Research on emerging-market multinational enterprises: Extending Alan Rugman’s critical contributions

We summarize Rugman’s contributions to the literature on emerging-market multinational enterprises (EMNEs) and propose directions to extend his work. We first review his work, where he extended his early research on international business theories to understand the nature, positioning, and activities of EMNEs. EMNEs typically exhibit home-based firm-specific advantages (FSAs) yet lack host-based and non-location-bound FSAs. Most of their sales or assets are focused on the domestic market. Given that the goals of EMNEs may conflict with or complement those of their home or host governments, EMNEs either receive government support or face regulatory barriers. We propose several directions for further research: investigating the mechanisms (e.g., international acquisitions) through which EMNEs develop strong FSAs, exploring the strategy and performance of state-owned EMNEs (vs. private EMNEs), and constructing comprehensive datasets to test the strategy and performance of EMNEs.     

Coordinating knowledge transfer: Global managers as higher-level intermediaries

In their day-to-day work, global managers exchange knowledge with individuals and teams scattered across the organizational network in order to make progress on current projects. Drawing on a case study of a global organization, we show that a core challenge of managerial work is associated with coordinating knowledge that is spatially dispersed and temporally fragmented. To address this challenge, we discuss the notion of ‘higher-level intermediary’ as a managerial role that provides coordination across functional and geographical boundaries by making knowledge sources available, connecting the parties to the transfer, and generating opportunities for knowledge exchange. These higher-level intermediaries act as ‘ambidextrous ties’ able to connect formal and informal knowledge search and transfer mechanisms.     

Heterogeneity in OFDI by EMNEs: Drivers and trends of Chinese and Indian firms

Previous research has identified a distinction between the internationalization of emerging market multinational enterprises (EMNEs) and their advanced-economy counterparts. However, the question as to whether EMNEs conduct outward foreign direct investment (OFDI) in a uniform manner remains under-studied. Prior studies have grouped together all emerging markets but have ignored the essential heterogeneity of EMNEs that leads to their diverse OFDI patterns and behaviours. In this study, we illustrate the drivers and related phenomena of heterogeneity by exploring differences and similarities between Chinese and Indian MNEs’ OFDI activities, namely, investment destinations (i.e., advanced vs. emerging economies), the level of political relationships with host countries, industry sectors supported by institutional patronage, and the primary motivations of investment projects. We suggest that the heterogeneity in OFDI is the result of the institutional environment and the strategic priorities of the industry sector.     

Do interlocks by different types of directors affect the nature of internationalization strategy of emerging market multinationals?

Research that links boards in general and interlocks in particular with internationalization activities of emerging market multinationals (EMNEs) has recently garnered significant attention. However, a focused examination of the impact of the interlocks of different types of directors on the nature of EMNE internationalization strategy is missing. To address this gap, we use an integrated agency–resource dependence perspective to distinguish board interlocks provided by inside directors from those provided by independent directors to demonstrate their impact on exploratory and exploitative internationalization. We test our hypotheses on 1996 observations of Indian firms between 2011 and 2017. Our results show that while inside director interlocks promote exploitative strategies over exploratory internationalization strategies, independent director interlocks deter exploitative internationalization. Furthermore, these preferences are contingent upon the R&D intensity of the firm.     

The effect of home country characteristics on the internationalization of EMNEs: The moderating role of knowledge stock

This paper examines the effect of home country characteristics on the internationalization of emerging market multinational enterprises (EMNEs). Drawing on the institution-based view (IBV), we argue that institutional, political, and social characteristics will positively relate to the internationalization of EMNEs. Further, drawing on the knowledge-based view (KBV), we also argue that a firm’s knowledge stock (KS) will positively moderate the aforementioned relationship. Our research setting involves the incorporation of primary data collected from Iranian multinational enterprises (MNEs) operating in the food and beverage industry. The results provide support for the hypotheses that home country characteristics positively impact the international growth of EMNEs but this does not lead to their further expansion. Also, supported was the hypothesis that EMNEs' knowledge stock positively moderates the relationship between home country characteristics and their international growth. These findings not only contribute to the current knowledge about the drivers of EMNE’s internationalization but also stress upon the idiosyncratic role of home country institutions and the impact of knowledge-specific capabilities on the internationalization of EMNEs, their international growth, and expansion.     

Willingness to work for multinational enterprises from emerging countries: The case of Chinese multinational enterprises in the Netherlands

How do perceptions of country-of-origin image (COI) relate to willingness of Western people to work for subsidiaries in advanced countries of multinational enterprises from emerging countries (EMNEs)? We seek to shed light on this question by exploring six hypotheses based on environment-processing metatheory. Applying a PLS-SEM analysis of online survey data from the Netherlands, we find that the COI and familiarity with the EMNE’s home country are positively associated with willingness to work. Additionally, we reveal a few mediating effects indicating that familiarity and individual difference are indirectly related to willingness to work. This study contributes to our understanding of the inability of EMNEs to attract talent in the Western world by adding a macro perspective to the human resource management literature. Furthermore, we extend environment-processing metatheory by expanding the focus from the perceived internal context (corporate information) to the perceived external environment (country of origin), as well as to the antecedents (familiarity and individual differences) of the perceived environment.     

What drives firms’ intent to seek strategic assets by foreign direct investment? A study of emerging economy firms

What drives firms, particularly those from emerging economies, to engage in competitive catch-up with world leaders? We study the first step leading to catch-up, namely the managerial intent to acquire strategic assets that help closing the gap. Theoretically grounded in the awareness–motivation–capability (AMC) framework of competitive dynamics, we identify key factors contributing to firms’ strategic intent to catch-up by acquiring strategic assets abroad. Using a sample of 154 Chinese firms, we find that firms’ strategic assets seeking intent of foreign direct investment is influenced by their exposure to foreign competition, their governance structure, and relevant financial and managerial capabilities.     

Interplay between dual dimensions of knowledge sharing within globalized chaebols: The moderating effects of organization size and global environmental munificence

Existing literature exploring ambidexterity based on the organizational and network learning perspectives is sparse. In particular, there are few studies dealing with the characteristics of ambidexterity construct in the context of inter-organizational relationships, and existing studies are limited. To date, studies have suggested only vague and inconclusive conceptualizations and empirical findings. Our research tackles this overlooked area of thought by dismantling the mechanisms of ambidextrous knowledge sharing among group-affiliated companies within the large complex Korean business group known as a chaebol and the impact of those mechanisms on the companies’ global performances. An internationalized chaebol is a cradle of transnational knowledge and resource sharing that functions as a business group–level knowledge reservoir. Conceptually, our research employs two dimensions of ambidextrous knowledge sharing, “balance dimension (BD) of ambidextrous knowledge sharing” and “synergistic dimension (SD) of ambidextrous knowledge sharing,” among group-affiliated companies within a chaebol. In this way, we clarify the conceptual issues regarding the degree to which ambidextrous knowledge sharing affects the extent of explorative relative to exploitative knowledge sharing or affects the combined synergistic extent of both activities. We collect survey data from 337 manufacturing multinational group-affiliated companies that belong to 61 internationally diversified chaebols. We analyze this data using ordinary least squares (OLS) regression with the hierarchical method. Our results show that having a balance between explorative and exploitative knowledge sharing among group-affiliated companies (i.e., BD) within a chaebol increases the global performance of that chaebol’s group-affiliated companies. High synergistic levels of ambidextrous knowledge sharing among group-affiliated companies (i.e., SD) also enhance the group-affiliated companies’ global performance. In addition, our study reveals the moderating effects that organization size and environmental munificence have on the interactions of BD and SD.     

A resource dependence perspective of EMNE FDI strategy

Using Resource Dependence Theory as a lens, we explore current explanations of how and why Emerging Market Multinationals (EMNEs) seek to compete internationally through Foreign Direct Investment. We find that all three dominant explanations and much of the ongoing literature either explicitly or implicitly highlight the importance of a firm's ability to acquire and maintain resources to its own survival and ability to compete as latecomers on a global stage. Through our conceptual model we show that whether EMNEs seek to exploit existing resources, seek to augment their resource base, or pursue a combination of both it is reflected by their generic internationalization strategy. This generic strategy is also reflective of the firm's strategic focus, as well as predictive of its entry mode and resulting resource dependence. Taking this perspective informs the current literature by clarifying how an internationalization strategy alters EMNE dependence on the external environment for critical resources.     

MNE performance during a crisis: An evolutionary perspective on the role of dynamic managerial capabilities and industry context

As the likelihood of worldwide crises increases due to globalization and the resulting economic contagion, understanding why some multinational enterprises (MNEs) prevail in such environments becomes ever more critical. Drawing from the concept of dynamic managerial capabilities, we posit that MNE in-crisis performance is associated with the pre-crisis development of asset management capabilities, or the capacity of managers to orchestrate assets so as to extract more value from the firm’s resource pool. Specifically, we argue that because dynamic managerial capabilities evolve as a response to a firm’s task environment, MNEs that operate in dynamic industries develop stronger asset management capabilities. However, we also posit that whether these capabilities contribute to in-crisis performance is contingent upon the munificence of the industry environment in which the capability evolves. Asset management capabilities that evolve in munificent environments would encompass a wider spectrum of routine-altering activities, and thus increase the ability of the MNE to react to more revolutionary events, such as global economic crises. Conversely, asset management capabilities that evolve in resource-scarce environments will result in more strategic lock-in due to firms' constrained ability to experiment with novel resource configurations, resulting in poorer in-crisis performance. We test our hypotheses using a sample of 854 MNEs in the context of the global financial crisis of 2008, and find support for our hypotheses. We discuss implications for the dynamic capabilities view and MNE resilience.     

How do business and political Networking shape overseas dispute resolution for state-owned enterprise from emerging economies

We examine how networking in host countries by state-owned multinational enterprises from emerging economies (EMNEs) influences the approaches used to resolve interfirm disputes in overseas markets. To test our hypotheses, we surveyed 127 senior Chinese executives working for overseas subsidiaries in 56 countries. The results indicate that EMNEs’ business networking experience facilitates the adoption of the cooperative approach in subsequent interfirm disputes but has an insignificant effect on the competitive approach. In contrast, EMNEs’ political networking experience enables them to avoid a competitive approach but has a negligible effect on the cooperative approach. Although the business networking experience of state-owned EMNEs headquartered in the capital is conducive to facilitating the cooperative approach, their political networking experience is ineffective in avoiding the competitive approach and even hinders their adoption of the cooperative approach. Overall, we highlight how networking with the key institutional actors in host countries affects EMNEs’ post-entry operations.     

A co-evolution perspective of EMNE internationalization and institutions: An integrative framework of 5Cs

While significant progress has been made on the contextual role of institutions, scholarly research on the dynamic process of emerging economy multinational enterprises’ (EMNEs) international activities interacting with home country and host country institutions still seems to be in its infancy. Therefore, in order to move the current academic debate forward, we examine the intersection between the internationalization of EMNEs and their institutional environments by undertaking a critical review of the existing literature, given that institutional forces not only shape organizational behavior but also affect EMNEs’ internationalization strategies and organizational outcomes. We propose an integrative framework of 5Cs (context, capability, change, concomitance and configuration) underlying the co-evolution of EMNEs’ internationalization and institutions, and position all the papers included in this Special Issue within this framework in order to point towards a number of directions for future scholarship.     

Do MNEs from developed and emerging economies differ in their location choice of FDI? A 36-year review

This study examines the extent to which MNEs from developed (DMNEs) and emerging (EMNEs) economies differ in Location behaviour. Studies on MNE location choices have failed to capture the changing FDI landscape and leave the inconsistent findings unexplained. We address this gap by systematically reviewing the extant literature on location choices of DMNEs and EMNEs over the past 36 years – from the introduction of the OLI model to 2016. Key themes emerging from the review reflect a comprehensive picture, capturing the impact of multiple factors affecting location choices of DMNEs and EMNEs. Future research is challenged by: a. adopting an integrated approach examining three levels – individual (managerial), firm (ownership structure, type of FDI, internationalisation stages, and the different nature of ownership advantage), and context of location decisions (home, host, sub-national, regional, supranational, and networking); b. refining or developing theories to capture the dynamic picture of MNE internationalisation.     

Crafting an environment to foster integration in new product teams

The integration of functionally diverse members in new product teams is a long-standing managerial challenge. This study addresses two questions to help meet this challenge: 1) how can the environment around teams be crafted to foster integration, and 2) does integration help teams to create superior or more advantageous new products? Based on a survey of 206 cross-functional new product teams, we learned that certain environmental factors (market-oriented reward system, planning process formalization, managerial encouragement to take risks, and managerial involvement in new product projects) facilitate integration in teams, which, in turn, leads to the creation of superior or more advantageous new products.     

Liability of emergingness and EMNEs’ cross-border acquisition completion: A legitimacy perspective

This paper contributes to the literature on emerging multinational enterprises (EMNEs) by revealing how the conditions in their home countries influence their cross-border acquisitions. The study focuses on the liability of emergingness (LOE). It develops an integrative theoretical framework based on neo-institutional theory and the concept of legitimacy to explain the relationship between LOE and EMNEs’ cross-border acquisitions completion and the situational conditions that shape this relationship. The study uses data on 27,648 announced acquisitions conducted by EMNEs from 24 emerging economies in 175 host countries to estimate the relationships. The results reveal that, while two types of LOE (economic and institutional) have negative impacts on cross-border acquisition completion, the negative impacts become less important or disappear when the host country’s unemployment rate is too high, and the host country’s institutional quality is too low. This finding suggests that EMNEs can mitigate the negative effect of the LOE by carefully choosing a good time and a suitable location to enter into these transactions.     

Following their predecessors’ journey? A review of EMNE studies and avenues for interdisciplinary inquiry

In this review article we take stock of international business (IB) research on emerging economy multinational enterprises (EMNEs) over the past three decades. Our review covers 690 articles published in 64 high-impact peer-reviewed journals between 1990 and 2021 (inclusive). We first present bibliometric findings on some key patterns of this vast body of scholarly work. We then conduct content analysis to critically assess this literature and provide a multilevel synthesis of the existing knowledge base. To do so we propose a theoretical framework that highlights three dimensions – micro-foundations, organizational characteristics, and institutional environment – by which the distinction between EMNEs and their predecessors, namely multinational enterprises (MNEs) from advanced economies, is investigated. At each level, we seek to understand EMNEs’ convergence with and divergence from their predecessors in terms of their motives, strategies/approaches, and outcomes of internationalization. Through this process we identify opportunities to move EMNE research forward through interdisciplinary inquiry, and we propose several avenues for future research.     

A longitudinal micro-foundational investigation into ambidextrous practices in an international alliance context–A case of a biopharma EMNE

This paper explores the development of an ambidextrous context in a rapidly growing emerging market multinational (EMNE), thus unbundling cultural and structural complexities. We use the micro-foundational lens of ambidexterity to explore and identify different processes, structures and mechanisms that underpin the development of ambidextrous practices in the EMNE. We adopt a longitudinal case study design to trace the evolution of the EMNE, which during the initial phases of its existence focused on supplying industrial enzymes and refined its technical base. In subsequent years, it exploited its technical base to emerge as a full-fledged biopharmaceutical EMNE and adopted strategic partnerships with international companies to explore new knowledge. Our novel and rich research context also provides us with insights on how this EMNE exploited its technological knowledge, whilst utilizing strategic alliances to simultaneously engage in exploratory activities. Through the micro-foundational lens of ambidexterity, we uncover the critical role played by its leadership in addressing paradoxical tensions for simultaneously managing exploitation and exploration in an international strategic alliance context.     

Subsidiary capability upgrading under emerging market acquirers

This article leverages a case study of a recent Chinese acquisition in the United Kingdom to explore the upgrading of capabilities in the subsidiaries in developed countries acquired by emerging market multinational enterprises (EMNEs). The seemingly implausible upgrading phenomenon is explained by the EMNEs’ complementary assets, their GVC lead firm positions and the unique power relationship between the acquirer and acquired firms, which enable the EMNEs to ‘impel’ upgrading and encourage ‘co-learning’ in their acquired subsidiaries. The contributions to the literature on EMNEs, global value chains, and organizational learning are outlined and discussed.     

Leadership Dynamics in Partially Distributed Teams: an Exploratory Study of the Effects of Configuration and Distance

Despite the importance of leadership and the wealth of empirical studies focused on leadership effectiveness in traditional and computer-supported groups, there is little research examining leadership dynamics in partially distributed virtual teams (PDTs). Virtual teams are partially distributed when they are configured with one or more subgroups of collocated members and isolated members. This paper lays the groundwork for an in-depth study of leadership in PDTs that can be extended to other types of virtual team configurations. Using three dimensions of virtual distance (geographic, cultural and temporal), we analyze how the configuration of virtual teams interacts with leadership dynamics. We also summarize the results of an exploratory study using 12 student teams to examine the effects of distance and configuration on leadership in PDTs. Findings show significant differences in leadership dynamics (i.e., leader emergence vs. leader retention) which impacted team performance. From these results, we develop propositions on leadership and PDTs.     

Advertising industry evolution: agency creativity,fluid teams and diversity. An exploratory investigation

ABSTRACT

The advertising industry is in a state of flux, where the agency model is evolving alongside todays’ fast paced digital environment. This paper reviews the drivers of change in the industry and explores how creative advertising agencies are evolving and developing their team resources to improve the creative product using the resource based view (RBV) as a theoretical lens. The study adopted a qualitative approach using a key informant strategy with 16 interviews with Creative Directors, Chief Executive Officer’s and Heads of Planning and Account Directors. The findings suggest that agencies who embrace team functional diversity, include external stakeholders and develop team fluidity as a dynamic capability will enhance agency creativity.