Technology sourcing in multinational enterprises and the roles of subsidiaries: An empirical investigation

This paper views the Multinational Enterprise (MNE) as a differentiated learning network with foreign subunits playing a critical role in managing knowledge. Drawing on a sample of 92 subsidiaries operating in Greece, it empirically tests the relationship between sources of technology acquired and/or generated (internally or externally) and relates them to differently strategically motivated subsidiaries. Our findings record the existence of a multifaceted network of technology generation and transmission, which is differentiated among the different types of subsidiaries. In particular, results confirm the fact that larger and innovative subsidiaries have granted access to wider sources of technology. Moreover, evidence indicates that product mandates, as well as subsidiaries of a more efficiency-seeking nature, are likely to be better embedded in the local environment.     

Corporate images' impact on consumers' product choices: The case of multinational foreign subsidiaries

The aim of this study is to ascertain the extent to which consumers' images of home and foreign business units, and their perceptions of the corporate images held by other stakeholders, influence their buying behavior. The sample consisted of high school students in the United Arab Emirates (UAE) who intended or expected to enter higher education. Using a survey questionnaire, we asked respondents about the extent to which they believed their overall impressions of foreign universities operating in the UAE were influenced by images of the institutions' home and UAE campuses and by their perceptions of the images held by other stakeholders. We found that when deciding on whether or not to buy from a foreign firm, consumers will be most influenced by the corporate images held by other stakeholders rather than the images of home and foreign business units constructed by themselves. These findings suggest that it would be advisable for firms to adopt a stakeholder perspective when developing and implementing their marketing strategy.     

Export intensity of foreign subsidiaries of multinational enterprises: The role of trade finance availability

We examine the relationship between the role of trade finance availability and the export intensity of foreign subsidiaries of multinational enterprises (MNEs). In developing our hypotheses, we draw upon insights derived from “new” internalisation theory (international business literature) and international trade finance (international economics literature). We empirically test these hypotheses using survey data compiled from subsidiary managers in six ASEAN countries, supplemented with host-country level data. We conceptualise, empirically test, and establish that the subsidiary-level capability in combining and utilising internal and external debts is an important subsidiary-specific advantage to support export intensity. We find that subsidiaries employ intra-firm loans from MNE internal capital markets and, to some extent, bank loans from external financial institutions to boost their export intensity. Subsidiaries may have concerns about foreign exchange risks, but the use of appropriate foreign exchange risk management is positively associated with export intensity. We discuss the implications of our findings for theory and practice.     

eHRM adoption in emerging economies: The case of subsidiaries of multinational corporations in Indonesia

Electronic HRM (eHRM) is assumed to strengthen the position of HRM as a business partner by promising strategic benefits. Empirical support for this assumption, however, mostly comes from studies conducted in developed economies. Yet eHRM adoption in the emerging economy context remains poorly understood as is how eHRM can result in strategic benefits. We argue that the difference between an emerging economy compared to that of a developed economy affects the adoption of eHRM in multinational corporation (MNC) subsidiaries. In order to investigate which extrinsic factors of a firm in an emerging economy context play a role in the adoption of eHRM, we conducted semistructured interviews in 11 subsidiaries in Indonesia. We found that headquarters’ influence and the available resources have a strong influence on eHRM adoption in Indonesia. Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.     

The kitchen and the multinational corporation: An analysis of the links between the household and global corporations

The paper examines relationships between multinational corporations and the unwaged work women do in their homes. It is argued that far from being a sanctuary, the home has become a dumpsite for unnecessary and unsafe products. Women in North America and the Third World are now dealing with health and safety issues in their neighbourhoods and households. Consciousness of these dangers has resulted in mobilization and the formation of alliances aimed at confronting multinationals and securing more government regulation. The experience of one group of women in a small Ontario community is described. Harriet Rosenberg is Assistant Professor in the Social Science Division at York University. She is the Principal Investigator of a SSHRC Grant for her Aging and Caregiving in an African Population. She is the co-author of Through the Kitchen Window: The Politics of Home and Family, with M. Luxton, Network Basic Series, Garamond Press, Toronto; and co-author with M. FitzGerald of Surviving in the City: Urbanization in the Third World, Oxfam, Toronto.Paper presented at Women and the Invisible Economy Conference, Institute Simone de Beauvoir, Concordia University, Montreal, Quebec, Feb. 22, 1985.     

Network effect and subsidiary autonomy in multinational corporations: An investigation of Taiwanese subsidiaries

Considering the lack of empirical evidence on the subsidiary autonomy of firms from Asian developing countries, which are usually smaller in size and have limited international experience, this study investigates the antecedents of subsidiary autonomy from a network perspective. We assess the range and the strength of both internal network (i.e., technological network) and external network (i.e., supplier's and distributor's networks) on subsidiary autonomy. Examining a sample of 1473 manufacturers extracted from a Taiwanese government-maintained database, we find that (1) a firm will grant less autonomy to a subsidiary with more internal network range and stronger internal network strength, and (2) a firm will grant more autonomy to a subsidiary with more external network range and stronger external network strength.     

Relational Capital: Strategic Advantage for Small and Medium-Size Enterprises (SMEs) Through Negotiation and Collaboration

Collaborative entrepreneurship research suggests that organizations will soon pursue more collaborative relationships throughout a worldwide network of firms, driving a strategy of continuous innovation, specially small- and medium-size firms (SMEs). Tapping into a body of literature that focuses on the importance of human capital in driving long-term success, we merge ideas of collaborative research with a growing body of work on human capital or human resource management in SMEs. Our paper states that it is not the human, per se, that is the real asset but the relationships those humans have that are the most inimitable and important capital. We will discuss how companies use relational capital as the basis for collaborative entrepreneurship. Consistent with our hypotheses, our exploratory study suggests that smaller firms place more value on relational capital than do larger firms. We also have some indication that the key capital that differentiates low vs. high performance, regardless of firm size, is the relational capital aspect. To sum up, relational capital is a fundamental asset for firms, but especially for SMEs, and high performing companies are those that are able to negotiate with others and develop collaborative agreements, thus placing a high value in relational capital.     

Regional location of multinational corporation subsidiaries and economic development contribution: Evidence from the UK

The regional location of multinational corporation (MNC) subsidiaries in their host country and their associated entrepreneurial output and networking activities are likely to affect their economic development contribution, measured in terms of technology and management know-how transfers; enhancement of innovativeness of other firms; and company spinoffs. This theme has considerable research and public policy value. We investigate the issue drawing from a large-scale study of 264 MNC subsidiaries based in the UK. The findings show that activities in developed regions are associated with higher economic development contribution than those in less developed regions. Moreover, entrepreneurial output and networking with partners external to the MNC system positively affect economic development contribution. Key implications of this study are that entrepreneurship critically influences economic development contribution, underlying the importance of the MNC subsidiary research stream; and that the policy practice of supply-side measures fostering entrepreneurial output and embeddedness in local networks seems to be appropriate to pursue.     

The belt and road initiative,cultural friction and ethnicity: Their effects on the export performance of SMEs in China

China’s Belt and Road Initiative (BRI) has provided Chinese firms with significant incentives to speed up the pace of internationalization. Yet very little international business (IB) research has been found to empirically examine such policy effects. This study explores this important issue using Chinese firms of different ethnicities in the Xinjiang Uygur Autonomous Region (XUAR) of China. We propose that the BRI has a positive formal institutional effect on the export performance of XUAR firms that target the “Belt” countries. Both cultural friction and ethnicity serve as the unique cultural contingencies that moderate the relationship between the BRI and export performance. More specifically, the cultural friction that results from the process of internationalization will negatively affect the export performance prompted by the BRI. The Uygur-owned firms will benefit more from the BRI due to their cultural similarity. Overall, the study takes the lead in investigating both internal conditions and external environments that promote and inhibit the internationalization process of small-to-medium enterprises (SMEs) in the XUAR that are geographically close to the “Belt” countries. The findings help enrich the understanding of the dual “push” and “drag” effects on the outcomes of SMEs’ international activities due to the government-led initiatives and the understanding of micro-foundation toward internationalization from an ethnicity perspective.     

中小企业融资:现状、争议与共识

世界许多国家融资模式的横比表明,内部融资是企业资金的最重要的来源,融资的瓶颈在于外部融资;而外部融资中最重要的是以银行贷款为主的间接融资。这种特点在中小企业融资中更为突出。各种中小企业融资理论从多种方面分析了融资收益和风险的匹配关系对中小企业资金供求的影响,并给出了争议与共识并存的政策建议。     

The Strategies and Characteristics of Exporting SMEs:

The behaviour of exporting firms is the result of the complex interaction of many factors of the external and internal environment both at the national and international level. This paper presents the main findings from an exploratory study which assessed the characteristics and marketing strategies of small- to medium-sized exporting firms in a developing country, Peru. Statistical analysis using non-parametric methods to measure the behaviour of these firms used criteria taken from studies of firms in mostly developed countries. The observations from the analysis indicate that characteristics such as size and management perceptions and commitment, and strategies related to market concentration in developed countries taking into consideration export sales volume as a measure of performance (dependant variable) were positively associated to the success of these Peruvian firms and added to their competitiveness.     

Headhunter-assisted recruiting practices in foreign subsidiaries and their (dys)functional effects: An institutional work perspective

This paper applies the institutional work perspective to elucidate how and why dysfunctional effects are reproduced by HRM practices. Our analysis of headhunter-assisted recruitment of local employees in foreign subsidiaries demonstrates how mutual dependence, self-interests, and a stratified labor market lead to specific candidate search criteria and limit the scope of search. It also shows how these practices result in limited positive effects from the key actors’ perspective, but in the long run reproduce voluntary turnover, communication-competence misalignment, and limited use of local talent pools. However, because these practices have become commonly used, the actors are unwilling and/or unable to change the system.     

The influence of market and cultural environmental factors on technology transfer between foreign MNCs and local subsidiaries: A Croatian illustration

Technology transfer from multinational corporations to local subsidiaries is essential for successful local market operations. In this study, the environment-strategy-performance framework is used to investigate the effects of market and cultural environmental factors on international technology transfer, and resultant performance. The relative influence of two factors of the market environment, i.e., competitive intensity and market dynamism, and the relative influence of two factors of the cultural environment, i.e., national cultural distance and organizational cultural distance, are examined. The results of a survey of 131 managers of subsidiaries of foreign multinational corporations indicate the direct effects of market and cultural environmental factors on international technology transfer, with market dynamism found to be a more influential market environmental factor than competitive intensity and organizational cultural distance found to be a more influential cultural environmental factor than national cultural distance. Further, a significant positive relationship between technology transfer and subsidiary performance was found. Theoretical and practitioner implications are discussed.     

The impact of geographic diversification on export performance of small and medium-sized enterprises (SMEs)

Two alternative diversification strategies—the geographic diversification of export sales and key market concentration—are extensively discussed in management, strategy, entrepreneurship, and economics literature. However, no conclusive evidence currently exists as to how either of these strategies affects the performance of international sales. This paper contributes to a better understanding of geographic diversification as a key dimension of the internationalization process for small and medium-sized enterprises (SMEs). In it, we analyze a comprehensive database of Polish exporters over a 3-year period to better understand the geographic diversification patterns of exporters. Based on this analysis, six propositions emerged from the export patterns examined and two viable strategies for exporting SMEs are identified: (1) concentrating on a single market and (2) a balanced approach aimed at targeting a small number of key markets, combined with a strategy of penetrating other markets. Implications for practice and future research are also discussed herein.     

The effect of non-conventional outbound foreign direct investment (FDI) on the domestic employment of multinational enterprises (MNEs)

Using a sample of 787 Japanese MNEs operating in 60 countries from 1996 to 2010, this study examines the impacts of MNEs’ three most commonly observed forms of non-conventional outbound FDI (i.e., as a means to counter trade barriers, to achieve a financial hedge, or to obtain tax breaks) on domestic employment levels of MNEs at home. We build on a conceptual classification of ‘motivation-activity’ of MNEs as a theoretical framework, and evaluate the impacts of MNEs’ non-conventional outbound FDI on their domestic employment levels in relation to the MNEs’ specific combination of ‘motivation’ and ‘activity’ as they conduct outbound FDI in host countries. The 3SLS regression results show strong evidence that non-conventional outbound FDI in core business activities reduces MNEs’ domestic employment levels when the investment is primarily for responding to country-specific conditions, such as circumventing host country restrictions (e.g., FDI to counter trade barriers) or escaping from home country restrictions (e.g., FDI for tax incentive packages), while FDI in non-core business activities (e.g., FDI for financial hedging or FDI in tax havens) has either a positive or insignificant effect on MNEs’ domestic employment levels depending on whether it aims to develop FSAs or not. We conclude the study with public policy implications from these findings.     

Lack of fit between business community and corporate culture: The case of a multinational company in Venezuela

The conflict between the culture of a multinational corporation and the culture of the local business environment in Venezuela is the focus of this study. Corporate culture serves as an integrating mechanism for a corporation that is expanding globally. At the same time, local Latin American managers have their own guidelines for achieving personal success in business dealings. As the two philosophies may not be in harmony, long-time local managers often experience dissatisfaction, causing them to advance their careers through entrepreneurial opportunities at local firms. This loss of management talent is a cost the multinational experiences by adhering to the headquarters culture rather than allowing some adaptation for differences in local business practices. © 1995 John Wiley & Sons, Inc.     

Governance Systems in Family SMEs: The Substitution Effects between Family Councils and Corporate Governance Mechanisms

The main objective of this paper is to explore the role of family councils vis‐à‐vis corporate governance mechanisms. Particularly, the paper explores whether family councils perform only their distinctive family governance role or if they also substitute for the roles performed by corporate governance control mechanisms. Based on a sample of 243 Italian family SMEs, our research findings show that the family council partially substitutes the shareholders' meeting and the board of directors in playing their respective corporate governance roles of ownership and monitoring. These findings are interpreted in the light of both agency and relational perspectives.     

Typology Analysis of Performance Models of Small and Medium-Size Enterprises (SMEs)

A number of firm performance models are available. Reviewing these models and pointing out their individual strengths and weaknesses, would help both academic researchers and professional users to understand and appreciate how and when to use these various models. The theoretical models for Small and Medium-size Enterprise (SME) performance can be divided into two categories: firm dynamics theories and performance prediction models. In the first part of this paper we review, in a condensed manner, the most relevant firm dynamic theories, i.e. SME's performance models. These include: Stochastic Theories, Learning Model Theories and Hazard Modeling Theories. In the second part of this paper, we examine the performance prediction models of SMEs, which include Z-Scores, ZETA-Scores, Neural Networks (NN) and the SIV® models, among others. The strengths and weaknesses of each of these models are exposed and discussed.     

Marketing in Chinese Small and Medium Enterprises (SMEs): The State of the Art in a Chinese Socialist Economy

This paper adopts the context-embedded approach to examine the marketing practices of 307 small and medium enterprises (SMEs) in the People’’s Republic of China by comparing the survey findings with that of Hong Kong and Guangdong SMEs. Chinese SMEs focus on regional markets to avoid direct competition with Hong Kong SMEs in the international markets and also their Guangdong counterparts in the turbulent nationwide market. To market their own brands, Chinese SMEs have to analyze the market and use superior marketing strategies in the competitive markets. Chinese SMEs do not attain the superior competitive positions as that of their Guangdong counterparts, but they use customer satisfaction surveys and claims investigation to help develop excellence in product performance. Also, Chinese SMEs have to provide value-added products and services and also a well-rounded marketing competitive strategy to gain market shares. The traditional state-owned enterprise structure in China facilitates the development of hierarchical organizational structure and joint decision making process. Thus, care should be taken in assuming that marketing tools and techniques are equally applicable across all places, even in similar cultural contexts. Socio-cultural influences and mediating environmental factors should be considered when attempting to understand the marketing practices of Chinese small firms, specifically when China is in transition to a socialist market economy.