The Renaissance of State‐Owned Multinationals

Abstract

State‐owned multinational enterprises (SMNEs) have significant levels of state ownership and value‐adding activities outside their home countries. SMNEs are undergoing a renaissance, highlighted by their numbers in the global economy and their heightened importance; as a result, they are gaining new attention in the academic literature and in the popular press. This work discusses the reasons for this renaissance and examines the challenges involved in managing SMNEs. SMNEs represent a hybrid organizational form with the dual characteristics of both the state‐owned enterprise (SOE) and the multinational enterprise (MNE). When compared with private MNEs, SMNEs are generally less profit oriented and have a more complex corporate governance structure. They have less autonomy to establish their strategies, but also experience a lower level of uncertainty in their external environment. As a result, SMNEs have more difficulty than private MNEs in developing strategies and making organizational changes. Our study concludes with recommendations to managers for improving SMNE performance. © 2015 Wiley Periodicals, Inc.