MNC Managers Research Articles

International Training and Development

It is widely accepted that effective management of human resources will bring about increased organizational and employee performance. Based on this, the area of international human resource management (IHRM) has gained increased interest, especially with the continued growth of multinational corporations and globalization. Many IHRM practices and theories have been developed since the emergence of international business. The boundaries of IHRM are established within the concepts of MNC management across diverse cultural work practices as well as comparative international HRM among organisations. In this paper, I will reflect on these concepts as applicable in the practices of international training and development and performance management and compensation. My reflective essay will explore these topics with a key interest in expatriates who are affected greatly

MNCs' corporate social irresponsibility and foreign subsidiary performance

AbstractResearch SummaryBuilding on the cognitive view of stakeholder evaluation, we propose that multinational corporations' (MNCs') socially irresponsible acts transcend geographic boundaries and negatively affect foreign subsidiary performance. Moreover, we propose that foreign subsidiaries' product innovation and marketing campaigns create strategic noise in the information space that can mitigate the negative effect of MNCs' corporate social irresponsibility (CSI) incidents occurring elsewhere on the performance of their foreign subsidiaries. We test our arguments on 335 subsidiaries of 42 multinational grocery retailers from 18 different home countries. Our analyses, based on a sample of 2185 subsidiary‐year observations over the period of 9 years (2012–2020), largely support our core argument that CSI incidents negatively influence the sales growth of foreign subsidiaries.Managerial SummaryThis research underscores the importance for MNC managers to be cognizant of the potential fallout from CSI incidents. With the global spread of information, MNCs' misconduct that occurs elsewhere can quickly impact the sales growth of foreign subsidiaries. The study found that product or service innovations are more effective than marketing campaigns in managing reputational damage, emphasizing the value of genuine, capability‐enhancing strategies. Furthermore, the findings highlight the interconnectedness between socially responsible practices and innovation, suggesting that MNCs and their subsidiaries should focus on maintaining strong ethical standards while simultaneously fostering an environment conducive to innovation. This approach not only addresses the adverse effects of CSI but also strengthens the MNC's overall standing with its stakeholders.

Islamic Human Resource Management in Gulf Countries: A Literature Review

This paper explores the nature and substance of Islamic management practices in Arab countries. It also examines the impact of globalisation on multinational (MNC) companies operating in Islamic countries. Understanding Islamic management principles helps build a more suitable model of best practice management in Arab and Islamic countries. The study argues that reverse management skills delivery by MNC managers is crucial to successful human resource management in host countries. It adds to the comparatively limited literature on Islamic management by presenting issues critical to advancing Western Islamic management systems. It concludes that the incompatibility between global integration and local obligations is a key reason for the lack of progress in most Arab and Islamic countries.

다국적기업 자회사의 한국시장 기부활동

Purpose - The main purpose of this study is to test two competing hypotheses on the relationship between foreignness and corporate philanthropy drawing on the resource dependence theory. Design/methodology/approach - This study used Korean Enterprsie Survey data constructed by Korean Statistical Information Service. This study employed both OLS and Tobit models to test the hypotheses. Findings - A conventional wisdom can argue that MNC subsidiaries are more willing to give charitable donations than local firms do because they may perceive philanthropy in the host country is a good opportunity to reduce liabilities of foreignness (H1-1). On the other hand, one can argue that MNC subsidiaries are less willing to give charitable donations than local firms do because they have operational flexibility when they are coerced to engage in corporate philanthropy by host country government stakeholders (H1-2). Empirical results support the prediction that MNC subsidiaries are less likely to give charitable donations than local firms do in Korea. Research implications or Originality - Our findings can provide useful insights to researchers and managers in the sense that MNC managers can increase or decrease their charitable donations depending on the institutional contingencies in different host countries. These institutional contingencies are particularly important within a transforming context such as Korea.

The Importance of Decision-Making Mechanisms in Business When It comes to Subjective Experience of Uncertainty Forms and MNC Management on Uncertainties

The Importance of Decision-Making Mechanisms in Business When It comes to Subjective Experience of Uncertainty Forms and MNC Management on Uncertainties

Deepening the timing dimension of emerging market multinational companies’ internationalization – An exploratory perspective

Building from the nascent debate pertaining to the internationalization trajectories followed by EMNCs, this article proposes to better understand behaviors of multinational companies from emerging markets (EMNCs). A database containing the complete internationalization trajectory of 110 firms was created to analyze sequence patterns. Optimal matching technique helped us to build a taxonomy of seven distinct sequence patterns (serial acquirers, late acquirers, sequential acquirers, contractual internationalizers, collaborative internationalizers, opportunistic internationalizers, wholly owned internationalizers). Our findings partially confirm previous works pertaining to the internationalization process of EMNCs and shed a light on atypical behaviors which have not been studied yet. These findings allow us to obtain new insights, deepening our understanding of theories depicting how EMNCs behave such as springboard theory and the Linkage Leverage Learning framework. We also provide recommendations to MNC managers and for public policy.

The Impact of Knowledge Management and Dynamic Capacity on the Ambidextrous Innovation of Korean MNCs in the Chinese Market

Purpose – With the increasing uncertainty of China's domestic political and economic environment in recent years, Korean MNC subsidiaries in the Chinese market face greater challenges and competition. Based on the insufficiency of existing research and the need for enterprise management practices, this paper uses the Chinese subsidiaries of Korean MNCs as an example to study and explore how knowledge management and dynamic capabilities affect ambidextrous innovation and the relationship between ambidextrous innovation and subsidiary performance. Design/methodology – From January to March 2019, this study collected 341 valid questionnaires using a survey company specializing in China for the members of the Chinese subsidiaries of Korean MNCs to verify the hypotheses. Using the collected data, the study model was verified using the Smart PLS 3.0 statistical package. Findings – Knowledge transfer and knowledge sharing have positive effects on dynamic capabilities and ambidextrous innovation, and dynamic capabilities have a positive impact on ambidextrous innovation. Ambidextrous innovation has been shown to have a significant effect on subsidiary performance. In addition, a partial mediating effect of dynamic capabilities on the relationship between knowledge management and ambidexterity innovation was found. Originality/value – In the academic context, this paper contributes theoretically to the relationship between knowledge management and ambidextrous innovation, as well as the mechanism of dynamic capability, and to verify the relationship between ambidextrous innovation and corporate performance. Against the background of MNC management, the results of this study provide further enlightenment for managers of subsidiaries.

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.

Reverse knowledge transfer from subsidiaries to MNCs in Korea: size matters

This paper attempts to identify the effects of knowledge transfer capacity and relational capital on the reverse transfer of local market information from subsidiaries within MNC networks. In particular, we try to examine the different influences of those determinants in organisations of different sizes. By using Spearman rank order correlation coefficients, we find that the key drivers for large subsidiaries are knowledge development capability, subsidiary autonomy and trust between subsidiaries and MNCs. The key drivers for medium-size firms are subsidiary willingness, trust and organisational distance. In the case of small firms, reverse knowledge transfer is driven by knowledge development capability, subsidiary autonomy and socialisation mechanisms. We believe that these findings offer valuable implications for both MNC managers and also for theory.

Reverse knowledge transfer from subsidiaries to MNCs in Korea: size matters

This paper attempts to identify the effects of knowledge transfer capacity and relational capital on the reverse transfer of local market information from subsidiaries within MNC networks. In particular, we try to examine the different influences of those determinants in organisations of different sizes. By using Spearman rank order correlation coefficients, we find that the key drivers for large subsidiaries are knowledge development capability, subsidiary autonomy and trust between subsidiaries and MNCs. The key drivers for medium-size firms are subsidiary willingness, trust and organisational distance. In the case of small firms, reverse knowledge transfer is driven by knowledge development capability, subsidiary autonomy and socialisation mechanisms. We believe that these findings offer valuable implications for both MNC managers and also for theory.

Evaluating the role of headquarters in the contemporary MNC

The role of HQ in contemporary MNCs is an important and timely research subject for multiple reasons. First, the two previous dominant streams of research on MNC management (the HQ-subsidiary relat...

Win, Place, or Show? How Foreign Investment Strategies Contribute to the Technological Growth of the Multinational Corporation

This paper investigates the sources of technological growth of the multinational corporation. We conceptualize and shed empirical light on whether foreign investment strategies based on advanced greenfield subsidiaries, acquired subsidiaries, or a combination of both increase the likelihood of entry into technologies that represent new additions to the MNC's technology portfolio. Repeated events analyses of the complete U.S. patenting activity in 226 foreign locations of 21 Swedish multinationals reveal a substantially higher likelihood of entry into new technologies among investment strategies based on foreign acquisitions, as opposed to investment strategies based on greenfield establishments only. To the extent that MNC managers seek to enhance technological and strategic renewal through the expansion of foreign operations, the findings suggest that foreign investment strategies that involve the use of acquisitions are and should be the preferred alternative.

Expatriates adjustment and job performance

PurposeThe purpose of this study is to examine the mediating effects of expatriate adjustment (work, general and interaction) between individual (previous international experience, self‐efficacy, social network and cultural sensitivity) and organizational factor (direct and indirect support) and job performance.Design/methodology/approachThe data were collected from 201 expatriates working in Malaysia and analyse by using structural equation modelling (Amos‐16).FindingsThe results of the study indicated that expatriate adjustment (work, general and interaction) mediate the relationship between individual and organizational factors and expatriate performance (supervisor rated).Research limitations/implicationsThe data were collected from the expatriates working in Malaysian universities. There can be differences between education industry and pure business organization in terms of working environment, selection process and management support. The respondents were citizens of different countries around the world which include Asia, Europe and Middle East. Even though Malaysia is a multicultural society and expatriates from any part of the world can find themselves in Malaysia, this research did not group the respondents in terms of their cultural differences and similarities with Malaysian culture.Practical implicationsThe findings of this study suggest that human resource managers and MNC's management should provide direct and indirect support to the expatriates and their families in terms of language and cultural training, career development, logistical assistance, family mentoring, psychological counselling, job search, self‐development and social activities. Furthermore, recruitment managers and MNC's management should consider these factors before appointing any employee for international assignment. Finally, the findings of this research suggest that better expatriate performance help MNC's to perform better in their international operations which will ultimately improve the home and host country economic situation. The better performance of MNC's in their international operations through effective expatriate performance will encourage other domestic organizations to expand their operations globally.Originality/valueExpatriate literature have highlighted many individual and organizational factors which affect expatriate job performance and adjustment but the role of some individual and organizational factors is still not clear and/or ignored by past researchers. For example, the role of direct and indirect support has not been well conceptualized in past studies. In addition, only a few studies have explained the importance of self‐efficacy, cultural sensitivity and social network in expatriate literature. Furthermore, role of previous international experience has generated conflicting results in past research.

Political-economy of pension plans: Impact of institutions, gender, and culture

National pension systems are an important part of financial intermediation and worker welfare in most countries, but how and why do they differ internationally? Controlling for important political, economic and social institutions, we document that international differences in pension progressivity, or how pensions reflect lifetime earnings, are negatively related to masculinity, uncertainty avoidance, individualism, long-term orientation, employment rights, average pension levels, social trust and economic inequality. We also find that pension progressivity is positively related to the economic and societal role of women, the extent of Catholicism; as well as political voice and accountability. These results provide important insights for both public policy and MNC managers.

Alignment or independence? Multinational subsidiaries and parent relations

PurposeSubsidiary units must respond to emerging threats including disaggregation of value chains and increased headquarters monitoring and control which have led to a cycle of subsidiary decline. The authors recognize the value of subsidiary initiatives as a short‐term response but argue that subsidiary long‐term survival and growth will depend on the unit's ability to align with its parent strategic activities and knowledge base through developing vertical embeddedness.Design/methodology/approachThis research is part of an ongoing quantitative and qualitative study programme of Irish subsidiary operations of foreign MNCs. This paper integrates the authors' broader research to date including both in‐depth interviews within a focal case combined with a comprehensive review of the literature relating to MNC and subsidiary management in identifying how subsidiaries can respond to current challenges.FindingsIn contrast to the dominant view in the literature, this research found that subsidiaries can respond to emerging threats by integrating their activities and deepening their alignment with their parent operation. The authors identify three pillars in developing a strategy of alignment – strategic embeddedness or ensuring development of subsidiary strategy in line with headquarters stated objectives, relational embeddedness determined by trust relationships and a history of consistent subsidiary delivery and finally knowledge embeddedness facilitated through coalescent knowledge creation and collaborative effort in line with headquarters strategy and direction.Research limitations/implicationsResults from the survey are subject to the standard limitations and a larger pool of interviewees may have reinforced the qualitative findings.Practical implicationsSubsidiary managers need to be aware of how closer integration of unit activities with headquarters and the management of knowledge outflows can reduce the risk of relocation and better position subsidiaries for survival and growth. To date the emphasis on subsidiary initiative has overshadowed the benefits of aligning with headquarters strategy, a more feasible alternative for many subsidiaries which do not enjoy strategic independence.Originality/valueBy demonstrating the benefits of alignment with headquarters, this paper identifies a valuable alternative perspective to the predominant view in the literature that subsidiary survival is dependent on subsidiary initiative. Interesting insights into how alignment can be achieved are also provided. Capturing both the subsidiary and parent perspectives provides valuable insights.

Political-Economy of Pension Plans: Impact of Institutions, Gender, and Culture

National pension systems are an important part of financial intermediation and worker welfare in most countries, but how and why do they differ internationally? Controlling for important political, economic and social institutions, we document that international differences in pension progressivity, or how pensions reflect lifetime earnings, are negatively related to masculinity, uncertainty avoidance, individualism, long-term orientation, employment rights, average pension levels, social trust and economic inequality. We also find that pension progressivity is positively related to the economic and societal role of women, the extent of Catholicism; as well as political voice and accountability. These results provide important insights for both public policy and MNC managers.

Political-Economy of Pension Plans: Impact of Institutions, Gender, and Culture

National pension systems are an important part of financial intermediation and worker welfare in most countries, but how and why do they differ internationally? Controlling for important political, economic and social institutions, we document that international differences in pension progressivity, or how pensions reflect lifetime earnings, are negatively related to masculinity, uncertainty avoidance, individualism, long-term orientation, employment rights, average pension levels, social trust and economic inequality. We also find that pension progressivity is positively related to the economic and societal role of women, the extent of Catholicism; as well as political voice and accountability. These results provide important insights for both public policy and MNC managers.

Subsidiary importance in the MNC: What role does internal embeddedness play?

This paper addresses the issue of how a subsidiary's internal and external embeddedness interact in generating the importance of the subsidiary vis-à-vis the MNC as a whole. We take previous findings of the positive impact of external embeddedness on a subsidiary's importance as our starting point and consider two questions: (a) how does the internal embeddedness of a subsidiary affect its organisational importance, and (b) how do a subsidiary's internal and external embeddedness interact in generating organisational importance? We test hypotheses reflecting these questions on data from 97 foreign subsidiaries belonging to Swedish multinationals. We find that internal embeddedness is negatively related to a subsidiary's importance to product development but unrelated to its importance to production development. We also find that internal embeddedness dilutes the positive impact of external embeddedness on a subsidiary's importance to production development. We discuss the findings in the light of the extant literature and consider implications for future research and MNC managers.

Global careers: a social capital paradox

Global careers, typically defined as involving multiple international relocations including various positions and assignments in several countries, have recently received increasing research attention. This interest is driven by a growing corporate need for managers who are able to deal with global integration and co-ordination in large multinational corporations. An important aspect of the competency of a global manager is his or her social capital, i.e. the network relationships he or she possesses. However, while the concept of social capital has been widely used in a number of research fields recently, it has received relatively little attention thus far in the IHRM context. This paper contributes to this research gap, and seeks to answer the empirical research question of how multiple international relocations affect the social capital of a manager. Our qualitative interviews of 20 Finnish MNC managers with global careers identified that such careers represent a ‘social capital paradox’. Global careers are characterized by a broad and diverse network of both internal and external ties. This breadth and diversity relate to (1) the managers' internal contact networks of weak ties (2) their internal support networks of strong ties and (3) their external networks of both strong and weak ties. These typical characteristics represent three major social capital paradoxes in the sense that they carry both significant social–capital-related benefits as well as potential risks.

Commitment for hire? The viability of corporate culture as a MNC control mechanism

This paper discusses the effectiveness of corporate culture as a control mechanism in the multinational context. While there is widespread managerial support for its use, there is also considerable challenge to the idea that corporate culture can be ‘managed’. A review of relevant literature dealing with the internalisation of corporate values, organizational commitment, psychological ownership, and corporate identification provokes questions about the viability of corporate culture as a MNC control mechanism. Much depends on individual employee responses that range from support to outright resistance, and may be moderated by variables, such as managerial action and the extent of violation of the psychological contract. It is concluded that, in the long run, it may not be in the best interests of MNC management to have a strong corporate culture. A workforce of highly inculcated employees might, in fact, impede MNC management's need for strategic changes.