Knowledge that Transforms

Strategic leadership research in the field of international business (IB) explains how the actions and outcomes of multinational enterprises (MNE) vary with the attributes and interactions of their key decision-makers, i.e., their strategic leaders. Yet, while the importance of strategic leadership has gained momentum in IB, we lack a systematic understanding of the roles that strategic leaders enact in the MNE context. This omission is critical, as understanding the distinctive roles of IB decision-makers is a key prerequisite for establishing uniqueness in this emerging research field. In this study, we elaborate on the theoretical foundations of five IB strategic leadership roles and outline how the MNE context fundamentally shapes their uniqueness. Our perspective presents each of the five roles as distinctly shaped by two core microfoundational processes – bounded rationality and bounded reliability – which intensify the challenges facing MNE strategic leaders in their role enactment. Acknowledging that IB strategic leaders perform multiple roles simultaneously and interdependently, we conclude with an overall synthesis and guide for future research that moves toward a multirole and multilevel understanding of IB strategic leadership.

By linking the resource dependence perspective with research on foreign direct investment location choices, we analyze how the dependence relationship between the home country of a multinational enterprise (MNE) and a subnational-level host location moderates the effect of local government enticement and deterrence signals on the MNE’s investment in a specific location. Specifically, we differentiate between two dimensions of the dependence relationship between an MNE home country and a subnational host location joint dependence and dependence asymmetry. Moreover, we examine the directionality of dependence asymmetry by distinguishing between the dependence advantage of a home country and that of a subnational host location. A sample of foreign manufacturing ventures across cities in China from 2003 to 2017 provides the empirical context for our investigation. Joint dependence and dependence asymmetry moderate the effects of local government signals on foreign investment location decisions. Although joint dependence enhances the positive effect of government enticement signals and mitigates the negative effect of government deterrence signals on foreign investments, dependence asymmetry affects the impacts of government enticement and deterrence signals differently, depending on which actor holds the dependence advantage.

Prior research is equivocal about whether leadership is more effective when it matches typical cultural practices (the cultural congruence argument) or compensates for "ineffective" cultural practices (the cultural compensation argument). We propose that a more nuanced answer to the congruence-versus-compensation debate requires the joint consideration of leadership, culture, and task contexts. A meta-analysis of 460 field samples of transformational leadership (N = 124,646) and 139 field samples of transactional leadership (N = 38,327) across 53 cultures revealed three key results: First, both transformational and transactional leadership universally relate positively to follower performance outcomes. The strength of these relationships ranges between 0.25 and 0.39 for transformational leadership and between 0.12 and 0.24 for transactional leadership. Second, the positive effects of transformational leadership on convergent performance outcomes are more pronounced in cultures characterized by norms of vertical differentiation (including high power distance) and harmony (including collectivism), consistent with the cultural congruence perspective. Third, the positive effects of transactional leadership on divergent performance outcomes are more pronounced in cultures characterized by norms of low performance-focus (including low uncertainty avoidance), consistent with the cultural compensation perspective. We discuss the implications of these findings for transformational and transactional leadership research and practice.

In anticipation of the upcoming changes and turbulence caused by Industry 4.0, in which digital integration connects all value chain members, managers at leading multinational enterprises (MNEs) are scrambling to predict the associated changes in the market. This pioneering study advances our understanding by investigating the impact of an MNE’s Industry 4.0 orientation on the globalization of its value chain network. Identifying two types of value-generation activities as potential moderators, namely value creation and value capturing, we compare the moderation effects when these activities are conducted by headquarters versus foreign subsidiaries. We test the proposed model using a panel dataset comprising 5572 subsidiary-year observations from 358 Korean MNEs from 2011 to 2019. The results show that an MNE’s Industry 4.0 orientation leads to a more rapid expansion of its distribution network than of its supplier network. Furthermore, value creation by headquarters has a stronger positive impact on the globalization of its distribution network than that of its supplier network, whereas value creation by subsidiaries has a stronger positive impact on the globalization of its supplier network than that of its distribution network. However, value capturing has a stronger impact on the globalization of the MNE’s distribution network than that of its supplier network when performed by both locations. This study concludes by discussing the theoretical and managerial implications.

More and more companies are turning to emerging markets as sources of global innovation to help transform business and society. However, building innovation capabilities in emerging markets is still elusive for most companies. To understand how some companies are successfully building these capabilities, we examined workers within R&D units in China across six foreign multinational corporations. In contrast with prior literature that emphasizes a structural view of who the workers interacted with to innovate, our inductive analysis highlights a behavioral view of how R&D unit personnel interact during the problem and solution search process. We identified two key behaviors associated with the problem and solution search: (1) observing customers in their everyday context, and (2) uncovering general knowledge principles from internal experts. Respectively, these behaviors helped R&D workers to question assumptions about existing products as they relate to customers and to apply useful principles from expert knowledge rather than copying solution templates. Our findings offer an alternative path to building global innovation capabilities in markets where structural constraints exist for the company.

We analyze whether cross-national distance between professional money managers and the positions they take in foreign markets affects investment performance. Out of four dimensions of cross-national distance (geography, culture, business climate, and industry), we find that only cultural distance inversely relates to portfolio performance. Investors earn higher returns in culturally similar foreign markets when market conditions in these countries are favorable. Our results show that the culture-based patterns in foreign portfolio allocations are associated with an information advantage and suggest that multinational corporate decisions influenced by culture increase firm value.

In response to Nachum et al.’s (J Int Bus Stud, 2023) call for further research in Africa by international business (IB) scholars, we argue that while IB scholars may have been slow to engage with Africa, the same cannot be said of related and IB-relevant business and management scholarship. There is already a substantial body of work on Africa in other domains of business and management scholarship – and relevant theorizing – that represents an important resource for IB scholarship. In contextualizing the ‘interesting’, we identify several contemporary theoretical strands that have so far characterized ‘Africa research’, interrogate ongoing challenges that mitigate these efforts, and suggest ways in which further research that speaks to theoretical, practical, and policy issues might inform IB researchers’ engagement with Africa. Specifically, we set out the broader scope of the African business/management debate that might inform IB research, re-examine African diversity through the prism of ‘theoretical tensions and puzzles’, and consider the role of emergent indigenous theorizing such as ubuntu and Africapitalism that make Africa both ‘interesting’ and worthy of IB inquiry.

We examine the 2022 JIBS Decade Award article by Ioannou and Serafeim (J Int Bus Stud 43(9):834–864, 2012) and review the literature since 2012 to clarify research developments in corporate social responsibility and corporate social performance (CSP) in the multinational enterprise, articulating key themes, findings and antecedents. We present a general framework that highlights unique traits and processes of CSP for MNEs. To advance scholarly progress, we delineate how new theoretical perspectives, such as organizational identity and strategic choice, can be blended with the IB literature to deepen theorization of the topic. We also discuss how new global dynamics, such as geopolitics, digitization, and activism, may shape CSP strategies and activities for MNEs and how future research can tackle these issues.

The dominant narrative about the rise of international business (IB) focuses on early research and the institutionalization of a new academic field. In this study, we explore the role of case writing in the field’s formative period from the mid-1950s to the mid-1960s. Based on an analysis of teaching cases on IB topics, we demonstrate that case-based teaching, including the writing of cases, was an innovative pedagogical method that made a strong impact on the formation of the new academic field. Analyzing the cases and the background and affiliation of their authors offers new insights into the linkages to other disciplines from which the new academic field emerged. The analysis of the cases also provides new insight into how the case authors connected to the new practical experiences from an increasing number of multinational enterprises, particularly from the US, and conceptualized the experiences into a pedagogical language. The investigation covers 489 cases written by scholars located in 18 countries from the early 1950s to 1963, as well as archival studies of the business schools and institutions that initiated the production of cases.

The experience of COVID-19 prompted us to rethink the imperatives of distance for the organization of value-creating activities globally. We advance a conceptualization of distance as representing separation in both space and time and posit that these distance dimensions represent different kinds of separation and require varied theoretical attention. We delineate the intrinsic qualities of spatial and temporal distances and theorize the impact of this extended conceptualization of distance on major tenets of international business theory and their predictions regarding the patterns of international business activity. We illustrate the ways by which varying configurations of spatial and temporal distances serve different value-creating activities and draw their implications for countries' global integration. We advance a call for more attention to time and temporal distance and their impact on the ways firms organize their value-creating activities in an increasingly virtual world.