coping with uncertainty in international business international business as compared with domestic business is usually characterized by increased uncertainty a study of 10 multinational companies uncovered several methods of coping with uncertainty this paper focuses on 2 methods which may not be apparent control and flexibility a framework of analysis suggesting appropriate methods for coping with uncertainty is also developed

strategy and control in supplier distributor relationships an agency perspective this paper examines the influence of competitive strategy on the relationship between suppliers and their distribution networks drawing on agency theory hypotheses are developed specifying the appropriate match between manufacturer strategies and systems of control within distribution channels cluster analysis is used to show distinct differences in channel management and structure for the three generic strategies of cost leadership differentiation and focus results suggest that variation in control relationships may be explained by the demands posed by manufacturers competitive strategies this study therefore extends the applicability of porter s typology to the specific structure of distribution channels and shows that agency theory can provide insights into the economic basis of interorganizational relationships

developing successful trust based international exchange relationships trust is a central construct in relationship marketing yet the literature provides mixed empirical evidence on the trust performance linkage also there is limited research on how to build trusting international buyer seller relations we develop a comprehensive model integrating performance enhancing mechanisms and antecedent processes of trust in import export relationships our survey results from importers trading with overseas manufacturers suggest that existing levels of trust have a positive effect on relationship performance outcomes achieved 1 year later importantly trust takes on greater importance in enhancing performance under conditions of high interdependence whereas in circumstances of low interdependence trust has no discernible effect the findings also indicate that interfirm psychic distance internal uncertainty and exporter transaction specific assets and opportunism are related to importer trust implications for academics and practitioners are addressed

towards more realistic conceptualisations of foreign operation modes we address a long standing discrepancy between theory and practice regarding how firms choose use and modify their modes of operation in foreign markets theory typically treats foreign operation modes as choices between well specified discrete alternatives observation of business practice reveals a messier reality we commonly observe mode packages within mode adjustments and mode role changes yet by and large these aspects of international business development have been relatively ignored in the literature and in theoretical and empirical research we propose richer and more realistic conceptualisations of foreign operation modes and look at their implications for theory and practice

valuation of the operating flexibility of multinational corporations the returns to multinationality are estimated as the value of operating flexibility empirical measures of the return of multinationality require a precise specification of the extensiveness of the mnc s transnational network to measure the degree of multinationality this precise empirically grounded definition of multinationality has been absent from the academic literature to date we address this omission and we find that two characteristics of the transnational network its breadth number of foreign countries in which the mnc has operations and depth the concentration of foreign subsidiaries in a few countries are significant in explaining the value of operating flexibility in particular we find that the returns to multinationality are maximized for firms with networks that have breadth but not depth the role of market intangibles such as r d and advertising on mnc market valuation is shown to depend on the flexibility regime

effectively conceiving and executing multinationals worldwide strategies this study addresses one of the most compelling questions in the field of international management how can a multinational simultaneously pursue the double ended objective of effectively conceiving and executing its worldwide strategy here we examine the ways in which the dynamics of the strategy making process between head office and subsidiary units influence the multinational s ability to achieve these two objectives specifically we introduce the concept of procedural justice the intellectual root of which is grounded in social psychology and law into the international management and explore the impact of process fairness on multinationals ability to conceive and execute effective worldwide strategies the results of this research are based on a two phase longitudinal study of the decision making dynamics of nineteen multinationals they provide support that the exercise of procedural justice is indeed a powerful way to organize the multinationals strategy making process procedural justice was found to significantly augment multinationals ability to achieve this double ended objective

configurations of strategy and structure in subsidiaries of multinational corporations a three fold typology of subsidiary roles world mandate specialized contributor local implementer was induced from the literature and its empirical validity was confirmed adopting a configurational approach we then explored the ways in which subsidiary structural context varies across subsidiary role types structural context characteristics were determined through a discussion of the underlying principles of the hierarchy and heterarchy models of multinational organization the key findings were a higher strategic autonomy in world mandates than in local implementers b a more internationally configured value chain in world mandates and specialized contributors than local implementers c lower levels of internal product flows in world mandates than the other two types and d a significantly lower performance in specialized contributors implications for a configurational model of subsidiary management and for heterarchy as a higher level conceptualization are discussed

effective rates of protection and the fordney mccumber and smoot hawley tariff acts comment and revised estimates this paper provides corrected calculations of the effective rate of protection for a wide disaggregation of us industries under the two important interwar tariff regimes

global strategy and multinationals entry mode choice this paper makes a case directed towards establishing the importance of global strategic considerations in choosing multinationals entry mode specifically it is our contention that beyond the environmental and transaction specific factors well established in the literature to affect the entry mode decision we should also consider the strategic relationship a multinational envisages between its operations across borders in reaching this decision after incorporating various global strategic variables into an eclectic framework of the factors influencing the entry mode choice this paper tests both the validity of the overall framework and the importance of each entry mode determinant in differ entiating among entry modes this is done based on ninety six multinational managers responses to a survey questionnaire concerning their entry mode decision experiences the results suggest that an express incorporation of global strategic variables into an analysis of the entry mode decision is warranted

managing across borders an empirical test of the bartlett and ghoshal 1989 organizational typology this paper reports an empirical test of the bartlett and ghoshal 1989 organizational typology some 131 senior executives of corporations with worldwide operations classified their organizations as being multinational global international or transnational in nature and evaluated their organizations configuration of assets and capabilities role of overseas operations and development and diffusion of knowledge results provide partial support for the typology as expected transnational corporations were least frequently reported by the respondents the hypothesized practices associated with multinational and global organizations were more consistent with the typology s predictions relative to those of the international and transnational types

overcoming export manufacturers dilemma in international expansion learning and acquiring local market knowledge from foreign distributors are central to manufacturers export market performance drawing from the resource based view we propose that manufacturers need to develop stronger local market competence while simultaneously minimizing the costs of distributor opportunism in order to compete successfully in the export market cultural distance and other barriers however may hinder the development of local market competence for the manufacturer while contributing to the occurrence of distributor opportunism in order to overcome these barriers we examine the impact of three alternative forms of manufacturer governance trust knowledge sharing and contract based relationship in export channels findings suggest that all three governance mechanisms contribute to enhancing the manufacturer s competence to exploit local market opportunity however of the three trust seems to be the only effective way to curtail distributor opportunism

a formal analysis of knowledge combination in multinational enterprises this paper outlines a model of process organisation for the combination of different types of knowledge from spatially separated sources in the multinational enterprise the model envisages an initiator entrepreneur as the motor of the process and identifies regularities in the types of knowledge combination within the firm that provide additional value knowledge losses decision losses and coordination losses are imperfections in the process and result in barriers to the effective combination of knowledge strategies of combination are of three types additive sequential and complex implying different types of control outcomes

a bibliometric analysis of the global branding literature and a research agenda this study examines the citations used in the global branding literature gbl and evaluates the knowledge structure of this area of research to date our bibliometric analysis involves an examination of 120 global branding articles in business related research we employ multidimensional scaling to reveal a range of intellectual influences that have helped shape the gbl the foundation of knowledge in the gbl is uncovered by analyzing co citation data to identify important topical influences in the formation of global branding research the conceptual framework developed incorporates five areas with important implications for the future development of global branding as an area of inquiry these major research topics in the gbl are international branding strategy brand positioning brand country origin brand concept image and brand performance we leverage resource and capability based paradigms and use the five underpinning knowledge groups to propose an agenda for future research that fills existing gaps and offers the potential to advance and enrich the gbl

the effect of domestic uncertainty on the real options value of international investments scholars have noted that international investments have the potential to provide firms with real options value under uncertainty to assess this issue prior studies have tended to focus primarily on exchange rate volatility although multinational firms face other types of uncertainty as well including those stemming from their domestic operating environment the role of such uncertainty for firms flexibility needs has not been previously considered in this study we compare the influence of both domestic economic uncertainty and exchange rate uncertainty on the real option value of international investments of korean firms over 16 years of varying uncertainty we find evidence that an international investment network characterized by greater breadth and lower depth is associated with higher firm value under domestic economic uncertainty exchange rate uncertainty however was not found to play a role in firms need for flexibility the results suggest that firms are able to hedge exchange rate uncertainty by using mechanisms such as forward contracts or derivatives thus potentially reducing the impact of this type of uncertainty on their operations

routine microprocesses and capability learning in international new ventures drawing on the distinction between the ostensive aspects abstract patterns and performative aspects specific actions of organizational routines the paper offers a micro level explanation of capability learning in international new ventures invs that is firms that internationalize actively from inception the paper argues that variability in the performative aspects of internationalization routines is associated with improvisational learning and new capability development whereas variability in the ostensive aspects is associated with trial and error learning and existing capability improvement furthermore psychic distance moderates these relationships low psychic distance facilitates both improvisation and trial and error learning high psychic distance frustrates learning of both types moderate psychic distance makes the success of both learning forms more likely but only for more experienced invs the paper also argues that social capital may mitigate the negative effects of high psychic distance it contributes to the extant literature by providing a micro level explanation of how invs accomplish capability learning and avoid wasteful learning efforts and by theorizing the moderating effects of psychic distance on the relationships between routine microprocesses and capability learning

a relational model of export performance export performance models anchored in the industrial organization and resource based theories have previously been developed and tested thus far there have been no empirically tested export performance models that have reflected the core tenets of the relational or behavioral paradigm drawing from relational exchange theory a model that includes reciprocal perceptions that relate to both past and future exchanges is developed this model is tested with dyadic data from 125 west east australia thailand exporter importer partnerships reflecting the increasing importance of west east exchange relationships results support the theory s contention that commitment to future exchanges is associated with export performance and is itself driven by a reciprocal cycle of each partner s perception of the other s commitment relationship specific investments and dependence this cycle of commitment is in turn influenced by each partner s trust in the other from past exchanges with different types of trust linked to different types of commitment trust and commitment are then found to be related both to interpersonal factors i e effective communication cultural sensitivity and likeability of partner and to firm factors reputation and competencies of partner

mimetic and experiential effects in international marketing alliance formations of us pharmaceuticals firms an event history analysis alliances are recognized as an indispensable tool for managers operating in a global business environment and as a fundamental stage of the internationalization process of the firm drawing on a co evolutionary framework this article investigates the mimetic and experiential effects in international alliance formation we focus on a critical unresolved issue in the literature what is the role of mimetic behavior and previous alliance experience in mitigating the uncertainty associated with engaging in cross border operations an event history analysis of 792 international marketing alliance formations initiated by 317 firms in the us pharmaceutical industry is employed to test the hypotheses the findings of two different hazard rate models reveal significant complex effects of density and cross border alliance experience on the propensity to engage in new international marketing alliances

equity joint ventures and the theory of the multinational enterprise this paper extends the internalization approach to the theory of the multinational enterprise mne to include an expanded role for equity joint ventures using the transaction cost paradigm of williamson this paper explains why joint ventures may sometimes be preferred over wholly owned subsidiaries also presented is empirical work on joint venture performance in developing countries which demonstrates that under certain conditions joint ventures can be the optimal mode of foreign direct investment

is knowledge power knowledge flows subsidiary power and rent seeking within mncs in recent years as multinational corporation mnc subsidiaries have become more closely linked to international networks their knowledge intensity has risen and some of their r d has gained a more creative role simultaneously and often connectedly many subsidiaries have acquired considerable strategic independence in all aspects of their operations and therefore are able to exercise considerable intra firm bargaining power to influence the distribution of the firm s resources in this context we suggest that intra mnc knowledge flows are a key determinant of subsidiary bargaining power we argue that subsidiary managers can exploit such power to pursue their own ends such rent seeking behavior is implicit in much of the literature on managerialism but our analysis suggests that such behavior can now occur in headquarters subsidiary and subsidiary subsidiary relations thus subsidiary strategic independence designed to enhance the competitiveness of outputs market knowledge and inputs asset seeking and learning can be corroded when the pursuit of subsidiary objectives encourages rent seeking empirical analysis of a sample of high technology subsidiaries in the uk provides strong support for the theory we examine several avenues whereby the incentives of units within the mnc can be aligned

market seeking mnes in an emerging market how parent subsidiary links shape overseas success this study extends research on parent subsidiary links applying new theoretical perspectives those of resource dependence and dynamic capability to the new empirical setting of an emerging market we suggest that parent subsidiary links help to mitigate emerging market threats by reducing external dependence and help to capitalize on emerging market opportunities by enhancing local responsiveness

revisiting multinational firms tolerance for joint ventures a trust based approach in spite of the increasing popularity of international joint ventures managers express a high level of dissatisfaction with them this paper argues that overemphasis on the outcome has resulted in a neglect of the social processes underlying the outcome the paper elaborates upon the rationale for a cooperative approach towards interorganizational collaborative relationships based on trust and discusses it in the context of joint ventures this is then applied towards understanding multinational ownership preferences and tolerance for joint ventures it is argued that trust centered logic is largely consistent with approaches that emphasize the issue of ownership and deepens and enriches the insights provided by the latter a shift in focus from ownership to relational dynamics is encouraged

drivers of commitment and its impact on performance in cross cultural buyer seller relationships the importer s perspective much of the recent literature on interorganizational relations provides evidence that relationship commitment can produce significant benefits for firms somewhat surprisingly limited attention has been devoted to the role that commitment plays in international buyer seller associations merging findings from the international business and transaction cost economics literature we propose and test a model that explains how commitment develops and its impact on performance in cross cultural interorganizational relations a sample of 216 overseas distributor manufacturer relationships provides the empirical setting for this research the findings suggest that transaction specific investments by the importer and exporter opportunism affect importer commitment and that environmental volatility and cultural sensitivity are indirectly associated with commitment through opportunism most important the study reveals that an importer s commitment has a positive impact on its performance in the relationship however no relationship is established between environmental volatility and commitment the implications of the study are discussed along with limitations and directions for future research

mnc subsidiary channel relationships as extended links implications of global strategies foreign subsidiaries of multinational corporations mncs rely on external partners such as channel partners to achieve global objectives we conceptualize the subsidiary s channel partner as an extended link of the mnc s internal network thus the subsidiary s adaptation and execution of the mnc s global strategies should influence the subsidiary s channel relationship and performance building on the strategy environment alignment framework we study the influence of mnc global strategies global efficiency multinational flexibility and worldwide learning on a subsidiary s channel commitment and the moderating influence of the host country environment survey data from german and japanese mncs in the united states indicate the importance of global strategies to a channel relationship for example we find that an emphasis on multinational flexibility is detrimental but worldwide learning benefits the subsidiary s channel commitment we also find that the host country environment plays a contingent role for example a global efficiency strategy is beneficial for channel commitment in a stable environment but detrimental in a dynamic environment our research offers key implications for mncs we suggest that when mncs decide to lay emphases on global strategies the mncs should consider not just their internal subsidiary network but also their extended channel partner links that function in foreign markets

global cities and multinational enterprise location strategy we combine the concept of location derived by economic geographers with theories of the multinational enterprise mne and the liability of foreignness developed by international business scholars to examine the factors that propel mnes toward or away from global cities we argue that three distinctive characteristics of global cities global interconnectedness cosmopolitanism and abundance of advanced producer services help mnes overcome the costs of doing business abroad and we identify the contingencies under which these characteristics combine with firm attributes to exert their strongest influence consistent with these arguments our analysis of a large sample of mne location decisions using a multilevel multinomial model suggests not only that mnes have a strong propensity to locate within global cities but also that these choices are associated with a nuanced interplay of firm and subsidiary level factors including investment motives proprietary capabilities and business strategy our study provides important insights for international business scholars by shedding new light on mne location choices and also contributes to our understanding of economic geography by examining the heterogeneous strategies and capabilities of mnes the primary agents of economic globalization that shape the nature of global cities

the determinants of trust in supplier automaker relationships in the us japan and korea we examine the determinants of trust in 453 supplier automaker relationships in the us japan and korea we define trust and derive a model of its determinants drawing upon 1 an embeddedness relationship based perspective 2 a process based perspective and 3 an economic hostage based perspective our findings indicate strong support for the process based perspective in all countries embeddedness was only important in japan and the economic hostage based variable stock ownership was not important in any country

international diversification and firm performance the s curve hypothesis a proposed theoretical framework for the study of multinationality and performance includes both benefits and costs of geographic expansion over different phases of internationalization data on 1 489 japanese firms over 12 years show a consistent horizontal x s shaped x relationship between multinationality and performance further firms investing more heavily in intangible assets such as technology and advertising achieved greater profitability gains from growth in foreign direct investment our framework and findings highlight complexity and temporal dynamics

do cio it budgets explain bigger or smaller governments theory and evidence from u s state governments given the recent concern on big governments and rising budget deficits in the united states and european nations there has been a fundamental economic debate on the proper boundary and role of governments in a society inspired by this debate we study the relationship between information technology it and government size drawing on a broad range of the literature from multiple disciplines such as information systems industrial organization and political sciences we present several theoretical mechanisms that explain the impact of it on government expenditures using a variety of data on it spending and state government expenditures we find that greater it investments made by a state chief information officer cio are associated with lower state government spending it is estimated that on average a 1 increase in state cio budgets is associated with a reduction of as much as 3 49 in state overall expenditures this study contributes to the literature by identifying a key technological factor that affects government spending and showing that it investments can be a means to restrain government growth