Knowledge that Transforms

This study examines the interactive effects of host-country societal trust and formal institutions on foreign subsidiary staffing strategies. Based on the conceptualization of institutions in new institutional economics, we demonstrate that high societal trust and strong formal institutions that support market-based exchange jointly reduce the incidence of expatriate staffing in foreign subsidiaries. We identify two contingency factors – subsidiary interdependence and host-country experience – that affect this relationship. Our finding suggests that the level of interdependence among subsidiaries within the MNE network and the host-country experience of the subsidiaries negatively moderate the interactive effect of formal and informal institutions on expatriate staffing. We test our hypotheses based on longitudinal data of 6675 foreign subsidiaries of 435 Korean MNEs in 42 countries between 1990 and 2014.

We study MNEs that tie their long-lasting competitiveness and internationalization to the deployment of their heritage assets, administrative heritage, and signature processes built in their home markets. When faced with changes, these “authentic” firms scan for and buffer against threats to their signature processes, use their heritage endowment to focus on their capacity to maintain and defend their niches, and preserve their capacity for stability. We complement the traditional dynamic capabilities perspective by redefining its boundary conditions. Furthermore, authentic firms resist and limit local adaptation of process and products, and internationalize only if opportune by deploying preservation capabilities.

Different theories offer different predictions of the impact of competition on corporate social responsibility (CSR). The stakeholder value and product differentiation theories hold that intensifying competition spurs firms to increase corporate social responsibility (CSR) to strengthen relationships with non-shareholder stakeholders (e.g., workers, suppliers, customers, and local communities) and differentiate their products to gain pricing power. However, textbook theories of the firm imply that competition spurs firms to focus on short-term survival and forgo investments that pay off in the long run, such as CSR. The purpose of this paper is to evaluate these competing hypotheses. Methodologically, we use a large sample of firm-level data on CSR and panel data on competition laws across 47 countries from 2002 to 2015 and employ multivariate regressions. We find evidence consistent with the stakeholder value and product differentiation theories: intensifying competition laws leads firms to increase their CSR activities, and the CSR-enhancing effects of competition vary across (a) firms with different institutional owners, controlling owners, industry structures, and financing constraints, and (b) countries with different social attitudes toward CSR in ways consistent with the stakeholder value and product differentiation theories. The results imply that firms use CSR, at least partially, as a profit-maximizing strategy.

Instead of the dire predictions of a post-pandemic world characterized by increased global risks, decoupling of economies, shake-up of global value chains, and the retreat of globalization, this article proposes that the changes induced by heightened nationalism and protectionism will be marginal rather than fundamental in nature. These marginally higher risks can easily be handled and ameliorated by multinational enterprises through alternate cross-border business strategies and emerging technologies. Moreover, the paper gives reasons why the future world economy will need even more globalization.

Scholarly efforts to propose future directions for international business (IB) research have generated a timely and extensive inventory of potentially interesting areas of research. We supplement this line of inquiry by suggesting that an additional layer of scrutiny could be beneficial when advocating in favor of giving more attention to particular research realms. Specifically, we advance several guiding principles that will help IB scholars assess which research areas merit greater scholarly attention, based on their potential importance and impact. We distinguish between (1) research in new or underdeveloped research domains, where salience, urgency, and actionability are critical elements, and (2) new research in relatively well-established domains, where scholars may contribute to changing the theoretical conversations taking place in IB.

Superstition is a pervasive informal institution affecting the decision-making of organizational actors yet remains under-studied and ill-understood in international business research. We address this lacuna through examining how Western MNCs affect – and are affected by – the use of superstition among local subsidiary managers in an emerging Asian economy. Based on interviews, archival documents, and observation, our inductive investigation reveals a complex, changing, and surreptitious relationship between MNC practice and an informal institution which, while widely practiced, remains forbidden according to its formal institutional counterpart (Buddhism) and illegal according to Myanmar state law. Initial findings showed how MNCs endorsed, acquiesced, or rejected superstitious practice based on a configuration of construed reputational risk, corporate values adherence, degree of formal institution approval, and perceived local performance impact. Subsequent MNC engagement then shifted from accommodation to resistance to manipulation in response to local managers’ disguising their ‘superstitious’ practices as Buddhism, ‘blurring’ the formal–informal institution divide in the process to secure MNC public approval. Together, our findings serve to refine and deepen existing theory into how the MNC subunit can manage its legitimacy through balancing the incompatible demands of formal and informal constituents within a contested institutional dyad.

We critically assess the state of play with the dynamic capability view (DCV) and explore its nature and scope, its relationship with extant theories, its application and applicability to the theory of the multinational enterprise (MNE), and its relationship with business model innovation (BMI). We claim that the DCV should be considered a meta-theory-plus that is both applicable to and extends extant theories. We submit that, while it has contributed to the theory of the MNE and BMI, there remains scope to add more value, and that its progress has been hindered because of several limitations. These are both conceptual and in terms of operationalization and empirical testing. We find disconcerting the plurality of concepts, and the lack of a comprehensive conceptual framework and of theory-congruent proxies for the key variables. We are also concerned by the lack of econometric evidence that accounts for causal inferencing. These limitations need to be addressed for the DCV to realize its full potential, and we propose ways to go about it.

The notion that multinational companies (MNCs) are comprised of multiple subsidiaries in different countries is one that underpins voluminous research in international management. This body of research was recently the subject of an authoritative and comprehensive review in this journal (Meyer et al. in J Int Bus Stud 51(4):538–576, 2020). However, we share the concerns about the prevalence of the term ‘subsidiary’ within academic writing expressed by some others (Mees-Buss et al. in J Int Bus Stud 50(9):1513–1543, 2019) and take this further by questioning the assumptions of authority and control on which it is based. We argue that the role of national subsidiaries in how MNCs are organized has been eroded by developments ‘from above’ and ‘from below’ the national level such that it cannot be assumed that national subsidiaries are important influences on how MNCs govern and coordinate their production and service provision and how work is organized. We set out the implications for theory and methods in international management (IM).

The anniversary of Kogut and Singh’s construct of “cultural distance” is a good time to reflect on this immensely popular but flawed construct, assess the efficacy of the remedies offered for its reform and refinement, and chart an alternative approach that represents a departure from distance as the dominant paradigm with which to view and analyze the impact of national culture on cross-border business. The proposed alternative, a contact-based framework shifts attention from what sets cultures apart towards the actual cultural interface that firms and their executives experience when participating in an international transaction. With this lens, the cultural exchange is regarded as an evolving interactional process of engagement, which commences prior to a transaction and proceeds through the life of the inter-party arrangement and beyond, and whose potential to yield negative – or positive – outcome is subject to specific contingencies. Implications for theory, methodology, and practice are delineated.

This paper adopts an organizational identity work perspective to examine how MNE subsidiaries manage dual embeddedness to strategically position themselves in both their local context and in the global MNE. Prior research suggests that although dual embeddedness provides benefits, it also brings challenges, as subsidiaries must effectively balance external pressures and expectations with internal ones. Through a qualitative case study of organizational identity work in the subsidiaries of a Norwegian MNE, we reveal the process through which subsidiary members manage dual embeddedness in their day-to-day work. We develop a model that conceptualizes organizational identity work in MNE subsidiaries as an ongoing process, one that enables the subsidiary to position itself as a legitimate actor across contexts, while reproducing the perceived tensions of dual embeddedness. This combination thus continually fuels organizational identity work. Our findings have both theoretical and managerial implications. We provide important theoretical insight into how MNE subsidiaries achieve flexibility to position themselves as globally and locally embedded. For managers, this implies that trying to remove the tensions of dual embeddedness – for instance, by privileging the global above the local – may hinder flexibility.