Knowledge that Transforms

In this commentary, we engage with the study by Carney, El Ghoul, Guedhami, Lu and Wang, titled “Political corporate social responsibility: The role of deliberative capacity.” Their study provides empirical support for earlier claims that deliberative capacity – the capacity of political institutions to enable diverse stakeholders to collectively assemble and voice their opinions – is an important building block to understanding the prominence or lack thereof of corporate social responsibility (CSR) in a country. In so doing, Carney and co-authors contribute to the so-called “Political CSR” or PCSR literature. Yet, their study carries two important shortcomings that can be addressed to bring PCSR research forward in an IB context. First, they ignore a fundamental tenet of the PCSR literature, namely the existence of global governance gaps requiring private businesses to actively engage in political activity. Second, and related to the first, their model and associated variables are misspecified, with independent and dependent variables that are at least partially overlapping. Departing from these shortcomings, we attempt to engage constructively with their work in the interest of advancing the conversation in IB about private sector involvement in democratic will formation to achieve social and environmental responsibility.

Information security and data breaches are perhaps the biggest challenges that global businesses face in the digital economy. Although data breaches can cause significant harm to users, businesses, and society, there is significant individual and national variation in people’s responses to data breaches across markets. This research investigates power distance as an antecedent of people’s divergent reactions to data breaches. Eight studies using archival, correlational, and experimental methods find that high power distance makes users more willing to continue patronizing a business after a data breach (Studies 1–3). This is because they are more likely to believe that the business, not they themselves, owns the compromised data (Studies 4–5A) and, hence, do not reduce their transactions with the business. Making people believe that they (not the business) own the shared data attenuates this effect (Study 5B). Study 6 provides additional evidence for the underlying mechanism. Finally, Study 7 shows that high uncertainty avoidance acts as a moderator that mitigates the effect of power distance on willingness to continue patronizing a business after a data breach. Theoretical contributions to the international business literature and practitioner and policy insights are discussed.

This study explores the role of clients’ mindset metrics (i.e., satisfaction and sentiment) attributing to the variation in the adoption patterns of multi-generational services (MGS) of those clients of an MGS supplier. Based on a triangulation approach and theoretical underpinning, we propose that clients manage three MGS adoption metrics – multigenerational depth, features, and time – to augment their capabilities over time.We show that the linkages between mindset, and adoption metrics, moderated by cultural and economic factors, explain the variation in adoption patterns using the adoption data of 58,476 clients from an MGS supplier providing five services generations of new-age products/services over a 10-year period in 13 developed and emerging markets. A small improvement in marketing mindset metrics significantly impacts firm revenues through improvements in MGS adoption metrics, which also vary by the culture and economic conditions of the client's country. We develop managerial insights about allocating scarce resources to foster MGS adoption and enhancing the success of new generations introduction across countries. We show that instead of a focus on faster adoption, a diversified strategy balancing multigenerational depth, breadth, and time and using appropriate strategies for enhancing satisfaction or sentiment leads to better outcomes for the MGS supplier.

Multinational corporations often are multilingual entities, yet surprisingly little is known about how foreign-language competencies in their foreign subsidiaries are related to local employees’ career success outcomes. This paper uses human capital and upward mobility theories to link local employees’ English language competencies through career encouragement and internal social capital development behavior to job promotions, wage increases, and career satisfaction in two independent studies conducted in foreign subsidiaries in Japan. Study 1’s findings are derived from 499 local employees at three points in time over 12 months in 376 foreign subsidiaries. These findings suggest that career encouragement mediates the positive relationships between English language competence and job promotions, wage increases, and career satisfaction. Study 2’s findings are from a sample derived from 448 local employees in 265 foreign subsidiaries with a similar time-lagged research design. These findings provide further support for the direct relationship of English language competencies to job promotions, wage increases, and career satisfaction, and that social capital development mediates the positive relationships between English language competencies and job promotions and career satisfaction. This paper contributes to the literature on international business by highlighting the importance of English language competencies to local employees’ career success outcomes in foreign subsidiaries operating in non-English-speaking countries.

Employing insights from political economics, international relations, and China studies, we identify the key variables that shape the dynamics of the U.S.–China rivalry and investigate their impacts on the bifurcation and value-chain decoupling processes. We show that the ongoing conflict and disengagement processes are more likely to evolve in the long run in significantly different ways to the one envisioned by current Washington decision-makers and echoed by Petricevic and Teece (2019). The latter predicted an escalation of the disengagement processes and inevitable convergence to a ‘bifurcated world’. Our main findings are: (1) The potential costs of bifurcation and consequent value-chain decoupling are prohibitive to both China and the U.S. Resistance is likely to grow by U.S.’ own MNEs and allies; (2) Washington decision-makers overstate the threats that ‘China’s rise’ poses to the survival of the liberal world order; and (3) China’s techno-nationalistic threats are likely to dissipate after a period of escalation, as a result of its own resource constraints, increasing costs of key programs, and inability to sustain in the long run its rapid innovation processes due to growing central controls. We conclude the paper by outlining an approach to maintain an open global economy and secure innovation systems.

Control and coordination efforts are at the heart of MNE functioning. Yet, our review reveals that the literature on MNE control and coordination lacks conceptual clarity, which may hamper the development of the field. In this critical review, we synthesize the literature over the past decade using a conceptual framework rooted in new internalization theory. Research remains fairly coarse regarding how various configurations and interactions of control and coordination mechanisms affect intended outcomes. We note a paucity of multilevel studies, direct investigations of microfoundations, and comparison studies between intra- and inter-MNE relationships. Insufficient attention has been paid to adaptation issues and the impact of external dynamics on the need for, and operationalization of, control and coordination mechanisms. These gaps are concerning, since external trends are changing the organizational landscape and MNE boundaries are becoming increasingly fuzzy. Going forward, a more nuanced conceptualization of outcomes is needed, one that specifies proximal outcomes which mediate the achievement of distant goals. We use our augmented conceptual framework to identify other key areas for future research. We also call for more research on how disruptive forces affect both the use and outcomes of organizational mechanisms aimed at achieving control and coordination.