this innovation into value by producing, marketing, and delivering efficiently on a global scale. The authors explain why traditional global strategies are no longer sufficient to differentiate leading competitors, what the knowledge economy means for managers, and why opportunities to leverage globally dispersed knowledge are growing. Most important, they outline exactly how managers can build a metanational advantage for their own organizations by: * Prospecting for and accessing untapped pockets of technology and emerging consumer trends from around the world * Leveraging knowledge imprisoned in a multinational's local subsidiaries * Mobilizing this fragmented knowledge to generate innovations, profits, and shareholder value Drawing from the experiences of pioneering metanationals including STMicroelectronics, ARM, Acer, Nokia, Shiseido, and PolyGram, the book shows how today's multinationals can use their existing global networks to gain an important head start in the global game-and how newcomers can leapfrog traditional competitors by rapidly building a new-style metanational corporation. Must-reading for every leader-from the CEO of a new global venture, to the executive of a currently successful multinational, to the founder of an e-business startup getting ready to "go global"-this pathbreaking book shows how to reshape strategies to compete and win in the global knowledge economy. "From Global to Metanational brings fresh insights to the management of multinational enterprise in today's knowledge-intensive economy. Moving beyond the traditional view of promoting international expansion to win market access, this thoughtful yet practical book describes the next level of how companies must compete in the global arena. Written by three of the world's leading thinkers in the field of international management, this book will change the thinking of executives and scholars alike." —Christopher Bartlett, Daewoo Professor of Business Management and Chair of the Program for Global Leadership, Harvard Business School Author Biography: Yves Doz is Timken Professor of Global Technology and Innovation at INSEAD. Jose Santos is Professor of International Management at INSEAD. Peter Williamson is Professor of International Management and Asian Business at INSEAD's Euro-Asia Centre.[EBK1]

Competitiveness, Technology and Skills

Abstract: What "competitiveness" is and why it is important "market stimulating" technology policies in developing countries - a framework with examples from East Asia import liberalization and industrial performance - the conceptual underpinnings the technological structure and performance of developing country manufactured exports, 1985-1998 skills and competitiveness in developing countries multinational corporations, technology development and export competitiveness technological change and industrialization in the Asian newly-industrializing economies - achievements and challenges India's manufactured exports - comparative structure and prospects competitiveness challenges in the new Asian tigers - Malaysia, Thailand and Philippines technology policies in Indonesia transfer and development of technology - Kenya and Tanzania.

Determinants of Entry in an Emerging Economy: A Multilevel Approach

Abstract: The dynamics of the world economy and global competition patterns are encouraging multinational enterprises (MNEs) to expand into emerging economies. This study validates the proposition that entry mode selection in an emerging economy is influenced by situational contingencies at four levels: nation, industry, firm, and project. Analysis of data collected from China suggests that the joint venture is preferred when perceived governmental intervention or environmental uncertainty is high or host country experience is low. The wholly-owned entry mode is preferred when intellectual property rights are not well protected, the number of firms in the industry is growing fast, the need for global integration is high, or the project is located in an open economic region. The importance of these multilevel determinants requires simultaneous and inseparable considerations of the risk, return, control, and resource effects of the entry mode decision. This necessitates a theoretical integration of multiple perspectives such as transaction cost, the eclectic paradigm, bargaining power, and organizational capability.

Do civil and political repression really boost foreign direct investments

Abstract: Multinational enterprises are often accused to have a preference for investing in countries in which the working populations' civil and political rights are largely disregarded. This paper presents an empirical investigation of the popular "political repression boosts FDI" hypothesis and arrives at the conclusion that the hypothesis is not supported. On the contrary, multinational enterprises rather appear to be attracted by countries in which civil and political freedom is respected. Our finding thus supports the notion that there is a positive relationship between democracy and economic growth.

Instituting the marketing concept in a multinational setting: The role of national culture

Abstract: A growing concern among international marketing managers is how to increase the market orientation and thereby performance of their transnational organizations. This study broaches this issue by investigating how the marketing concept, the heart of the market orientation, may be established in a multinational setting and the effects of national culture on that process. From a wide array of literature, the authors construct a theoretical framework and propositions on how global organizations may transform this philosophy from an abstract platitude to an operational reality. Their findings suggest that the process consists of complex, interdependent steps—interpretation, adoption, and implementation of the marketing concept. Cultural values shape interpretation and facilitate or impede adoption and implementation. The overall framework and findings can be used to guide institutionalization of the marketing concept across the organizational span, in particular by anticipating culture-based reactions from international subsidiaries.

Innovation and Risk-Taking in a Transitional Economy: A Comparative Study of Chinese Managers and Entrepreneurs

Abstract: This research was set in the People’s Republic of China. As former socialist China moves from central planning toward a more market-driven economy, improved knowledge about the new environment and firm decisions within such an environment has significant implications. For organizational researchers, such a transition represents a genuine shift of paradigm, and thus offers a unique opportunity to test existing organizational theories and develop new ones. For multinational businesses seeking business opportunities, they have to compete or cooperate with these Chinese firms, whether state-owned or privately owned. Motivated by a deep curiosity in, using the language of Williamson (1996), “What is going on there” behind the “bamboo curtain,” and underpinned by a strong conviction that organizational researchers have much to gain as well as to offer by focusing on transitional economies, I undertook this study to examine characteristics of a regulatory environment and the impact on innovation and risk-taking among Chinese managers and entrepreneurs. I collected original primary data that represents managers from large state-owned enterprises (SOEs) and entrepreneurs from small privately-owned enterprises (POEs) through personal interviews and a survey. Significant differences were found between managers and entrepreneurs in their reported environmental characteristics, strategic orientations, size, and firm performance, indicating that managers are not as innovative and are less willing to make risky decisions than entrepreneurs. Being smaller and faster than SOEs, entrepreneurial firms have adopted some strategies that distinguish them from their larger and more established competitors. Speed, stealth, and sound execution allow entrepreneurs to harvest first-mover advantages and thus increase their chances for survival in a turbulent environment.

Nationality, Cultural Distance, and Expatriate Status: Effects on the Managerial Network in a Multinational Enterprise

Abstract: We study the role of three characteristics of international managers—nationality, cultural distance, and expatriate status, for their network ties. A network analysis of cross-subsidiary interactions among 457 managers in an MNE demonstrates that managers form strong expressive ties with peers with smaller cultural distance and from the same status group. However, managers form strong instrumental ties with peers who are different on these background characteristics. The implications for international management theory and practice are discussed.

The Multinational Firm: Organizing Across Institutional and National Divides

Abstract: 1. The Multinational Firm: Organizing across institutional and national divides 2. HOW AND WHY ARE INTERNATIONAL FIRMS DIFFERENT? THE CONSEQUENCES OF CROSS-BORDER MANAGERIAL COORDINATION FOR FIRM CHARACTERISTICS AND BEHAVIOUR 3. The Emergence of German Transnational Companies: A theoretical analysis and empirical study of the globalization process 4. Constructing Global Corporations: Contrasting national legacies in the Nordic Forest 5. BETWEEN NATIONAL AND INTERNATIONAL GOVERNANCE: SECTOR COORDINATION AND GEOPOLITICS IN ELECTRICAL ENGINEERING 6. The Impact of the Internationalizing of Capital Markets on Local Companies: How international institutional investors are restructuring Finnish companies 7. The Making of a Global Firm: Local pathways to multinational enterprise 8. Globalization and Change: Organizational continuity and change within a Japanese multinational in the UK 9. THE DEVELOPMENT OF TRANSNATIONAL STANDARDS AND REGULATIONS AND THEIR IMPACTS ON FIRMS 10. Globalization and its Limits: The making of international regulation 11. National Trajectories, International Competition, and Transnational Governance in Europe

General-Equilibrium Approaches to the Multinational Firm: A Review of Theory and Evidence

Abstract: Beginning in the early 1980s, theoretical analyses have incorporated the multinational firm into the microeconomic, general-equilibrium theory of international trade Recent advances indicate how vertical and horizontal multinationals arise endogenously as determined by country characteristics, including relative size and relative endowment differences, and trade and investment costs Results also characterize the relationship between foreign affiliate production and international trade in goods and services In this paper, we survey some of this recent work, and note the testable predictions generated in the theory In the second part of the paper, we examine empirical results that relate foreign affiliate production to country characteristics and trade/investment cost factors We also review findings from analyses of the pattern of substitutability or complementarity between trade and foreign production

Antecedents of organizational identification in multinational corporations: fostering psychological attachment to the local subsidiary and the global organization

Abstract: This article reports the results of an empirical case study of the antecedents of organizational identification among local managers in a multinational corporation (MNC). Organizational identification, which refers to an individual's psychological attachment to the organization, has gained increasing attention because of its assumed link with behaviour associated with enhanced organizational performance. Yet little work has been done on what fosters organizational identification, particularly within the context of a MNC. Moreover, there is empirical evidence showing that managerial employees of MNCs draw a distinction between their local subsidiary and the global organization as manifest in separate group identifications. This suggests that there may be differential sets of antecedents of identification with the local subsidiary and with the global organization. The results of the present study indicate that there are different sets of factors that promote identification with the local and global levels o...

The corporate ethics crusade

Abstract: Are multinational enterprises getting religion? So it seems. Around the world, corporate codes of conduct on human rights, labor standards, and environmental performance are proliferating. These codes reflect the growing pressure being placed on firms by nongovernmental organizations (ngos), activist shareholders, and the portfolio managers of "socially responsible" investment funds. A veritable corporate ethics crusade has been launched, and it has been surprisingly successful in forcing executives to take its concerns into account.

Unleash innovation in foreign subsidiaries.

Abstract: In multinational corporations, growth-triggering innovation often emerges in foreign subsidiaries from employees closest to customers and least attached to the procedures and politeness of the home office. But too often, heavy-handed responses from headquarters squelch local enthusiasm and drive out good ideas--and good people. The authors' research into more than 50 multinationals suggests that encouraging innovation in foreign subsidiaries requires a change in attitude. Companies should start to think of foreign subsidiaries as peninsulas rather than as islands--as extensions of the company's strategic domain rather than as isolated outposts. If they do, innovative ideas will flow more freely from the periphery to the corporate center. Basing their arguments on a rich array of examples, the authors say that encouraging such "innovation at the edges" also requires a new set of practices, with two aims: to improve the formal and informal channels of communication between headquarters and subsidiaries and to give foreign subsidiaries more authority to see their ideas through. The challenge for executives of multinationals is to find ways to liberalize, not tighten, internal systems and to delegate more authority to local subsidiaries. It isn't enough to ask subsidiary managers to be innovative; corporate managers need to give them incentives and support systems to facilitate their efforts. The authors suggest four approaches: give seed money to subsidiaries; use formal requests for proposals as a way of increasing the demand for seed money; encourage subsidiaries to be incubators for fledgling businesses; and build international networks. As part of the last approach, multinationals also need to create roles for idea brokers who can link entrepreneurs in foreign subsidiaries with other parts of the company.

Transnational communities and business systems

Abstract: The paper examines the concept of ‘transnational communities’ as a way of understanding globalization practices in business and management. It argues that ‘transnational communities’ are emergent properties of the internationalizing of economic activity. Three specific aspects of this process are considered in detail: the development of multinational companies; the development of international regulatory bodies; and the development of cognitive and normative frameworks through the practices of business education, management consultancies and other global professional service firms. It is argued that in each case, transnational spaces are emerging; within these spaces, transnational communities are developing. The article calls for more research into the diverse nature of these spaces and communities as a way of avoiding the sterile polarities of what Held et al. (1999) refer to as the ‘hyperglobalists’ and the ‘sceptics’.

Globalization and the state–profession relationship: the case the Bank of Credit and Commerce International

Abstract: Globalization of businesses raises major questions about the regulation of corporations, both in the national and international context. The debate is marked by two competing views. The ‘hyperglobalists’ claim that in a globalized world, nation-states cannot take effective actions to regulate multinational businesses, especially those relating to banking and finance. In response, the ‘skeptics’ accept the view that to regulate corporations, the nation-state has always had to restructure itself. However, they challenge the contention that globalization has reduced the power, functions and authority of the state. The paper contributes to the debate through an examination of some of the processes leading to the forced closure (and the aftermath) of the Bank of Credit and Commerce International (BCCI), a bank that operated from 73 countries. It particularly focuses upon the role of the banking regulators and their reliance upon auditing technologies to regulate major banks. The paper sides with the ‘skeptics’ and argues that the nation states, especially major Western states, remain important players in the regulation of global businesses. It concludes that the nation-state’s capacity to regulate global enterprises is compromised by history, domestic concerns and relationships with class and capitalist interests rather than by globalization per se.

Emerging Market Segments in a Transitional Economy: A Study of Urban Consumers in China

Abstract: How to integrate the emerging consumer segments in transitional economies into multinational corporations’ global marketing strategies presents a significant challenge. An analysis of China’s urban consumers based on a 1997 national survey reveals several market segments that are distinctive in their demographics, psychographics, lifestyles, media usage, and consumption patterns. The findings suggest that multinational corporations need to adapt to the local market conditions in China and other transitional economies.

Operational Hedges and the Foreign Exchange Exposure of U.S. Multinational Corporations

Abstract: This paper examines the impact of operational hedges of US multinational corporations (MNCs) on their exchange rate exposure. The two important contributions of this study are: First, it documents the importance of operational hedges as significant determinants of exchange rate risk, as measured by “breadth” and “depth” dimensions of the MNC foreign subsidiary network. Second, this finding remains robust even after examining the impact of operational hedges on exposure separately for negatively and positively exposed MNCs.

Global Account Management in Multinational Corporations: Theory and Evidence

Abstract: This paper uses two theoretical perspectives, information processing and resource dependency, to examine global account management (the co-ordination of activities involved in serving a single customer in multiple countries). It is hypothesized that global account management structures allow the multinational corporation (MNC) to increase its information processing capacity as well as its bargaining power vis-a-vis the global customer. Using data on 106 global accounts in 16 MNCs, we find support for both perspectives individually. Furthermore, evidence is presented for an interaction effect in which the effectiveness of structures for increasing information processing is conditional upon the presence of high customer dependence.