German Multinational Corporations Research Articles

Marketing Strategies of Puma

Puma SE a well known german multinational corporation that manufactures athletes shoes footwear and other sportwear.

Talent management in German multinational firms in China: the role of headquarters-subsidiary relations

Despite the bourgeoning interest in talent management (TM) in the last two decades, limited research has been carried out to understand the diffusion of TM strategies and practices from home-country headquarters to their subsidiaries in host countries. Furthermore, extant firm-level research on TM tends to neglect the role of the macro-level context, particularly in emerging economies where talent shortage is acute and their institutional distance is large, with headquarters in developed countries. This study fills these knowledge gaps by exploring the TM of German multinational corporations (MNCs) and their subsidiaries in China. Drawing on qualitative data collected from 42 semi-structured interviews with senior managers, human resource professionals, and operations managers from six German MNCs and their subsidiaries in China, the study uncovers headquarters-subsidiary relations. We identify a portfolio of what we refer to as ‘institutional shapers’ and develop a model for future research. This study contributes to extant knowledge by contextualizing multi-level TM shapers from an institutional-cultural perspective, supported by cross-country empirical data based on informant triangulation.

Digitizing International Financial Reports with iXBRL and the IFRS Taxonomy: The Case of the European Union, U.S., and SAP SE

ABSTRACT This case enables students to investigate recent financial reporting mandates requiring EU and SEC IFRS filers to digitize financial reports using IFRS-based taxonomies and iXBRL. EU filers are mandated by the ESMA to file IFRS-iXBRL financial reports, complying with the ESEF. SEC IFRS filers follow similar specifications. ESMA and the SEC recently transitioned to XBRL’s enhanced format, iXBRL, combining human and machine-readable language into a single document. Student learning objectives include analyzing these developments and evaluating German multinational corporation SAP SE’s motivation for IFRS–XBRL implementations. SAP, since 2005, files IFRS financials and, since 2009, creates IFRS–XBRL reports. Students apply Corefiling’s Yeti Taxonomy Viewer, the SEC’s EDGAR iXBRL Viewer, and TagniFi’s Console to iXBRL mapping/analysis exercises. The case is for accounting information systems and international accounting courses. It is especially useful for introductory classes on digitized financial reporting with students who have no prior XBRL knowledge.

Effective Leadership Differs Between Organizations: A Comparative Study of US and German Multinational Corporations in South Korea

Effectively implementing leadership is critical for organizational success. In consideration of this issue, this study investigated effective leadership in US- and Germany-based multinational companies (MNCs) operating in South Korea. Drawing on transformational leadership (TL) theory and leadership contingency theory, the study clarified the contextual dependency of TL effectiveness. A survey was administered to 258 employees of the target MNCs, during which the participants were asked to rate their supervisors’ transformational leadership behaviors. The responses were empirically analyzed on the basis of the research framework. The findings showed that a leader’s group-focused TL behaviors indirectly influenced organizational commitment and that this relationship was mediated by psychological empowerment in the US-based MNCs. Conversely, a leader’s individual-focused TL behaviors demonstrated a pronounced effect on organizational commitment and that this association was also mediated by psychological empowerment in the Germany-based MNCs. The leadership behaviors that effectively empowered employees and increased their organizational commitment differed depending on the cultures prevalent in the organizations’ countries of origin. Adopting the two-dimensional model of TL, this study confirmed the contextual dependency of TL behaviors and suggested the need to incorporate an organization’s cultural context into predictions regarding the effects of certain leadership behaviors.

Developing Language Operative Capacity in a Subsidiary of a German MNC in China

One of the key challenges of language management in multinational companies is developing corporate language capacities to fulfil business goals. Yet the notion of corporate language capacity remains to be explored and developed in research. To address this gap, this study aims to conceptualise corporate language operative capacity and investigate how it is developed at a German multinational corporation that specialises in providing business software. Participants in this study were six staff members at different levels, namely two vice presidents and four senior managers from different departments. Data were collected through in-depth interviews and document analysis. Qualitative analyses indicated senior management’s conceptualisation of languages as a sophisticated, dynamic and multi-functioning system in support of the company’s global strategy. Developing corporate language operative capacity requires the acquisition, deployment and development of language resources derived from interactions among human capital, social-cultural capital and technological capital. Analyses of the data also identified middle-level management’s role in designing and implementing language-related activities to support the corporate goal of developing corporate language operative capacity

Corporate profit misalignment: evidence from German headquarter companies and their foreign affiliates

ABSTRACT Despite numerous data challenges, economists have established that the multinational corporations’ reported profits are not well aligned with their economic activity across countries. However, uncertainties remain about the extent and patterns of this misalignment. We fill in this gap for German-based multinational corporations and their foreign affiliates. We use the data collected by the Deutsche Bundesbank, which include confidential data on foreign direct investments and a combination of confidential and publicly available balance sheet data. We find that the world’s tax havens attract a considerably higher share of German multinational corporations’ profit than economic activity, while in Eastern European countries, most developing countries and some big European countries reported profits are much lower than economic activity would suggest. We also find that the most important tax haven is the Netherlands, followed by other EU tax havens of Cyprus, Ireland, Luxembourg and Malta.

The impact of thin‐capitalization rules on the location of multinational firms’ foreign affiliates

AbstractThis paper examines how restrictions on the tax deductibility of interest cost affect location choices of multinational corporations (MNCs). Many countries have introduced so‐called thin‐capitalization rules (TCRs) to prevent MNCs from shifting their tax base to countries with lower tax rates. As of 2012, in our sample of 172 countries, 61 countries have implemented a TCR. Using information on nearly all new foreign investments of German MNCs, we provide a number of new and interesting insights in how TCRs affect the decision of where to locate foreign entities. In particular, stricter TCRs are found to negatively affect location choices of MNCs. Our results include estimates of own‐ and cross‐elasticities of location choice and also novel results on the relative importance of tax base vs. tax rate effects. We finally provide estimates for different uncoordinated as well as coordinated policy scenarios.

‘National culture’ as an integrating agent in the post-acquisition organisation

This paper, drawing on literature in anthropology and positive organisational scholarship (POS), and using a case study of the acquisition of a British car company by a German multinational corporation, proposes that national culture, in contrast to its treatment as a source of ‘distance’ or ‘friction’ can also operate as an integrating agent, whereby participants shape the new reality of the merged organisation through discourse and narrative, creating a collectively agreed new culture while also allowing particular groups to retain a distinctive identity within it. The paper concludes by suggesting theoretical and epistemological ways forward which focus on integrating HR managers’, as well as researchers’, perspectives on mergers and acquisitions, and which move away from binary models of analysis which judge mergers and acquisitions in abstract terms of ‘success’ versus ‘failure’. This allows researchers instead to focus on how ‘success’ is defined by the participants in the merger, and considers mergers and acquisitions as dynamic, multifaceted processes which incorporate different forms of success and failure within themselves.

Perceptions and effects of cross-national corporate reputation

PurposeFew scholars have analysed the corporate reputation (CR) of multinational corporations (MNCs) internationally, but both CR perception and effect are likely to differ across nations. Most studies have compared a few countries, linked differences to selected dimensions of Hofstede’s cultural approach, and reported ambiguous results. The purpose of this paper is to address the important role of all Hofstede’s cultural dimensions that may influence CR perceptions and effects by applying an appropriate method.Design/methodology/approachBy integrating signalling theory and each cultural dimension, hypotheses are proposed and tested using consumer surveys of a German MNC in 37 countries. Multilevel structural equation modelling (SEM) showed whether and how all cultural value dimensions – the predominant approach in marketing – affect CR perceptions and effects.FindingsIndividual CR perceptions and effects are strongly attributable to national culture, which explains up to 62 per cent of country-level variance; however, the explanatory powers of the cultural dimensions differ between CR perceptions and effects. Not all dimensions affect both. The results are stable in alternative models.Research limitations/implicationsThe results enhance extant research because the relative importance of Hofstede’s dimensions and not only a possible role in country comparisons is shown. Hofstede’s approach explains considerable country-level variances. MNCs learn which cultural dimensions are core antecedents of CR perceptions (individualism and power distance explain >30 per cent variance) and core moderators of CR effects on loyalty (masculinity, individualism and uncertainty avoidance).Originality/valueThis study provides novel insights into the role of national cultural differences on CR perceptions and CR effects using the still novel multilevel SEM.

Practice Transfer in Organizations: The Role of Governance Mode for Internal and External Fit

This study leverages multinational corporations (MNCs) as a research context to advance our understanding of the relationship between internal and external fit over the course of the transfer of organizational practices. While internal fit describes the important condition that a practice should be aligned with organizational goals and must gain support internally, external fit refers to an additional condition for successful transfer, namely, that a particular practice must gain and sustain support and legitimacy in the environment. Studying two German MNCs transferring apprenticeship-based training to foreign operations in the United States, this paper starts from the key observation that organizations can use different governance modes to organize the transfer process: they may either go it alone and organize transfer in a hierarchy mode, or they may partner up with other organizations and form an interorganizational network for transfer. Using rich qualitative data, this paper finds that different governance modes affect the ability to attain internal and external fit by revealing a critical trade-off: while hierarchy helps create internal fit, it comes with significant additional costs to attain external fit; conversely, using the network mode facilitates the creation of external fit, but involves making compromises that reduce internal fit. Based on these findings, I theorize that different governance modes (hierarchy versus network) work through distinct processes (autonomous versus collaborative), driven by unique mechanisms (inward versus outward orientation), to influence outcomes in terms of internal and external fit. The study contributes to the literature by shifting attention to the implications of different governance modes for transfer processes.

Disclosure Responses to a Corruption Scandal: The Case of Siemens AG

In the current study, we examine the changes in disclosure practices on compliance and the fight against corruption at Siemens AG, a large German multinational corporation, over the period 2000–2011 during which a major corruption scandal was revealed. More specifically, we conduct a content analysis of the company’s annual reports and sustainability reports during that period to investigate the changes of Siemens’ corruption and compliance disclosure using both quantitative and qualitative methods. Through the lens of legitimacy theory, stakeholder analysis, and organizational facades, we find evidence that Siemens changed its compliance and corruption disclosure practices to repair its legitimacy in the wake of the 2006 corruption scandal. We analyze these strategies more closely by using the rational, progressive, and reputation facades framework (Abrahamson and Baumard in The Oxford Handbook of Organizational Decision Making, pp 437–452, 2008). Our primary findings suggest that the annual reports show peaks of disclosure amounts on corruption and compliance disclosures earlier than sustainability reports, which can be partly explained by analyzing the disclosures made about—and to—the different stakeholder groups. We find that the annual report focuses more on internal stakeholders such as employees, while the sustainability report focuses more on external stakeholders such as suppliers. We also find that the company uses the facades differently depending on which report is being analyzed.

Effort estimation in agile software development: Case study and improvement framework

AbstractEffort estimation is more challenging in an agile context, as instead of exerting strict control over changes in requirements, dynamism is embraced. Current practice relies on expert judgment, where the accuracy of estimates is sensitive to the expertise of practitioners and prone to bias. To improve the effectiveness of the effort estimation process, the goal of this research is to investigate and understand the estimation process with respect to its accuracy in the context of agile software development from the perspective of agile development teams. Using case study research, 2 observations and eleven interviews were conducted with 3 agile development teams at SAP SE, a German multinational software corporation. The results reveal that factors such as the developer's knowledge, experience, and the complexity and impact of changes on the underlying system affect the magnitude as well as estimation accuracy. Furthermore, there is a need for a tool that incorporates expert knowledge, enables explicit consideration of cost drivers by experts and visualizes this information to improve the effectiveness of the effort estimation. On the basis of the findings of the case study, a framework, inspired by the quality improvement paradigm is proposed to improve effort estimation in agile development.

SAP-Created Niche in Enterprise System Application

SAP SE is a German multinational software corporation that makes enterprise software to manage business operations and customer relations. Headquartered in Walldorf, Germany, with locations in more than 130 countries, SAP SE is the world leader in enterprise software and software-related services. Founded in April 1, 1972, Weinheim, Germany with a group of Founders: Hasso Plattner, Klaus Tschira,Claus Wellenreuther, Dietmar Hopp, Hans-Werner Hector.

The Impact of Thin Capitalization Rules on the Location of Multinational Firms' Foreign Affiliates

This paper examines how restrictions on the tax-deductibility of interest cost affect location choices of multinational corporations (MNCs). Many countries have introduced so-called thin-capitalization rules (TCRs) to prevent MNCs from shifting tax base to countries with lower tax rates. As of 2012, in our sample of 172 countries, 61 countries have implemented a TCR. Using information on nearly all new foreign investments of German MNCs, we provide a number of new and interesting insights in how TCRs affect the decision of where to locate foreign entities. These results include estimates of own- and cross-elasticities of location choice and also novel results on the relative importance of tax base vs. tax rate effects. We finally provide estimates for different uncoordinated as well as coordinated policy scenarios.

Innovating Across Boundaries: Towards an Ecosystem View of the Multinational Corporation

This paper develops an ecosystem view to explain how multinational corporations (MNC) benefit from innovation partnerships that span functional, geographical and temporal boundaries. Analyses of a cross-sectoral sample of 470 German MNCs reveal the radical innovation performance of a focal MNC to improve with the extent to which its innovation ecosystem contains members that occupy distinct roles in the value chain (functional scope), originate from distinct regions (geographical scope), and are involved in distinct stages of the innovation process (temporal scope). These returns, however, vary across partnership types and economic sectors calling for a carefully tailored approach to ecosystem design.

MNC subsidiary channel relationships as extended links: Implications of global strategies

Foreign subsidiaries of multinational corporations (MNCs) rely on external partners, such as channel partners, to achieve global objectives. We conceptualize the subsidiary’s channel partner as an extended link of the MNC’s internal network: thus, the subsidiary’s adaptation and execution of the MNC’s global strategies should influence the subsidiary’s channel relationship and performance. Building on the strategy–environment alignment framework, we study the influence of MNC global strategies (global efficiency, multinational flexibility, and worldwide learning) on a subsidiary’s channel commitment and the moderating influence of the host-country environment. Survey data from German and Japanese MNCs in the United States indicate the importance of global strategies to a channel relationship. For example, we find that an emphasis on multinational flexibility is detrimental, but worldwide learning benefits the subsidiary’s channel commitment. We also find that the host-country environment plays a contingent role: for example, a global efficiency strategy is beneficial for channel commitment in a stable environment, but detrimental in a dynamic environment. Our research offers key implications for MNCs; we suggest that when MNCs decide to lay emphases on global strategies the MNCs should consider not just their internal subsidiary network, but also their extended channel partner links that function in foreign markets.

Subsidiary control in Japanese, German and US multinational corporations: Direct control from headquarters versus indirect control through expatriation

This study examines the degree to which Japanese, German and US multinational corporations (MNCs) use two different subsidiary control mechanisms: direct control through headquarters and indirect control through staffing key positions in subsidiary management with expatriates. On the basis of data from 617 subsidiaries, we found that US MNCs focus more on the former, whereas Japanese MNCs rely primarily on the latter. German MNCs take a middle position. Furthermore, we found across all three countries that the more technical management functions are controlled more tightly than more culturally sensitive areas. The reliance of Japanese MNCs on subsidiary control through expatriates suggests that these corporations have a particularly acute need to invest in global talent management systems.

Marketing Channels in Foreign Markets: Control Mechanisms and the Moderating Role of Multinational Corporation Headquarters–Subsidiary Relationship

To manage marketing channels, subsidiaries of multinational corporations (MNCs) must balance mandates from headquarters (HQ) with the local realities of the foreign markets. The performance implications of subsidiary–distributor relationship efforts thus are contingent on the HQ–subsidiary relationship. Drawing on marketing channels, economics, and organization theory literature streams, the authors (1) describe the complex performance properties of output and process control mechanisms that MNC subsidiaries deploy to manage foreign distributors and (2) conceptualize the HQ–subsidiary nexus along three attributes that should moderate the performance effects of control mechanisms: task coordination, or HQ's central coordination of processes across subsidiaries; subsidiary decision involvement, or two-way communications and consensual decision making between HQ and the subsidiary; and relational disharmony, or the extent of the HQ–subsidiary conflict. The authors test the hypotheses using field data from German and Japanese MNCs in the United States and Bayesian models that account for measurement error, endogeneity in the control mechanisms, heterogeneity in country of origin, and nonlinear and interactive terms for the latent constructs. The results demonstrate the importance of the HQ–subsidiary relationship for managing the subsidiary–distributor relationship.

Energy Innovation and Transport: The Electrification of Trams in Spain, 1896–1935

The electrification of trams was one of the most significant changes in urban transport. It led to price reductions, increased speed, better regularity, comfort and convenience, and the popularization of this means of transport. Its introduction required a new business model, characterized by massive investment, modern management, and the use of more sophisticated technology. This innovation came late to Spain and its arrival was aided by capital from Belgian investors and German multinational corporations.

Knowledge transfer in multinationals: The role of inpatriates' boundary spanning

AbstractViewing knowledge as rooted in individuals, this study investigates knowledge transfer in multinational corporations (MNCs) from an individual‐level perspective. Specifically, the author focuses on inpatriates as a particular group of knowledge actors in MNCs and examines the role of inpatriates' boundary spanning between their home unit and the headquarters for transferring their knowledge to headquarters staff. Based on a sample of 269 inpatriates in 10 German MNCs, the author found that inpatriates' boundary spanning is positively related to inpatriates' individual efforts to transfer knowledge and inpatriates' perceptions of HQ staff efforts to acquire subsidiary‐specific knowledge. Both perceived HQ absorptive capacity and mentoring by HQ staff moderate these relationships. This study's findings contribute to our understanding of the theoretical mechanisms through which MNC knowledge flows occur and highlight key requirements for the design of international staffing practices. ©2011 Wiley Periodicals, Inc.