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What are the consequences of initiative-taking in multinational subsidiaries?

Journal of International Business Studies 2010 41(7), 1099-1118 open access
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-à-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.

Unpacking collective materialism: how values shape consumption in seven Asian markets

Journal of International Business Studies 2024 55(3), 361-375
We study how collectivism, religion-tradition, thriftiness, and status/materialist consumption values jointly shape consumption preferences in seven Asian markets. These markets are diverse but relatively small, so identifying similarities should help companies implement standardized marketing strategies. Using data from 3000+ consumers, we find the effects to be largely similar. Collectivistic values directly and indirectly increase both religious and thriftiness values, both of which negatively affect status consumption values. However, the direct positive effect of collectivistic values on status consumption values is so strong that it dominates all of these countervailing negative effects, which explains the paradoxical affinity of Asian consumers towards luxury consumption while endorsing the moral virtues of thriftiness. We identify the effects these values have on preference towards symbolic (style, prestige, overseas origin) and utilitarian (durability, and value for price) attributes. Our results have implications for international marketing theory by highlighting the role of values in Asian consumption, and for practice by helping marketers arrive at more informed standardized brand/product strategies in these rapidly growing Asian markets. In particular, they support earlier findings that high and increasing luxury consumption in Asia may not be due to increasing individualism nor Westernization, but because collectivists have their own reasons for valuing status consumption.

The declining share of primary data and the neglect of the individual level in international business research

Journal of International Business Studies 2021 52(7), 1365-1374 open access
Complementing Nielsen and colleagues’ (2020) analysis of methodological trends in the Journal of International Business Studies over the past 50 years, we examine similar data on methods published in a wider range of leading international business (IB) journals. Our analysis shows a clear decline of studies based on primary data relative to secondary data, and a persistently low level of individual-level studies among the growing body of research using secondary data across all IB journals considered. We discuss the main mechanisms driving these trends and identify the problems of IB’s increasing exposure to the risks inherent in secondary data. We also discuss the implications related to neglecting individual-level data for theory advancement in IB, such as a disregard for novel secondary data opportunities at the individual level and the risk of reduced theoretical pluralism. In doing so, we substantially extend the debate initiated by Nielsen and colleagues (2020).

Managing interrelated tensions in headquarters–subsidiary relationships: The case of a multinational hybrid organization

Journal of International Business Studies 2020 51(6), 906-932 open access
While all multinational organizations face the challenge of managing tensions between local integration and global responsiveness, they are increasingly required to pursue additional, often paradoxical, objectives – such as social and commercial goals. However, we know little about how these tensions at the core of the MNC strategy interact. Based on an inductive qualitative study of four headquarters–subsidiary relationships in a Latin American Multinational Hybrid Organization, we develop a model showing the interplay of multiple tensions and management approaches to address them. This allows us to contribute to research on subsidiary roles, which we found to differ depending on how multiple tensions are addressed. Furthermore, we add to the literature on hybridity in multinational organizations by pointing out how regional differences between units of a single organization unfold. Finally, we provide some practical recommendations for the management of multinational hybrid organizations.

From crossing cultures to straddling them: An empirical examination of outcomes for multicultural employees

Journal of International Business Studies 2017 48(1), 63-89
International organizations, ranging from large MNCs to small born global firms, are increasingly recognizing that multicultural employees can help them operate across countries and across cultures. However, multiculturals – individuals who identify with and internalize more than one culture – are a diverse group, and organizations seeking to leverage their potential can benefit from a deeper understanding of the resources they possess and the challenges they face. We conducted three studies with a total of 1196 participants to test relationships between multicultural identity patterns and personal, social and task outcomes. Consistent results across studies indicated that individuals with more cultural identities (higher identity plurality) had more social capital and higher levels of intercultural skills than those with fewer cultural identities, while individuals who integrated their cultural identities (higher identity integration) experienced higher levels of personal well-being than those who separated them. Based on these results we advocate for two directions in future research on multicultural employees: moving beyond cognitive mechanisms alone, and examining monocultural and multicultural individuals simultaneously along the spectrum of identity plurality.

National culture and corporate investment

Journal of International Business Studies 2013 44(7), 745-763
We explore the relation between individualism and horizons and types of corporate investment, based on individualism’s implications for risk taking. We find that firms in individualistic countries invest more in long-term (risky) than in short-term (safe) assets. Moreover, the effect of individualism on long-term investment hinges on R&D: firms in individualistic countries invest more in R&D projects but not more in physical assets. To test whether risk taking is the channel through which individualism works, we employ two-stage ordinary least squares and other analyses to nullify alternative explanations, such as: (1) uncontrolled institutions determine both individualism and R&D; and (2) firms in individualistic countries invest more in R&D because they have higher investment efficiency, or pick less-risky R&D projects. We further find that individualistic firms tend to employ excess cash to increase R&D rather than increase dividends, and R&D decisions are less reliant on internal financing but more responsive to growth opportunities in individualistic countries.

Broadening the foreign market entry mode decision: separating ownership and control

Journal of International Business Studies 2003 34(5), 473-488
This paper argues that the ownership and control dimensions of foreign market entry mode choice should be separated, and that foreign market entry mode decisions should be expanded to business activities beyond production and distribution. Empirical results from the global hotel industry indicate that the transferability of the entrant's competitive advantages, the local market's absorptive capacity, and the availability of trustworthy local partners differentially affect the ownership and control dimensions of the entry mode decision.

Research on country-of-origin perceptions: review, critical assessment, and the path forward

Journal of International Business Studies 2024 55(3), 285-302 open access
Despite the volume of research and significant advancements in the country-of-origin (CO) area, the topic remains contentious in two key areas. One area is the presence of tensions and contradictions associated with origin-related research. The second relates to an over-reliance on relatively narrow theories that can neither address disparities nor capture a range of CO ecosystem considerations critical to the effective use of results in addressing firm-level planning and outcomes. Our examination of the business-to-consumer CO literature details the characteristics of published work and highlights the substantive contributions of the 50 most influential publications, with the overarching goal of accommodating meaningful future research. We examine 417 journal articles (551 studies) published from 1962 to 2022 to extract important granular characteristics of the literature and to summarize the findings of the most influential CO contributions. We also report the results of two surveys of academic researchers and US exporters and importers examining CO’s role in research and practice. Finally, we propose a theoretical lens, the paradox theory, as a basis for considering and framing competing aspects of the CO ecosystem and recommend the use of multilevel modeling to link future studies to marketing strategy and performance outcomes, thus advancing CO research.

National culture and expatriate deployment

Journal of International Business Studies 2008 39(8), 1293-1309
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.

The Impact of Nationalism, Patriotism and Internationalism on Consumer Ethnocentric Tendencies

Journal of International Business Studies 2001 32(1), 157-175
The study investigates the impact of patriotism, nationalism and internationalism as antecedents to consumer ethnocentrism in Turkey and the Czech Republic. Controlling for demographics, the findings indicate that the impact of patriotism and nationalism is not consistent across the two countries. Consumer ethnocentrism in Turkey is fueled by patriotism, and in the Czech Republic by nationalism. Internationalism does not have a significant effect on consumer ethnocentrism in either country. Managerial implications of these findings are considered and future research directions are identified.