Large Multinationals Research Articles

DMI: Design Value Awards 2024

In a ceremony held in September, DMI celebrated the 2024 Design Value Award winners. These were teams that have delivered significant value through design or design management practices. The 13 winners fill out a distinguished list of international organizations including non‐profit agencies, government entities, large multinationals, and regional enterprises.

BUSINESS INTELLIGENCE: TOMADA DE DECISÃO PARA MICROEMPRESÁRIOS, UMA IDEIA REVOLUCIONÁRIA PARA ALCANÇAR O SUCESSO

With the world economy and international trade increasingly integrated and diffuse. Companies find a competitive rivalry between competitors, and having good quantitative and qualitative methods for making decisions are some performance indicators. From small organizations to large multinationals in the world, they continually seek a predictable and profitable future scenario. So that they can control or anticipate any eventualities. In the commercial market there is a growing search by organizations for more information and data to assist in decision making. On the other hand, there is an increase in Information Technology (IT) tools, capable of managing, analyzing, generating reports and decisive graphics for decision making (whether for investments; purchases; contracting services; projects and events). Business Intelligence (BI) decision making is accurate, and its information (dice + evidence = strategic decision), based on dynamic statistical data and its environment meets business demands. Implementation project managers, both in BI and ERP, need to be aware of the impact of these systems, otherwise the implementation will fail, as in the Hershey’s case study. The benefits that ERP

BUSINESS INTELLIGENCE: TOMADA DE DECISÃO PARA MICROEMPRESÁRIOS, UMA IDEIA REVOLUCIONÁRIA PARA ALCANÇAR O SUCESSO

With the world economy and international trade increasingly integrated and diffuse. Companies find a competitive rivalry between competitors, and having good quantitative and qualitative methods for making decisions are some performance indicators. From small organizations to large multinationals in the world, they continually seek a predictable and profitable future scenario. So that they can control or anticipate any eventualities. In the commercial market there is a growing search by organizations for more information and data to assist in decision making. On the other hand, there is an increase in Information Technology (IT) tools, capable of managing, analyzing, generating reports and decisive graphics for decision making (whether for investments; purchases; contracting services; projects and events). Business Intelligence (BI) decision making is accurate, and its information (dice + evidence = strategic decision), based on dynamic statistical data and its environment meets business demands. Implementation project managers, both in BI and ERP, need to be aware of the impact of these systems, otherwise the implementation will fail, as in the Hershey’s case study. The benefits that ERP and BI systems bring are numerous and the results are reflected positively within the

A IMPORTÂNCIA DA GOVERNANÇA CORPORATIVA PARA A GESTÃO FINANCEIRA DAS ORGANIZAÇÕES EMPRESARIAIS: UMA IDEIA REVOLUCIONÁRIA PARA ALCANÇAR O SUCESSO

This study analyzed the relationship between Financial Management and Corporate Governance of Micro and Small Companies and their financial performance. To know the reasons that lead a micro and small company to close. By not carrying out an investment plan, spending more than what is actually invoiced and the difficulty of controlling accounts is something that many entrepreneurs suffer. With the world economy and international trade increasingly integrated and diffuse. Micro and small companies are in a competitive rivalry between competitors, and having good quantitative and qualitative methods for analyzing decisions are some performance indicators (KPIs). From small organizations to large multinationals in the world, they continually seek a predictable and profitable future scenario. So that they can control or anticipate any eventualities through financial governance. In the financial market, there is a growing search by organizations for more information and data to assist in their decision-making arrangements. Financial Management has been increasing its area of expertise in terms of needs: cash; planning; capital expenditure research and decisions. Financial management as a refined tool becomes a privilege in the organization's decision making, envisioning future scenarios, which if used correctly leverages profits.

Echoes of Speculation Underway in Relations Between the Occident and China

In a previous article I talked about speculative waves in sequence that have hit the global economy since the 2000s in a world struggling with deflation. Well, this wave of speculation has not stopped but today it seems to concern the transfer of industrial plants from the West to China. A process that was born with the good intentions of transferring industrial activities to developing countries with the dual objective. Give a boost to the economy in developing areas and at the same time reduce the management costs of large multinationals' plants. A process therefore that was born with a positive sign in the intent to help a coordinated development of the territories and a reduction in the costs of industrial products. Meanwhile, the objective of coordinating the development of the territories and continents has not been achieved and on the contrary the process has led to an almost exclusive delocalization of industrial production from the West to China. The excess of industrial localization has exacerbated the concentration of unassimilable waste with a worsening of the disease of the planet struggling with atmospheric overheating. The process, therefore, has been slowed down but not stopped for natural reasons. On the other hand, the acceleration of the development of the Chinese economy has also marked a halt coinciding with the spread of the global epidemic. After about fifty years of accelerated economic growth, the Chinese community has sensed the change in the country's economic prospects and has pulled the brakes on both consumption and investments, marking the end of the accelerated race on the road to development. The picture of the speculative evolution of industrial delocalization processes sees together the interest of mega companies in reducing management costs which is congenial to the increase in the financial values of companies that increase on the Western stock exchanges. In other words, delocalization helps reduce management costs and at the same time seems to support ultra increasing financial values. In short, it plays into the hands of speculation which is certainly not the interest of global social and economic development which instead requires coordination of the territories on the road to development. With the further dilemma that the fate of the global economy may be in the hands of the Boards of Directors of mega companies and not of states and communities.​

Exploring circular economy strategies of SMEs in the Italian tanning cluster of Arzignano: A multilevel perspective of reactive and proactive strategies

While the Circular Economy predominantly affects large companies and multinationals, its impact on Small and Medium-sized Enterprises (SMEs) is an emerging research area. This research aimed to unfold the Circular Economy strategies implemented by SMEs within an industrial cluster context. Ten companies from the Italian tanning cluster of Arzignano were selected as case studies. Thematic analysis, pattern-matching, and multi-value Qualitative Comparative Analysis techniques were used to analyze primary and secondary data. Main findings revealed that CE strategies taken by the studied companies were characterized by the economic and efficiency benefits provided, such as resource-saving, waste management, energy use reduction, and materials selection for further recycling. SMEs' management is targeting compliance with environmental regulations/certifications, market pressures, and cost-benefit assessments, evidencing an adaptive behavior to external exigencies. Novel findings came from the meso level, such as a ‘symbiotic circularity’ strategy taken by two SMEs and their value chain for co-production, and the chain actions related to recycling, remanufacturing, and reusing wasted products by partner companies. A cascade chain of interdependent actions toward Circular Economy practices was also identified within the cluster level. Reactive and proactive Circular Economy strategies were identified in a multilevel framework.

Successful Foreign Direct Investment Through the Development of Parts Supply Industries in the Host Country: A Study of India's Automobile Manufacturing Sector

Several large multinationals and a few local assemblers dominate the Indian automobile industry. The largest multinational, Maruti Suzuki, entered the Indian automobile industry with a policy of developing local automotive parts manufacturers to achieve high local content ratio. This study seeks to determine the extent to which foreign direct investment (FDI) in host countries contributes to the growth of automobile parts manufacturers. We use district‐level panel data from 2000 to 2008 to assess the linkage between the production of major automobile assemblers and the development of automotive parts suppliers located in the same and adjacent districts to those assemblers. Our regression results show the heterogeneity of the linkages, suggesting that the formation of industrial clusters by local parts suppliers and the expansion of their production capacity are likely to be key determinants of the success of FDI in the Indian automobile industry, rather than relying on in‐house parts production or imports.

Identifying Profit-Shifting to Tax Havens using statistics on Country-by-Country Reports

Profit-Shifting is an aggressive tax planning activity that erodes public revenues worldwide. Using statistics based on recent Country-by-Country Reports, this article identifies both descriptively and econometrically the existence of such activity by large Spanish multinationals in EU tax havens. Moreover, the paper shows that the application of the minimum Effective Tax Rate of 15% to profits generated in other EU countries by these large multinationals, within the Two-Pillar solution of the OECD/G20 Inclusive Framework, could increase Spanish tax revenue by around 2- 17% of annual corporate income tax.

Disruptions, Redundancy Strategies, and Performance of Small Firms: Evidence from Uganda

We study the impact of firm-specific business disruptions on the performance of small emerging market firms and test the effectiveness of building in redundancies to buffer against disruptions. Managerial disruptions result in the absence of the entrepreneur-owner, whereas operational disruptions lead to a shortage of critical resources, for example, inventory or electricity. We propose the use of relational redundancy—that is, the availability of a trusted and capable person with whom the entrepreneur-owner has an existing relationship, who can manage the business in his or her absence—to recover from managerial disruptions. We also examine whether resource redundancy—for example, maintaining safety stock or electricity backup—helps recover from operational disruptions. In the absence of publicly available data, we hand-built a panel data set by interviewing 646 randomly selected small firms over four time periods in Kampala, Uganda. We find that disruptions are highly prevalent and have a statistically and economically significant effect on firm performance. When a firm faces multiple exogenous and severe disruptions in a six-month period, its monthly sales decrease by 13.8% (p = 0.013), and its sales growth decreases by 18.8 percentage points (p = 0.070). Importantly, we find that both managerial and resource redundancies can help firms build resilience against the negative impact of disruptions. In some cases, firms with high levels of redundancy are able to completely overcome the negative effect of disruptions on sales and sales growth. We discuss implications for entrepreneurs, policymakers, and large multinationals that buy from or sell to small emerging market firms. This paper was accepted by Charles Corbett, operations management. Funding: This research was supported by grants from: Deloitte Institute for Innovation and Entrepreneurship (DIIE), the John A. and Cynthia Fry Gunn Faculty Scholar award, London Business School, Stanford Graduate School of Business, Stanford Institute for Innovation in Developing Economies (SEED), and STARS Foundation. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2023.4978 .

Exposure of Syrian refugee agricultural workers to pesticides in Lebanon: a socio-economic and political lens.

This article adopts a socio-economic and political lens to elucidate the interplay of factors that heighten the vulnerability of Syrian refugee agricultural workers and their exposure to pesticides in Lebanon. It provides a comprehensive understanding for the interconnected social, political and economic factors at the global, regional, national and local levels and how they increase the vulnerability of Syrian refugee agricultural workers, particularly their exposure to pesticides. The global factors highlight the shifts from colonialism to state-controlled economies to neoliberal policies. These changes have prioritized the interests of large agricultural schemes and multinationals at the expense of small and medium-sized agriculture. Consequently, there has been a boost in pesticides demand, coupled with weak regulations and less investment in agriculture in the countries of the Global South. The article explains how the dynamic interaction of climate change and conflicts in the Middle East and North Africa region has negatively impacted the agriculture sector and food production, which led to an increased potential for pesticide use. At the national and local levels, Lebanon's social, political and economic policies have resulted in the weakening of the agricultural sector, the overuse of pesticides, and the intensification of the Syrian refugee agricultural workers' vulnerability and exposure to pesticides. The article recommends that researchers, policymakers, and practitioners adopt a political-economic-social lens to analyze and address the full dynamic situation facing migrant and refugee workers in Lebanon and other countries and promote equity in the agricultural sector globally.

Caught between two worlds: CSR of Swiss Corporate Foundations

Purpose: This study explored the activities of Swiss corporate foundations as the CSR arms of their parent corporations. Even though Switzerland has a favorable legal context for setting up foundations and is perceived as a country with a long philanthropic tradition, little empirical research exists on this topic. Design/Methodology: The sample of 14 foundations represented SMEs and large multinationals across eight industries. Qualitative in-depth interviews were used for data gathering, accompanied by elite interviews with opinion leaders. The data focused on various aspects such as the connection to the funding corporation, the rationale behind setting up the foundation, current perceptions on corporate citizenship as well as the stakeholder communication. Findings: The findings revealed that Swiss corporate foundations seem to be caught between two worlds. They are beholden to a profit-oriented corporation for establishing them but they are expected by society to pursue the altruistic goal of being good citizens supporting charitable activities. They have a delicate balancing act to develop their own identity and position themselves to society. To stay within the legal boundaries and keep credibility high, these foundations struggled to not be seen as the publicity arm of the parent corporation – some foundations performing this balancing act better than others. Different structures such as the composition of the board of trustees or the place of work reflected the standpoint of the interviewees of either being independent or supporting the business. Originality: To the best of our knowledge, no other study has explored the dimensions of Swiss corporate foundations as conducted in this study, which is important to the body of knowledge. Given the large number of corporate foundations in the world, this study helps broaden the horizons of the CSR body of knowledge.

The influence of home-country resources and state ownership on subsidiary’s performance: a multilevel perspective

PurposeAlthough emerging markets are distinctly known for the rapid growth and international expansion of their state-owned enterprises, little is known about the influence of parent resource advantages and mixed state ownership on a subsidiary’s performance. Using the resource-based view, this study aims to investigate how resource advantages from the parent company and state ownership influence the performance of subsidiaries.Design/methodology/approachThis study included a unique data set of 207 subsidiaries from 33 large Brazilian multinationals located in 32 countries from 2000 to 2015. The authors used a hierarchical linear modeling and a multilevel structure based on data at different levels to analyze the influence of home-country parent resource advantages and state ownership on host-country subsidiary’s performance.FindingsThis study illustrates that state ownership can alleviate the resource advantages of parent companies. Evidence is presented, indicating that low and medium degrees of state ownership have a negative impact on the resource advantages of the parent company, consequently reducing the subsidiary’s performance. Moreover, this study highlights that low and medium degrees of state ownership lead to conflicting interests between state ownership and parent resource advantages, resulting in an overall decline in subsidiary performance.Originality/valueThis research contributes new evidence regarding state ownership and resource advantages to the field of international business studies and the domain of Latin American multinational enterprises, Multilatinas. The results suggest that low and medium levels of state ownership diminish the influx of resources from parent companies, thereby restricting the subsidiary’s performance.

Theoretical Underpinnings and Practical Considerations in Taxing Excess Profits

This article critically examines the existing literature on taxation of excess or supernormal profits of large multinationals and calculates excess profits in India with special reference to the pharmaceutical sector. It concludes with policy recommendations on taxing excess profits using an allowance of capital employed approach.

Bilateral political tension and the signaling role of patenting in a host country

The current increasing volatility in international politics makes it more important to understand how multinational enterprises respond to political tension between host and home countries. This paper explains the impact of macro-level bilateral political tension on micro-level strategy of multinationals in the host country. We developed the idea that patenting may be used to signal a firm’s commitment and contribution to the host country’s economy and development. Data on 437 large multinationals and interviews with senior managers of 20 foreign subsidiaries in China show that patenting local innovation does indeed help an investing firm signal its usefulness to the host country government. It can thus serve as a response to bilateral political tension. The relationship between political tension and local patenting also depends on the relative trade dependence of the home and host countries and on the investing firm’s technology level and its stake in China. The greater the dependence of an MNE and its home country government on the host country, the more likely patenting of local innovations would increase in times of bilateral political tension.

2023 Design Value Awards Night

In a ceremony held in Boston, DMI celebrated the 2023 Design Value Award winners. These were teams that have delivered significant value through design or design management practices. The 12 winners fill out a distinguished list of international organizations including nonprofit agencies, government entities, large multinationals, and regional enterprises.

Towards a standardized tool for improving the mainstreaming of climate change adaptation in Moroccan private companies

Climate change (CC) represents new and unprecedented challenges for businesses and is now viewed as a new business imperative. Unlike large multinationals, Small and Medium Enterprises (SMEs) are particularly vulnerable to climatic hazards, and often lack flexibility in the distribution of their risks. To preserve their business and sustainably strengthen their resilience and competitive advantages, SMEs must now systematically integrate adaptation to the impacts of CC in their business strategies and the various links in their value chain. Therefore, it is necessary to provide them with appropriate methodological tools dedicated to the assessment of their vulnerabilities and risks and the development of CC resilience strategies. Using an optimized approach to Moroccan SMEs, this research work provides a sequential flowchart to characterize and prioritize climate risks, identify potential business opportunities, and develop a coherent strategy to adapt to climate change, integrated with the Greenhouse Gas mitigation process. The development of this flowchart was guided by the results of the evaluation of the implementation of the Climate Expert tool to help analyze climate risks and opportunities- with several Moroccan companies and the benchmark of the instruments for screening and evaluating climate risks relevant to the Moroccan business context. Consequently, three main areas of impact have been identified, covering the company's core operations, the value chain and the external environment. Later, this flowchart will serve as the basis for developing an online tool for managers to assess vulnerability to climate risks at the scale of their companies and to identify and prioritize adaptation measures.

Predictive value of supply chain sustainability initiatives for ESG performance: a study of large multinationals

PurposeAlthough the integration of sustainability into business strategies and operations has received considerable scholarly attention, little is known about how sustainability initiatives across the extended value chain affect this integration. This study aims to analyze the impact of multinational corporations’ supply chain sustainability initiatives on their environmental, social and corporate governance (ESG) performance and the moderating role of the key country-level factors of the multinational’s headquarters.Design/methodology/approachThis study analyzes data published by the top 201 multinationals among Fortune Global 500 companies over the period 2011–2021 on their attempts to integrate sustainability measures in extended supply chains and the resultant impact on their ESG scores. A fixed-effect model is used in the primary empirical study.FindingsResults indicate that managerial interventions through a more robust supply chain policy framework, monitoring mechanisms, corrective actions and training initiatives lead to better ESG-environment pillar performance for multinationals. Additionally, the ESG-environment pillar performance is influenced by the socioeconomic model and country-level ESG risks of the nation where the multinational is headquartered.Originality/valueThe implications of this study are vital for understanding the criticality of sustainability initiatives in the supply chain for a firm’s overall ESG performance. To attain better levels of sustainable performance, multinationals must assume a stewardship position and deploy sustainability initiatives in their extended supply chain.

The Impact of Innovation Adoption of Emerging Digital Technologies within a collaborative ecosystem on Firm Innovation Performance- Focus on Emerging Economies (Middle East, Africa, and Asia)

ABSTRACT: In today's fast-paced and ever-changing world, innovative technologies' rapid emergence and integration profoundly impact organisational strategies, the industry landscape, and overall economic and societal development. This article explores the adoption of specific emerging digital technologies (Artificial Intelligence (AI), Industry 4.0( I4.0 ), and the Internet of Things (IoT). It proposes a comprehensive framework to enhance firm innovation performance in organisations. A deep understanding of the future commercial utilisation of these technologies is crucial for informed decision-making. Acknowledging the interconnected nature of emerging technologies, this research emphasises the importance of collaboration among various stakeholders such as businesses, academic institutions, research organisations, regulatory bodies, and government agencies. This collaborative effort forms a unique and interdependent ecosystem essential for effectively applying, adapting, and improving emerging digital technologies. This study highlights perspective and limitations, particularly in emerging economies, by investigating the determinants that impact their implementation, mainly focusing on emerging economies. A robust framework is developed to address the research objectives by combining existing technology models, including the Diffusion of Innovation Technology-Organisation-Environment and Technology Acceptance Model. A quantitative research survey targeted managers and above in large enterprises and multinationals within the Middle East, Africa, and Asia manufacturing industries. The collected responses (n=153) were analysed using Structural Equation Modelling and Chi-Square methods. The findings of this study emphasise the advantages of the collaborative adoption of emerging digital technologies in improving firm performance. By bridging the gaps in integrating multiple emerging technologies within the innovation ecosystem, organisations can enhance their innovation capabilities and leverage them for sustainable competitive advantage. This comprehensive framework provides valuable insights and practical guidance for organisations seeking to navigate the complex landscape of emerging digital technologies and maximise their innovation potential.

The challenges of a sustainable cocoa value chain: A study of traditional and “fine or flavour” cocoa produced by the kichwas in the ecuadorian Amazon region

Cocoa (beans) is one of the highest-value crops globally, yet some producer countries still follow ancient ancestral-style production practices, particularly in Latin America. Most of the production system is in the hands of small-scale producers, who have faced significant obstacles to trading their products with large multinationals due to a power imbalance in the negotiation, generating a gap between the social, environmental, and economic outcomes. Several initiatives have been developed to promote social and sustainable practices, especially regarding social factors in some industries. However, producers still face issues concerning their sustainability due to ongoing economic challenges. This study aims to identify the mechanisms of integrating these ancestral producers into the cocoa value chain and the sustainability challenges this production system faces. This study attempts to upgrade trade opportunities, focusing on Productores Kichwas: an association of cacao producers in Ecuador's Amazon region. Our research relies on primary sources, and we based our case study on questionnaires and interviews supplemented with secondary sources (official documents and assessments). We applied a value chain analysis proposed by Gereffi and other researchers to process the data. This analysis allowed us to identify factors that impede commercialisation: a scarcity of physical capital and financial backing, partly due to an inability to access credit, and poor access to international markets. These factors restrict the producers' ability to make game-changing upgrades and limit their ability to exploit their real potential, including their natural (chakra) production system and social (communal organisation) capital. Thus, an intermediary's role is essential to handle the aspects of cacao production that the community organisation cannot manage.

Dynamics of Large Multinationals

Abstract Multinational enterprises are very large multi-product firms. To capture salient features of the data, we develop a model of large multinational enterprises, each one producing a continuum of products. These outsized firms compete as oligopolists in domestic and foreign markets, facing competitive pressure from monopolistically competitive single-product firms. The multinational enterprises engage in foreign direct investment (FDI) in order to expand the product scope of their foreign affiliates, and they invest in research and development (R&D) in order to invent new products. We study the dynamic evolution of these enterprises and characterize transition dynamics and steady states. We also characterize the evolution of prices, markups, market shares, and exports relative to subsidiary sales. Furthermore, we study comparative dynamics that result from changes in trade costs, R&D costs, FDI costs, and productivity. Finally, we illustrate the use of our model for an analysis of mergers.