Japanese MNCs Research Articles

Foreign direct investment from Japan, South Korea and China in the Czech Republic: A comparative analysis

Multinational companies from Japan, South Korea and China began to actively penetrate Czech market starting from the mid-1990s. By 2021, Japan was the leader in terms of foreign direct investment stock in the Czech Republic ($ 4.7 billion), followed by South Korea ($ 3.4 billion); and China ($ 760 million). The methodological basis of the paper is Dunning’s eclectic paradigm, which makes it possible to explain foreign investment activities from the point of view of the simultaneous availability in these processes of ownership, location and internalization advantages. As a result of a comparative analysis, the author comes to the following conclusions. In the processes of activity of foreign affiliates of Asian companies in the Czech Republic (as part of the implementation of existing ownership advantages), the following features were identified: concentration on the main field of activity of the parent company; concentration of activity in those industries that are most developed in the Czech Republic (industry agglomeration effect); clustering of affiliates around the leading company and main activity; diversification of the activities of foreign affiliates by supplementing the main activities of the parent company with the activities in related sectors. To explain the weak presence of Chinese MNCs in the Czech market and the more deep activity of South Korean and Japanese MNCs, a “wedge-shaped” foreign market entry was proposed; it is based on the idea of internalization advantages of. The leading company represents a spearhead of the “wedge-shaped” foreign market entry. A large MNC possesses powerful and well-developed ownership advantages. It is the first to enter foreign market in the sector that is main one for its activity in the national market; and it is followed by foreign affiliates operating in the main and related sectors in a kind of expanding “wedge”. It is the penetration that enables MNCs to gain a foothold in the market, leveraging both ownership, location and internalization advantages.

Ethics-related value acculturation: the case of Thai employees working at UK and Japanese MNCs in Thailand

PurposeMultinational corporations (MNCs) at their foreign subsidiaries hire local employees, whose cultural values may differ from the organisations' home cultures. Such value differences may pose managerial difficulties, making it critical to observe whether working at MNCs changes local employees' cultural values, reducing these differences. This study investigates how and to what extent local employees from a collectivistic culture acculturate their ethics-related values when working at MNCs' foreign subsidiaries. The authors examine (1) whether local employees change their values to become closer to the MNCs' home cultures, and if so, (2) whether the cultural distance between the MNCs' home and host national cultures affect the degree of such adaptation.Design/methodology/approachSurvey data were collected through stratified random sampling from Thai employees of a Japanese-owned MNC (n = 196), a UK-owned MNC (n = 143) and a Thai-owned organisation (n = 137), all operating in Thailand. Hypotheses were developed using Berry's bidimensional acculturation model and were tested using OLS and logistic regression analyses.FindingsThe study's findings indicate that MNCs' local employees from collectivistic cultures adopt Berry's integration acculturation strategy and acculturate their ethics-related values – collectivism, ethical relativism, collective responsibility preference and executive pay differentiation tolerance – towards the values prevalent in MNCs' home cultures. Overall, acculturation is greater when cultural distance is greater. New insights are presented in relation to collective responsibility preference and pay differentiation tolerance.Originality/valueFindings add to current knowledge on acculturation in management by (1) providing new insights into value acculturation (2) utilising Berry's acculturation model to analyse employees' acculturation within an organisation in the context of an emerging economy, outside the more frequently studied topic of mergers and acquisitions, and (3) investigating the impact of cultural distance on the degree of employee acculturation outside the field of expatriate adjustment.

A comparative examination of the tensions of sustainability managers in Korean and Japanese MNCs

Despite the growing attention on the conflicting dimensions of corporate sustainability, little is known about the tensions experienced by managers when adopting global corporate sustainability standards. In East Asia, more specifically, these standards are often viewed as strategic tools that differ from the indigenous and normative understanding of environmental and social contribution. In this paper we take a cultural viewpoint to examine and explain the tensions—and reactions to these tensions—of corporate sustainability managers in South Korean and Japanese multi-national corporations tasked with the implementation of global standards. Through 65 in-depth and comparative interviews conducted in Seoul and Tokyo between 2012 and 2017, we found that corporate sustainability managers in South Korea and Japan similarly encounter societal-commercial, traditional-new and individual-collective tensions. Nonetheless, our evidence indicates that they react to those tensions in contrary ways because of the roots of their indigenous sustainability, which are predicated upon different interpretations of Confucian ethics. This paper contributes to the literature on corporate sustainability by bringing into the analysis the tensions of corporate sustainability managers in East Asia.

아세안 진출 일본 기업의 해외직접 후속투자 결정 요인에 관한 연구

아세안 진출 일본 기업의 해외직접 후속투자 결정 요인에 관한 연구

Japanese Foreign Direct Investment in the Visegrád Four: Trends, Characteristic and Driving Forces

Japan continues to be the most important Asian investor in Poland and Czechia, and the second most important player in Hungary and Slovakia (after South Korea). Japanese multinationals, operating in the automotive, electronics and other industries, as well as in certain services, play an important role in the Central and Eastern European economies, enhancing the performance of the respective V4 economies. Although compared to, for instance, German MNCs’ investment, Japanese MNCs represent a rather minor share in the total FDI stock of these countries, the number of companies increase year-on-year. The paper briefly presents the history and main trends of Japanese investment in the V4 region, maps out the main characteristics of Japanese investment flows, and identifies the driving forces of Japanese FDI within the V4 region. The last section of the paper also sheds light on a new opportunity for the V4 countries to attract more investment from Japanese companies, that is the Japanese companies’ possible relocation to the V4 region from the United Kingdom, as a result of Brexit.

Work design expectations of Japanese MNCs’ local managers in English-speaking and Far East cultural clusters – USA, Thailand and India

PurposeThe importance of work design to organizational engagement and firm performance is increasingly recognized in management scholarship. For international business, a majority of variation in work design based on national cultures is addressed through cross-cultural management scholarship. However, there is a paucity of qualitative research on the influences international business human resource managers face for work design in the intercultural environment of overseas subsidiaries. The purpose of this interpretivist study was to examine the lived experience of overseas subsidiaries’ local managers to surface a more nuanced understanding of their expectations and related implications for work.Design/methodology/approachEmpirical research was conducted through semistructured in-depth interviews with senior managers of subsidiaries of Japanese MNCs in USA, Thailand and India.FindingsThe findings of the study develop and extend on prior cross-cultural management scholarship on world cultural clusters revealing changed expectations of work in intercultural work environments as instantiated by Japanese MNCs.Social implicationsThrough engaging work design, international businesses can contribute to the United Nations Sustainable Development Goal 8 that pertains to decent work.Originality/valueThe study adds to extant understanding of the work design antecedent to engagement by broadening to intercultural environment impacts understanding facilitated by empirical lived experience data and suggesting a modification to extant theory. This study pioneers in taking world cultural clusters as the field for evaluating data.

Managing Hybridization: Transferring Production Practices within Japanese MNCs

This paper aims to explore theoretical relationships between MNC practice transfer strategies and subsidiary hybridization. To achieve this aim, we analyzed in-depth, qualitative data on transferri...

Factory performance and decision-making authority between headquarters, expatriates, and local employees in Japanese MNCs in Southeast Asia

This study aims to clarify the relationship between foreign factory performance and the decision-making authority for manufacturing activities between headquarters, expatriates, and local employees. To investigate these relationships, we conducted logistic regression analysis based on a questionnaire survey of 246 Japanese manufacturing subsidiaries in Southeast Asia and multiple case studies. We found (1) a negative relationship between factory performance and the level of the headquarters’ authority, (2) a positive relationship between factory performance and the level of expatriates’ authority, and that (3) subsidiaries’ operating years and export ratio moderate the relationship between factory performance and expatriates’ authority.

A Quasi-Global Mindset: Psychological and Structural Factors That Made Japanese MNCs Succeed in the West and Struggle in China

The aim of this study is examining why many Japanese MNCs, which are embedded in Eastern cultures, were successful in the late 1970s and 1980s in Western markets, but have struggled in Eastern emerging markets such as China since the mid-2000s. The success of Japanese MNCs in Western developed countries, whose cultural, institutional, and business environments are very different from the Japanese market, suggests that Japanese managers were developing global mindsets. Thus, their recent struggle in China, which should have more commonalities with Japanese markets than Western markets, is a puzzle and should provide important implications for both researchers and practitioners. Based on the results of exploratory interviews with senior executives of ten large Japanese MNCs, we proposed the idea of a quasi-global mindset, which characterizes Japanese managers’ mindsets that are not truly global but are subjectively global. To the extent that managers erroneously believe they have a global mindset and that traditional organizational structures and systems block opportunities to recognize the problem, managers cannot understand the real problems and thus falsely attribute difficulties to the external environment. This study provides important implications to Japanese MNC managers as well as other MNC managers in terms of articulating the importance as well as the difficulties in obtaining true global mindset.

Japanese MNCs Subsidiary Strategy and Firm Value under Foreign Exchange Rate Uncertainty

Japanese MNCs Subsidiary Strategy and Firm Value under Foreign Exchange Rate Uncertainty

Overseas R&D Activity by Japanese MNCs

Overseas R&D Activity by Japanese MNCs

Psychological Contract Fulfillment and Repatriation Success of Japanese Expatriates and MNCs

Psychological Contract Fulfillment and Repatriation Success of Japanese Expatriates and MNCs

Knowledge Assimilation at Foreign Subsidiaries of Japanese MNCs through Political Sensegiving and Sensemaking

We analyse political sensegiving and sensemaking by expatriates and host country employees through exportive, contestative and integrative stages of knowledge assimilation at two China-based subsidiaries of different Japanese MNCs. Comparative case study analysis indicated that efforts by expatriates and HQ-based experts to convey, routinize and standardize home country practices during the exportive and contestative stages, while involving traditional ‘one way’ knowledge transfer, can provide a foundation for a subsequent integrative stage, during which host country employees’ locally embedded knowledge is assimilated despite geopolitical asymmetry between home and host countries. Without this foundation, knowledge assimilation can remain ‘frozen’ at the contestative stage, with host country employees resisting importation of good practices from the HQ, and expatriates marginalizing host country employees’ contributions unless these are exceptionally compelling.

Cross-national distance and insidership within networks: Japanese MNCs' ownership strategies in their overseas subsidiaries

This study investigates the controversial question about how cross-national distance influences MNCs' equity ownership in their overseas subsidiaries. Prior studies adopted aggregated constructs and time-invariant measures of cross-national distance, failing to capture the complexity of the phenomenon. Moreover, although ‘insidership’ within business networks may moderate the foreignness that MNCs confront in overseas markets, prior studies have not incorporated it into analysis. The present study confirms the explanatory power of multiple dimensions of cross-national distance and MNCs' insidership within networks. It also shows that cross-national distance and insidership within relevant works strengthen or weaken each other's influences on Japanese ownership strategies.

Do Japanese MNCs use expatriates to contain risk in Asian host countries?

We investigate the impact of host-country risk on the expatriation strategies of multinational firms, using data on Japanese subsidiary firms in manufacturing industries in 13 host countries in Asia. We find that country risk is negatively correlated with the degree of expatriation and that, rather than host-country risk, firm-specific factors (particularly capital intensity, ownership share of parent firms in subsidiaries and the age of the venture) explain most of the variation in the degree to which subsidiaries rely on Japanese expatriates. Contrary to previous studies, the capital intensity of production is a key explanatory firm-specific variable that correlates positively with the degree of expatriation. Japanese multinational companies do not rely on expatria127=tes to off-set host-country risk, but to mitigate risk to parent investment in subsidiaries.

Cultural determinants of alliance management capability – an analysis of Japanese MNCs in India

This study examines the role of national and organizational culture in alliance management in the context of three prominent joint ventures between India and Japan, which reached diverse alliance outcomes. It uses the case study method as a tool for an initial rich exploratory analysis (Yin 2013) of alliance management capabilities that may later be tested on a larger dataset. The study finds that national and organizational culture is both important factors of alliance management capability. It highlights the specific role of trust, consensus in decision-making, communication and relationship building as key constituents of alliance management capability. This paper thus contributes to an important strand of literature on alliance management in the context of two important Asian players from the developed and emerging markets. Its focus on cultural factors as determinants of alliance management helps to establish a managerial blueprint leading to positive alliance outcomes for such ventures in future and to establish a roadmap for increased interaction between India and Japan.

Do Japanese MNCs Use Expatriates to Contain Risk in Asian Host Countries?

We investigate the impact of host country risk on the expatriation strategies of multinational firms, using data on Japanese subsidiary firms in manufacturing industry in 13 host countries in Asia. We find that country risk is negatively correlated with the degree of expatriation and that, rather than host country risk, firm-specific factors (particularly capital intensity, ownership share of parent firms in subsidiaries and the age of the venture) explain most of the variation in the degree to which subsidiaries rely on Japanese expatriates. Contrary to previous studies, the capital intensity of production is a key explanatory firm-specific variable that correlates positively with the degree of expatriation. Japanese MNCs do not rely on expatriates to off-set host country risk, but to mitigate risk to parent investment in subsidiaries.

The bi-cultural option for global talent management: The Japanese/Brazilian Nikkeijin example

This paper reports on an important subgroup of international boundary-spanners – immigrants and second or third generation migrants from the MNC's home country living in the subsidiary host country. We take as our example the Nikkeijin (Japanese immigrants and their descendants) in Brazil. Such bi-cultural people are a largely unexplored source of boundary-spanning internationally competent talent for multinational enterprises. Using two different surveys, we find that this group is recognized as a source of talent by Japanese MNCs, but that their HRM practices are not appropriate to attract and use them in their global talent management programmes.

Korea-Japan Economic Cooperation Amid a New East Asian Integration

The purpose of this paper is two-fold: First, to examine a) ongoing East Asian integration in terms of intra-regional financial cooperation, b) the proliferation of intra-regional free trade agreements with extra-regional economies and cross-border foreign direct investment flows c) and structural changes in the Japanese and Korean economies in the past two decades and subsequent challenges faced by the two countries. Second, to suggest that Japan and Korea, as the two most mature and closest market economies in East Asia, should not wait to push mutually collaborative FDI until a formal FTA between them is effective. Despite historical legacies, the geographical proximity and the presence of high-tech manufacturing capacities in the two countries could be combined for immediate mutual benefits through engaging in increasingly emerging cross-border value chains. For this purpose, the active promotion of cross-border FDI flows between Japan and Korea is critical for both countries to overcome serious challenges. For the Japanese MNCs hollowing out Japan to respond to the “six difficulties” domestically, Korea could be reassessed as one of the most favored outbound destinations.

The effect of host country long term orientation on subsidiary ownership and survival

This paper examines the role which the long term orientation (LTO) dimension of host country culture plays in transforming multinational corporations’ (MNCs’) focus from transaction cost to transaction value in the context of MNC subsidiary ownership and survival. We used a sample of 10,236 overseas subsidiaries established by 1,291 Japanese MNCs in 29 host countries with varying levels of LTO to test our hypotheses. Results first showed that LTO has a direct positive effect on ownership levels. Second, we observed that there were positive interactions between LTO and cultural distance, and between LTO and geographic distance, on ownership levels. Third, we found that there were positive interactions between LTO and subsidiary ownership level, and between LTO and cultural distance, on subsidiary survival. The theoretical and practical implications of these findings are discussed in terms of the vital role LTO plays in determining whether transaction value or transaction cost considerations prevail in MNCs’ ownership strategies, and how MNCs can better take advantage of host country LTO and improve the survival likelihood of their subsidiaries.