Managing people in global markets—The Asia Pacific perspective

In this introductory note to the Special Issue, we examine the growing discourse surrounding the ‘Asia Pacific century’. We outline the growth in importance of this region and the challenges that MNEs face in managing people within and from these increasingly diverse markets. The eight papers in this SI are briefly summarized under four emerging themes: Increasing Competition for Skilled Workforces; Managing International Assignments in the Asia Pacific; The Challenge of Integration and Alignment of HR Practices; and HR Implications of a ‘New Competitive Order’.     

Dynamics in foreign markets — A study of strategic control in CEE

Effective coordination is crucial to managing a global network of subsidiaries. Although much has been said on the instruments multinational companies use to control their foreign operations, only very little is known on how they develop over time. An empirical longitudinal analysis of 40 multinationals shows that as subsidiaries mature, control strategies need to be adapted. Consequently, headquarters’ executives need to take into account a dynamic perspective on interactive effects of single control instruments when selecting control strategies during the internationalization process.     

Are we overconfident in executive overconfidence research? An examination of the convergent and content validity of extant unobtrusive measures

Building understanding of overconfident executives is central to a growing literature that spans a number of disciplines. Much of this research has utilized unobtrusive, or indirect, measures to assess executive overconfidence from secondary data sources. We analyze the convergent and content validity of seven extant unobtrusive measures of executive overconfidence. The results of our analyses indicate that these measures do not exhibit adequate convergence, suggesting that existing measures are not measuring the same construct. Further, we administer a sort task to academic colleagues to assess whether scholars believe that the seven measures are adequately assessing the intended construct. The results of our sort task indicate that scholars did not categorize any of the seven measures as sufficient for measuring overconfidence. We conclude with suggestions for future research to address the inadequate convergent and content validity found in our assessment of extant measures of executive overconfidence.     

Advertising visuals in global brands’ local websites: a six-country comparison

The visual strategies employed in top global brands’ local advertising websites were compared between two groups of nations: the Western group, consisting of the US, UK and Germany; and the Eastern group, consisting of Japan, Korea and China. The results of a content analysis of 253 web ads show a clear pattern of differences in the role of visuals (literal vs symbolic), the use and role of celebrity models, the use of photographs vs illustrations, and the frequency of product portrayals between two groups. Ads from high-context nations tend to rely on symbolic visuals, celebrity models featured as characters, mixed use of photographs and illustrations, and indirect portrayals of advertised products. Ads from low-context nations are found to be the opposite, reaffirming the association between Hallx2019;s information contextuality and advertising visual strategies. The findings imply that the idea of employing advertising visuals that reflect the communication styles of a particular national market appears to be a promising strategy to effectively reach consumers around the world. With this in mind, multinational advertisers might prefer to implement differentiated ad visual strategies in web advertising for Western and Eastern markets.     

Violators versus non-violators of information security measures in organizations—A study of distinguishing factors

The present study analyzes the elements that differentiate violators from non-violators of information security measures. Various elements are derived from established theories and models such as general deterrence theory, theory of planned behavior, theory of reasoned action, protection motivation theory, and social cognitive theory. To examine these factors, the data are gathered through an online study conducted in a Midwestern University, USA. The data are collected using questionnaires, and after scrutiny, 195 questionnaires are selected for final analysis. This data are analyzed using second-level statistical techniques, such as chi-square analysis and ANOVA. Results reveal that violators and non-violators of information security measures differ significantly with respect to many factors. These factors include perceived privacy, subjective norms, perceived information security policy (ISP) scope, perceived severity of penalty, perceived celerity of penalty, management support, organizational security culture, and perceived organizational IT capability. The non-significant factors are trust and work load. Implications for practitioners and researchers are provided.     

Foreign direct investment in emerging markets and acquirers’ value gains

We investigate the shareholder wealth effects of 306 foreign direct investment (FDI) announcements by UK firms in seventy-five emerging markets (EM). Our results show that acquirers enjoy highly significant gains during the announcement period of FDI. Perhaps surprisingly, the highest gains are accrued to acquirers investing in countries with high political risk and high corruption ratings. The type of asset acquired has also a significant effect on the gains of acquirers’ shareholders, with the highest gains accrued to acquirers of physical assets. Also, investments in physical assets in EM with a high corruption rating elicit the highest gains. We contend that UK firms following resource-seeking strategies in EM with a high corruption rating are facilitated access to resources on favorable terms and this is viewed positively by the market participants. Our results are robust to alternative model specifications and the endogenous choice to expand internationally.     

A composite measure of performance–expectation and performance-only measures

Performance–expectation measures and performance-only measures of service quality have been widely used in the literature. However, either of the two measures is not sufficient to explain customers’ evaluation of service quality and satisfaction. Their assumptions are too restrictive to explain the evaluation processes. From an analytic perspective, this paper derives a composite measure integrating both measures for service quality. The previous measures are nested in the composite measure. Due to this feature, the composite measure is more flexible than the previous measures. It can account for conflicting theories and empirical findings supporting each of the two measures. Furthermore, the composite measure allows us to interpret the link between service quality and customer satisfaction more intuitively.     

A frontier analysis comparison of banking ‘added value’

Recently, a new added value to inputs (AVI) ratio has been developed for ranking banks by their ‘competitive advantage’. This kind of market-based measure of performance is now being widely developed in banking. The primary aim of this article is to use the data envelopment analysis (DEA) technique to expose some of the underlying properties of AVI: a comparative simulation exercise is used to perform an exploratory sensitivity and critical variable analysis. It is shown that the AVI scalar ratio embodies inter alia a hidden assumption of constant returns to scale, and it corresponds to the simplest possible form of DEA model. Another aim is to generalise and improve the AVI approach using DEA. More insight is obtained by applying DEA, which allows for explicit assumptions about returns to scale and provides multi-dimensional forms of AVI measures.     

Does relationship quality matter in e-services? A comparison of online and offline retailing

The quality of the relationship between customers and service firms has been found to be a major driver of customer loyalty in traditional (i.e., offline) service contexts. The increasing use of electronic services, or e-services, raises questions concerning the extent to which the relationship quality-customer loyalty link holds in an e-service context. Based on an extended model of relationship quality and by applying the social information processing perspective, this research tests the relevance of relationship quality for online relationships and explores differences of the relationship quality-loyalty link between online and offline retailers. To test the model, a large-scale study is conducted on both online and offline relationships for two service contexts (media and travel retailing). Using multi-group structural equation modeling, the authors identify differences between the online and offline environment in both service contexts. Results show that (1) relationship quality is similarly important for retaining customers online and offline and (2) differences in the impact of relationship-quality dimensions strongly depends on the service context.     

Export marketing research in practice: A comparison of users and non‐users

Following a review of the literature, this paper analyses the differences between users and non‐users of export marketing research. The study was conducted on a sample of small and medium‐sized Finnish design companies, exhibiting a range of different export characteristics. Contrary to prior expectations, the results show only a few significant differences between users and non‐users of export marketing research. The implications of these findings are discussed and avenues for future research on the topic are outlined.     

Cross-cultural examination of the effects of promotional framing on consumers’ responses: A comparison of China and Pakistan

Although extensive studies have focused on the impact of different types of sales promotions on consumers’ responses, few studies examined the effects of online sales promotional framing on consumers’ responses from cross-cultural perspective. Therefore, this study explored how cross-cultural differences moderated the effects of buy one get one free and buy two get fifty percent off promotion on consumer responses across China (lower uncertainty avoidance) and Pakistan (higher uncertainty avoidance). Based on the promotional framing effect theory, an empirical investigation across these two countries revealed that people with higher uncertainty avoidance (vs. lower uncertainty avoidance) prefer buy one get one free to buy two get fifty percent off promotion. Buy one get one free will lead to higher consumer perceived quality and purchase intention than buy two get fifty percent off promotion in both Pakistan and China, while the impact of buy one get one free and buy two get fifty percent off on perceived risk, perceived quality, perceived value and purchase intention are significantly larger in Pakistan than in China. In addition, the study verified the negative perceived risk-perceived value link, positive perceived quality-perceived value link and positive perceived value-purchase intention link from cross-cultural investigated data. The study provides new insights into the effects of online sales promotions on consumers’ responses considering cultural differences. Our findings have implications for multinational corporate managers to design appropriate online sales promotions strategies.     

A comment on ‘A Multidimensional Scale for Measuring Business Ethics: A Purification and Refinement’

This comment is offered in response to Hansen's A Multidimensional Scale for Measuring Business Ethics: A Purification and Refinement. Five issues arising from Hansen's purification and refinement efforts are addressed. These include the issues of parsimony, predictive validity, collinearity, reliability, and what we see as a confusion between normative and positive theory.Dr. R. Eric Reidenbach is Professor of Marketing, and Director of the Center for Business Development and Research at The University of Southern Mississippi. He has written extensively on business and marketing ethics.Dr. Donald P. Robin, Professor of Business Ethics and Professor of Marketing, is coauthor with R. Eric Reidenbach of two recent books on business ethics with Prentice-Hall. He is a frequent lecturer on business ethics and is the author of several articles on the subject.     

Country and industry factors in returns: evidence from emerging markets’ stocks

This study examines the influence of country and industry factors on the cross-sectional variance and correlation structure of returns. I use new data on emerging markets’ stocks obtained from the Emerging Markets Data Base. I find that emerging markets’ returns are mainly driven by country factors, as it was shown previously in studies for mature markets, and that cross-market correlation is not affected by the industrial composition of the indices. These results have important implications in regard to international portfolio diversification: cross-market diversification seems to be a better bet than cross-industry diversification. A finer industry partition shows, however, that ignoring the industrial mix leads to an important loss of diversification benefits.     

East meets west—Corporate governance in Asian emerging markets: A literature review and research agenda

This review examines how corporate governance mechanisms in the Asian emerging markets (AEMs) context affect firm-level outcomes. Literature about characteristics of the main corporate governance actors (boards and owners), their effects on firm-level outcomes, and contingency factors in AEMs offers interesting first insights. I synthetize these results and develop a research agenda that proposes how AEM corporate governance research should extend (but not ignore) agency theory, how AEM research about firm effects of corporate governance could take a stakeholder-oriented perspective, and how research could utilize the AEM institutional context to model contingency factors and extend our theoretical understanding of corporate governance.     

Asset or constraint: Corporate reputation and MNCs’ involvement in the least developed countries

This study investigates the relationship between corporate reputation and a firm's involvement in the least developed countries (LDCs), where the most impoverished base of the pyramid markets are located. We draw upon extant literature in corporate reputation and international business to develop competing hypotheses regarding the foreign investment of the highly reputable firms in the LDCs. Corporate reputation can be a double-edged sword: while it can be a valuable asset to be leveraged in the LDCs, it demands monitoring and protection which might be challenged by a firm's LDC presence, thereby constraining the involvement in LDCs. Our results show that corporate reputation has a negative effect on a firm's foreign direct investment involvement in LDCs, supporting the view that reputation could constrain firm action in uncertain environments. We contribute to a more nuanced understanding of the relationship between reputation and international action than that of existing literature.     

Advertising’s sequence of effects on consumer mindset and sales: A comparison across brands and product categories

Advertising has the power to influence how consumers experience, think, and feel about brands, but the sequence of these mindset effects may differ by brand and category. This paper analyzes how the mindset factors of cognition, affect, and experience mediate advertising effects on sales, using data from 178 fast-moving consumer good brands in 18 categories over seven years. The authors compare the models proposed in the literature and conclude that the concept of sequentiality in advertising effects holds up well. Importantly, the sequence varies across brands, with the affect → cognition → experience (ACE) sequence being the most common. Brand differentiation and the hedonic versus utilitarian nature of the product category moderate the incidence of the ACE sequence: this sequence is even more likely for utilitarian products and less differentiated brands. For managers, the results show that the last mindset factor in the sequence is the most important in driving sales, with cognition being most responsive to advertising among the mindset factors. Moreover, in utilitarian categories, highly differentiated brands can expect about seven times higher advertising responsiveness of affect than less differentiated brands.     

The influence of individual and firm level social capital of marketing managers in a firm’s global network

Firm success is dependent, to a degree, on a marketing manager’s ability to develop social capital within the firm’s global network. A model is developed employing individual social capital (both internal and external) as the foundation for three types of firm level social capital (i.e., customer, business partner and governing agency) resident in a firm’s global network. It is theorized that customer, business partner and governing agency social capital provide a basis for enhancing customer value delivery and thus firm performance. Specific marketing management strategies necessary for the development of each type of firm level social capital, as well as the benefits derived from each type of social capital are presented. This analysis raises a number of previously unexplored research issues concerning the nature and scope of social capital in a firm’s global network and how social capital can be employed in a global marketplace.     

Multinational enterprises’ risk mitigation strategies in emerging markets: A political coalition perspective

This paper contributes to the IB literature by investigating MNEs’ risk mitigation strategies in emerging markets. Drawing on institutional perspectives and March’s theoretical concept of forming a ‘political coalition’, we propose that risk mitigation cannot be limited to passive compliance and/or demonstrating good corporate behavior, but should extend to collective efforts by building a political coalition and working with key stakeholders to manage potential risk and obtain favorable outcomes in complex institutional environments. In considering MNEs in contemporary China and India, we offer different types of risk mitigation strategies under various institutional contexts and a framework for future research.     

Austerity measures in crisis countries — results and impact on mid-term development

Since the onset of the sovereign debt crisis, the crisis-stricken countries in Europe have been pushed to take drastic steps to consolidate their finances and reduce their budget deficits. Despite strong public opposition and largely damaging short-run effects, the countries have undertaken many of the internationally recommended/mandated reforms and spending cuts. In this Forum, authors from Greece, Ireland, Italy, Spain and Portugal report on the fiscal consolidation achieved in their respective countries — and the sacrifices that have made it possible. Furthermore, the authors detail what remains to be done to resolve the crisis.     

Speculation and volatility—A time-varying approach applied on Chinese commodity futures markets

Experts have long discussed and empirically investigated whether speculative activity increases volatility on commodity futures markets. Little empirical research, however, analyzes the role of speculators on commodity futures markets in China. Using time-varying vector autoregression models with stochastic volatility, this paper investigates for four heavily traded metal and agricultural contracts, how the relationship between returns volatility and speculation evolves over time. Our findings indicate that speculative activity has little to no impact on volatility. On the contrary, for all commodities examined, returns volatility seems to amplify speculation.