Indian Multinational Enterprises Research Articles

Home country and firm-specific advantage influences on HRM replication versus adaptation in EMNEs operating in advanced economies: A qualitative comparative analysis

This article examines a variety of home and host-country factors and explains how they influence the global integration versus local adaptation of human resource management (HRM) in subsidiaries of emerging multinational enterprises (EMNEs) in advanced economies. The study draws on data collected from 15 multiple case studies using semi-structured interviews with senior directors and managers working in Australian subsidiaries of Indian multinational enterprises (MNEs) operating in the information technology (IT) services industry. The findings reveal that despite originating from weak institutions, Indian IT service MNEs do not face hurdles in replicating their home-country HRM model to their subsidiaries in Australia. International staffing of expatriates was a key industry-specific resource and capability enabling reverse country-of-origin effect to allow the Australian subsidiaries to be managed ethnocentrically. This article challenges the notion that EMNEs struggle to adapt their indigenous HRM systems and model due to weak institutions as it sheds light on the reverse relationship that exists between management practices and country-of-origin in leveraging home-country institutions. It also demonstrates that EMNEs derive competitive advantages mainly from their traditional firm and industry-specific resources and capabilities which allow them to achieve global integration of HRM.

Configuring International Growth of Emerging Market Multinational Enterprises: A Compositional Springboarding View in the Context of India

AbstractThe rapid international growth of emerging market multinational enterprises (EMNEs) has become widely researched in the international management field. The compositional springboarding view (CSV) provides a theoretical understanding of amalgamation‐ambidexterity‐adaptability elements that impact EMNEs' internationalization. Here we utilize the CSV to conduct a configurational analysis of factors explaining Indian firms' rapid international growth. Using fuzzy‐set qualitative comparative analysis (fsQCA) of a survey‐archival data set matched with a sample of listed manufacturing firms from India, we identify five configurational solutions for Indian multinational enterprises (MNEs) to achieve international growth. We further develop a taxonomy of Indian MNEs' CSV configurations supporting rapid international growth that we name as amalgamator, adapter, augmentor, explorer, and springboarder. Through the configurational approach, we extend the EMNE literature in the international management field by exploring the efficacy and complementarity of compositional springboarding factors that enable Indian MNEs' rapid international growth. We also contribute to the organization theory and strategy literatures by addressing the tension alleviation between reconfiguring existing resources and creating new ones. Our theoretical extension opens new opportunities for CSV to guide strategic analyses across various resource reuse and creation scenarios.

Role of “Indianness” in International Location choice – The effect of religion and langauge

Unlike other countries’ firms that have undergone the path of liberalization since the 1990s, Indian Multinational Enterprises (MNEs) have registered exceptional cross-border activities. Originating from the institutional void, a large majority of successful Indian MNEs are generally part of a single business family’s portfolio of businesses, commonly known as business groups (BGs). MNEs are embedded in their home country environment before their internationalization. Thus, acknowledging the role of home country institutions in shaping the culture of the organization, we adopt the concept of “Indianness” and unpack it in the form of linguistic and religious diversity which shapes the organizations in their formative years. This study aims to understand the impact of Indianness on the foreign location choice of the most deeply entrenched organizational forms, that is, the Indian BGs. Here we show that Indian firms prefer to internationalize to nations that are least distant linguistically and religiously and have a less diverse set of languages and more diverse religiously. Additionally, as the religious distance seems to dissuade the location choice in high distant nations, international experience gained by the same BGs’ affiliate in the same or psychically similar host nations aids in choosing religiously distant nations. These results are contrary to the belief that high religious or linguistic distance dampens the prospects of foreign location choice. This study also highlights the role of prior experience in the same or psychically similar nations in aiding the reduction of the negative impacts of religious differences. This study brings to fore the importance of home country (informal)institutions or as we term them Indianness in the case of Indian MNEs internationalization.

Examining the evolution of emerging market multinational enterprises’ competitive advantages: Evidence from India

Using a large panel dataset on Indian multinational enterprises (MNEs) spanning over a period of 20 years, from 2000 to 2019, we explore how emerging market multinational enterprises (EMNEs) are evolving their capabilities to catch-up with their global peers. We employ the springboard perspective and the global factory framework for providing theoretical foundations to our empirical exposition. We argue that the cross-border acquisitions (CBAs)-led asset augmentation strategy leads to the process of EMNEs’ evolution by internalizing intangible assets, such as brand and advanced sophisticated technology. This helps EMNEs to not only enhance their marketing- and technology-related capabilities but also to internationalize further. However, in this process EMNEs trade-off their existing production-related capabilities. We make significant contributions to the extant literature by exploring the effects of CBA-led asset augmentation strategy and extending the application of global factory framework to the case of EMNEs.

The international training of expatriates in Western subsidiaries of emerging multinational enterprises: A knowledge-based perspective

There is a considerable gap in academic theoretical literature about the international training of expatriates in multinational enterprises (MNEs). While the majority of research has focused on developed (Western) multinationals operating in developing countries, very limited research has been conducted on emerging multinational enterprises (EMNEs) operating in developed countries and the expatriates who work in them. In this study, we explore the international training of expatriates in Indian MNEs from the information technology industry operating in Australia to examine how they provide training to their expatriate staff who are sent on international assignments. We collected qualitative data in the form of multiple case studies via interviews with senior executives based in the Australian subsidiaries. Our findings reveal that Indian IT MNEs provide a variety of centralised training programmes for their managerial and technical expatriates and use training as a key instrument to leverage and transfer home country knowledge to their Australian subsidiaries. We also found that each stakeholder involved in the training process plays a distinct role in the knowledge transfer process, which allows Indian EMNEs to integrate the training with their people-centred business model to deliver IT services in host countries.

Dual institutional embeddedness and home country CSR Engagement: Evidence from Indian MNEs

This study contributes to the international corporate social responsibility (CSR) literature and emerging market multinationals research by examining the influence of dual institutional embeddedness on home country CSR engagement in the understudied context of Indian multinational enterprises (MNEs). Specifically, we study the role of internationalization, depth of involvement in stringent CSR contexts, and implementation of mandatory CSR regulation in the home country on the domestic CSR engagement of Indian MNEs. Our results indicate that heterogeneous institutional pressures experienced by firms embedded in dual institutional contexts encourage greater home country CSR engagement.

Knowledge hide and seek: Role of ethical leadership, self-enhancement and job-involvement

This paper tests the mediating role of knowledge hiding in the ethical leadership–employee well-being relationship. The moderated mediation examines the impact of individual characteristics (self-enhancement motives and job involvement) on employee well-being through knowledge hiding. The hypotheses are supported by multi-source data collected at two points from 410 employee and co-worker dyads from emerging Indian multinational enterprises. Results reveal that ethical leadership reduces knowledge hiding behavior, which, in turn, strengthens the well-being of employees. Individual characteristics moderate this relationship such that the negative impact of ethical leadership on knowledge hiding is more pronounced when self-enhancement motives and job involvement are high. Finally, the moderated mediation suggests that individual characteristics act as catalysts and ameliorate the indirect negative impact of ethical leadership on employee well-being through knowledge hiding.

Outward Foreign Direct Investment from India: A Comparative Analysis

The outward foreign direct investment (OFDI) is an important vehicle through which the multinational enterprises (MNEs) expand their global business. Before the initiation of the liberalisation measures, India was more of a recipient than a contributor of foreign direct investment in the global economy. led to an astounding The ongoing liberalisation measures embarked in 1991 growth of outward FDI in India. This study performed a comparative analysis of the outward FDI from India during the post-liberalisation period (1992 to 2018) using a time series data set collected from the UNCTAD. The analysis revealed that the outward FDI from India was increasing faster than the inward FDI, both in terms of FDI stock as well as FDI flows, in the post-liberalisation period. At the same time, growth of outward FDI from India was much faster than that from the developing countries and from the world; therefore, the share of India in the global outward FDI and in the outward FDI from developing countries has been steadily increasing. This reflected the growing presence of Indian multinational enterprises (MNEs) in the global economy in the post-liberalisation period.

Subnational institutions and EMNE acquisitions in advanced economies: institutional escapism or fostering?

Purpose The purpose of this paper is to examine whether subnational market-supporting institutions in Indian states affect the likelihood of Indian multinational enterprises (MNEs) to undertake acquisitions in advanced economies (AEs) rather than emerging economies (EEs) and, if so, which mechanism – institutional fostering or escapism – underlies the phenomenon. Design/methodology/approach The paper uses a logistic regression model on a dataset of 647 firm-level cross-border acquisitions (CBAs) undertaken by Indian MNEs during the period 2010–2016. Findings The paper finds support for the institutional escapism mechanism, as opposed to the institutional fostering mechanism, underlying Indian MNEs’ acquisitions in AEs (rather than EEs). That is, firms headquartered in Indian states where market-supporting institutions (such as economic liberalization and efficiency of legal systems) are weak are more likely to undertake CBAs in AEs than in EEs as an escapist response to weak subnational institutions at home. Originality/value The paper highlights the relevance of the mainstream international business (IB) concept of emerging market multinational enterprises (EMNEs) internationalization to critical IB scholarship by examining subnational institutional influences on EMNEs’ foreign market choice between AEs and EEs. In particular, by providing evidence for the institutional escapism mechanism which has potential negative socioeconomic consequences in the region of the investing firm, the paper adds to critical IB research which places great emphasis on the examination of inequalities and draws attention to the EMNE context as a suitable setting for further research on internationalization from a critical perspective.

Out of India: Towards a conceptual framework on internationalization motives, parenting styles and human resource management practices among Indian MNE subsidiaries in Ireland

The significant growth of Asian multinational enterprises (MNEs) in western economies in recent years, in particular in smaller advanced economies such as Ireland, has led to calls for a deeper understanding of the drivers of location choice among these MNEs and for more compelling accounts of the parenting and management of the subsidiaries being established. In this conceptual contribution, we focus on the specific case of Indian MNEs with subsidiaries in Ireland. Assembling theoretical insights from the literature on parenting styles and headquarter-subsidiary interactions, coupled with practice-led observations garnered from Indian MNEs, we develop a conceptual framework elucidating key variations in headquarter-subsidiary relationships and the HR policy and practice mix. We reason that the preferred approach to corporate parenting, vested in adding value to the subsidiary, extracting value from it, or seeking a balance in the overall exchange, results in a range of interactions between headquarters and subsidiaries, encompassing integration, collaboration or local responsiveness. Furthermore, we postulate that the preferred headquarter-subsidiary interactions influence the subsequent HR recipes adopted in the subsidiary setting as it seeks to build its strategic position within the broader MNE network. In order to deepen lines of inquiry around these different interactions, we advance a series of propositions for testing.

Role of Industry Factors in Financing the Outward Foreign Direct Investment by Indian Multinational Enterprises

The article investigates the impact of industry environment of the home country (in which Indian parent firms operate) on financing their outward foreign direct investment (OFDI) for the period 2008–2009 to 2013–2014. Due to difficulty in empirically examining the flows within a multinational system there exists scant literature in this area. By employing random effects probit model we find that size and growth rate of the industry have important implications for OFDI financing by parent firm. Second, by including time effects, uniqueness of the industry to which the parent firm belongs significantly shapes the OFDI financing. Third, parent firms are found to significantly rely on their own strengths than industry environment in financing the OFDI, lending support to the ownership advantage theory of international business. Finally, parent firm is found to follow industry norms in financing their OFDI. The study has implications for supply-side factors determining capital structure of firm and internal capital available to a multinational.

Family businesses from emerging markets and choice of entry mode abroad: insights from Indian firms

Internationalization of family businesses (FBs) is an interesting topic that has received extensive attention in the literature during the last decades. Prior studies emphasized the conservative attitude toward risk of FBs. However, studies addressing international decisions of emerging-market FBs (EMFBs) are still scarce. We investigate whether home and host countries matter when EMFBs choose the entry mode abroad. By doing so, we discern whether they follow the same behavioral pattern as developed-country multinational enterprises (MNEs) or they show a distinctive strategic behavior. Drawing on a sample of 298 foreign market entries carried out by Indian MNEs, our results show that Indian FBs prefer acquisitions instead of greenfield investments. Moreover, host country factors matter, since outward foreign direct investment (OFDI) of Indian FBs in developed markets is associated with a preference for acquisitions, whereas OFDI in developing countries is associated with greenfield investments.

Ownership strategies in knowledge-intensive cross-border acquisitions: Comparing Chinese and Indian MNEs

Drawing on the comparative ownership framework, we perform a comparative analysis of Chinese and Indian multinational enterprises (MNEs)’ ownership strategies in knowledge-intensive cross-border acquisitions (CBAs). Specifically, we claim that due to their lower comparative ownership advantage, and the consequent higher information asymmetry, Chinese MNEs are more cautious (than Indian MNEs) in their ownership strategy. We rely on a dataset of acquisitions undertaken by high and medium-high tech Chinese and Indian MNEs worldwide during the period 2000–2014. Results confirm that Chinese MNEs prefer lower equity control than their Indian counterparts. However, such a preference for lower equity decreases with higher home-host institutional distance and host country-specific previous experience. These factors do not seem to modify the ownership preference of Indian MNEs in the same way.

The role of country alliances in reducing the transaction costs of internationalisation: evidence from Indian multinational enterprises

This paper analyses the role of home-host country alliances in reducing transaction costs in the internationalisation process. We test hypotheses about the role of country-level alliances and firm internationalisation with comprehensive longitudinal multi-industry data on 623 acquisitions made by Indian multinational enterprises (MNEs) between 2000 and 2007 on a panel of 65 host countries. The results show that country alliances reduce the transaction costs arising from the distance between home-host countries, thereby positively influencing the internationalisation of Indian MNEs. However, the extent of that influence depends upon the nature of the alliance. Our findings have significant implications for public policy and theory.

The role of experiential and non-experiential knowledge in cross-border acquisitions: The case of Indian multinational enterprises

This paper investigates the antecedents of the internationalization of emerging economy multinational enterprises (EMNEs) through cross-border acquisitions. Using a panel data set of 1138 cross-border acquisitions made by 515 Indian multinational enterprises (MNEs) during 2000–2013, it examines interactions of in-house resources with experiential and non-experiential knowledge to explore how EMNEs manage and exploit their knowledge base when internationalizing. The results show that Indian multinational enterprises have ‘interface competence’. They combine in-house resources with experiential market and externally sourced technological knowledge for undertaking cross-border acquisitions. The Uppsala model provides insights in analyzing the role of market knowledge and the Global Factory model helps in analyzing the role of technology in cross-border acquisitions by EMNEs.

Cross-border Acquisitions and Host Country Determinants: Evidence from Indian Pharmaceutical Companies

This study seeks to examine the locational determinants of outward foreign direct investment (OFDI) of Indian pharmaceutical companies (IPCs); best known for their technological leapfrogging and widely acclaimed as one of the most successful representations of emerging market multinationals. Research on the specific ownership advantages of Indian multi-national enterprises (MNEs) and their internationalization strategies is catching up and there still exists a knowledge gap concerning the choice of investment destination and motivations behind their acquisitions. This study tries to address this gap by attempting to build a locational choice model which best explains the spatial distribution of Indian pharmaceutical acquisitions. Based on theoretical insights, 13 important variables measuring the host country characteristics such as economic, political, institutional and cultural environment of 33 countries for the period 2000–2012 have been considered. Panel regression has been employed to empirically analyze the host country-specific determinants. Our results highlight the importance of strategic assets of the host countries as the key determinants for the Indian pharmaceutical firms who appear to be targeting the developed countries through the inorganic route to overcome their inadequate product development capabilities. The presence of a conducive economic environment, a common language and openness of the host countries also seem to impact the choice of location. Interestingly, geographical distance, group affiliations and institutional variable corruption had no impact on the locational choice of the host country. The findings of the study may be extended to other studies on the internationalization strategies of firms arising from other emerging economies.

Religiosity, spirituality and ethical decision-making: Perspectives from executives in Indian multinational enterprises

Through a semi-structured interview with 40 senior executives from Indian multinational enterprises (MNEs), we use virtue ethics theory to examine the types of virtues that are promulgated by religiosity and spirituality in shaping ethical behavior. The responses were coded in NVivo and the themes and concepts were organized into four categories (e.g., environmental context, individual religious virtues, individual non-religious spiritual virtues, and organizational ethical virtues). These categories contributed to ethical decision-making. The findings suggest that it is critical to understand ethical decision-making by identifying virtues that are important in religious, spiritual, and humanistic contexts in countries such as India, which are religiously and spiritually diverse. The study findings assist in the development of a framework of ethical decision-making that can be used for further empirical testing across both non-Western and Western contexts in multi-faith populations. Several theoretical, practical, and methodological contributions are presented along with suggestions for future research.

The Viability of Sustained Growth by India’s MNEs: India’s Dual Economy and Constraints from Location Assets

This paper considers the longer-term viability of the internationalization and success of Indian multinational enterprises (MNEs). We apply the ‘dual economy’ concept (Lewis, Manch Sch 22(2):139–191, 1954) to reconcile the contradictions of the typical emerging economy, where a ‘modern’ knowledge-intensive economy exists alongside a ‘traditional’ resource-intensive economy. Each type of economy generates firms with different types of ownership advantages, and hence different types of MNEs and internationalisation patterns. We also highlight the vulnerabilities of a growth-by-acquisitions approach. The potential for Indian MNEs to grow requires an understanding of India’s dual economy and the constraints from the home country’s location advantages, particularly those in its knowledge infrastructure.

Foreign Acquisitions by Indian Multinational Enterprises: Testing and Extending Internationalisation Frameworks

Scholarly interest on scrutinising internationalisation strategies used by multinational enterprises from emerging economies has been swiftly growing. New theoretical frameworks, such as the Linkage-Leverage- Learning (LLL) framework, competing with the traditional ones, such as the Ownership-Location-Internalisation (OLI) framework, have been put forward to explain their idiosyncratic behaviour. Using a database on foreign acquisitions undertaken by Indian multinational enterprises, this study tests these theoretical frameworks and reconciles differences between them

The strategies of Chinese and Indian software multinationals: implications for internationalization theory

China and India are emerging as major entrants into the international software industry. Both are rapidly learning through outsourcing with multinational enterprises (MNEs) from advanced nations, yet their paths to this dynamic sector are very different. Chinese software firms have focused on their domestic market by working with foreign MNEs, while they move cautiously abroad. Indian firms, which are already large, continue to expand overseas as well as to climb the value chain. Different approaches to MNEs provide useful perspectives. At the same time, the innovation systems approach is necessary to explain the foundations of the industry. The article provides hypotheses and tests them. It concludes that learning internationalization processes are different in Chinese and Indian MNEs, and provides explanations for the different patterns.