Competing to be innovative: Foreign competition and imitative innovation of emerging economy firms

We examine the effect of increased competitive pressures within and outside the home market on the innovation of local firms. We argue that the relationship between exposure to foreign competition in domestic and international markets and firm innovation is better captured by imitative innovation than by radical innovation. We hypothesize that exposure to foreign competition inside and outside the home country is positively associated with local firms’ imitative innovation. Further, we argue that this relationship is contingent on institutional factors, including the role of the government, the legal system, and natural resource endowment. Using a dataset of 949 firm-year observations in the Middle East and North Africa (MENA) region, we find empirical support for the positive impact of competitive pressure on imitative innovation.     

Entry decisions of multinational firms: The role of competition threats

How do multinational corporations (MNCs) influence each other's foreign entry decisions? In this paper, I examine the interactions in MNCs' entry decisions by investigating how MNCs respond to competition threats from their multinational competitors. The analysis shows that entry threats anticipated through foreign investment news encourage MNCs to take preemptive actions by entering the same city after the news, while the actual entry of competitors and the anticipated expansion of incumbents discourage more entry. Incumbent MNCs, on the other hand, respond to entry threats by upgrading productivity. The effect of competition threats depends on each MNC's own existing activity and production network within the region. The effect of entry threats increases with the size of threats, measured by the investment value, expected employment and expected output, the influence of the news, the credibility of the news and the local market orientation of the threats. Across industries, MNCs' entry decisions are found to respond to only the actual entry—not anticipated entry—in vertically linked industries. Further, by exploring the time path, I find that MNCs' preemptive entry is only taken before FDI news expires. The main results are robust to IV analyses that explore unique information from news source and news content.     

The sources of management innovation: When firms introduce new management practices

Management innovation is the introduction of management practices new to the firm and intended to enhance firm performance. Building on the organizational reference group literature, this article shows that management innovation is a consequence of a firm's internal context and of the external search for new knowledge. Furthermore the article demonstrates a trade-off between context and search, in that there is a negative effect on management innovation associated with their joint occurrence. Finally the article shows that management innovation is positively associated with firm performance in the form of subsequent productivity growth.     

Fostering integration through HRM practices: An empirical examination of absorptive capacity and knowledge transfer in cross-border M&As

Transfer of knowledge-based resources from acquirers to the acquired units has been ubiquitously emphasized as an important driver of post-acquisition integration. Equally emphasized is the importance of recipient unit’s absorptive capacity for the success of knowledge transfer and the facilitating role of HRM practices in developing absorptive capacity. In this paper, we integrate different streams of research on post-acquisition integration, knowledge transfer, absorptive capacity and HRM practices. Different from most past research, we pay attention theoretically and empirically to the multi-dimensional nature of both knowledge transfer and absorptive capacity. We test our hypotheses on a sample of acquired Chinese subsidiaries of 181 multinational corporations from seven countries. We find that successful inflow and implementation of knowledge require the acquired unit to have distinct types of capabilities each of which can be developed by a specific HRM practice. These results contribute literature by recognizing absorptive capacity as a manageable capability and identifying how different components of this capability could be developed by specific HRM practices. Furthermore, our results shed light on human side of M&As by examining how companies can foster post-acquisition integration by fine-tuning the absorptive capacity of acquired units.     

Boundary spanners,HRM practices,and reverse knowledge transfer: The case of Chinese cross-border acquisitions

This paper investigates the role of boundary spanners in reverse knowledge transfer in EMNEs’ cross-border acquisitions. Applying a micro-foundational approach and building on boundary spanning as theoretical perspective, we conducted case studies of acquisitions by Chinese companies in Germany and the UK. We find reverse knowledge transfer is a collective endeavour that relies on both the ability and motivation of individual boundary spanners as well as team-based international collaborations. We propose a conceptual framework of reverse knowledge transfer with two mechanisms—enabling and materializing. Their successful implementation depends not only on the personal characteristics of boundary spanners, but on supportive HRM practices.     

Validating the innovation prowess framework for firms in emerging economies facing tight regulatory regimes: the case of Indian pharmaceutical firms

ABSTRACT

The purpose is to investigate the generalizability of an innovation prowess framework, developed for firms in developed countries, for firms in emerging economies facing tight regulatory regimes. Using a qualitative approach we investigate key informants in six firms, supported by secondary documents and the business press, as well as in-depth organizational observation within one organization. Academic evidence suggests there are four factors – one external (industry structure) and three internal (economic structure of the firm, organizational structure of the firm, and historical development of the firm) – that drive the innovation prowess of firms. While firms in developed economies take such factors as the norm, firms in developing countries face evolving norms and internal challenges to comply with tighter regulatory regimes; however, the research suggests that impact of these four factors appear to be similar to those faced by firms in developed countries. Our research contributes by seeking to broaden our understanding of innovation prowess in emerging country contexts. Innovation in these markets is generally less well understood, especially as they adapt to the tighter regulatory regimes required to compete in global markets (e.g. WTO).     

The motives and performance of cross-border acquirers from emerging economies: Comparison between Chinese and Indian firms

During the recent decade, the world has witnessed the rapid growth of MNEs from emerging economies. Their increasing participation in cross-border mergers and acquisitions has raised great attention in the extant literature. This study evaluates the value creation from these cross-border transactions from two representative emerging countries, namely China and India, and determines factors that result in the different performance of these international acquisition activities. Cross-border acquisitions conducted by these countries’ companies indeed lead to significant shareholder wealth creation. Furthermore, Indian shareholders are more likely to benefit from deals in small cultural distance countries, while Chinese investors gain from the cross-border expansion of manufacturing companies. Location also affects the performance of cross-border acquisitions, with acquisitions into developed countries generating higher returns to shareholders. Our sample consists of 203 Indian and 63 Chinese cross-border deals over the period 2000–2010 and our results hold after controlling for various deal-level and firm-level characteristics.     

Managing relational conflict in Korean social enterprises: The role of participatory HRM practices,diversity climate,and perceived social impact

Social enterprises are hybrid organizations that primarily pursue social missions while also seeking economic gains. Drawing on workplace diversity and conflict theories, this article addresses recent calls for further research to explore how employees within social enterprises experience internal conflicts arising from the organizational pursuit of dual, competing missions (i.e., social and economic), and how social enterprises manage, and potentially overcome, these challenges. In the context of Korean social enterprise, we conducted a quantitative study that built on an initial explorative qualitative study. Our research examined whether perceived participatory human resource management practices and diversity climate increase employees’ affective commitment by reducing their relational conflict. We further explored a boundary condition, perceived social impact, which strengthened this mediation relationship. Our results offer significant insights into social enterprise, business ethics, and broader management literature. Implications for future research and practice are also discussed.     

New to the game and questioning the rules: The experiences and beliefs of founders who start imitative versus innovative firms

This paper examines how founders' work experiences and beliefs about an industry's prevailing practices influence the degree of novelty exhibited by their firms. Our results indicate that extensive experience in the core of an organizational field constrains individuals into acting as “imitative entrepreneurs,” essentially reproducing established routines even if they question their legitimacy. In contrast, founders with greater experience in the field's periphery are more likely to act as “innovative entrepreneurs,” as are those who more strongly question the ethicality of prevailing practices. Doubts about the functionality of established routines are not sufficient, on their own, to provoke acts of innovative entrepreneurship.     

The war for talent: human capital challenges for professional service firms

Abstract

Professional service firms face particular human capital challenges. This study reflects on the distinctive characteristics of professional service firms through the concepts of knowledge intensity, low capital intensity and professionalized workforce. Based on in-depth interviews with 21 partners of Australian law firms, we provide empirical evidence on the war for talent challenges faced by professional service firms and in particular, law firms. The findings point to talent management challenges including reputation building and maintenance, employee autonomy, knowledge acquisition, revenue and profitability through internationalization, managing knowledge across borders, managing employee mobility, talent acquisition and retention, talent engagement, performance management and developing leadership capability. These challenges are important issues to be considered by professional service firms as they attempt to compete more effectively in global business contexts.     

The internationalization of competition policy: implications for international business

In the post–Uruguay Round World Trading System and with the creation of the World Trade Organization (WTO), a new set of agendas on the governance of the world economy has emerged. Among them are the relationship between trade and social policy, trade and the environment, and trade and competition policy. These issues are new in the sense that policymakers have, until now, avoided drawing direct‐policy linkages between them. The main reason for this is that traditionally social and competition policies have been domestic policy domains that international policymakers were prevented from influencing. While environmental policy has been subject to several international negotiations, the link between trade and the environment has been relatively under‐discussed in the GATT. Moreover, there have been few international agreements that have drawn a direct link between trade and the environment.¹ The focus of this paper is the relationship between trade and competition policy. In particular, this paper seeks to address the issues related to international competition policy and the concerns and problems faced by international business in this context. ¹ An exception being the agreement on trade in endangered species (CITES). © 2000 John Wiley & Sons, Inc.     

Towards an Ethical Research Agenda for International HRM: The Possibilities of a Plural Cosmopolitan Framework

In this conceptual paper, we aim to develop a much needed ethical research agenda for international Human Resource Management (HRM), given that the changing geopolitical dynamics interrogate the political role of multinational companies and the ethical stance they take in their HRM practices. To theoretically ground this agenda, we turn to cosmopolitanism and distinguish three main perspectives??political, cultural, and social??each of which implies a different understanding of the self?Cother relation in the context of the global world. We translate the core and ethical stance of each perspective to the field of international HRM, presenting three different foci of an ethical research agenda in terms of the ethical implications for multinational companies, research focus, methodological suggestions, and inherent limitations.     

Competition for firms in an oligopolistic industry: The impact of economic integration

We set up a model of generalised oligopoly where two countries of different size compete for an exogenous, but variable, number of identical firms. The model combines a desire by national governments to attract internationally mobile firms with the existence of location rents that arise even in a symmetric equilibrium where firms are dispersed. As economic integration proceeds, equilibrium taxes initially decline, but then rise again as trade costs fall even further. A range of trade costs is identified where economic integration raises the welfare of the small country, but lowers welfare in the large country.     

Expanding opportunities in fashion merchandizing: a successful internship programme through an innovative collaboration with The National NeedleArts Association

Internships are an important part of education in an applied field such as consumer sciences. Within consumer sciences, coursework typical of a fashion merchandizing programme exposes students, often for the first time, to issues of fibre, yarn and textile structure as well as colour and design. While these topics expand student knowledge beyond apparel, students find it difficult to imagine careers outside of the typical fashion merchandizing framework, thus limiting their internship choices to apparel retailing. Most students are unaware of the art and craft markets, specifically the needlearts of knitting, crocheting, needlepoint, cross‐stitching and embroidery. In the United States and Canada alone, this market, which includes fibre and yarn designers and producers, suppliers and retailers, constitutes an $8.5 billion industry. In summer 2006, the University of Akron and The National NeedleArts Association (TNNA), a trade association, initiated a joint venture, coined Pathways into Professional Needlearts (PiPN), to familiarize and train students in the needlearts. During the pilot programme, 10 fashion merchandizing students attended TNNA's trade show, spent 2 weeks in intense needlearts training and completed 10‐week‐long internships. TNNA appealed to its members for internship positions, which were subsequently matched with students’ abilities and expectations. The positions, scattered throughout the United States and Canada, ranged from a summer camp for school‐aged children, a design house for specialty knits, a needlepoint boutique and design business, yarn designers and distributors, to a web site and e‐business to retail boutiques. Both hosts and students benefited from new, and ongoing, business relationships. The enthusiasm for PiPN prompted TNNA to sponsor a second class in 2007. The students reported that they easily transferred their traditional fashion course concepts to their new areas of interest. They were able to apply their knowledge of textile materials, construction techniques, fashion trends, market research and consumer behaviour to both their needlearts course and subsequent internship. Students not only learned the fundamentals of the needlearts, they also gained a new perspective on the possibilities of future careers. Equally important, they experienced the personal fulfilment of self‐expression through artistic media previously not attempted and the relevance of building a community through the needlearts. They also learned that in applying the traditional content of fashion merchandizing to a related industry, they could expand consumer choice by providing a different market perspective.     

Marketing for Muggles: The Harry Potter way to higher profits

Mainstream marketing has become so obsessed with rigor, quantification, and scientific rectitude that it has lost sight of the importance of magic, mystery, and imagination. We need to restore the balance somewhat, and the way to do that is to take a look at the boy wizard who has captivated the hearts and minds of readers the world over—and turned marketing on its head.     

Informal training and learning in Australian firms: The need for a new perspective

This paper examines the use of informal training for workers, by Australian companies and other organisations. Using survey data, it reports the prevalence of informal training and also the utilisation of different types of informal training. Differences are found by employer size, particularly for the different types. By examining qualitative responses, it is found that employers' perceptions of informal training are often not those reflected in existing literature. The paper therefore argues for a new definition of informal training which is comprehensible to employers and workers alike, so that more, and more reliable, research can be undertaken.     

The Japanese corporate network transferred to North America: Implications for North American firms

A significant difference between Japanese and American corporate environments is the existence of extensive networks of intercorporate agreements among firms in Japan. Networks in Japan are the dominant factor in determining how firms transact with other organizations. Given that Japanese networks are taking root in the American business environment, what does this mean for American firms competing and cooperating with Japanese firms? Drawing on a recent study of North American-Japanese joint ventures, this article examines the Japanese network and considers the implications for outsider firms gaining temporary, and perhaps even permanent access to the network through the formation of alliances and joint ventures with Japanese firms. © 1995 John Wiley & Sons, Inc.     

The 'privacy in employment' critique: a consideration of some of the arguments for 'ethical' HRM professional practice

A developing area of interest in ethics and in legal studies is privacy protection. This paper focuses on privacy protection in employment, and examines some of the arguments of commentators who seek to limit the information obtained from job candidates and employees. The ethical underpinnings of these restrictions are discussed in terms of how privacy in employment relations can be understood as functioning to provide a context for the maintenance and development of self-identity, an autonomous self-concept, the practice of meaningful autonomy, and a pluralistic social order. In the second part of the paper the proposed restrictions are examined in terms of their impact on economic welfare. The latter consideration suggests that HRM and allied professional groupings that unilaterally implemented the critics' proposals could be deemed to be paternalistic. The potential relevance of legal regulation to resolve this issue for 'ethical' HRM professional practice and its significance in the area of genetic discrimination are discussed.