Indian Multinational Corporations Research Articles

Value Relevance and Share Price Dynamics: An Empirical Analysis of Indian Multinational Corporations

The share price is one of the major aspects of taking financial decisions by the investors. This study has investigated the impact of value relevance on the share price of Indian multinational companies. In this study, the top 10 multinational corporations (MNCs) have been taken for the analysis of data from the financial year 2018–2019 to 2022–2023. However, share price has been considered a dependent variable, whereas earnings per share (EPS), book value per share (BVPS), price to book value (PB), price to earnings (PE) and assets turnover ratio (ATR) have been considered independent variables. By employing correlation, ordinary least squares (OLS), fixed effect model (FEM), random effect model (REM), Hausman test and the Jarque–Bera test, data have been analysed and significant associations among the given variables have been found. The outcome of the study has revealed that there is a significant impact of value relevance on the share price of the MNCs in India, as the p value derived from the analysis is less than .05. This means that a statistically significant relationship exists between the variables considered in the study. JEL Codes: G10, M41, Y10

Analysis of Market Entry Strategies for Foreign Multinational Corporations in India A Market Research Study

This research paper explores market entry strategies for foreign multinational corporations (MNCs) in India, aiming to provide actionable insights for navigating the complexities of this dynamic market landscape. Through a qualitative research design, semi-structured interviews were conducted with key industry experts and executives of foreign MNCs operating in India. The findings reveal that joint ventures are the preferred entry mode, with factors such as access to local knowledge, regulatory requirements, and cultural compatibility influencing entry mode selection. Performance evaluation metrics primarily focus on revenue growth, market share, and customer satisfaction, while adaptation strategies include product localization, marketing customization, and supply chain optimization. Challenges faced by foreign MNCs in market entry include regulatory compliance, cultural differences, and competition. Overall, this study contributes to filling the identified literature gap by providing a nuanced understanding of market entry strategies and their effectiveness in the Indian context. The implications of these findings extend to both academia and practice, offering opportunities for further research and guiding strategic decision-making for MNCs seeking to establish and expand their presence in India.

Responsible leadership toward garnering legitimacy from stakeholders in India: an institutional perspective

PurposeUnderstanding societal expectations of a leader's responsibility and context-specific challenges in less-researched emerging economies has become imperative for foreign Multinational enterprises (MNEs) to survive in these contexts while developing globally responsible leaders. Identification of institutionally sanctioned characteristics, competencies and strategies that assist leaders in dealing with such challenges while achieving shared value has wider implications for academics, practitioners and the literature on responsible leadership (RL), which is the purpose of this paper.Design/methodology/approachThe authors conducted in-depth interviews of 28 senior indigenous leaders in 3 Indian Multinational corporations (MNCs) in construction sector, following a grounded theory approach.FindingsThe authors identified three vital institutionally driven challenges and four individual-level societal-driven factors, subsequently influencing leaders' strategic decisions and choices to deal with such challenges beyond passive conformance. Contrary to the previous findings, this study also briefly discusses that a mere ethical climate is insufficient; organizations must develop a holistic values climate that works as contextual factors to influence RL.Originality/valueContrary to the previous findings suggesting Indian leaders' conformance to constraining forces to RL, by adopting a multilevel approach, the authors identify the context-specific strategic behaviors that responsible leaders adopt in dealing with such forces responsibly. Thus, it is the first multilevel inductive approach conducted in a non-Western context, offering a discrete understanding of RL while addressing some of the inconsistencies in the literature and contributing to cross-cultural leadership research. Also, findings highlight the factors of RL that are more emic and etic for generalization.

A Study on Role of Financial Planning and Forecasting in Organizational Growth and Development

The group is made up of a number of individuals who must cooperate in order to accomplish the stated goals. The business must create and present a strategy that outlines the direction and establishes goals for this reason. An estimate's purpose is to reveal what resources might be required for the business to effectively implement its strategy. Organizations can manage liabilities, investment possibilities, and cash flow with the aid of financial planning. Setting objectives, forecasts, resource requirements, and other indicators in order to achieve them within a reasonable budget is the process of financial planning and forecasting. The projections show how much money the company will need from investors or consumers to meet its strategic goals. One component of management accounting, which encompasses all facets of financial reporting having data on assets, liabilities, and financial results, is corporate finance. The importance of planning and forecasting for Indian multinational corporations is the topic of the present study. The research was conducted based on a survey of 200 employees from the finance departments of ten major MNCs with offices in Pune and Mumbai. The study's findings suggest that Indian multinational corporations (MNCs) are eager to improve their financial projections and planning so they can make better choices that will help them reach their objectives.

In-group and out-group behavior in Indian multinational corporations: An analysis of its implications on organizational performance

The purpose of this study is to investigate in-group and out-group dynamics within multinational corporations in India and their influence on organizational performance. The paper uses concurrent triangulation. Primary data were gathered via a purposive sample of 500 employees across various demographic backgrounds, ensuring diversity. Respondents participated in an online survey and a few in-depth interviews, administered in-person or online, capturing their experiences of group dynamics. Survey data were analyzed using R, SPSS, and SAS, while thematic analysis was applied to in-depth interview transcripts using NVivo software. The study also employed descriptive statistics, ANOVA, MANOVA for the survey and thematic analysis for interviews, revealing the depth and complexity of in-group favoritism. In-group members have reported significantly higher levels of communication, trust, cooperation, conflict management, and innovation, indicating the impact of group dynamics on organizational performance. The outcome of the multivariate analysis of variance (MANOVA) demonstrates a substantial impact of in-group/out-group categorization on the amalgamated dependent variables (evidenced by a Wilks’ Lambda value of 0.68, F (5,94) = 4.17, p < .001). This suggests a noteworthy influence of in-group/out-group affinities on overall team efficacy. The insights offer concrete strategies to enhance inclusivity amid diversity within multinational corporations, thereby mitigating group bias and promoting organizational performance. This study not only expands the understanding of group dynamics in Indian multinational corporations but also offers valuable guidance for managerial practices.

The dynamic effect of corporate financial hedging on firm value: The case of Indian MNCs

This paper explores the effect of financial instruments for exchange rate hedging on a firm's value in the presence of non-operating profit or loss from foreign exchange transactions. This study uses Tobin's Q ratio as a proxy for firm value and a two-step generalized method of moments (GMM) model to estimate the effect of financial hedging. Our dynamic panel analysis using extensive data on 61 Indian multinational corporations (MNCs) in 2009–2020 shows that financial hedging instruments, such as foreign currency derivatives (FCD) and foreign currency–denominated debt (FDD), enhance firm value by 16.91% and 10.21%, respectively. The results of the robustness test confirm the findings.

Samsung’s CSR in Solving Educational Issues in India

This paper discusses how corporate social responsibility could help in assisting states with global issues. The globalization which is experienced by every part of the world has created new and more complex issues. These issues sometimes cannot be solved by the state solely, demanding a global governance with the hope to cope with the issues. The existence of multinational corporations (MNC) as a new rising actor, through their corporate social responsibility (CSR) is hoping to be responsible to the society they operate. The writer argues that through the Public-Private Partnership, the CSR by MNC can help the state in solving the global issues faced by them. One of the global issues that needs the attention of the community is educational issues, especially in developing states. To strengthen the writer’s argument, this paper will raise a case study on Samsung’s CSR and their impacts on India educational issues. India is one of the states who is battling with the educational issues, and Samsung as one of the biggest MNC in India is actively assisting the government regarding the issues. The success of these CSR can be seen through the response of the Indian local government.

Tax rate motivated profit shifting and base erosion by multinational corporations: Indian evidence

PurposeProfit shifting is a matter of great concern for governments internationally. It leads to the loss of tax revenues and puts multinational corporations (MNCs) in a disparate position. Lately, due to the aggressive stance of the Indian taxman, several Indian MNCs are planning to minimise their tax outflows. This paper aims to study profit-shifting drawing from the institutional theory for the Indian MNCs.Design/methodology/approachThe sample comprises 679 MNCs listed on the Bombay Stock Exchange or the National Stock Exchange with either Indian parents with foreign subsidiaries (553) or Indian subsidiaries of a foreign parent (126) for FY 2013–14 to FY 2018–19. A fixed-effect panel regression technique was invoked to examine tax rate differential motivated profit-shifting undertaken by MNCs with the moderating effect of international presence and patents.FindingsThe results suggest that MNCs shift their profits to take advantage of differences in global tax rates when they have an international presence in at least five tax countries. Further, profit shifting is likely towards no-tax compared to low-tax countries, with the presence of patents in an MNC group having no significant impact.Originality/valueLosses to the government revenue due to profit shifting by MNCs are rather severe in emerging economies. The study provides the first empirical evidence of the direction of profit shifting with the moderating effect of the extent of global presence and group patents, which would interest scholars in the field. The findings provide valuable insights to the policymakers, highlighting the urgent need to operationalise the general anti-avoidance taxation rules.

Relational Leadership Within Business Partnerships In India: A Process Framework

Inter-organizational partnerships are an essential mechanism for corporations to access resources, particularly in emerging markets. This study is concerned with the steps relating to how multinational corporations in India create, develop, and evaluate their partnerships based on relationships. In the context of business-to-business partnerships, the researchers aim to (i) create a relational leadership process framework for how these relationships are built, and (ii) analyze if relational governance through relational leadership is complementary or rather a substitute to formal contracts in the context of such business-to-business partnerships. A case study-based research design is employed to explore relational leadership in business partnerships in India, thereby incorporating case studies based on interviews from nine internationally operating corporations. A process framework for relational leadership with six distinct steps on how to develop business partnerships in India was developed. Furthermore, the researchers found that the framework complements the relational governance processes supported by relational leadership and formal contracts when engaging in business partnerships in India. The study’s main aim was to contribute to the current theory in the emergent field of relational leadership. Practitioners responsible for partnership building among corporations can gain insights from the framework into the application of relational leadership. The results indicate that corporations can maintain long-term partnerships if specific relational governance mechanisms mainly supported by the application of relational leadership are in place.

Formulating an Effective Cross-Border Insolvency Framework under the Indian Insolvency and Bankruptcy Code

In 2016, India introduced the Insolvency and Bankruptcy Code largely in response to the non-performing crisis that plagued the domestic banking and financial sector for nearly two decades. However, given the large and growing presence of Indian businesses abroad, as well as multi-national corporations in India, a bankruptcy code without a cross-border insolvency framework was a task half done. This Note analyzes the nascent cross-border insolvency legal regime in India and makes recommendations for establishing an effective cross-border insolvency regime. In particular, it argues for the adoption of the UNCITRAL Model Law on Cross-Border Insolvency with certain modifications. Further, it also argues for the adoption of alternatives in the form of bilateral treaties and cross-border protocols in addition to the Model Law.

Indian Multinational Corporations and Technology Transfer: Prospects and Determinants

Indian Multinational Corporations and Technology Transfer: Prospects and Determinants

Multi National Companies in India– A Critical Review

India is one of the faster growing emerging economies in the world. For this many industries are contributing that may be Indian or foreign origin company. By observing the statistics, 49.86 % of contribution by MSMEs towards nation export and the remaining by large companies only. MNCs (multinational corporations) are also contributing to the growth of the country by generating employment, the inflow of FDI, transfer of technology etc. The orientations of international business connotatively deal with ethnocentric, polycentric, geocentric, and regiocentric approaches. The MNCs and their profit-making objective always influenced by entry strategies with the time of entry, size of the entry, and place of entry into the foreign market. It also influenced by way of entry into the foreign market by concentrating on FDI with green field and brown field strategies. Here the present paper addresses the multinational corporations in India and their contribution to the economic development of India and attempts to address characterization of MNCs with employment argument and growth prospects of economic variables significantly influenced on different sectors growth in India. The present study attempts to analyze the relationship between foreign companies’ mode of entry with FDI and economic variables by using Karl Pearson coefficient correlation.

A neo-institutional perspective on ethical decision-making

Drawing on neo-institutional theory, this study aims to discern the poorly understood ethical challenges confronted by senior executives in Indian multinational corporations and identify the strategies that they utilize to overcome them. We conducted in-depth interviews with 40 senior executives in Indian multinational corporations to illustrate these challenges and strategies. By embedding our research in contextually relevant characteristics that embody the Indian environment, we identify several institutional- and managerial-level challenges faced by executives. The institutional-level challenges are interpreted as regulative, normative and cognitive shortcomings. We recommend a concerted effort at the institutional and managerial levels by identifying relevant strategies for ethical decision-making. Moreover, we proffer a multi-level model of ethical decision-making and discuss our theoretical contributions and practical implications.

Institutional distance, establishment mode choice and international experience: the case of Indian MNCs

PurposeFocusing on the growing importance of Indian multinational corporations in the past decades, this paper aims to understand how establishment mode decisions in a foreign market can differ depending on a series of factors. Specifically, the authors examine how institutional distance, including cultural distance and political risk, could affect these decisions, and how international acquisition experience could moderate this relationship.Design/methodology/approachThe authors test their hypotheses using data from 114 outward foreign direct investments between 2000 and 2010.FindingsThe findings suggest that experience in international acquisitions increases the likelihood of subsequent acquisitions in high-risk and culturally distant countries.Originality/valueBy considering that the country of origin also matters, some differences among emerging-market multinational corporations (MNCs) may arise. Besides, since empirical research focusing on emerging-market MNCs is scarce, more empirical studies are needed to analyze the influence of cultural distance and political risk on some decisions. In the case of India, there are also additional motivations for analyzing those institutional factors. First, since this is a country with significant linkages to Western countries, it is interesting to know if the influence of cultural distance is similar or not. Second, there is a lack of empirical evidence on the relationship between political risk and establishment mode choice in the case of Indian MNCs. To fill this gap, the first aim of this paper is to analyze how cultural distance and political risk affect the establishment mode choice of Indian MNCs. Moreover, recognizing international experience to be an important factor in explaining international expansion, we focus on international experience interactions with sources of uncertainty inherent in the host market.

Determining factors for Intent to Leave: Literature Review

Globalization has given opportunity for many Organizations to create a space for themselves in the International Market. It is vital for Indian multinational corporations to remain competitive in this area. This study is an effort to determine the relationship between repatriation adjustment, job satisfaction, and organizational commitment and their Intention to leave. It further helps to understand the repatriation process which will reduce Indian Repatriates intentions to leave their organization. It is an expensive affair for the Organization on account of Repatriation failure. Understanding the role of repatriation adjustment, job satisfaction, and organizational commitment in the repatriation process would give organizations an edge to use these factors for successful adjustment and retention of repatriates. The study further proposes a model to identify the relationship between them.

Religion-Based Decision Making in Indian Multinationals: A Multi-faith Study of Ethical Virtues and Mindsets

The convergence of India’s rich cultural and religious heritage with its rapidly transforming economy provides a unique opportunity to understand how senior executives navigate the demands of the business environment within the context of their religious convictions. Forty senior executives with varying religious backgrounds and global responsibilities within Indian multinational corporations participated in this study. Drawing from virtue ethics theory and using systematic content analysis, several themes emerged for ethical virtues (empathy, sympathy, humanity, justice, fairness, temperance, integrity, transparency, governance, conscientiousness, transcendence, wisdom, moral fortitude and determination). The analysis illustrates how these deeply seated ethical virtues helped to form and refine these executives’ ethical mindsets via guiding principles such as an ethical culture, environment, molding, education, commitment and leadership. In turn, these ethical mindsets influenced the executives’ ethical decision-making processes. We find that these executives’ ethical virtues and mindsets are inspired by their religious backgrounds. In summary, a very complex mental tug-of-war appears to take place as these executives rationalize and negotiate unethical circumstances while being cognizant of personal religious beliefs. We contend that in a pluralistic multi-faith society such as India, it is critical for corporations to align the virtues of its senior executives with those of the corporation so that virtues are applied consistently when dealing with various stakeholders. The findings present several theoretical and practical implications, which are discussed.

HR Manager Roles in the Context of Globalizing MNC Environment : Empirical Study

With the increasing globalization, more integrated markets, growing number of Multinational Corporations (MNCs) in India and dearth of studies in the area of internationalization and Human Resource (HRR) roles posed a line of enquiry into this aspect as the study is intended to explore the role of HR managers with the degree of internationalization in Indian MNCs. The roles of HR Professionals are also changing due to dramatic rate of change in today’s organizations. It has been advocated that the role of the HR Professionals must parallel the needs of changing organization. It has been argued that globalization leads to more strategic role for Human Resource (HR) managers (Scullion and Starkey 2001). For measuring HR roles, most popular four roles model of Ulrich (1997) is used in the present research. Degree of Internationalization (DOI) is measured through Composite scale developed by (Sullivan 1994). The scales were tested for unidimensionality, reliability, response and non response biases and all kind of concerned validities. Thereafter measurement model was developed for the proposed relationships using Structural Equation Modeling (SEM) through the capabilities of Lisrel 8.80. The findings corroborates with the existing literature reporting strong relationship of DOI with all the four roles proposed by Dave Ulrich especially with strategic role.

Workplace inclusion of persons with a disability

PurposeThe purpose of this paper is to integrate research on human resource systems with work on disability management practices to outline how multinationals across India and Germany are engaged in efforts to increase workplace inclusion of persons with a disability.Design/methodology/approachSemi-structured interviews with respondents from multinational corporations in India and Germany were conducted, transcribed, and analyzed.FindingsEmployers followed three guiding principles (i.e. beliefs): importance of harnessing diversity, encouraging multi-stakeholder engagement internally, and engaging with the external ecosystem to build internal human resource capabilities. Respondents further noted two interdependent and mutually constitutive programs that covered the life cycle of the employee: job flexibility provisions and integration programs. Country-specific differences existed in terms of perceived external stakeholder support and availability of talent.Research limitations/implicationsThe results complement prior research with respect to the importance of organizational factors for the inclusion of persons with a disability and also extend prior research by shedding light on the role of the national context in such inclusion endeavors.Practical implicationsFindings indicate that disability-inclusion principles may be universal, but their operationalization is region specific. Global organizations must be aware of these differences to design effective inclusion programs.Social implicationsThe study helps in designing and evaluating appropriate inclusion initiatives for persons with disabilities, an important yet underutilized group of potential employees in both India and Germany.Originality/valueThis is the first study to investigate country-specific commonalities and differences in fostering workplace inclusion of persons with disabilities in India and Germany.

Does Being Perceived as Global Pay Off? An Analysis of Leading Foreign and Domestic Multinational Corporations in India, Japan, and the United States

As global players, multinational product and corporate brands are known to have an advantage over local competitors. Although foreign multinational corporations (MNCs) increasingly compete against domestic MNCs, particularly in economically strong countries, little is known about (1) whether foreign MNCs can use their globalness to their advantage and (2) how the perceptions of foreign versus domestic MNCs drive consumer behavior. To examine this issue, the authors propose a framework based on accessibility-diagnosticity theory and test it using consumer data from countries in which leading foreign and domestic MNCs compete. The results show that perceived brand globalness enhances consumers’ intentional loyalty toward MNCs indirectly by affecting the functional and psychological value these MNCs offer. The value-creation routes change according to firms’ origins—that is, foreign MNCs translate globalness through functional and psychological value, while domestic MNCs translate globalness through psychological value. However, the benefits of being global and the value-creation routes for foreign (vs. domestic) MNCs differ between countries. Finally, high consumer ethnocentrism weakens—but does not completely erase—the effects of perceived brand globalness in all countries and interacts with MNCs’ origins.

Entering the base of the pyramid market in India

Purpose– The purpose of this paper is to shed light on the international market expansion of multinational corporations (MNCs) to the base of the pyramid (BoP). The authors employ the corporate social entrepreneurship (CSE) perspective to reveal how MNCs can enter this market, the key enabling factors and the benefits they can gain. CSE is related to entrepreneurial and marketing strategies that are inspired by social responsibility.Design/methodology/approach– An exploratory, qualitative multiple-case study has been employed. In-depth interviews were conducted with managers from three MNCs that have entered the BoP market in India.Findings– The findings of this research confirm that successful entry into the BoP requires the pursuit of social responsibility and the adaptation of marketing strategies. In addition, MNCs should identify the key environmental factors (demand conditions and socio-political actors’ expectations) and develop organisational characteristics (management support, network orientation towards non-governmental organisations and availability of financial resources) to match. The findings of this research show that engagement in CSE in countries with considerable BoP populations can bring firms legitimacy and sustainable profitability.Research limitations/implications– This research is based on interviews with a limited number of MNCs in India. Future studies could generalise the findings of this research to a larger number of corporations in other countries.Originality/value– This research brings new insights to the field of international marketing by integrating the corporate social responsibility, marketing and entrepreneurship disciplines. The findings of this research offer empirical support for CSE and its role in international marketing strategies.