Managerial stereotypes in Singaporean subsidiaries of multinational corporations

The responses of 365 managers from 34 Singaporean subsidiaries of multinational companies are used to profile the stereotypes these individuals hold of each other. The managers' replies to 18 semantic differential items show greater agreement on each other's managerial performance and style between expatriate and local managers in British corporations than in Japanese corporations. The results from American corporations are between these two. Stereotyping has been shown to be a very common phenomenon in international relationships (Davidson and Thomson, 1980). Despite some recognition of the importance of stereotyping in international business situations (Hays, 1972), very little empirical work has been conducted into the general process of stereotyping in multinational corporations (viz. Stening and Everett, 1980; Whitehead and King, 1973). Even less research has been conducted on the stereotypes held by expatriate and local personnel in multinational corporations of their own group (auto-stereotypes) and of other groups (hetero-stereotypes). This study examines the auto-stereotypes and hetero-stereotypes held by expatriate and local managers in Singaporean subsidiaries of British, Japanese and American corporations. It is apparent from the comparative management literature that there are differences in attitudes and behaviour among managers from these countries (Haire, Ghiselli, and Porter, 1966; Ronen and Kraut, 1977). There is insufficient basis, however, for anticipating variations among them in terms of their auto-stereotypes and their hetero-stereotypes. This exploratory study presents evidence on the nature of those variations.     

The external knowledge sourcing process in multinational corporations

Research summary: We study the processes through which multinational corporations (MNCs) identify and make use of external sources of knowledge. Based on a seven‐year longitudinal study of one MNC's overseas scouting unit, we show how a simple one‐directional “channelling” process gradually gave way to three higher value‐added processes, labelled “translating,” “matchmaking,” and “transforming.” Building on these insights, we develop an integrative framework, defining the conditions under which each of the four processes is likely to transpire, and showing how the stock of social capital held by the scouting unit allows it to perform increasingly high value‐added activities over time. Implications for the MNC, external knowledge sourcing, and boundary‐spanning literatures are discussed. Managerial summary: Over the years, many multinational corporations (MNCs) have created overseas “scouting” units to tap into new ideas and opportunities in leading‐edge markets, but with mixed outcomes. In this study, we describe the development of a European telecom firm's scouting unit in Silicon Valley during the 2000s, focusing on the specific approaches used by the scouting managers to build effective connections between Silicon Valley start‐ups and the firm's business units back in Europe. We identify four distinct approaches for different types of opportunities, and we observe a clear sequencing of effort over time as the scouting managers built the necessary capabilities and credibility. Copyright © 2015 John Wiley & Sons, Ltd.     

Centers of excellence in multinational corporations

This paper seeks to understand the conditions under which ‘centers of excellence’ emerge in foreign subsidiaries of multinational firms. We define a center of excellence as an organizational unit that embodies a set of capabilities that has been explicitly recognized by the firm as an important source of value creation, with the intention that these capabilities be leveraged by and/or disseminated to other parts of the firm. Drawing on overlapping research in international business and strategic management, we argue that the formation of centers of excellence is shaped by conditions in the subsidiary's local environment as well as by various aspects of the subsidiary's relationship with other parts of the multinational firm. Based on a survey of 99 foreign units in Canada, our results highlight the fundamental role played by parent firm investment as well as the role of internal and external organizations in the development of subsidiary capabilities. Performance implications of the center of excellence phenomenon are also explored. Copyright © 2002 John Wiley & Sons, Ltd.     

Building firm-specific advantages in multinational corporations: the role of subsidiary initiative

This paper investigates how subsidiary companies are able to contribute to the firm-specific advantages of the multinational corporation (MNC). Specifically we examine the determinants of the contributory role of the subsidiary and subsidiary initiative. The study reveals the following significant relationships: (a) internal subsidiary resources in combination with initiative have a strong positive impact on the subsidiary's contributory role; (b) subsidiary initiative is strongly associated with the leadership and entrepreneurial culture in the subsidiary; and (c) contributory role is strongly associated with subsidiary autonomy and a low level of local competition. We discuss the implications of these findings and some of the theoretical issues associated with subsidiary initiative. Our provisional conclusion is that MNC subsidiaries can not only contribute to firm-specific advantage creation, they can also drive the process. © 1998 John Wiley & Sons, Ltd.     

Life duration of foreign multinational subsidiaries: Evidence from UK northern manufacturing industry 1970–93

Duration analysis is employed to examine the survival of 252 foreign manufacturing plants in the UK Northern region during 1970–93. Contrary to expectations, the hazard function is approximately inverse quadratic rather than monotonic decreasing. Greenfield entrants face a lower risk of failure than acquisition entrants, particularly early in life. Acquisitions of older plants exhibit stronger survival than acquisitions of recently established plants, so that the age of (indigenous) acquired plant at the point of foreign takeover appears to matter to the survival of acquisition entrants. Plant size and industrial concentration also emerge as important. Home country of parent firm and location within region are unimportant. Consistent with the inverse U-shaped hazard function, the lognormal regression model provides a reasonably satisfactory fit to the data, certainly tighter than the Weibull model.     

Expatriate management succession in foreign business subsidiaries

In most foreign subsidiaries, expatriate top managers are routinely exchanged after a certain period of time. The handing over procedure between the expatriate predecessor manager and his successor has attracted very little academic research. A proper succession ensures continuity and the accumulation of experience in the foreign operation. Our sample includes expatriate business managers employed by companies from Australia, Germany, Holland and Italy assigned to Hong Kong. A mail questionnaire is used to collect the information, and this investigation is a direct extension of a previous exploratory study undertaken by one of the authors. The main issue in this paper is to investigate the duration of the overlap period at the foreign subsidiary. This dependent variable is related to three sets of independent variables: personal, corporate and subsidiary characteristics.Dr Jan Selmer is Reader and Head, Department of Management, and Mrs Vivienne Luk is Senior Lecturer and BBA (Hons.) Degree Course Leader, both at the School of Business, Hong Kong Baptist University. The authors gratefully acknowledge the helpful comments and suggestions of two anonymous reviewers as well as the Chief Editor on earlier versions of this paper. The research was supported by a Faculty Research Grant from Hong Kong Baptist University.     

Financial performance and survival of multinational corporations in China

This study investigates the impact of entry timing, mode of entry, market focus, and location advantages on the financial performance and survival of multinational corporations (MNCs) in China. Three major results were found. First, MNCs that entered China in an earlier year had a higher level of profit than those that entered in a later year. Second, equity joint ventures (EJVs) had a higher profit level than cooperative operations or wholly foreign‐owned subsidiaries. Third, MNCs that utilized well the location advantages in China had a higher profit. We also found that EJVs were more likely to survive compared to cooperative operations, while wholly owned subsidiaries did not differ from EJVs. The findings are based on a 2‐year study of about 1000 MNC operations in China. Copyright © 1999 John Wiley & Sons, Ltd.     

Top management incentive compensation and knowledge sharing in multinational corporations

Growing interest has emerged in viewing the multinational corporation as a knowledge creating and diffusing entity. The importance of sharing knowledge across organizational and national boundaries has been established in previous research. However, the question of which organizational policies lead to knowledge sharing between multinational units is still not fully understood. In particular, the link between compensation mechanisms and knowledge sharing has not received attention in previous studies. By studying 164 foreign‐owned subsidiaries located in Finland and China, this article attempts to identify the relationship between subsidiary bonus pay based on MNC‐wide performance and knowledge sharing between different units of the MNC. In line with the knowledge‐based perspective of the firm, the results suggest that incentive pay based on the collective performance of the MNC leads to greater knowledge sharing. Copyright © 2008 John Wiley & Sons, Ltd.     

Geographical distance and the role and management of subsidiaries: The case of subsidiaries down-under

Based on a international mail survey covering 169 subsidiaries of MNCs headquartered in the USA, Japan, the UK, Germany, France and the Netherlands, we investigate the impact of geographical distance on the role that subsidiaries play in the MNC network and the way they are managed. To this end, we compare Australian and New Zealand subsidiaries – which provide a significant example of geographically isolation – compared to subsidiaries located in other countries. Referring to the typology constructed by Gupta & Govindarajan (1991), we show that Australian and New Zealand subsidiaries are more likely than subsidiaries in other countries to be Local Innovators rather than Global Innovators. In addition, both intra-company flows and the type of control mechanisms applied by HQ reflect the geographical isolation of Australian and New Zealand subsidiaries. The overall level of capabilities of Australian and New Zealand subsidiaries is equal to that of other subsidiaries, although lower relative capabilities in R{&}D and production seem to be associated with lower levels of local R{&}D and production. We discuss the implications of these findings and provide recommendations for management and competitiveness issues in Australia and New Zealand.     

跨国石油公司应对LNG行业大转型的策略及启示

近年来,全球LNG行业格局正发生重大转型,给天然气业务带来价格下行、产能过剩、项目成本控制、市场和法律等方面的风险,以埃克森美孚、壳牌、BP、道达尔、雪佛龙五大公司为代表的跨国石油公司,积极调整策略应对“行业低谷”,表现为:加强市场导向布局项目,对大型项目更为谨慎,小项目更受青睐;推进商务模式创新,强化一体化产业链竞争优势,巩固“资源供应整合商”地位,发展更多的B2B和B2C业务;大力推进成本创新、政策创新和管理模式创新,探索FLNG、FSRU等新技术,注重全产业链降成本.目前中国石油公司天然气业务发展与五大公司存在一定差距,应从战略上更加重视天然气业务发展:明晰“资源供应整合商”的战略定位,突出对资源渠道的控制能力,增强一体化产业链竞争力;推进技术创新、管理及商业模式创新,拓展新市场需求,使公司在未来低碳能源转型中占有一席之地.     

Environmental analysis units and strategic decision-making: A field study of selected ‘leading-edge’ corporations

In response to increasing environmental change many corporations have developed specialized environmental scanning units. Previous research reveals conflicting findings regarding the viability of these units for introducing environmentally relevant information into strategic decision processes. A field study was conducted on 10 ‘leading-edge’ corporations. The results show continuing experimentation with alternative administrative structures and the vulnerability of units that are not tightly linked with strategic planning processes.     

Cognitive simplification processes in strategic decision-making

Strategic decision-making can be viewed as a special kind of decision-making under uncertainty. Such decision-making involves the activities of goal formulation, problem identification, alternatives generation, and evaluation/selection. Researchers in cognitive psychology and behavioural decision theory have identified a number of cognitive simplification processes which may affect the way decision-makers perform these tasks. Within this paper, the research on these processes is summarized and their possible effects on strategic decision-making are discussed. Implications for future research in this area are also drawn.     

Navigating the purchasing power gap in new product development in multinational corporations

Multinational corporations (MNCs) face a significant purchasing power gap of customers between developed and emerging economies. In R&D intensive industries making physical products, MNCs can benefit from economies of scale. Therefore, managers strive to achieve a product standardization–adaptation (S‐A) balance when navigating the purchasing power gap. Through focusing on five MNCs headquartered in developed countries, I examined how MNCs can achieve such a balance through new product development (NPD). I found that (1) an S‐A balance can be achieved through three NPD strategies (product simplification, product retaining, and reverse innovation); (2) managers need to take into account five key factors when choosing NPD strategies (product complexity, product modularity, brand strategy, position in local competition, and internal technical standards); and (3) the NPD strategies can be implemented through structural separation, temporal separation, and a shared value. This research reveals the complexity of achieving an S‐A balance when managers navigate the purchasing power gap in NPD. Different NPD strategies have certain advantages and shortcomings. High product complexity and product modularity can serve as favorable conditions for a product simplification strategy. A brand strategy of leading‐edge technologies can serve as an adverse condition for a product retaining strategy. Strong local competitors in emerging markets can be a motivation for a reverse innovation strategy, while stringent internal standards for safety can be an adverse condition. This research also reveals the nuances of implementation of NPD strategies in terms of managing innovation and refinement activities. MNCs may need temporal separation when adopting both downhill and uphill NPD strategies.     

A strategic contingency model of multinational corporate structure

This paper develops a model of multinational corporate structure in which each of the five structures—worldwide product, worldwide functional, area, international division and matrix—is explained in terms of domain parameters, management orientation and generic strategy. The strategic contingency model (SCM) is developed by integrating recent theoretical and empirical literature into one holistic model. The SCM delineates specific independent variable relationships which predict multinational corporate structure and explains anomalies in recent research finds.     

The utilization of individual capabilities in group approaches to strategic decision-making

Previous research has found that groups using dialectical inquiry (DI) or devil's advocacy (DA) make better strategic decisions than groups using a consensus (C) approach. This paper explains those findings by using new data to show that the DI and DA approaches make better use of the capabilities of individual group members. Specifically, the DI and DA groups yielded significantly higher quality recommendations and assumptions than the average of the individuals in the respective groups, whereas the C groups did not. Moreover, the recommendations and assumptions of the DI groups and the recommendations of the DA groups significantly exceeded those of the best individual in the respective groups. There were no significant differences for the C groups.     

Innovation in multinational corporations: control and communication patterns in international R&D operations

This paper addresses issues of global innovation in multinational corporations by examining the patterns of communication and control in international R&D operations. Using a sample of 110 international R&D units from 15 multinational corporations, we identify three types of R&D unit role (local adaptor, international adaptor, international creator). We show that: (1) each type of R&D unit is managed primarily through a different mode of control; (2) local and international adaptors both focus their communication on their internal corporate network; and (3) international creators have strong internally and externally oriented networks of relationships. The implications for the management of global innovation are discussed. © 1998 John Wiley & Sons, Ltd.     

Empirically derived models of strategic decision-making processes

This paper reports on an empirical study of strategic decision-making processes and organizational learning in 32 business organizations facing complex environments. The decision processes were found to vary in four prototypical patterns described here as the strategic decision-making models. These models are proposed as an initial step towards the development of a taxonomy of strategic decision processes. The relationships between strategic decision-making models and organizational learning systems that support them are explored. These models may help researchers to conceptualize and practitioners to manage strategy formulation processes in organizations.     

A measure of ceo social power in strategic decision-making

For the strategic management field to advance its understanding of the interpersonal dimensions of strategic decision-making, valid and reliable measures of power and influence need to be developed. Research in the discipline would also be subsequently likely to enjoy enhanced viability and greater cross-discipline confidence if it was based on proven measures. For these reasons, field research was undertaken to determine if a modified version of an existing instrument (Spekman, 1979), designed to gauge social power at low organizational levels, could be used to measure the exercise of CEO power in strategic decision-making.     

Determinants of increasing R&D complexity in affiliates of manufacturing multinational corporations in the UK

The aim of this paper is to evaluate the technological trajectories of the UK subsidiaries of manufacturing multinational corporations as measured by changes in their R&D complexity over a five year period. The data was gathered from a postal survey of 500 randomly selected subsidiaries in the UK; of the respondents that had been established in Britain for at least five years, 16 were found to demonstrate decreasing and 48 increasing complexity of R&D activities. These 64 firms were compared across a number of strategic variables, and a powerful logistic regression model developed that predicts technological trajectories with great precision.
The key variables in the model were differences (over five years) in sales volume, decision making autonomy about human resource matters in the subsidiary, sensitivity to the needs of sister subsidiaries when developing new products, heterogeneity of the subsidiary's markets, and the degree of localization of certain control functions. The central lesson for the subsidiary R&D manager is that HQ undertakings about R&D strategy as it concerns the subsidiary may be fairly accurately evaluated via the model and its five strategic variables.     

Strategy and structure in multinational corporations: A revision of the stopford and wells model

The Stopford and Wells study of strategy and structure in multinational corporations produced a now familiar model relating certain types of structure to certain elements of a firm's international strategy. This paper re-examines the important relationships expressed by the model, using data from a recent study of 34 large U.S. and European multinationals. While some of the relationships are supported, others are not. A new element of strategy, the relative size of foreign manufacturing, is introduced, and found to be an important predictor of structure. Based on the findings, a revised model for relating strategy and structure in MNCs is proposed.