Organizational goals and resource allocation to overseas foreign direct investment |
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| Institution: | 1. Assistant Professor, Jönköping International Business School, Jönköping University;2. Professor, Cairnes School of Business & Economics, National University of Ireland Galway;3. Professor, Stockholm University, Stockholm Business School, Stockholm, Sweden;1. Excelia Business School, CERIIM, 102 Rue de Coureilles, La Rochelle 17000, France;2. Collaboration Sales Specialist, Cisco, 11 Rue Camille Desmoulins, Issy-les-Moulineaux 92130, France;3. Cranfield School of Management, College Road, Wharley End, Cranfield, Bedford MK43 0AL, United Kingdom;1. Department of Management and International Business, Florida International University College of Business, United States;2. Naveen Jindal School of Management, University of Texas at Dallas, United States;3. University of Kent Business School, Kent ME4 4AG, United Kingdom;4. Faculty of Business Administration, University of Macau, Macao;5. Faculty of Business and Economics, Monash University, Australia;6. Department of Management, City University of Hong Kong, Hong Kong;1. School of Management, Zhejiang University of Technology, 288 Liuhe Road, Xihu District, Hangzhou, Zhejiang 310023, China;2. School of Management, University of San Francisco, 2130 Fulton Street, San Francisco, CA, USA 94117 |
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| Abstract: | We investigate how organizational goal setting impacts slack resource allocation between markets at home and overseas, and argue that organizational goals, publicly announced, impact managers’ evaluations of resource allocation opportunities. Based on a sample of Chinese publicly listed manufacturing firms for the period 2010 to 2016, we find that when firms announce publicly a sales increasing goal as their priority, their attention will be focused on this goal with a tendency to invest the firm's slack resources locally. This tendency to invest slack resources locally is enhanced if the announced goal is not achieved, but is not achieved with a minor discrepancy. However, if the goal is not achieved, and with a major discrepancy, managers will likely conduct problemistic search and look to foreign locations to invest the firm's slack resources to achieve this goal. We also find the impact of organizational goal setting is more salient for SOEs and is dependent on levels of remuneration in the firm. As such, we revisit the importance of organization goals and the resource allocation decision in the firm which has not received the research attention one may have expected. |
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