Knowledge that Transforms

Despite the growing involvement of multinational firms in foreign-based R&D during the past fifteen years, little research has been done on why and how firms internationalize their R&D and what effects it might have on firm competitiveness. The present paper calls attention to this neglect and seeks to advance the management of multinational R&D as an area of study for international business scholars. To this end, the paper first examines the key contributing factors to increased foreign R&D investments among multinationals. It then reviews the research literature to find out what we presently know about the management of multinational R&D. Finally, a research agenda is proposed to provide a foundation and stimulus for future investigations. Seven research directions are recommended, with an emphasis on interdisciplinary inquiry and a focus on issues that have both theoretical and practical significance.

This paper investigates the existence of country-of-origin effects occurring in foreign investments in the People's Republic of China. The eclectic theory of international production posits that the pattern of foreign investments should vary by country of origin. This aspect of the eclectic theory is difficult to test directly, especially in developing countries, because of the relatively small numbers of foreign investment projects in a single country. The data used in this research cover 1,665 Sino-foreign joint ventures (JVs) from 1979 to 1985, allowing a more reliable test of this aspect of the theory. Statistical evidence suggests that country-of-origin effects are indeed present in foreign investment activities in China.

The internalization/eclectic theory of foreign direct investment includes the important insight that government policies create market imperfections, which make foreign direct investment an economically rational strategic alternative for firms. This paper reexamines the effects of government policies on market imperfections and foreign direct investment (FDI). It broadens and refines the analysis of the impact of government policies by developing the following arguments: (1) There is a wide range of government policies that affect firms' FDI decisions via their effects on market imperfections. (2) There are numerous dimensions of variability in government policies that need to be identified in order to understand fully the effects of government policies on market imperfections and hence FDI flows. (3) Some of the effects of government policies on market imperfections and FDI are the opposite of those previously noted in the FDI literature. (4) The effects of government policies vary across the several individual components of FDI flows. The paper thus examines the following variables and relationships more extensively and precisely than has the previous literature: government policy variables as causal factors affecting FDI; market imperfection variables as intervening factors in the causal connections between government policies and FDI; and the multiple indicators of the various dimensions of FDI as dependent variables.

This study addresses one of the most compelling questions in the field of international management: How can a multinational simultaneously pursue the double-ended objective of effectively conceiving and executing its worldwide strategy? Here we examine the ways in which the dynamics of the strategy-making process between head office and subsidiary units influence the multinational's ability to achieve these two objectives. Specifically, we introduce the concept of procedural justice, the intellectual root of which is grounded in social psychology and law, into the international management and explore the impact of process fairness on multinationals' ability to conceive and execute effective worldwide strategies. The results of this research are based on a two-phase longitudinal study of the decision making dynamics of nineteen multinationals. They provide support that the exercise of procedural justice is indeed a powerful way to organize the multinationals' strategy-making process. Procedural justice was found to significantly augment multinationals' ability to achieve this double-ended objective.

The expansion of international business necessitates an increased number of employees based in foreign markets. These expatriates, nationals and third-country nationals represent unique and complex compensation problems. This article addresses five of the recurring compensation problems reported by members of the Society for Human Resource Management International (SHRMI) in a recent survey.

This article reports on a survey of United States-based multinational corporations (MNCs) and the corporate programs they use to reduce the impact of terrorism. It was found that less than 50% of the MNCs surveyed had formal programs to deal with a terrorist attack. Most of the MNCs that did have an anti-terrorist program spent their money on security equipment and not on training executives and their families. The training that did take place concentrated on handling weapons and avoiding being kidnapped. Respondents were also critical of the federal government's lack of assistance in dealing with terrorists.

Two important aspects of political risk analysis that have not received much attention in the literature are (a) the reasons why multinational firms experience different types of intervention, and (b) the timing of intervention. In order to address these issues, this research develops a conceptual model of political risk based on the premise that host government intervention is related to specific objectives of the government vis-à-vis multinational firms. Information reflecting the attainment of objectives motivates the government to intervene in a given manner. The application of this model to the case of the Venezuelan petroleum industry from years 1947 to 1976 provides some support for this model and gives insight into the timing of specific types of intervention.

In this study of convergence/divergence of managerial values, four Western-developed measures (Machiavellianism, locus of control, intolerance of ambiguity and dogmatism) and the four dimensions of the Eastern-developed Chinese Value Survey (Confucian dynamism, human-heartedness, integration, and moral discipline) were the measures used. The findings indicate that often times both culture and the business environment interact to create a unique set of managerial values in a country.