foreign locals a cautionary tale on the culture of mnc local employees multinational corporations mncs rely heavily on local employees when conducting their international operations yet the international business literature provides few instances of true focus on these employees the commonly used label host country nationals hcns confers them an identity strongly related to the culture of their country prompting both researchers and practitioners to know them through the knowledge about the local culture this paper provides evidence that a more sophisticated view of the culture of hcns is needed through an ethnographic exploration of hcns working in local subsidiaries of american mncs in romania i reveal that hcns are not always culturally interchangeable with the rest of the host country population hcns can display a variety of cultural profiles more or less reflective of the national culture depending on their enacted stance towards the native culture and the cultural landscape of the mncs themselves the findings call for further specification of theories relying on the assumed localness of hcns and should contribute to the ongoing conversation on the interplay between the cultures specific to the mnc and its host countries

the liability of localness in innovation i analyze differences in the innovativeness of domestic firms and subsidiaries of foreign firms operating in the same country i argue that domestic firms suffer a liability of localness in innovation or a competitive disadvantage in product innovation relative to subsidiaries of foreign firms i propose that this liability of localness is driven by the relatively lower levels of multiculturalism in employees of domestic firms in comparison with subsidiaries which limit the identification transfer and integration of a large diversity of knowledge that supports product innovation i also propose that managers of domestic firms can compensate for this liability of localness in two ways by investing in the training of their employees and by exporting training modifies the mindsets and abilities of employees and enables them to become more cognitively multicultural which facilitates product innovation exporting changes employees mindsets as they become exposed to new ideas available abroad which also facilitates product innovation i test these arguments on a sample of manufacturing firms and find that although domestic firms introduce fewer new products than subsidiaries of foreign firms they introduce more new products than subsidiaries at the same level of investment in language training and of exports

mne institutional advantage how subunits shape transpose and evade host country institutions scholars increasingly emphasize the impact of institutions on multinational enterprises mnes but the opposite relationship has attracted less research that is mne agency in relation to institutions based on a comparative case study of six mnes from the united states and sweden this paper remedies this it explores and explicates mne subunits strategic responses to host country institutional constraints and opportunities in five different regions a new institutional approach is adopted which allows for an investigation of mne subunit agency in relation to normative and cognitive institutions as well as regulative ones this fine grained analysis reveals not only what kinds of responses mne subunits invoke but why and how they are able to respond we identify four strategic responses by which subunits shape transpose and evade institutions in the pursuit of competitive advantage innovation arbitrage circumvention and adaptation these responses are driven by three key enablers multinationality foreignness and institutional ambiguity that serve to enhance and heighten three mechanisms reflexivity role expectations and resources by linking the enablers and the mechanisms to specific types of strategic responses in a framework and typology the paper not only contributes to emerging research on the interplay between mnes institutions and strategy but to strategy practice

the cross cultural research imperative the need to balance cross national and intra national diversity this paper provides a brief overview of the evolution of comparative management theories paradigms and highlights the contribution of the cross vergence construct despite progress most studies of work values across countries continue to suffer from two primary limitations the first is the fallacious assumption of cultural homogeneity with nations given the growing diversity of the workforce within country intra national variations can often be as significant as cross national differences the second is the fallacious assumption of cultural stability over time since cultures evolve albeit slowly it is important to take these changes over time into consideration and be aware of the paradoxes inherent within any given society hence the paper calls for the need to balance cross national and intra national diversity in order to truly understand cross cultural phenomena and thus further improve the quality of cross cultural research

the multifaceted role of language in international business unpacking the forms functions and features of a critical challenge to mnc theory and performance language lies at the heart of international business ib activities yet language as a key construct in the field of ib has not been sufficiently articulated or theorized language presents itself in forms such as national corporate technical or electronic in functions in terms of defining hierarchies exercising power or facilitating integration and in features such as the use of mixed syntax or gender marking understanding the complex interplay between the multiple facets of language and how they affect day to day operations is becoming increasingly critical to global business effectiveness the purpose of this special issue is therefore to catalyze and set a course for the development of a new domain in ib scholarship originating from an explicit focus on language

multinationals and corporate social responsibility in host countries does distance matter prior studies have found that foreign affiliates of multinational enterprises mnes suffer from liability of foreignness lof foreign affiliates may be able to improve their social legitimacy and overcome lof by demonstrating social commitment to host country constituents through corporate social responsibility csr if lof is positively related to the distance between the home and host countries and csr activities confer social legitimacy benefits on foreign affiliates we should expect csr activities and distance to be positively related however we argue that despite this potential motivation foreign affiliates from more distant home countries are in fact less likely to engage in host country csr our argument focuses on the ways in which distance affects the mne s willingness and ability to engage in csr abroad we also predict that host country csr reputation negatively moderates this relationship using community reinvestment act data for foreign bank affiliates from 32 countries in the united states over 1990 2007 we find strong support for our hypotheses the paper enriches our understanding of csr practices in mnes and of when and how mnes try to overcome legitimacy issues in host countries

firm capabilities technological dynamism and the internationalisation of innovation a behavioural approach we develop a behavioural framework of bounded rational decision making under uncertainty to analyse the role of technological dynamism in the firm s environment for its decision to internationalise innovation applying prospect theory we argue that technological uncertainty in the firm s environment affects its risk preferences differently depending on its technological capabilities a key prediction is that firms with low capabilities will internationalise innovation when faced by technological uncertainty while firms with high capabilities will concentrate their innovation at the home base we also argue that our behavioural approach based on prospect theory is not a stand alone programme but benefits from the integration with traditional concepts in ib in particular we make a case that organisational measures fostering absorptive capacity such as intensive personnel exchange between headquarters and subsidiaries can help to attenuate the high capability firms tendency to concentrate innovation at the home base when faced by high uncertainty we corroborate the predictions of our framework based on data from the german part of the community innovation survey

organizational attractiveness is in the eye of the beholder the interaction of demographic characteristics with foreignness our analysis of 4605 individual evaluations of the 60 companies in the reputation quotient annual 2000 study suggests that foreign headquartered companies are less attractive employers whereas more international companies are more attractive moreover we find that gender race respondent age and educational level significantly interact with our foreignness variables in predicting company attractiveness

coupon redemption and the demand for frozen concentrated orange juice a switching regression analysis a switching regression model was estimated and used to study the impact of florida department of citrus coupon promotional programs on the demand for frozen concentrated orange juice the empirical results show that discounts and information provided by coupons were effective in increasing the demand for fcoj and that the fdoc s coupon programs had positive impacts on the probability of using coupons for purchasing fcoj moreover different types of coupon promotions had different impacts and coupon users and nonusers demonstrated different degrees of response to price changes

r d appropriability opportunity and market structure new evidence on some schumpeterian hypotheses one of the largest bodies of literature in the field of industrial organization is devoted to the interpretation and testing of several hypotheses advanced by joseph schumpeter 1950 concerning innovation and industrial market structure one set of hypotheses focuses on the role of firm size as a determinant of r d spending and the rate of technological advance another set focuses on the effect of market concentration on r d and technological advance in this paper we reexamine the latter set of hypotheses at the industry level using new data on r d appropriability and technological opportunity collected by levin et al 1984 in a survey of r d executives in 130 industries

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

domestic alliance networks and regional strategies of mnes a structural embeddedness perspective we draw on a social network perspective to explain multinational enterprises mnes propensity to distribute their operations unevenly across various regions of the world we focus on how the positioning of mnes in their domestic network of strategic alliances affects their geographic scope i e whether they concentrate on their home region or expand beyond it we theorize that embeddedness in alliance networks constitutes a double edged sword to the geographic scope of mnes strong embeddedness in domestic alliance networks drives the development of location bound firm specific advantages fsas which may narrow down mnes geographic scope in contrast moderate embeddedness leads to more non location bound fsas which reduce liability of foreignness and hence motivate mnes to widen their geographical scope we thus predict a non linear relationship between domestic alliance network embeddedness and mne geographic scope furthermore the impact of the domestic alliance network on mne geographic scope hinges on the organizational ability to efficiently and effectively absorb resources stemming from the network we test our hypotheses using fdi data from 302 us mnes in the information and communication technology industry for the period of 2001 2008 and generally find robust support for the hypothesized relationships

know how and asset complementarity and dynamic capability accumulation the case of r d dynamic capabilities enable firms to create new products and processes and respond to changing market conditions this empirical investigation of dynamic r d capabilities deals with the role of complementary know how and other assets in the context of changing conditions in the u s petroleum industry during the 1970s and early 1980s the analysis suggests that in response to rising oil prices firms with larger amounts of complementary technological knowledge and physical assets also undertook larger amounts of r d on coal conversion a synthetic fuels process 1997 by john wiley sons ltd

an international multilevel analysis of product innovation this paper studies multilevel determinants of product innovation by incumbent firms with data from 68 countries covering over 25 000 firms in eight manufacturing sectors the author assesses the predictions of interdisciplinary research on firm behavior in different contexts which have emphasized that product innovation is affected by three sets of factors the extent of global engagement information spillovers and market structure the empirical model of the probability of observing a product innovation a probit model by a firm considers three levels of analysis firm characteristics industry characteristics and the national context the econometric evidence supports the global engagement and information spillovers hypotheses but the evidence on the role of market structure is mixed regarding global engagement the evidence suggests that product innovation by incumbent firms is positively correlated with the act of investing in r d and licensing of foreign technologies and country level average import tariffs reduce the probability of product innovation regarding information spillovers the evidence also shows that a country s patent density is positively correlated with product innovation in contrast concerning the market structure hypotheses country level indicators of business density and of policy induced costs of entry are not robustly correlated with product innovation

the dynamics of the liability of foreignness a global study of survival in financial services we study the impact of foreignness on survival in interbank currency trading worldwide over the period 1974 93 in particular we develop hypotheses on the behavior of the liability of foreignness over time and on the consequences of evolving sources of firm level competitive advantage on this liability we test these hypotheses on the population of 2667 market making trading rooms located in 47 countries worldwide that either existed in 1974 or entered the industry between 1974 and 1993 the results show that there is a liability of foreignness and that it changes over time further strategic and organizational factors such as the adoption of technology by these firms and their mode of internal control significantly influenced survival as did location related factors such as the intensity of local and foreign competition 1997 by john wiley sons ltd

upgrading the technological capabilities of foreign transnational subsidiaries in developing countries the case of electronics in thailand although substantial research shows the importance of transnational corporations tncs to export led growth in some developing countries it cannot be assumed that tnc subsidiaries will automatically upgrade their capabilities through time or in a uniform fashion this paper explores the pattern and pace of a sample of exporting tnc subsidiaries operating in the electronics industry in thailand showing how the different architectures of global value chains centralised versus decentralised shaped the technological progress of subsidiaries in this country the case evidence suggests a wide variety in upgrading through time with some subsidiaries failing to develop capabilities and remaining as assembly only plants other more dynamic plants developed process engineering and product design skills investing heavily in capability building one common determinant in capability building appears to be the overall technology strategy of the global value chain leader or parent company in those subsidiaries which did not upgrade beyond assembly technology decisions and processes were tightly controlled within the parent headquarter locations in relatively centralised international value networks by contrast the more dynamic plants exercised more discretion over local capability building the latter operated in relatively decentralised networks more open to domestic policies to encourage upgrading the study suggests that governments should tailor upgrading policies not only according to the approximate level of capabilities attained by local subsidiaries but also according to how receptive subsidiaries are to upgrading arguing that capability building and policy receptiveness go hand in hand other countries hoping to upgrade the quality of foreign direct investment might also wish to focus policies on the more technologically capable ambitious and receptive categories of foreign subsidiary

causes of the difficulties in internationalization we study the causes of the difficulties faced by firms when they internationalize in search of new markets we build on the resource based theory to argue that the difficulties in internationalization can be separated into three main sets based on their relationship to advantage loss of advantage provided by resources transferred abroad creation of a disadvantage by resources transferred abroad and lack of complementary resources required to operate abroad in each set we further distinguish difficulties that are specific to a firm from those that are common to a set of firms we argue that only a few of the resulting types of difficulties of internationalization are exclusive to the cross border expansion and propose solutions that address the root cause of each type

management development and firm performance in germany norway spain and the uk while comparative studies of human resource management hrm are relatively plentiful few have examined the way organisations in different countries train and develop their managers or the impact of this upon firm performance given the centrality of management capability for corporate and national competitive performance this represents an important area of enquiry utilising telephone interview data from the human resource development manager and a line manager in 482 domestic and multinational organisations in four european countries patterns of management development md are found to differ according to country and to a lesser extent by international strategy however a significantly greater amount of organisational performance is explained by internal md strategies adopted by the organisations concerned and the credence accorded these by line managers

foreignness and exit over the life cycle of firms received wisdom indicates that owing to a liability of foreignness foreign firms exit with greater likelihood than do comparable domestic firms and that the difference attenuates as firms age and overcome the liability we posit that foreign firms are also intrinsically more volatile and footloose than domestic ones and that this leads to an increasing divergence between the exit rates of foreign and domestic firms empirically we find that the difference between exit rates of foreign firms and domestic firms increases with age as exit of foreign firms increases with age while that of purely domestic firms decreases exit rates of domestic based multinationals do not change significantly with age they are between those of foreign and purely domestic firms but are closer to the latter this suggests that the footlooseness observed for foreign firms is due to foreignness more than to multinationality

offshoring of r d looking abroad to improve innovation performance the offshoring of knowledge services has become a phenomenon of increasing importance for firms but many of its implications are yet to be discussed thoroughly this paper analyzes whether r d offshoring contributes to enhancing firms innovation capabilities specifically the study distinguishes between two governance models of offshoring captive offshoring and offshore outsourcing and two types of innovation outcomes product and process innovations we suggest that r d offshoring has different impacts depending on the innovation results and governance models considered the study empirically tests these relationships using the spanish technological innovation panel this survey contains information on a large sample of firms from diverse sectors for the period 2004 2007 the empirical findings allow us confirm our hypotheses and highlight the strategic importance of r d offshoring the empirical evidence reveals a positive relation between offshoring and innovation performance with a greater effect on product than on process innovations the results for different governance models show that captive offshoring has a greater effect on innovation outcomes than offshore outsourcing these findings lead us to conclude that firms that look overseas can benefit from location specific and specialization advantages to improve innovation performance

multiculturalism from a cognitive perspective patterns and implications multiculturalism the internal representation of multiple cultural meaning systems has critical implications for global managers and multinational corporations mncs understanding multiculturalism is becoming increasingly important given that the locations within which mnc activity resides and the composition of the workforce even within a given location are more diverse building on the connectionism perspective we offer a novel cognitive conceptualization of multiculturalism that incorporates the individual s multicultural cognitive content and structure based on that we explain how specific sociocultural experiences interact with existing individual cognitions to form different patterns of multiculturalism specifically we propose five stylized patterns compartmentalization integration inclusion convergence and generalization and explain how they are developed through specific sociocultural experiences we discuss how different patterns of multiculturalism influence specific capabilities of multicultural mnc managers and their effectiveness in a variety of critical mnc tasks we believe the cognitive connectionist perspective which has not been brought before into international business discussions of culture and cultural capabilities holds great promise for better understanding global managers capabilities and development

perceived career opportunities from globalization globalization capabilities and attitudes towards women in iran and the us as competition for human capital intensifies understanding how employees perceive their fit in a company can assist companies in harnessing the knowledge and skills needed to achieve competitive advantage building on the person organization fit theoretical framework we suggest that individual employee perceptions of globalization related career opportunities represent a fit between individual and company capabilities and values we find both similarities and differences between the relationships of individual and company level globalization capabilities and attitudes towards women an important capability source and globalization related career perceptions within samples of 96 iranian and 210 us employees

language policies and practices in wholly owned foreign subsidiaries a recontextualization perspective this study adopts a recontextualization perspective on language policies and practices in wholly owned foreign subsidiaries drawing on a field study of 101 subsidiaries in japan we develop a contingency model that distinguishes between four different types of recontextualization with characteristic language policies and practices developing locally adaptive developing globally integrated established locally adaptive and established globally integrated our analysis shows how each of these four types is accompanied by specific problems and challenges in particular it elucidates five important aspects of language implementation 1 the emergence of language praxis from the interplay of headquarters strategies and local responses 2 the hybridization of language practices 3 the central role of key actors such as subsidiary presidents in recontextualization 4 the pervasive power implications of language policies and practices and 5 the multifaceted implications for strategic human resource management by so doing our analysis opens up new avenues for context specific and practice oriented studies of language in multinational companies

measuring production efficiency of acute hospitals in scotland 1991 94 validity issues in data envelopment analysis data envelopment analysis is a potentially useful technique for measuring production efficiency and is being increasingly applied to health care services as with other areas however some fundamental concerns need to be addressed before data envelopment analysis can be accepted widely as a routine tool these include issues of validity and specification error this paper suggests a broad framework for assessing validity which should be developed further and gives illustrative examples of the problems in a real application within health care data from 75 scottish acute hospitals for three years from 1991 94 are analysed internal validity is assessed by examining the effect on the results obtained of the choice of inputs and outputs selected for analysis external validity is assessed by examining differences in the results obtained from the data for each of the three years in both cases it is concluded that there is a disturbing lack of concordance between the different results obtained caution mu

multinational companies technology spillovers and plant survival how does the presence of multinational companies affect plant survival in the host country we postulate that multinational companies can impact positively on plant survival through technology spillovers we examine the nature of the effect of multinationals using a cox proportional hazard model which we estimate using plant level data for irish manufacturing industries our results show that the presence of multinationals has a life enhancing effect only on indigenous plants in high tech industries suggesting the presence of technology spillovers in contrast multinationals compete with each other in low tech sectors in the host country

a consistent analysis of diversification decisions with non observable firm effects the empirical analyses of firm diversification decisions both for new activities new products and markets for example new routes for airlines have usually estimated a binary dependent variable model for each of the decisions the firm makes to obtain consistent estimators every relevant effect must be considered in the specification as this will hardly happen the presence of nonobserved firm effects either because such data do not exist or because it is impossible to obtain them must be econometrically treated because it causes inconsistency in the estimations in this paper we propose to use the estimators provided by the maximization of the conditional likelihood function in problems of this kind because they give consistent results even when unobserved firm effects are present finally we apply this technique to an example of diversification among spanish manufacturers 1997 john wiley sons ltd