research notes characterizing environmental variation a hypothesized relationship between environmental variation and organizational actions is central to organization theory this study shows that conventional summary measures of instability do not c

inertia and creeping rationality in strategic decision processes in two earlier studies comprehensiveness a characteristic of rational strategic decision making processes exhibited a positive relationship with organizational performance in a stable environmen

going the distance the pros and cons of expanding employees global knowledge reach while some scholars have suggested mnes to be superior to markets for managing knowledge across geographically distant boundaries how they actually accomplish this has not been fully considered we address this void by developing and testing a model that highlights the critical role of organizational incentives in enhancing employees internal search and use of knowledge data from 166 knowledge intensive projects support our argument that in contrast to process based incentives that influence more local search outcome based incentives motivate employee teams to reach well beyond their immediate location which in turn enhances performance at the same time we demonstrate that expanded reach also increases the likelihood of accessing more codifiable knowledge which can hurt performance our model examines the contradictory and previously unknown effects of global knowledge reach

what are the consequences of initiative taking in multinational subsidiaries the phenomenon of subsidiary initiative has received increasing attention in recent years but the consequences of initiatives and the associated dynamics of headquarters subsidiary relationships have received much less research attention building on resource dependence theory and self determination theory we argue that two basic goals subsidiary managers pursue are to achieve autonomy vis a vis corporate headquarters and influence over other units we investigate how a subsidiary s past initiatives contribute to its bargaining power and how headquarters response through granting attention or monitoring affects the realization of the subsidiary s goals using structural equation modeling our hypotheses are tested by drawing on a sample of 257 subsidiaries located in three different countries australia canada and the united kingdom our results show that subsidiaries are not able to increase their influence through initiatives unless they get headquarters attention we also find that subsidiary initiatives have a direct effect on subsidiary autonomy but the caveat is that initiatives also evoke headquarters monitoring which in turn decreases the subsidiary s autonomy in addition to providing insights into how subsidiaries can achieve their goals the paper also sheds light on the critical role headquarters plays in leveraging initiatives and the influence of individual subsidiaries in the multinational enterprise

bootstrapping the data envelopment analysis malmquist productivity index this paper presents a bootstrap approach to calculate confidence intervals for firm specific malmquist productivity indices obtained from data envelopment analysis dea models the bootstrap is easily implemented and allows identification of production units that have significant productivity changes an application using data from swedish eye care departments is included we find that 40 of departments have significant progress in productivity whereas only 10 of the departments have a significant regress in productivity this differs from the original results where about half the sample have estimates of progress and the other half have estimates of regress in productivity

patent length and the rate of innovation this paper models the effect of patent length on the rate of innovation and consumer welfare the authors find that the patent length that maximizes the rate of innovation exceeds that which maximizes consumer welfare they show a countervailing effect of patent length upon the size and frequency of innovation longer patents increase the size but decrease the frequency of innovation the patent lengths that maximize the rate of innovation and welfare represent balance points between size and frequency the divergence of the welfare maximizing and rate of innovation maximizing patent lengths has important policy implications that the authors briefly explore copyright 1996 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

a fresh look at the productivity and efficiency changes of uk airlines this article uses the bootstrapped malmquist index methodology to measure and test the extent of efficiency and productivity changes in the uk airline sector the aim of the bootstrap method is to overcome the statistical limitations of the data envelopment analysis dea method generally used to measure the distance functions of the malmquist index in applying the method we use input output data on a sample of major uk airlines for the period 2004 2007 results showed that most airlines have witnessed significant decrease in their productivity efficiency scale and technology measures using a second stage tobit regression this article attributed the sources of productivity and efficiency changes to factors such as stage length load factor and airline size this article also discussed the negative impacts of oil price using illustrations from the uk and other international airlines

firm level determinants of political csr in emerging economies evidence from india multinational companies mncs frequently adopt corporate social responsibility csr activities that are aimed at providing public goods and influencing the government in policymaking such political csr pcsr activities have been determined to increase mncs socio political legitimacy and to be useful in building relationships with the state and other key external stakeholders although research on mncs pcsr within the context of emerging economies is gaining momentum only a limited number of studies have examined the firm level variables that affect the extent to which mncs subsidiaries in emerging economies pursue pcsr using insights from resource dependence theory institutional theory and the social capital literature we argue that mncs subsidiaries that are critically dependent on local resources have greater ties to managers of related businesses and to policymakers and that those that are interdependent on the mncs headquarters and other foreign subsidiaries are more likely to be involved in pcsr we obtain support for our hypotheses using a sample of 105 subsidiaries of foreign firms that operate in india our findings enhance our understanding of the factors that determine mncs political csr in emerging economies

strategic goals perceived uncertainty and economic performance in volatile environments an untested proposition in the normative strategic management literature is that strategists should make decisions based on accurate assessments of their external environments empirical organization theory literature holds the assumption that high levels of perceived uncertainty are detrimental to performance both literatures assume goal consensus to be important to effectiveness this study investigated the relationship between top management perceptions of uncertainty corporate goal structures and industry volatility in explaining economic performance in 20 firms findings suggested that attempts to avoid true environmental uncertainty and to seek high levels of goal congruence may be dysfunctional

patterns of control in u s uk and european multinational corporations this paper examines the type and level of control exercised by the parent headquarters of 50 u s uk and european multinational corporations over their foreign subsidiaries patterns of control in the 3 national groups differ in significant ways and these differences seem to have important implications for other characteristics of a company s organization design and managerial style

the global value chain and internalization theory in a research note in this issue strange and humphrey discuss how a global value chain gvc approach serves to usefully move internalization theory towards a better understanding of the increasingly important middle ground between markets and hierarchies in the contemporary highly globalized international business scene after a brief recount of their main arguments we argue that their discussion needs to the extended as it does not adequately recognize important differences between internalization theory and the gvc approach specifically the approaches differ on the notions of efficiency opportunism and level of analysis we then argue that internalization theory can benefit from the systemic view implied in the gvc approach and discuss the role of trust as a coordinating mechanism in international business this leads to a more general discussion of internalization theory and the difficulty of encompassing dynamic considerations such as learning and foreign operation mode combinations and flexibility within value chain interdependencies we conclude with a research agenda that flows from our discussion

when does elastic labor supply cause an inverted u effect of patents on innovation this study analyzes how patent protection affects innovation in an r d based growth model with elastic labor supply we find that increasing patent breadth may generate an inverted u effect on innovation depending on whether the model features the knowledge driven or lab equipment innovation process this result highlights an important interaction between elastic labor supply and the innovation process through which patent protection has an inverted u effect as documented in recent empirical studies

a causal model of linkages among environmental dimensions macro organizational characteristics and performance an integrative model of relationships among environmental dimensions diversification strategy firm size structural divisionalization and economic performance was developed and tested using environmental and organizational data from 110 large manufacturing firms the results suggested that among those organizations 1 higher levels of environmental instability were associated with lower levels of divisionalization and diversification 2 strategy followed structure and 3 size did not mediate the strategy structure relationship furthermore both environmental instability and diversification were positively related to market determined performance and instability was negatively related to operating performance the results provided support for portions of each of three models the external control strategic management and inertial models

guanxi vs networking distinctive configurations of affect and cognition based trust in the networks of chinese vs american managers this research investigates hypotheses about differences between chinese and american managers in the configuration of trusting relationships within their professional networks consistent with hypotheses about chinese familial collectivism an egocentric network survey found that affect and cognition based trust were more intertwined for chinese than for american managers in addition the effect of economic exchange on affect based trust was more positive for chinese than for americans whereas the effect of friendship was more positive for americans than for chinese finally the extent to which a given relationship was highly embedded in ties to third parties increased cognition based trust for chinese but not for americans implications for cultural research and international business practices are discussed

utilizing the broader agency perspective for studying headquarters subsidiary relations in multinational companies the nature of global business today increases the complexity of multinational companies and highlights the challenges of managing headquarters subsidiary hq sub relationships we identify key unresolved issues in hq sub relations including closing the gap between headquarters expectations and subsidiary performance managing the nested hierarchical relationships across multiple organizational layers and aligning these relationships across diverse subunits embedded in different social contexts we propose that agency theory particularly its more recent progressions can advance our understanding of these issues and we offer a perspective to guide such research we discuss several research implications of the static bilateral static multilateral dynamic and social and contextual streams of agency theory

explaining stakeholder evaluations of hrm capabilities in mnc subsidiaries this paper examines how functional and line management stakeholders evaluate operational human resource management capabilities in multinational corporation mnc subsidiaries we suggest that such evaluations are a function of two key structural factors 1 that focal subsidiary human resource hr departments respond differentially to the expectations of differently located stakeholders and 2 that the structural position of the stakeholder determines what cues he or she relies upon to construct the evaluation our findings show that the focal hr subsidiary department is likely to exert more effort towards meeting the expectations of line management stakeholders and we suggest that this is a function of line management s co location with the focal hr department second we find that co located line management stakeholders are more likely to rely on experience based cues when constructing evaluations whereas headquarters located functional stakeholders tend to rely on cognition based evaluation driven by their ability to compare across different subsidiary hr departments we contribute to the literature by going beyond existing research that has tended to focus on evaluation from the perspective of organizational behavior by providing a structural perspective on capability evaluation in mncs that combines the insights of role theory and cognitive choice heuristics

resampling dea estimates of investment fund performance abstract data envelopment analysis dea is attractive for comparing investment funds because it handles different characteristics of fund distribution and gives a way to rank funds there is substantial literature applying dea to funds based on the time series of funds returns this article looks at the issue of uncertainty in the resulting dea efficiency estimates investigating consistency and bias it uses the bootstrap to develop stochastic dea models for funds derive confidence intervals and develop techniques to compare and rank funds and represent the ranking it investigates how to deal with autocorrelation in the time series and considers models that deal with correlation in the funds returns

managing the mne subsidiary advancing a multi level and dynamic research agenda abstract multinational enterprise mne subsidiaries abroad are important organizations in their own rights they typically hold some of the mne s most critical resources and operate at the forefront of complex international environments in this review we identify and organize theoretical and empirical research on subsidiary management based on over 600 articles in leading academic journals we develop a conceptual framework that integrates complementary streams of theoretical and empirical research with the subsidiary as its focal unit of analysis in particular we review six lines of research on subsidiary scope practices knowledge management engagement with local market and nonmarket actors performance and individuals within subsidiaries we highlight theoretical perspectives that have contributed to and been advanced by research on mne subsidiaries based on the review we explore future research agendas linking the contemporary research themes with two main thrusts first subsidiary management is a multi level phenomenon that would benefit from more microfoundational research second subsidiary management operates at key interfaces of technology paradigm shifts and of disruptions in the political and institutional environment research into the dynamics of subsidiary management would thus enhance our understanding of international business in a volatile global economy

characterizing environmental variation a hypothesized relationship between environmental variation and organizational actions is central to organization theory this study shows that conventional summary measures of instability do not capture all dimensions of environmental variation this problem is addressed with frequency amplitude and predictability measures that characterize the pattern of environmental variation the hypothesis that there is a relationship between longitudinal environmental variation and organizational structures actions and outcomes is common to most of the major perspectives of organization theory child 1972 hannan freeman 1977 pfeffer salancik 1978 thompson 1967 although there has been little agreement across theories about the causal mechanisms linking environmental variation with organizational characteristics organizational theorists have generally agreed that there is some relationship between longitudinal environmental change and organizing problems as a result environmental variability is a central independent construct in models of processes as disparate as strategic choice firm failure and executive turnover organizations experience longitudinal environmental variation as variation in the availability of the resources required for organizational survival dess beard 1984 52 these resources include sales and knowledge about product design and manufacturing processes in private enterprises budget allocations in the public sector personnel and other production factors researchers have typically characterized variation in the availability of such resources over time with measures of volatility dynamism or instability that attempt to capture total environmental variation with a single dimension we propose a characterization of the pattern of longitudinal environ

firm size effects on transaction costs associated with effects of scale scope experience and learning there are effects of firm size on transaction costs in the stages of contact contract and control these effects are due to threshold costs in setting up contacts contracts and governance schemes and to differences with respect to the factors that cause transaction costs bounded rationality opportunism uncertainty and transaction specificity of assets implications are considered for firm strategy and public policy

trust and performance in cross border marketing partnerships a behavioral approach existing research on international partnerships focuses primarily on the ex ante structuring of interorganizational relationships this study departs from this research by taking a behavioral approach to understand the ex post maintenance of cross border marketing partnerships a conceptual model is developed by identifying the antecedents of trust and performance in such partnerships the model is empirically tested on a sample of u s firms having distributor and licensing relationships with firms from asia europe and central south america findings support the importance of bilateral relational norms and informal monitoring mechanism in building interorganizational trust and improving market performance of international partnerships

using panel data analysis to estimate confidence intervals for the dea efficiency of individual decision making units this article demonstrates a methodology using panel data analysis to estimate confidence intervals for the data envelopment analysis efficiency of individual decision making units dmus and the statistical significance of trends in individual dmu efficiency the procedure accounts for stochastic variations of the inputs and outputs of the target dmu as well as stochastic variations of the inputs and outputs of its efficient benchmark peers the procedure is demonstrated using 9 years of data from 34 canadian paratransit agencies

malmquist productivity index decompositions a unifying framework in two widely cited but unpublished working papers simar and wilson 1998 and zofio and lovell 1998 proposed an alternative decomposition of the malmquist productivity index which retained what seemed to be the strongholds of previous proposals with regard to the contribution of technological and efficiency change to productivity change namely a technical change term with regard to the best practice variable returns to scale vrs technology which is to be found in ray and desli 1997 and a scale efficiency change term that illustrates a firm s situation with regard to optimal scale benchmark technology fare et al 1994 attaining this objective required the introduction of an additional term in the malmquist productivity index decomposition which would reflect the scale bias of technical change it is our objective to provide economic rationale for this term within a theory of production context the existing decompositions and recent articles that further elaborate on this issue the ide

the relationship between firm growth size and age estimates for 100 manufacturing industries this study uses a sample of all firms operating in 100 manufacturing industries to examine some aspects of firm dynamics it finds that firm growth the variability of firm growth and the probability that a firm will fail decrease with firm age it also finds that firm growth decreases at a diminishing rate with firm size even after controlling for the exit of slow growing firms from the sample gibrat s law therefore fails although the severity of the failure decreases with firm size copyright 1987 by blackwell publishing ltd

trust across borders we make the case for fresh approaches to examine the role of trust in international collaborations based on the idea that not only do the levels of trust differ across international borders but also both the nature of trust and the institutional and cultural support for trust can vary across different national contexts collaboration partners from different countries are therefore likely to bring either symmetric or asymmetric conceptions of trust to the business relationship we develop a model and propositions linking symmetry and asymmetry in the institutional and cultural support for trust in international collaborations with the degree of partner interdependence and identify implications for governance and trust building investments we conclude with some suggestions for research that incorporates trust asymmetries between partners

international attention and multinational enterprise performance this study examines the performance consequences of international attention defined as the extent to which headquarters executives in the multinational enterprise mne invest time and effort in activities communications and discussions aimed at improving their understanding of the global marketplace using detailed questionnaire and archival data on 135 mnes our analysis revealed three significant findings first international attention can be operationalized as a meta construct that consists of three interrelated and reinforcing dimensions second international attention has a curvilinear inverted u shape relationship with mne performance third the performance benefits of international attention increase with three categories of moderating factors the international assignment experience of top executives the independence of value adding activities across country locations and the degree of industry dynamism

the coordination of manufacturing interdependence in multinational companies many companies have recently adopted global manufacturing rationalization programs in order to realize the full benefit of these internationally integrated manufacturing strategies however companies need to overcome the problem of coordinating operations where interdependence exists among subsidiaries this article which is based on a field study of 25 multinational companies provides insights on how manufacturing interdependence among country subsidiaries is coordinated specifically the study examined the relationships between increasing manufacturing interdependence with the use of 4 coordination modes impersonal methods use of organization members who have a system sensitive outlook executive compensation systems based on a subsidiary s performance and personal communication and with the use of 3 communication patterns communication between managers of different country subsidiaries communication with top management and communication with a central manufacturing staff group findings suggest that although there is an extensive use of impersonal methods of coordination with increasing interdependence there is a change in coordination mix towards greater use of system sensitive members and personal communication increasing interdependence is also significantly associated with greater communication among country subsidiary managers and greater communication with a central manufacturing staff group although the relationships between increasing interdependence and communication with top management through the formal hierarchy was not found to be statistically significant interviews with managers suggested the importance of this channel when communication among country subsidiary managers and communication with the central manufacturing staff group are inadequate for managing the manufacturing interdependence implications are drawn for companies planning to increase the international integration of their manufacturing operations

foreign market entry strategies and post entry growth acquisitions vs greenfield investments we examine the relationship between the foreign market entry strategy and the subsequent growth of a subsidiary we build upon the penrose theory of firm growth and on the organizational economics international management and foreign market entry strategy literatures we hypothesize that the post entry growth of acquisitions is positively associated with weak and codifiable interdependence within the multinational enterprise network whereas the post entry growth of greenfield investments is positively related to strong and complex interdependence empirical findings from a sample of japanese subsidiaries in the us lend support to our argument

resource scarcity environmental uncertainty and adaptive organizational behavior the article provides information on a study which investigated the effects of environmental uncertainty and resource scarcity in interaction with organizational structure on the categories of organ

global strategy implementation at the business unit level operational capabilities and administrative mechanisms the study examines the impact of internationally strategy on organizational design and the influence of the organizational design on effectiveness at the business unit level the empirical findings are based on survey responses from eighty two business units competing in global industries the findings are supportive of the contingency notion which suggests that business unit effectiveness is a function of the fit between the international strategy and the organizational design

unraveling the mne wage premium whereas ib has extensively studied mnes generic positive impact on host economies but rarely on employee wages economics research has only shown an overall mne wage premium we unravel this premium considering multiple levels of analysis and accounting for host country contextual contingencies to unveil mnes different positive or negative distributional effects using unique micro level data from over 40 000 employees in 13 countries we examine mnes distributional effects for employees gender experience and immigrant status the influence of host country property rights protection and labor regulation and interplays with region and industry effects mnes distributional effects show marked differences that largely depend on the host country context and that are positive for experienced and foreign born employees in developed countries but negative for females working in developing countries whereas in developed countries the gender wage gap is smaller in mnes than in domestic firms as hypothesized we find evidence of a larger wage gap in developing countries the analysis also reveals that the higher host countries level of property rights protection the lower the mne wage premium our study points at the need to reassess statements about the generic positive impact of mnes in host countries particularly in developing countries and discusses further research implications

managing foreign subsidiaries agents of headquarters or an interdependent network in this study two different theoretical perspectives are used to develop sets of hypotheses regarding the mechanisms used to manage foreign subsidiaries of multinational corporations first agency theory serves as the basis for a model that predicts the use of monitoring mechanisms and incentive compensation then it is argued that these mechanisms are insufficient for managing subsidiaries characterized by high levels of intra firm international interdependence the management of which is critical to many of today s complex global firms a second set of hypotheses is argued linking international interdependence to several social control mechanisms primary and secondary data from u s based multinational corporations were used to test both sets of hypotheses the results indicate that agency theory although a useful foundation for studies of control within mncs is limited in its ability to explain fully the phenomenon of foreign subsidiary control however the model based on intra firm interdependence had much greater predictive ability copyright 2000 john wiley sons ltd

staying home or moving away restructuring efforts within multinational enterprises this paper analyses the impact of geographic dispersion on employment changes within multinationals building on earlier work of landier et al 2009 review of financial studies 22 3 1119 we investigate whether corporate decision making within a multinational is affected by the distance between an affiliate and its headquarter our findings suggest a detrimental impact of distance on employees by either an increased likelihood of observing a downsizing event or by witnessing a larger decrease in the number of employees at distant locations during downsizing events in addition our results seem to relate the higher likelihood of observing a downsizing event to the role of social factors on decision making the more visible a manager is in his community the less likely he is to downsize proximate divisions

inter organizational trust and the dynamics of distrust early research on inter organizational trust drew on theories about social ties among individuals for example duration of ties and amount of interaction yet these proved inadequate to explain the diverse arrangements arising in international business dyer and chu s award winning jibs paper demonstrated that trust was best predicted by organizational processes that developed positive expectations of predictability reliability and competence not only within national boundaries but also in cross national relationships this review of recent trust research building on dyer and chu draws attention to six themes 1 new conceptualizations that explore identity roles and rules as foundations of presumptive trust at the organizational level 2 dynamics of trust and distrust over time how violations of trust are interpreted and what affects ease of repair 3 pendulum swings in inter organizational relationships arising from plural governance and alternation between modes but also resulting in the continuous coexistence of positive and negative states 4 the impact of intra organizational conflict and inter organizational coalitions on the establishment and maintenance of trust 5 the relative impact of nation level vs organization level differences in culture as influences on trust and 6 whether intermediate modes of exchange in between transactional and relational modes are unstable transitional hybrids or embody complementarities that yield both value and stability

patent protection and strategic delays in technology development implications for economic growth we present an endogenous growth model in which both the investment to develop a new technology that upgrades the quality of machines and entry of imitators are determined endogenously according to the model how soon the new technology machine is launched after the patent is granted is influenced by two factors returns to scale in technology development and strategic delays strategic delays in technology development are most likely to occur when earlier dates of success enable imitators to enter an industry i e when imitation is swift and relatively cheap and or patent protection is relatively lengthy we then explore the link between the optimal patent length and economic growth and find that the equilibrium investment in technology development and thus the expected rate of technological progress exhibit an inverted u shape relationship with respect to the legal patent length our results further suggest that in order to minimize the strategic delays in technology development and spur technological progress legal patent lengths should be shorter in industries where barriers to entry are relatively low

national culture and expatriate deployment we hypothesize that expatriate deployment is a control function predicted by home country culture dimensions with transaction cost and agency repercussions rather than culture in the aggregate this departure from the traditional conceptualization and measurement of cultural impact also yields a hypothesized asymmetrical effect which is tested for a multi country sample of 236 multinational subsidiaries using multiple measures of national culture hypotheses are supported with assertiveness and power distance confirmed as prime predictors of expatriate deployment

firm and industry as determinants of executive perceptions of the environment this study examines variation in top executives environmental perceptions within firms and within industries more specifically we investigate how industry and organizational membership affect top executives perceptions of five environmental attributes results indicate that significant homogeneity of perceptions exists within firms and also within industries approximately 40 percent of the variance in individual top level executives perceptions of aspects of their respective organization s environment is explained by their organizational and industry membership implications of the findings for strategic management and organization theory and for future research are presented 1998 john wiley sons ltd commonality of views about a firm s environment among a firm s top managers is frequently discussed but there is little empirical evidence to validate the notion we do not know whether homogeneity of perceptions within top management teams tmts is more imaginable than real an assumed executive team property corresponding to what common sense says should be the case further if there is within firm commonality of views concerning the environment we do not know whether this might not actually be an industry effect the purpose of the research reported here is to assess the degree of homogeneity in executives perceptions within firms and within industries and to compare organizational vs industry membership as explanations of the relative proportion of agreement about organizational environments one of the most compelling reasons to examine the homogeneity of top managers environmental perceptions within firms and within industries

appropriability and commercialization evidence from mit inventions the effects of appropriability on invention have been well studied but there has been little analysis of the effect of appropriability on the commercialization of existing inventions exploiting a database of 805 attempts by private firms to commercialize inventions licensed from the massachusetts institute of technology mit between 1980 and 1996 we explore the influence of several appropriability mechanisms on the commercialization and termination of projects to develop products based on university inventions our central hypothesis is that the relationship between a licensee s decision to either terminate or commercialize the invention is driven by the current market value of the invention as well as the option value of delaying its commercialization we use a competing risks framework that allows for nonparametric heterogeneity and correlated risks we find that better appropriability in the sense of more effective patent strength and secrecy has a strong negative effect on the hazard of license termination the effectiveness of learning has a strong positive effect on the hazard of technology commercialization while lead time has a negative effect

financial and legal constraints to growth does firm size matter using a unique firm level survey database covering 54 countries we investigate the effect of financial legal and corruption problems on firms growth rates whether these factors constrain growth depends on firm size it is consistently the smallest firms that are most constrained financial and institutional development weakens the constraining effects of financial legal and corruption obstacles and it is again the small firms that benefit the most there is only a weak relation between firms perception of the quality of the courts in their country and firm growth we also provide evidence that the corruption of bank officials constrains firm growth

stages of diversification this paper studies the evolution of sectoral concentration in relation to the level of per capita income we show that various measures of sectoral concentration follow a u shaped pattern across a wide variety of data sources countries first diversify in the sense that economic activity is spread more equally across sectors but there exists relatively late in the development process a point at which they start specializing again we discuss this finding in light of existing theories of trade and growth which generally predict a monotonic relationship between income and diversification

a multilevel approach to trust in joint ventures this article examines issues of level in the study of joint venture trust in particular we explain how international joint venture ijv trust can be conceptualized and measured at the person group and firm levels to do this we 1 provide a definition of ijv trust applicable to persons groups and firms 2 promote alignment of levels of theory and measurement through the use of a 3 3 approach to guide researchers in identifying the level at which they are theorizing and the proper level of measurement and 3 propose operational measures of ijv trust across levels and dimensions in order to lay a solid foundation for theory testing

implementing global strategy characteristics of global subsidiary mandates implementing a global strategy requires coordinating subsidiary activities across country locations the assumption often made is that such coordination must be managed at headquarters however an alternate approach is decentralized centralized responsibilities in which different subsidiaries within the multinational are given worldwide mandates to manage specific products or products lines this study identifies subsidiary characteristics that are associated with receiving a global mandate by examining foreign subsidiaries located in france germany japan u k u s and canada

an empirical analysis of the integration responsiveness framework in global industries in this study businesses competing in global industries were categorized into three groups according to the integration responsiveness framework for conceptualizing industry pressures confronting business competing internationally using this framework contextual conditions associated with each group were examined competitive attributes distinguishing each group were then identified to clarify alternate business level strategies for competing within a global industry context beyond providing additional insight into the nature of competition in global industries several broad extensions to the integration responsiveness framework are suggested

managing knowledge transfer in mncs the impact of headquarters control mechanisms in this paper we explore the impact of organisational mechanisms on inter unit knowledge flows in multinational corporations mncs a comprehensive model based on agency theory and socialisation theory is tested on a sample of 134 finnish and chinese mnc subsidiaries our findings indicate that mncs can influence inter unit knowledge transfer by specifying the objectives of the subsidiary and by utilising corporate socialisation mechanisms however we found no support for the hypothesised impact of management compensation systems and the use of expatriate managers on the extent of knowledge transfers from foreign subsidiaries to other parts of the mnc

how multinational subsidiary mandates are gained and lost a subsidiary mandate is a business or element of a business in which the subsidiary participates and for which it has responsibilities beyond its national market this research studied thirty one mandates in six canadian subsidiaries of u s owned multinational corporations a life cycle framework was proposed and used to explore the factors associated with the gain development and loss of mandates by subsidiaries two key findings emerged first it was shown that there is a risk in having a full scope world product mandate because it is possible to become marginal to the corporate strategy second it was observed that the engine of subsidiary growth is its distinctive capabilities and that for a mandate to be effective it must be built on those capabilities implications for mandate sustainability are proposed on the basis of these two insights

management and ownership effects evidence from five countries despite the growing recognition in the corporate governance literature that the relationship between ownership concentration and profitability is context dependent this issue has not yet been subjected to direct empirical investigation using a single cross national sample this study empirically examines the ownership concentration performance relationship across the nations of canada france germany the united kingdom and the united states essentially we argue that the correlation if any between ownership concentration and firm profitability differs across countries in a systematic way determined by the national system of corporate governance results indicate that important and statistically significant differences do in fact exist across the countries studied 1998 john wiley sons ltd

the impact of natural culture and economic ideology on managerial work values a study of the united states russia japan and china this study assesses the impact of economic ideology and national culture on the individual work values of managers in the united states russia japan and china the convergence divergence crossvergence cdc framework was used as theoretical framework for the study while the schwartz value survey svs was used to operationalize over investigation of managerial work values across these four countries the findings largely support the crossvergence prospective while also confirming the role of national culture implications from the findings are drawn for the convergence divergence crossvergence of values as well as for the feasibility of multidomestic or global strategies for a corporate culture

the determinants of expatriate staffing by japanese multinationals in asia control learning and vertical business groups we empirically examine the determinants of the decision whether or not to appoint an expatriate as the managing director of overseas affiliates for a sample of 844 japanese manufacturing affiliates operating in asia in 1995 confirmation is found for hypotheses derived both from a control and coordination perspective on expatriation and from a knowledge creation and learning perspective strategic dependence of the parent on the affiliate increases the propensity to appoint expatriates whereas localisation of the affiliate reduces it organisational experience in the country both by the affiliate and by the firm increases the probability that host country nationals will be appointed inter firm relationships within vertical keiretsu groups impact on expatriation policies through inter organisational knowledge exchange in host countries and the mitigation of localisation requirements owing to intra group transactions

on two definitions of productivity abstract caves et al in 1982 introduced a productivity measure that does not proceed from a continuous timer presentation they named these indexes after sten malmquist who in 1953 used ratios of distance functions to formulate quantity indexes in the consumer context in a later paper diewert proposed an alternative definition of productivity also based on distance functions which he attributed to hicks and moorsteen in this letter we provide necessary and sufficient conditions for the malmquist productivity index to equal the hicks moorsteen index

on evaluation costs in strategic factor markets the implications for competition and organizational design this paper uses a formal model to study how evaluation costs affect competition for resources in strategic factor markets it finds that relative scarcity may not always benefit resource sellers rather when competition among resource investors passes a certain threshold intensity miscoordination among investors increases to the point that sellers expected profits decline this paper extends the model to consider how investors organize to overcome managerial agency in resource evaluation two organizational designs are considered a incentivization wherein a lower level manager is motivated by an incentive contract to evaluate resources for an investor and b supervision wherein evaluation is either handled directly or closely monitored by headquarters the model suggests that competition among investors will be associated with a greater use of supervision and that investors using supervision will tend to make lower offers this paper also finds that supervision will be more common when valuable resources are rare this paper was accepted by bruno cassiman business strategy

quality ladders and product cycles we develop a two country model of endogenous innovation and imitation in order to study the interactions between these two processes firms in the north race to bring out the next generation of a set of technology intensive products each product potentially can be improved a countably infinite number of times but quality improvements require the investment of resources and entail uncertain prospects of success in the south entrepreneurs invest resources in order to learn the production processes that have been developed in the north all r d investment decisions are made by forward looking profit maximizing entrepreneurs the steady state equilibrium is characterized by constant aggregate rates of innovation and imitation we study how these rates respond to changes in the sizes of the two regions and to policies in each region to promote learning

inside the black box technology and economics economists have long treated technological phenomena as events transpiring inside a black box and on the whole have adhered rather strictly to a self imposed ordinance not to inquire too seriously into what transpires inside that box the purpose of professor rosenberg s work is to break open and examine the contents of the black box in so doing a number of important economic problems be powerfully illuminated the author clearly shows how specific features of individual technologies have shaped a number of variables of great concern to economists the rate of productivity improvement the nature of learning processes underlying technological change itself the speed of technology transfer and the effectiveness of government policies that are intended to influence technologies in particular ways the separate chapters of this book reflect a primary concern with some of the distinctive aspects of industrial technologies in the twentieth century such as the increasing reliance upon science but also the considerable subtlety and complexity of the dialectic between science and technology other concerns include the rapid growth in the development of costs associated with new technologies as well as the difficulty of predicting the eventual performance characteristics of newly emerging technologies

lost that lovin feeling the erosion of trust between small high distance partners we investigate the role of high distance in trust erosion between small partners high distance is known to hinder the formation of trust between potential partners but its role in trust erosion in established partnerships is less understood by international business scholars through a qualitative longitudinal study we extend current theory of how high distance affects the trust dynamics between cross border partners specifically we unearth three interrelated mechanisms that together explain how and why trust can erode due to high distance we show that before a partnership is formed high distance can lead partners to erroneously attribute cues to a potential partner s high quality leading to over expectations of partner performance once the partnership is operational high distance hinders actors ability to understand situational factors associated with disappointing outcomes and so they are attributed to failings of the partner at the same time distance related challenges of bounded reliability render partners reluctant to discuss partnership outcomes this can result in a vicious cycle of inertia as partners strive to protect goodwill while abandoning efforts to produce partnership outcomes because of doubts of the other s quality thus our theoretical model illustrates the limitations of trust and explains how paradoxically high distance can facilitate both trust formation and trust erosion

effects of cultural ethnicity firm size and firm age on senior executives trust in their overseas business partners evidence from china we investigate trust relationships between senior business executives and their overseas partners drawing on the similarity attraction paradigm social categorization theory and the distinction between cognition and affect based trust we argue that executives trust their overseas partners differently depending on the partners cultural ethnicity in a field survey of 108 chinese senior executives we found that these executives have higher affect based trust in overseas partners of the same cultural ethnicity as themselves cognition based trust is associated with affect based trust differently when overseas partners are of the same or different cultural ethnicity we also examine the role of relative firm size and age in shaping intra and intercultural trust relative firm size has a stronger negative effect on executives cognition based trust if their partners are of a different cultural ethnicity although firm age does not have a negative effect on executives affect based trust as hypothesized we found firm age to be positively associated with affect based trust for partners of the same cultural ethnicity we discuss theoretical and practical implications of this pattern of inter and intra cultural trust on international business and networking guanxi dynamics in china

the social regulation of inter firm relations in britain and germany market rules legal norms and technical standards an analysis of institutionalised rule systems particularly of technical standards traces their effects on various aspects of supplier relations in britain and germany and attempts some evaluation of performance outcomes drawing on the insights of new institutionalism in economics and sociology it is shown that the higher degree of stability and consistency in systems of social regulation in germany as compared with britain leads to more predictable and consensual relations between firms the resulting development of greater mutual trust encourages more long term and closer technological collaboration the paper utilises data from a recent comparative study of supplier relations in two traditional industries and supplements them with information from more general studies of the technical regulation of inter firm relations

rational decision making and firm performance the moderating role of environment this study investigates the moderating roles of environmental munificence and dynamism in the relationship between process rationality and organizational performance based on a sample of 62 manufacturing firms the study found that environmental munificence and dynamism moderate the relationship between rationality and performance further the study found that rationality is strongly associated with performance in environments high in munificence and dynamism 7997 by john wiley sons ltd the relationship between rationality in strategic decision processes and firm performance has been a subject of continuing controversy in the strategic management field one school of thought favors the rational comprehensive approach ansoff 1965 another feels that an incremental political approach offers better descriptive accuracy and normative validity quinn 1980 in recent years the emphasis has moved away from a search for universal relationships that juxtapose these two ideal types to a focus on the context specificity of the rationality performance relationship empirical research on the perfonnance implications of the comprehensiveness of decision processes has yielded confiicting results in a recent review of this literature rajagopalan rasheed and datta point out that most previous studies have focused on one aspect of the

balancing subsidiary influence in the federative mnc a business network view the contest for intra organisational power in the multinational corporation mnc has gradually become a prominent issue on the research agenda as long as 25 years ago hedlund 1980 investigated the strategic roles of subsidiaries in mncs and doz and prahalad 1981 raised the issue of how difficult it is for headquarters to remain in control of its subsidiaries and to influence their strategies over time since then several researchers have suggested that mncs can be considered to be dispersed structures of power in which the top management s authority does not necessarily result in hierarchical power being the ultimate control mechanism hedlund 1986 forsgren 1989 ghoshal and bartlett 1990 doz and prahalad 1993 ferner and edwards 1995 kristensen and zeitlin 2001 morgan and whitley 2003 birkinshaw and hood 1998 examined the evolution of capabilities at the subsidiary level and recognised that in most corporations there is an internal competition for charter that implies a process of change in subsidiary roles birkinshaw and hood 1998 782 case research has also indicated that changes in the charters of divisions or subsidiaries in mncs constitute a strong feature of horizontal or vertical competition in the corporate marketplace galunic and eisenhardt 1996 birkinshaw and fry 1998 the tension between the headquarters and overseas laboratories caused by the laboratories desire for autonomy and influence is an example of such a competition asaka wa 2001

a critical assessment of the eclectic theory of the multinational enterprise the paper critically deals with the electric theory of the multinational enterprise it examines firstly the theoretical redundancy of the ownership advantage secondly the inseparability of the ownership advantage from the location advantage thirdly the conceptual ambiguity of the location advantage and lastly possible methodological dangers of a multi factor analysis under the three headings of the eclectic theory

the role of expatriates in the management of interdependence complexity and risk in multinational corporations a multilevel analysis of environmental country and organizational affiliate factors is used to explain the differential utilization rates of u s nationals in overseas professional positions of a major u s bank with 84 branches in 43 countries the research suggests that to the extent that the affiliates of a multinational corporation operate in environments with differing levels of political risk cultural distance and competition and have operations with different levels of complexity and interdependence a single staffing policy may be inappropriate

testing scale efficiency in dea models a bootstrapping approach this paper presents a method for estimation and test of firm specific scale efficiency using data envelopment analysis dea the use of a simple bootstrap algorithm is proposed to perform firm specific inference for scale efficiency an empirical application using swedish hospital data is provided it is found that about 40 of the departments were scale efficient according to the original results however for about one third of those departments the hypothesis of scale efficiency could be rejected

firm size rivalry and the extent of the market in endogenous technological change abstract evidence shows that firms build their market position by accumulating knowledge protected by secrecy patents and other appropriation devices i explore the implications of this fact in a model economy where oligopolistic firms establish in house r d programs in symmetric equilibrium the number of firms determines concentration and firm size these determine the scale and the efficiency of r d operations and the rate of innovation the number of firms moreover is endogenous and determined jointly with the rate of growth by the zero profit condition this property yields new results for example the scale effect of population size may be negative the market allocation of resources is not pareto optimal i discuss the nature of this distortion

extending the internationalization process model increases and decreases of mne commitment in emerging economies the internationalization process model suggests that firms internationalize by building positions in foreign markets and networks following iterative cycles of learning and changes in commitment however as subsidiaries evolve commitments may be decreased as well as increased a phenomenon that has rarely been studied moreover it remains an open question why strategic intentions at the outset of an investment project differ from the actual operations established we address these questions by extending the model and combining it with mintzberg and waters framework of strategy formation specifically we suggest that commitment decisions correspond to statements of intended strategy while network positions correspond to realized strategies the processes of learning opportunity creation and trust building triggered by commitment decisions are however moderated by institutional influences that lead to divergences between realized and intended strategies we test propositions derived from this framework on a survey data set of subsidiaries of multinational enterprises in hungary lithuania and poland and find that institutional voids and institutional uncertainty affect subsidiary strategy implementation but in opposing directions under high institutional uncertainty investors prefer low commitment but flexible modes that enable later commitment increases whereas institutional voids increase up front information search and adaptation costs that reduce the likelihood of early post entry adjustments our analysis reinforces the need for more differentiated theoretical analyses of how institutions affect business strategies over time

project escalation and sunk costs a test of the international generalizability of agency and prospect theories previous north american research suggests that aspects of agency theory and prospect theory may explain decisions to escalate commitment to failing projects this study explores the universality of these theories in this context the willingness of north american and asian managers to escalate commitment to losing projects was measured using four go no go decision cases we hypothesized that asian managers would be less willing to act in their self interest a lower agency effect and would be more willing to escalate a decision in the face of negative framing a stronger framing effect we found that agency theory had strong explanatory power for project in our asian sample framing effects were significant in both but they were not significantly different

process standardization across intra and inter cultural relationships theory suggests that culture may hinder the ability to effectively standardize the process of relationship development strategies across intra and inter cultural relationships construct relationships between trust commitment conflict and satisfaction in manufacturer distributor relationships are examined intra i e within a single cultural type and inter culturally i e between different cultural types with a sample of distributors from canada chile mexico and the united states results support theoretical differences in the consequences of the trust commitment relationship between intra cultural and inter cultural relationships the results suggest process standardization based upon cultural type

ownership organization and private firms efficient use of resources the principal agent theory asserts that public firms performance is driven by efficient capital and labor markets but is silent about non listed private companies which are less permeable to market forces both capital and labor than are public companies we propose and test a 2 x 2 framework distinguishing owner controlled vs agent led firms from firms with a flat vs multilayer organization our findings provide highly contrasted results and raise important issues for further study of private firms

environmental scanning behavior in a transitional economy evidence from russia we examined the effects of perceived strategic uncertainty in seven environmental sectors on the scanning behavior of russian executives strategic uncertainty was highest in sectors influenced by

sourcing patterns of foreign owned multinational subsidiaries in europe tavares a t and young s 2006 sourcing patterns of foreign owned multinational subsidiaries in europe regional studies 40 583 599 this paper investigates the determinants of the international sourcing propensities of foreign owned multinational mne subsidiaries in four european union host countries major findings concern the impact of subsidiary roles and economic integration on international sourcing patterns regional and global integration are leading to a greater import orientation among mne subsidiaries including product mandate firms that are assumed to be strongly embedded within host economies the results cast doubts on existing criteria for inward foreign direct investment fdi attraction policy implications are developed relating to the attraction of inward fdi and to corporate development policies tavares a t et young s 2006 la distribution des sources d approvisionnement des filiales multinationales a capital etranger en europe regional studies 40 583 599 cet article che

spatial linkages and export processing location in china this paper provides empirical evidence that spatial linkages matter for the localisation of global value chain activities relying on processing trade data for chinese provinces during the period 1997 2008 we investigate whether a chinese province s proximity to international suppliers and international buyers within an industry chain affects its attractiveness as an export processing location we find that the upstream and downstream spatial linkages both have a strong and independent explanatory power we also explore what factors explain the influence of these spatial linkages

human capital in multinational enterprises does strategic alignment matter this research proposes a strategic human capital alignment framework to examine whether the alignment between subsidiary strategy i e export oriented vs local market oriented strategy and human capital i e parent firm vs local specific human capital is positively related to subsidiary performance in multinational enterprises mnes we further explore two important exogenous i e foreign exchange rate change and endogenous i e mne international experience boundary conditions since they may adjust the positive effect of strategic human capital alignment on performance the analysis based on 5604 subsidiary observations of 423 mnes from 1990 to 2012 confirms the positive synergic effect of aligning subsidiary strategy and human capital and shows the moderating effects of foreign exchange rate change and mne international experience by presenting the importance of subsidiary strategy global staffing alignment and the roles of external economic environments and internal organizational capabilities as boundary conditions the strategic human capital alignment framework suggests that what makes human capital valuable for the firm is its alignment with strategic orientation thus managers should carefully deploy the appropriate type of human capital to fulfill the requisite organizational strategy and take into account changing external and internal contextual conditions in applying the framework

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

the uppsala internationalization process model revisited from liability of foreignness to liability of outsidership the uppsala internationalization process model is revisited in the light of changes in business practices and theoretical advances that have been made since 1977 now the business environment is viewed as a web of relationships a network rather than as a neoclassical market with many independent suppliers and customers outsidership in relation to the relevant network more than psychic distance is the root of uncertainty the change mechanisms in the revised model are essentially the same as those in the original version although we add trust building and knowledge creation the latter to recognize the fact that new knowledge is developed in relationships

a review of research on the growth of multinational enterprises a penrosean lens abstract we provide a comprehensive review of the growth of multinational enterprises mnes based on a quarter century 25 years of scholarly international business publications we synthesize research insights on the determinants of the growth of mnes through the lens of penrose s theory of firm growth which is the most influential theoretical perspective on firm growth the review takes stock of the research findings on the facilitators constraints and the trajectory of growth of mnes and elaborates on the commonalities and differences between research on the growth of mnes that draws on penrose s theory and research that does not this comparison highlights the opportunity to build an internally coherent theory of the growth of mnes that is a theory that connects what an mne is to what determines an mne s growth it also indicates that past research placed a strong emphasis on exogenous factors e g cross country distances as key constraints on growth even though the penrosean lens suggests a close consideration of endogenous factors that drive international growth as well as endogenizing the ostensibly exogenous growth determinants the review highlights the importance of firm specific managerial knowledge and learning which shapes the direction of the growth of mnes and ensures its administrative coherence