Manufacturing Strategies for Southeast Asia after the Crisis: European, US and Japanese Firms

This article describes short-term reactions to the Asian crisis by European, US and Japanese MNCs and examines their long-term regional production strategies for Southeast Asia. In the process, it highlights similarities in the firms' responses but also distinguishes differences in the long-term regional reorganization of production activities of Western and Japanese firms. The article argues that there is currently a window of opportunity for Western MNCs to expand their Southeast Asian operations. Japanese firms face several obstacles to the implementation of a comprehensive regional production strategy as a result of their highly centralized way of managing international operations and their comparatively early production engagement in Southeast Asia whichequips most US and European MNCs with a latecomer advantage.     

Influencing MNC strategies for managing corruption and favouritism in Pacific Asia countries: a multiple-theory configurational perspective

ABSTRACT

The research gap addressed here concerns how to encourage multinational corporations (MNCs) to combat corruption and favouritism. This study’s rationale is that MNCs can have a highly influential role in supporting or opposing such practices globally. The study examines how MNCs might choose flexibly among alternative strategies but could be encouraged positively. Three illustrative strategies are described in detail using theoretical propositions: (1) anti-corruption reform; (2) ‘tightrope’ balancing; and (3) tolerance for corrupt practices. A proposed multiple-theory configurational perspective is consistent with secondary data and reported cases about domestic corruption and MNC propensity to bribe focused on Pacific Asia countries.     

‘Inpatriation’ for knowledge-transfer within Japanese multinational corporations

This article uses knowledge management theory and the gravity model to analyse the determinants of ‘inpatriation’ for knowledge-transfer within multinational corporations (MNCs) and the differences in their effects based on the region of the subsidiary’s host country. The empirical analysis uses data collected through a survey of the overseas subsidiaries of Japanese MNCs and finds that factors related to both the countries and the individual MNCs affect inpatriation, with the former factors having a stronger influence than the latter. With regard to the country factors, a smaller geographic distance and a larger cultural distance between the home and host countries and a lower GDP per capita in the subsidiary’s host country increase inpatriation. Regarding the individual MNC factors, a larger subsidiary R&D budget, a larger parent firm and the execution of collaborative R&D projects between a subsidiary and its parent firm increase inpatriation. Additionally, this study finds that in Asia, geographic closeness and low GDP per capita facilitate inpatriation, whereas a relatively small R&D budget and rare collaborative R&D projects with Japan decrease inpatriation. More subsidiaries in Asia send inpatriates to Japan than do subsidiaries in other regions because these positive factors are much stronger than these negative factors.     

Nafta,the financial crisis,and multinational management in Mexico

The North American Free Trade Agreement (NAFTA) joined Mexico, the United States, and Canada in a free trade and investment block. While NAFTA has generated considerable interest, much of the initial enthusiasm for the treaty has faded due to the Mexican financial crisis. To learn more about the effects of NAFTA and the crisis on multinational (MNC) strategy and operations, we conducted interviews at manufacturing firms in Mexico. Even with NAFTA, we found that significant restrictions remain that limit the strategies that MNCs can pursue. Also, only a limited number of MNCs have been seriously hurt by the financial crisis due to the risk management strategies these firms have adopted. We conclude with a discussion of the implications of this study for the effective management of MNC firms in Mexico.     

Competing globally: How Japanese MNCs have matched goals and strategies in India and China

Japanese MNCs have established strong investment positions in the US, Europe and Asia. China has been a major recipient of Japanese foreign direct investment (FDI), while investment in India has grown much more slowly. We argue that the differences extend much beyond the levels of investment—Japanese involvement in India and China is qualitatively different. Japanese FDI in China was motivated by access to location-specific productive resources, and it involved a high degree of technology, management skills and organizational knowledge transfer. The Japanese subsidiaries in China were integrated with the network of international subsidiaries as a part of the MNC's global strategy. Japanese FDI in India, however, was motivated by the desire to access local markets. It involved less transfer of technology and management skills, and Japanese subsidiaries in India operated independently as part of a multi-domestic strategy. We conclude that foreign entrants to the region should be aware and able to respond to the unique advantages of each host country and to the different strategies and capabilities of the subsidiaries of Japanese MNCs.     

It's all fair in love,war, and business: Cognitive philosophies in ethical decision making

Exploratory research was undertaken in four locations in the Asia Pacific Rim to investigate the cognitive frameworks used by managers when considering ethical business dilemmas. In addition to culture, gender and organisational dimensions were also studied. Aggregate analysis revealed no significant differences in the cognitive frameworks used by business managers in Hong Kong, Malaysia, New Zealand, and Canada. Of the eight frameworks used in the study four cognitive frameworks appeared to feature predominantly. Utilising the results of regression analysis the most salient cognitive frameworks utilised by managers were identified as; Self Interest, Neutralisation, Justice and Categorial Imperative, with Neutralisation and Self Interest being the most significant among all managers. Religious Conviction and the Light of Day framework (which relates to fear of being exposed) did not feature prominently in the analysis. A few significant differences in the ethical frameworks used by males and females were identified. For males in all four locations Self Interest, Neutralisation and Justice appeared to be dominant frameworks, while considerable variability was seen in the frameworks used by females. Marginally significant differences were observed in the cognitive frameworks used by managers with differing functional responsibilities. Across all locations respondents with general management responsibilities relied predominately on Self Interest, while those with marketing responsibilities utilised Neutralisation. Respondents with an accounting orientation also relied predominately on Neutralisation and Categorial Imperative frameworks. Gael McDonald is currently completing her doctorate at the Institute of Management in the London School of Economics and Political Science. Previously she was an Associate Professor with Asia Pacific International University based in Hong Kong and teaching on their international M.B.A. programs within the Pacific Rim. Miss McDonald has published in Journal of Business Ethics, Journal of Managerial Psychology, Asia Pacific International Journal of Marketing, Management Decision,the International Review of Retail Distribution and Consumer Researchand is an Associate editor of Business Ethics — A European Review.Patrick C. Pak is a Lecturer in Management with the Hong Kong Polytechnic University. He has a diverse interest in management research. His research interests are mainly in the areas of learning organization, organizational control, leadership, organizational change, business ethics and strategic management.     

Subsidiary managers’ knowledge mobilizations: Unpacking emergent knowledge flows

Knowledge flows are a key source of advantage for multinational corporations (MNCs); however the nuances of knowledge flow practices and their micro-foundations require further theoretical development. Using qualitative data on 40 cases of subsidiary managers’ knowledge mobilizations, this paper unravels micro-level practices of knowledge flows in MNCs. We find that subsidiary managers’ knowledge mobilizations initiate a complex pattern of subsidiary knowledge inflows, pinpointing the significance of lateral and bottom up exchanges (locally as well as internationally). We use these insights to distinguish between two types of subsidiary knowledge flows: deliberate and emergent, and discuss how their differences have profound implications for the investigation of MNC knowledge flows and their micro-foundations.     

America’s shifting emphasis to the Pacific

East Asian nations, which not long ago were counted among the more backward, are emerging as dramatically expanding markets as well as tough competitors for the United States. Predictions are that the Pacific-rim economy will expand twice as fast as the rest of the world. Professor Jens Biermeier shows that there has been a shift in the trading pattern of the United States away from Europe towards Asia as well as a shift of US political and strategic interests from the Atlantic to the Pacific in recent years.     

Motives of foreign MNCs investing in the United States and effect of company characteristics

Given the recent influx of and changes in foreign direct investment, the purpose of this study is to identify the motives of foreign-based multinational companies (MNCs) coming to the United States. Factor analysis is used to analyze the underlying pattern of the motives. The results are compared to findings of previous studies of FDI in the United States. The study also seeks differences among motives of different types of MNCs. Implications for policy and future research on FDI are discussed.     

Taking stock of social capital research: its application in service-oriented firms

Abstract

Notwithstanding the substantial literature on social capital produced in recent years, there have been fewer attempts to examine social capital within the services industry. Our contribution highlights existing research on social capital particularly on the application and outcomes of social capital in the context of service-oriented firms in the Asia Pacific region. We structure our analysis of existing research around the different approaches of social capital studies – either egocentric or sociocentric approach and the focus on the creation and outcomes of social capital. The analysis on the different perspectives of social capital research contributes to our further understanding in the areas of social capital and services industry in the Asia Pacific. The implications for theory and management practice are noted.     

Using the Capital Assets Pricing Model for risk management—A tool for multinational corporation managers

In this article, using a theoretical model and empirical analysis, we show how multinational corporations (MNCs) can utilize the fundamentals of the Capital Assets Pricing Model (CAPM) to formulate a strategic risk management in a global economy. We show that MNCs with branches all over the world, specifically those that specialize in nontradable goods (e.g., McDonald's), should consider each country's beta as the appropriate measure of the relevant risk attached to the location in the country. Finally, using data from the most recent world economic crisis (the subprime crisis), we show that during a world economic crisis the loss of growth will be significantly higher in countries with higher betas, and lower in those with lower betas. © 2011 Wiley Periodicals, Inc.     

集群内跨国公司的当地结网与中小企业的国际化

针对跨国公司参与集群中当地中小企业迅速国际化的现象,文章基于演进理论与网络理论的分析,指出集群中的跨国公司为区内中小企业吸引、培养和输送了大量具有国际经营理念、知识和经验的高级人才;并且为当地企业提供了国际商务网络的共享与支持,因而大大加速了当地企业国际化进程。文章分析了对我国中小企业国际化的启示。     

Japanese multinationals in the post-bubble era: new challenges and evolving capabilities

Since the bursting of Japan's bubble economy, from 1990 onwards, Japanese multinational companies (MNCs) have faced new competitive challenges and questions about the management practices on which they had built their initial success in global markets. Japanese engagement in the international economy has undergone a number of phases. In the period before the Second World War, Japanese companies learnt from foreign MNCs in trading, shipping, and manufacturing, frequently through strategic alliances, and leveraged their capabilities to succeed in overseas and largely Asian markets. In the immediate post-war decades, during the Japanese ‘economic miracle’, there were notable examples of MNC investment in raw materials and labour intensive production, but both inward and outward foreign direct investment were not significant. Japanese companies achieved leadership in management and technology, in order to support a strategy of export-orientated industrialization. Changes in government policies in the developed economies of the US and Western Europe forced leading Japanese manufacturers to convert themselves into MNCs and to transfer their home-grown capabilities to overseas subsidiaries. The period after 1990 marked declining Japanese competitiveness and it asked questions about the ability of Japanese MNCs to be more responsive and global in their strategies, organization and capabilities.     

离岸服务战略重塑跨国公司的竞争优势

由于信息技术的发展,越来越多的服务产品变成可分割的,从而增加了服务的可贸易性。这种变革促使制造业跨国公司将其服务活动离岸经营或进行国际外包,而服务型跨国公司扩张的可能性也大大增加了。离岸服务战略的实施重塑了各类跨国企业的竞争优势,提高了全球化条件下企业的国际竞争力。     

How have Japanese multinational companies changed? Competitiveness,management and subsidiaries

Evidence on the strategies and capabilities of Japanese multinational companies (MNCs) and their subsidiaries points to aspects of established management practices (typically home-grown) that complicate or inhibit adaptation to the demands of global competition since the 1990s. Japanese MNCs have had to respond, amongst other trends, to the switch from production to buyer-driven global value chains, cross-border vertical specialization, global factory strategies and strategic alliances and cooperative relationships. Amongst the factors that might affect the ability of Japanese MNCs to make competitive and organizational transitions are: parental MNC intent and capability in the cross-border transfer of management practices; the impact of host country risk on investment, ownership and entry strategies; measures of institutional difference and the gap in economic development between home and host nations; parent firm–subsidiary and subsidiary–subsidiary power relations and knowledge boundaries; and the evolution of insider networks that might overcome institutional and cultural distances within an MNC.     

An unrequited affinity between talent shortages and untapped female potential: The relevance of gender quotas for talent management in high growth potential economies of the Asia Pacific region

We demonstrate that gender quotas have not attracted due interest as a talent management formulation in the Asia Pacific region. Drawing on a literature review, this paper illustrates the utility of gender quotas for talent management in the context of high growth potential economies in the Asia Pacific region, i.e. China, Singapore, Thailand, Hong Kong and Taiwan. These five economies are characterized with talent shortages on the one hand, and untapped female potential on the other. We show the necessity and legitimacy of considering gender quotas as part of talent management strategy in the region in order to leverage untapped female potential for addressing talent shortages.     

Challenging APEC: the Asia Pacific labour network and APEC's human resource development working group

This contribution examines the interaction between the Asia Pacific Labour Network and Asia Pacific Economic Cooperation (APEC). In particular it explores the reasons behind the APEC decision to undertake a project to examine successful practices in training, skills development and other human resource activities that have involved labour, management and government. This marks a departure in APEC activiry which to date has neglected labour issues and excluded labour organizations from any substantive role within APEC. The study examines the relationship of APEC to civil sociery, how human resource development issues fit within APEC, the role of the international labour movement in lobbying APEC and the challenges the labour movement might face in participating in APEC including its Human Resources Development Working Group.     

Expatriate return on investment in the Asia Pacific: An empirical study of individual ROI versus corporate ROI

The return on investment (ROI) from international assignments is a crucial aspect of expatriate management. The literature has taken a mostly organizational perspective of this important phenomenon, with little attention to the ‘individual ROI’ expatriates gain when undertaking an assignment. Especially lacking is research on expatriate ROI in the Asia Pacific region. Based on interviews with 31 long-term expatriates in 10 Asian countries, we use psychological contract theory to examine (1) how ‘individual ROI’ acts as a key driver of ‘corporate ROI’ and (2) the challenges and opportunities that expatriation in the Asia Pacific presents to individuals and organizations.     

Multinational corporations and trade union development in Malaysia

This contribution considers the impact of American, Japanese and Australian capital upon organized labour in Malaysia and concludes that the legacy of the multinational corporations' (MNCs') home context is carried forward to the host country. Despite the predictions of globalization theorists, country of origin characteristics interact with local contexts to inform management strategies towards trade unions, rather than being driven by the lowest common denominator of anti-unionism. While there are substantial differences between the MNCs in their approach to trade unions in Malaysia, there is also a degree of conformity in as much as they all embrace the restrictive intent of the Malaysian state's trade union regulatory environment, thereby severely curtailing the power of the union movement.     

Why has the United States continued to receive net investment income as a debtor country?

Why has the United States been able to keep receiving net international investment income as a debtor country? Several authors have pointed out that it is because US direct investments abroad have been generating better returns than have foreign direct investments in the United States. However, there is no consensus on why this is the case. This paper investigates this issue by conducting panel regressions to identify the main determinants of return on US direct investment abroad (RUSDIA) and those of return on foreign direct investment in the United States (RFDIUS), using data from 49 countries over the 1994–2013 period. Our findings suggest that the largest contributor to the RUSDIA‐RFDIUS gap is USDIA's advantage in the internalisation effect, which more than offset any negative age effect. The second largest contributor is income‐shifting activities by US‐controlled MNCs aiming to lower their overall tax payments. The third contributor is the negative age effect of inward FDI in the United States, which more than offset its weak internalisation effect. Altogether, those effects account for about 50% of the average return gap from 1994 to 2013. The contribution of the risk‐compensation hypothesis to the return gap is negligible.