How have Japanese multinational companies changed? Competitiveness,management and subsidiaries

Evidence on the strategies and capabilities of Japanese multinational companies (MNCs) and their subsidiaries points to aspects of established management practices (typically home-grown) that complicate or inhibit adaptation to the demands of global competition since the 1990s. Japanese MNCs have had to respond, amongst other trends, to the switch from production to buyer-driven global value chains, cross-border vertical specialization, global factory strategies and strategic alliances and cooperative relationships. Amongst the factors that might affect the ability of Japanese MNCs to make competitive and organizational transitions are: parental MNC intent and capability in the cross-border transfer of management practices; the impact of host country risk on investment, ownership and entry strategies; measures of institutional difference and the gap in economic development between home and host nations; parent firm–subsidiary and subsidiary–subsidiary power relations and knowledge boundaries; and the evolution of insider networks that might overcome institutional and cultural distances within an MNC.     

Demand-following or supply-leading? Trade openness and financial development in China

This study explores the causal relationship between financial development and trade openness in China, using the research methodology namely bootstrap Granger full-sample causality test and sub-sample rolling-window estimation. The results reveal that there is a significant bidirectional relationship between financial development and trade openness in China, pointing out the existence of both ‘demand-following’ and ‘supply-leading’ hypotheses. Furthermore, their relationship fits well the fact that China has experienced economic restructuring and structural changes in the past few decades. As financial development improves trade openness robustly, the Chinese policymakers should further increase financial reform to promote trade development.     

Transfer or localize? International reward and compensation practices of South Korean multinational enterprises in China

International reward and compensation has received little academic attention, but past research was mainly conducted in advanced Western economies. This study explores the extent to which multinational enterprises (MNEs) from an emerging economy, South Korea, transfer reward and compensation practices from business headquarters to a transitional economy, China and the determining factors for transfer. Using a qualitative approach to analysing 10 South Korean MNEs in China, this study reveals that the sample companies adopt home-oriented focal reward and compensation policies and practices (including base pay and performance-based pay) and an integrative approach to peripheral components (including allowances and benefits) for expatriates. However, the companies adopt an integrative approach to focal components of reward and compensation and a localized approach to peripheral components for host country nationals (HCNs). These findings indicate that Korean MNEs adopt different approaches to reward and compensation for expatriates and HCNs, as well as to focal and peripheral components of reward and compensation practices. The transfer of reward and compensation is due to the dominance effect resulting from the fact that the home economy is relatively more advanced than the host economy. On the one hand, the tendency to localize reward and compensation results from contextual differences between host and home nations, such as economic development, living costs and compensation traditions.     

Internationalization and HRM strategies across subsidiaries in multinational corporations from emerging economies—A conceptual framework

The rapid rise of multinational Corporations (MNCs) from emerging economies has led to greater interest and urgency in developing a better understanding of the deployment and diffusion of managerial strategies from their perspective and without assuming the prevailing Western ethnocentric orthodoxy. This paper develops a conceptual framework of global HR strategies and practices in MNCs from emerging economies across their subsidiaries in both developed and developing markets. Using data from a pilot study of an Indian MNC, it provides insights and guidance into the motives, strategic opportunities and constraints in cross-national transfer of HR policies and practices in a multi-polar world.     

Moral imagination or heuristic toolbox? Events and the risk assessment of structured financial products in the financial bubble

The paper uses the example of the failure of bankers and financial managers to understand the risks of dealing in structured financial products, before the financial collapse, to investigate how people respond to crises. It focuses on whether crises cause people to challenge their habitual frames by the application of moral imagination. It is proposed that the structure of financial products and their markets triggered the use of heuristics that contributed to the underestimation of risks. It is further proposed that such framing heuristics are highly specialised to specific contexts and are part of a wider set of heuristics that people carry in their cognitive ‘adaptive toolboxes’. Consequently, it is argued, when a crisis occurs, the heuristics are not challenged, but are simply put away, and other more appropriate heuristics are put to use until a sense of normality returns, and the use of the old heuristics is resumed.     

The effect of innovation policy on SMEs’ employment and wages in Argentina

This article evaluates the effect of the Argentinean Support Program for Organizational Change on employment and wages. The program aimed at increasing small and medium-sized enterprises’ competitiveness by co-financing technical assistance to support process and product innovation activities. Although employment is not usually the main objective of these types of programs, they are always implemented assuming that they create—or at least do not destroy—employment opportunities. We use a unique data set with information for the population of firms in Argentina from 1996 to 2008 to test this important assumption. Using a combination of fixed effects and matching, we find that both process and product innovation support increased employment and wages, with a higher impact on employment. In addition, we find that product innovation support had a larger effect on wages than process innovation support.     

Sourcing or sharing in MNE networks? National headquarters and foreign subsidiaries as knowledge conduits in SMOPECs

Multinational enterprises (MNEs) act as important conduits of knowledge in advanced, small open economies (SMOPECs). This paper constructs a typology of asymmetric knowledge patterns by comparing net knowledge flows – or differences in sourcing and sharing – in the dual networks of headquarters of national MNEs and subsidiaries of foreign MNEs. We find both act as internal contributors to the MNE, but subsidiaries are more likely to act as external contributors to local partners or dual receivers of net knowledge flows from both networks, and headquarters as dual contributors to both networks. R&D intensity of the subsidiary and of the country are associated with different knowledge patterns of subsidiaries. Inclusion of asymmetric knowledge sourcing and sharing in internal corporate and external business networks contributes to our understanding of knowledge flow directionality via the focal unit, and the roles of national and foreign MNEs as knowledge conduits in SMOPECs.     

Individualism,Collectivism and Management in China: Does Atlas Shrug in China?

Rand’s philosophy of objectivism has enjoyed a recent resurgence of interest in the United States, but little is known about how it is conceptualized in non-Western cultures and how it influences business practice. This paper investigates and supports the existence of a form of objectivism within the Chinese culture, drawing into question the notion that Chinese society is inherently collective. Results concerning an anticipated metaphysical dimension were inconclusive, suggesting that Chinese who embody epistemological, ethical, and political aspects of objectivism lack a corresponding and clear notion of causality, time, and identity.     

Assets of origin? Chinese multinational enterprises amidst the Belt and Road Initiative

This article reviews the current literature on the implications of the Belt and Road (B&R) Initiative for Chinese multinational enterprises (CMNEs) and calls for further empirical investigations of the motivations, processes, and consequences of the expansion of CMNEs into B&R countries. We posit that the rapid expansion of CMNEs in these countries indicates assets, rather than liabilities, for the county of origin. Empirical studies in this special issue provide new insights into what is “Chinese” about Chinese foreign direct investment in B&R countries and how the “assets of origin” may play a role in CMNEs' expansion in B&R countries.     

The Roles of HRM in CSR: Strategic Partnership or Operational Support?

As the implementation of corporate social responsibility (CSR) strategy requires promoting employee participation and initiating meaningful changes in organisational culture, the involvement of the human resource management (HRM) function in policy formulation and implementation is highly desirable. The relationship between the HRM and CSR functions is, however, under-investigated than other areas. Hence, there is a lack of clarity concerning HRM roles and the conditions under which they may be strategic or operational in nature. By drawing on data from interviews with 29 CSR and HRM professionals of large organisations in New Zealand, this paper argues that the role and contribution of the HR function in CSR is contingent on organisational variables such as the CSR structure, the scope and application of CSR and the nature of the HR functions. It concludes that in such contexts HRM is more likely to offer operational support in executing CSR rather than strategic input.     

Reconciliation of Overseas Economic and Trade Disputes in China

In case a dispute arises during economicand trade activities or invested enterprisesin China,reconciliation is one way toresolve problems,in addition to arbitrationand law suit. Reconciliation has the advantage ofbeing easy,time-,energy- and money-conserving and harmony preserving,andreconciliation through mutual understandingand mutual compromise can be reached onthe basis of respecting the opinions of both     

Business Target of Industrial and Commercial Bank of China in 2003

On January 22, the Industrial and Commercial Bank of China announced its business target of 2003. It said, in 2003, before the reserve for risks is appropriated, profit would be increased by 15 percent more than in 2002, or at the value of RMB51billion. Of them, the profit in the account would be RMB6.5 billion, and the amount of appropriations to the reserve and the written down value of financial deficit over the past years would be RMB44.5 billion. In 2002, the     

The effects of trust and shared vision on inward knowledge transfer in subsidiaries’ intra- and inter-organizational relationships

Drawing on the social capital literature, this study examines the relationship between trust and shared vision and inward knowledge transfer to subsidiaries from both the subsidiary's corporate and external relations. Previous literature has acknowledged and theoretically suggested that potential differences may exist in knowledge transfer between intra- and inter-organizational relationships, it has not yet been well examined empirically. The study provides some initial insights into the literature by theoretically suggesting that the effects of trust and shared vision on inward knowledge transfer differ in importance in intra- and inter-organizational relationships. Hypotheses were tested on data collected from 75 Western MNCs’ subsidiaries located in China. The study represents an effort towards a better understanding of the context where trust and shared vision are more of vital importance.     

Science and Technology Take-off in China?: Sources of Rising R&D Intensity

China's ratio of research and development (R&D) spending to its gross domestic product (GDP) more than doubled from 0.6 per cent in 1996 to 1.4 per cent in 2005. This study documents the pattern of science and technology (S & T) take-off, characterized by an abrupt increase in the R&D to GDP ratio. This abrupt increase, observed in many of the now Organization for Economic Cooperation and Development (OECD) countries, typically drives R&D intensity from below 1 per cent to the range of 2–3 per cent. The question addressed in this work is whether China has begun a similar S & T take-off. The study reviews several conditions identified in the endogenous growth literature that drives R&D intensification and notes their emergence in China during the past decade. It also speculates why China's R&D intensification appears to be starting at such a low level of income per capita.     

What changes the rules of the game in wholly owned subsidiaries? Determinants of knowledge acquisition from parent firms

We examine key factors affecting the extent of knowledge acquisition from multinational enterprises (MNEs) in their wholly owned subsidiaries (WOSs). As the volume of foreign direct investment (FDI) by MNEs is rapidly growing, empirical studies dealing with knowledge acquisition from parent firms in subsidiaries are in the limelight. However, as far as we know, none has attempted to identify primary mechanisms influencing subsidiary learning by dividing WOSs based on ‘investment mode’ and ‘investment direction’. We believe WOSs are characterized by these two issues and thus this research contributes to current literature by providing a detailed picture of learning mechanisms in subsidiaries. We advance a series of propositions to achieve the research objective by using a sample of WOSs established by MNEs in Korea. By doing this, we reveal that subsidiary learning depends significantly on absorptive capacity in learning organizations, relational capital and parent firms’ behavior. Also, we confirm that factors facilitating knowledge acquisition are influenced by investment mode and investment direction. Based on the results, this study provides some useful implications for MNEs and policy makers in local markets.     

Is the Red Dragon Green? An Examination of the Antecedents and Consequences of Environmental Proactivity in China

China is the world’s second largest economy and the largest emitter of carbon dioxide, yet we know little about environmental proactivity in the most populated country in the world. We address this gap through a survey of 161 Chinese companies with two respondents per firm (N = 322), where we seek to identify the antecedents and consequences of environmental proactivity. We identify two categorizations of environmental proactivity: Environmental operational improvements and environmental reporting. We find that ecological motivations and regulatory stakeholder pressure are positively related to both types of environmental proactivity, and external stakeholder pressure is negatively related to environmental reporting. Furthermore, we find that (1) if a firm is environmentally proactive (as it relates to either measure) and they are ecologically motivated, there is a positive and significant cost advantage, and (2) if a firm makes use of environmental operational improvement and they are competitively motivated, there is a positive and significant reputation advantage. Implications for researchers, managers, and policy-makers in China are discussed.     

Effect of financial development on international trade in Africa: Does measure of finance matter?

Although improving international trade on the back of financial sector development is one of the preoccupations of countries in Africa, empirical literature on financial development-trade nexus has not been rigorous in examining how finance shapes trade. In this study, we examine the effect of financial development on international trade in Africa relying on data for 46 countries over the period 1980–2015. Results from our system generalized method of moments reveal differential effects of finance on trade. In particular, we notice that, private credit does not promote trade while domestic credit positively affects trade. These effects are robust to measures of trade. Thus, improving the level of private (domestic) credit dampens (amplifies) exports and trade openness. However, we also find a U-shaped relationship between private credit and trade measures suggesting that financial sector development may be detrimental (helpful) to trade for economies with low (high) level of private credit.     

Bridging the great divide? Making sense of the human rights-CSR relationship in UK multinational companies

Human rights (HR) and corporate social responsibility (CSR) are both fields of knowledge and research that have been shaped by, and examine, the role of multi-national enterprises in society. Whilst scholars have highlighted the overlapping nature of CSR and HR, our understanding of this relationship within business practice remains vague and under-researched. To explore the interface between CSR and HR, this paper presents empirical data from a qualitative study involving 22 international businesses based in the UK. Through an analysis based on sensemaking, the paper examines how and where CSR and HR overlap, contrast and shape one another, and the role that companies’ international operations has on this relationship. The findings reveal a complex and multi-layered relationship between the two, and concludes that in contrast to management theory, companies have bridged the ‘great divide’ in varying degrees most notably in their implementation strategies.