Ambidexterity as a dynamic capability in the globalization of the multinational business enterprise (MBE): Case studies of AB Volvo and IKEA

Most current research argues that globalization of companies is a myth. In spite of this Swedish firms have managed to globalize successfully according to a study by Vahlne and Ivarsson (2014). On a general level this is because they managed to build strong advantages and learned to overcome barriers constituted by cultural, institutional and geographic distance. We elaborate on the expectation that organizational ambidexterity has explanatory power for profitable globalization. We perform case studies of IKEA and AB Volvo to motivate our expectation and illustrate how these firms have been able, or not able, to balance and manage the simultaneous processes of exploration and exploitation. Ambidexterity is included in the package of dynamic capabilities affecting the globalization process positively. We find that being proactive in exploration and improving on the effectiveness in exploitation may lead to successful globalization performance.     

Transaction services and SME internationalization: The effect of home and host country bank relationships on international investment and growth

Building on the argument put forward by North and Wallis (1994) that the transaction sector enables economic growth by lowering the costs of transacting, we investigate how internationalizing firms’ host and home country bank relationships affect their international specific investments and growth. Banks provide payment, liquidity, and risk management services, which are essential to international business relationships, yet little is known about how banks affect international business relationships. In a sample of 255 small and medium-sized enterprises (SMEs), we find that host and home country bank relationships affect the dependent variables differently. We contribute to the literature by explicating the role and effects of banks in international business relationships. Our findings have implications for understanding transaction services in international business as well as the choices made by their customers.     

Explaining municipal audit costs in Sweden: Reconsidering the political environment,the municipal organisation and the audit market

With the purpose of explaining professional audit costs in Swedish municipalities, we hypothesised that audit costs are partly driven by various signalling and monitoring incentives in order to manage stakeholder relationships. Our model of the determinants of audit costs was tested on data from Swedish municipalities, thus extending the study of audit costs to political organisations in a Scandinavian institutional context. The test supported to some extent the traditional propositions of organisational complexity, risk and market determinants, as well as the proposition of the political environment. Our results indicate that audit costs are used to signal accountability, thereby suggesting that audit as a signal could be managed without managing professional auditors.     

The unexpected “yes”: Explanatory factors behind the positive attitudes to congestion charges in Stockholm

Several authors have argued that acceptability for road pricing is likely to increase with familiarity. The experiences in Stockholm, where a trial period with congestion charges changed the public opinion from negative to positive, support this hypothesis. Analysing acceptability and attitudes in Stockholm allows us to study a situation where the population is in fact familiar with congestion charges, and explore what the decisive factors for acceptability are in such a situation. By analysing a survey collected after the referendum and the subsequent reintroduction of the charges, we analyse the prerequisites to achieve acceptability given that the public is familiar with congestion charges.As expected, low car dependence and good transit supply are associated with high acceptability. But the two most important factors turn out to be beliefs about the charges' effectiveness, and general environmental attitudes. The importance of beliefs and perceptions of the effects of the charges underscores the importance of both careful system design and careful evaluation and results communication. The strong connection between environmental concerns and positive attitudes to congestion charges underscores the importance of considering and “marketing” the charges' environmental effects. In Stockholm, the politicians' decision to “re-label” the congestion charges to “environmental charges” and emphasising their positive effects on air quality may very well have had a positive impact on acceptability.     

Non-convexities and the gains from concealing defenses from committed terrorists

How should countries defend against committed terrorists who attack until defeated? We identify a fundamental non-convexity—one only needs to defeat the terrorist once. Consequently, provided a country values targets similarly, it should conceal defenses and allocate defense resources randomly.     

Property Prices and Exposure to Multiple Noise Sources: Hedonic Regression with Road and Railway Noise

This study examines the effect of road and railway noise on property prices. It uses the hedonic regression technique on a Swedish data set that contains information about both road and railway noise for each property, and finds that road noise has a larger negative impact on the property prices than railway noise. This is in line with the evidence from the acoustical literature which has shown that individuals are more disturbed by road than railway noise, but contradicts recent results from a hedonic study on data of the United Kingdom.     

A New Test of Price Dispersion

In recent years considerable attention has been devoted to differences across countries in the institutional environments in which corporations operate, and the consequences of these institutional differences for corporate performance. In this paper we test for the presence of differences in corporate performance across 38 countries, and in particular whether these differences are related to the types of legal systems existing in each country. To measure corporate performance we estimate returns on investment relative to company costs of capital in each country. We find significant differences in the investment performance of corporations across our sample of countries. Companies in countries with English-origin, common law legal systems perform significantly better on average than do those in civil law systems.     

Cost-utility analysis of the rehabilitation of patients with musculoskeletal problems

The objective of this study is to discuss the rehabilitation of patients in primary health care with problems in the musculoskeletal system from a socioeconomic perspective. A trial with coordinated rehabilitation in primary health care is compared with traditional rehabilitation. This trial, performed in Sweden in 1994, was a two-year prospective and comparative study of consecutively included patients with long-term illnesses due musculoskeletal problems (810 observations). A cost-utility analysis shows that the new rehabilitation program in primary health care is a cost-minimization program for society. There is no significant difference in the quality of life between the trial and control groups. The total cost is lower for rehabilitation in primary health care than for traditional rehabilitation (6 percent). The indirect costs are higher than the direct health care costs (60 percent), and payments from social insurance increased by 8 percent. The health economic results support rehabilitation in primary health care but also points out that this type of rehabilitation can be further improved.     

Turn to the material: Remote diagnostics systems and new forms of boundary-spanning

To learn and adapt, organizations engage widely in Information Technology (IT)-mediated boundary-spanning. This involves making sense of a swath of peripheral information made available by digital means so as to expand local knowledge. Prior research on boundary-spanning has paid scant attention to material differences between IT systems in enabling or constraining such activity. In this article, we argue that material features do matter: features afforded by IT systems have a significant impact on the form and content of boundary-spanning. We analyze material features and related affordances provided by remote diagnostics systems – a family of ubiquitous IT systems. These features allow remote diagnostics systems to collect, store, and continuously analyze data about the state of machinery and related production processes across space, time and organizational boundaries. Organizations use these systems to determine when maintenance intervention is needed, or to improve their production processes. Often, these systems are run by external service providers at remote sites, which become the new ears and the eyes of a focal organization’s production processes. Building on a longitudinal multi-site case study of two organizations, we explore the impacts of remote diagnostics systems on boundary-spanning. We observe that material features afforded by the remote diagnostics led the organizations to change their boundary-spanning in contradictory ways. On one hand, they reinforced existing boundaries. On the other hand, they crossed or cut down others, or created new ones. This suggests that the material features of these systems, when combined with new knowledge creation and sharing practices, within and between the local and the remote sites generate richer, multi-faceted inter-organizational knowledge flows. We surmise that IT’s new material features will continue to significantly shape organizing logics that determine where and when organizational boundaries are drawn and crossed. Future boundary-spanning will increasingly be shaped by socio-technical assemblages brought together by increasingly pervasive IT capabilities.     

Steady‐state priors for vector autoregressions

Bayesian priors are often used to restrain the otherwise highly over‐parametrized vector autoregressive (VAR) models. The currently available Bayesian VAR methodology does not allow the user to specify prior beliefs about the unconditional mean, or steady state, of the system. This is unfortunate as the steady state is something that economists usually claim to know relatively well. This paper develops easily implemented methods for analyzing both stationary and cointegrated VARs, in reduced or structural form, with an informative prior on the steady state. We document that prior information on the steady state leads to substantial gains in forecasting accuracy on Swedish macro data. A second example illustrates the use of informative steady‐state priors in a cointegration model of the consumption‐wealth relationship in the USA. Copyright © 2009 John Wiley & Sons, Ltd.