Subsidiaries Of Multinational Companies Research Articles

Factors in the effective transfer of knowledge from multinational enterprises to their foreign subsidiaries: a Mozambican case study

The purpose of this article is to better understand the role of internal stakeholders in subsidiaries of multinational companies (MNCs) in order to offer potential insights into the cross‐border transfer of knowledge from those companies’ headquarters to their subsidiaries. The focus is upon subsidiaries in developing countries, here Mozambique. More specifically, the article is concerned with identifying factors that influence the learning of internal stakeholders and noting practices which seem associated with a high level of absorptive capacity and performance of subsidiaries. The starting point is evidence of ineffective transfer of knowledge by MNCs to their subsidiaries in developing countries, with consequent sub‐standard performance. The research reported involves four case studies of Portuguese companies operating in Mozambique and draws on data from interviews with senior and middle managers in the firms’ Mozambican subsidiaries. The results obtained suggest that successful knowledge transfer to overseas subsidiaries is found under the following conditions. First, the parent company knows the local context and provides a flow of relevant information. Second, application of knowledge locally is done flexibly to suit local circumstances. Next, a participatory approach is used so that local staff can see why the knowledge conveyed is necessary. Fourth, explanation and demonstration are key techniques, with major roles for on‐the‐job training, continuous improvement and training at headquarters. Finally, issues arising from local culture may need to be addressed.

Selecting an appropriate strategy to make quality 7.1% chlorhexidine digluconate accessible for umbilical cord care.

Achieving increased access to medicines in low- and middle-income countries is a complex issue that requires a holistic approach. Choosing an appropriate manufacturing strategy that can ensure a sustainable supply of these medicines is an essential component of that approach. The Chlorhexidine Working Group, a consortium of more than 25 international organizations, donors, and manufacturers led by PATH, has been working to increase access to 7.1 % chlorhexidine digluconate for umbilical cord care in low- and middle-income countries to reduce neonatal mortality due to infection. The working group initially considered two strategies for manufacture of this commodity: (1) production and global distribution by a multinational company; and (2) production and regional distribution by locally owned companies or subsidiaries of multinational companies based in low- and middle-income countries. Local production may be beneficial to public health and economic development in these countries, yet capability and capacity of pharmaceutical manufacturers, regulatory and legal provisions, and market factors must be carefully assessed and addressed to ensure that local production is the correct strategy and that it contributes to improved access to the medicine. To date, this effort to implement a local production strategy has resulted in successful registration of 7.1 % chlorhexidine digluconate for umbilical cord care by manufacturers in Bangladesh, Kenya, Nepal, and Nigeria. Additionally, the product is now available in domestic and export markets.

Managing interpersonal conflicts at work by line managers

Abstract There are disagreements about the key factors affecting a line manager’s conflict management modes. Psychologists emphasise the role of the conflict situation and personal traits, while other scholars focus on the impact of organisational aspects in managing interpersonal conflict. This paper provides empirical evidence suggesting that three sets of factors, namely, situational, personal and organisational aspects, influence the mode of handling conflict by line managers. Mixed methods were used to collect primary data from 19 line managers and two human resources managers working in two Irish subsidiaries of multinational companies. Although the research design did not allow for a verification of whether each of those three sets of factors has a significant influence on managing conflict by line managers, the paper suggests that combining psychological and managerial approaches to managing conflict provides a fuller understanding of handling interpersonal conflict. It also provides original findings on how line managers handle interpersonal conflicts, contributing to a better understanding of the under-researched area of the actual role of line managers in dealing with negative HR aspects.

Strategic Corporate Social Responsibility of Multinational Companies Subsidiaries in Emerging Markets: Evidence from China

With the advent of globalization, the track record of multinational companies (MNCs) has been vague in relation to their corporate social responsibility (CSR) in the emerging host markets. What seems lacking is a better understanding of what exactly is required of today's MNCs to simultaneously generate profits for shareholders, while satisfying the legitimate demands from multiple stakeholders in the countries where they operate. This paper explores whether and how MNC subsidiaries practice strategic CSR in the emerging market of China. Drawing on various streams of CSR literature, we develop a conceptual framework and then apply it to analyze the CSR strategies of eleven MNCs known to be active in relation to their CSR involvement in China. Our multiple case studies, involving interviews with MNC managers and archival research, reveal distinctive features of CSR orientation and the strategies of MNCs that rely on developing relationships with non-traditional stakeholders, co-inventing social solutions, and building local capacity and infrastructure in emerging markets, being sensitized to a mixture of motivations and reconciling social and economic value creation. The findings are analyzed and implications are drawn regarding how MNC subsidiaries position themselves in the context of CSR in emerging markets.

The Impact of Communication on Conflict between Expatriate and Local Managers Working in NPD Projects of MNC Subsidiaries: A Local Perspective

ABSTRACTThis study investigates the impact of communication between expatriate and local managers on two types of conflict in subsidiaries of multinational companies (MNCs) engaged in new product development (NPD). The data was collected from 438 local NPD managers who regularly collaborate and communicate with expatriate managers. The findings suggest that the quality and bidirectionality of cross-cultural communication reduce relationship conflict but increase task-related conflict. In addition, a more formalized communication style increases both relationship conflict and task conflict. The findings hold implications for MNCs in that improvements to different communication dimensions are suggested.

Subsidiary capabilities and innovation in developing countries

This study examines the innovativeness of multinational company (MNC) subsidiaries in developing countries. The extant literature assumes that MNC subsidiaries in developing countries are less like...

Role of Multinational Companies (MNE) in the Transfer of Human Resource Management (HRM) Practices in Albania

Globalization is part of everyday life for everybody and for companies, too. In this globalization era, multinational companies (MNE) are gaining new experiences in diverse environments, diverse nations and diverse cultures. So, a big concern for MNEs, nowadays, is the issue of convergence versus divergence. In the focus of this issue is the transfer of Human Resource Management (HRM) practices across countries. The effectiveness of this transfer is the key of success of MNEs and it depends on different factors, such as: the cultural distance between MNEs home country and host country; new institutional environments; presence of expatriates in their subsidiaries etc. This paper is a literature review one and has in focus the identification of factors affecting the transfer of HRM practices from MNEs in their subsidiaries in Albania. In the Albanian reality there is a lack of studies in this aspect, which serves as the contribution of this topic, same as for academics, as well as for MNEs that have subsidiaries in our country. The future research will continue with survey method which tends to collect data from the top managers of subsidiaries of MNEs operating in Albania. DOI: 10.5901/ajis.2015.v4n3s1p445

Cross-country Business Engagement between China and India

In recent years, there has been increasing argument for studying the business environment through a research design focused on international business. Given the importance of China and India to the global economy and the lack of studies on Chinese and Indian multinational companies (MNCs) operating in each other's country, this paper aims to contribute by extending knowledge of the contextual factors that support or inhibit ventures, operations and growth of Chinese and Indian MNCs operating in each other's country. Meaningful implications include: first, the ‘context’ becomes the subject of investigation, instead of being just one of the elements in the research design; and second, Chinese and Indian business environments are mapped and analysed with reference to multiple contextual dimensions (i.e. market context, institutional context and organisational context) and illustrate the impact of these factors on the functioning and performance of the subsidiaries of Chinese and Indian MNCs.

What makes MNCs succeed in developing countries?

Purpose– The purpose of this paper is to examine the evolution in subsidiary performance and the factors influencing this performance based on a unique database of approximately 800 multi-national company (MNC) subsidiaries in developing countries. Developed-country multi-national companies (MNCs) are increasingly establishing subsidiaries in developing countries. The potential gains are high; however, so are the risks. While the issue of subsidiary performance should be at the heart of any international business (IB) enquiry into MNC activity in developing countries, surprisingly little research has examined this issue.Design/methodology/approach– Based on a comprehensive literature review of the IB performance literature, it is hypothesized that subsidiary performance essentially is shaped by five clusters of factors: location, industry, MNC capabilities, subsidiary role and entry strategy. These factors’ ability to explain variance in subsidiary performance is tested through a multiple regression analysis.Findings– MNC subsidiary performance in developing countries has improved enormously in recent decades. Especially, MNC capability and subsidiary role-related factors appear to explain variance in performance, while location factors appear to have less explanatory power. This suggests that strong MNC capabilities and organization can make MNCs succeed regardless of location.Practical implications– The key preparatory work for MNCs contemplating entry into developing countries is to carefully scrutinize internal capabilities and organization.Originality/value– The paper presents a model for explaining variation in subsidiary performance in developing countries specifically. The paper offers unique empirical insights into the state and drivers of subsidiary performance in developing countries.

Do the strategic decisions of multinational energy companies differ in divergent market contexts? An exploratory study

In the European energy industry, different countries’ national institutional frameworks have evolved divergently in response to increasing concerns about environmental issues. This paper explores the influence of these divergent national institutional frameworks on the strategic behavior of multinational company (MNC) subsidiaries. Differences in MNC subsidiaries’ strategic decisions in different countries, regardless of common capabilities and strategies, illustrate the importance of this influence. The paper focuses on the strategic decisions that determine which energy technology MNCs choose to acquire or invest in. MNCs are the predominant force in the European energy industry, and our understanding of their strategic decisions regarding choice of technology is an essential step in achieving a low-carbon energy industry. Our analysis is based on a longitudinal case study of Vattenfall, a Swedish multinational energy company. Findings confirm that even in the energy industry—a capital-intensive, national, and institution-based industry—MNCs follow their core global strategy to such an extent that it may prevail over local institutional considerations. Nevertheless, as European energy markets become deregulated and renewable energy matures, local institutions are likely to play a more dominant role, and MNCs will increasingly need to comply with local institutions’ guidelines. The paper offers recommendations for policymakers and several managerial implications.

Commitment to a parent company and a local operation

Purpose – The purpose of this paper is to investigate the nature of commitments of local employees to a parent company and a local operation in comparison to the nature of commitment of Western expatriates to the two foci. Design/methodology/approach – Data were collected by questionnaire from 532 local employees and 471 Western expatriates currently working for the subsidiaries of multinational companies (MNCs) in Vietnam. Hypotheses were tested using exploratory factor analyses, confirmatory factor analyses, correlation analyses, t-test, generalized linear models and hierarchical regression. Findings – The results confirmed two distinct commitment foci and revealed that the commitment to the local operation was stronger than the commitment to the parent company for local employees. Remarkably, retention and absenteeism are more driven by local operation commitment than by parent company commitment for the local employees. In contrast, these outcomes are more driven by parent company commitment for the Western expatriates. Working conditions (job autonomy, job variety, transformational leadership and remuneration) positively predicted affective commitment to the local operation for both groups; particularly job variety and leadership were better predictors for local employees than for Western expatriates. Practical implications – The comparison shows effective and specific ways to sustain and reinforce the commitments of each employee group with regard to two foci. This information may help to reduce the rate of turnover intention and absenteeism in MNCs. Originality/value – By using a multifaceted approach, this study provided a comparison of dual organizational commitment for different categories of employees working in MNCs. Second, this study shows that the stronger commitment focus has a stronger influence on related outcomes (i.e. retention and absenteeism). If so, MNCs can focus on reinforcing the selected commitment focus in order to reduce the costs of management. Third, the study has initially pointed out that some work factors exert a specific influence on different commitment foci in the two groups. Controlling these work conditions is recommended to sustain and develop commitment levels of the two groups.

Pengaruh Atribut Perusahaan dan Faktor Audit Terhadap Keterlambatan Audit pada Perusahaan yang Terdaftar di Bursa Efek Malaysia

Audit delay is interval of days between balance sheet date and audit report date. The purpose of this research is to analyze the effect of company attributes and audit factors to audit delay. This research uses 611 companies listed in Malaysian Stock Exchange from the period of 2006 until 2011 as sample. The independent variables used are size of the company, debt to equity ratio, profitability, subsidiaries of multinational companies, audit firm size, audit fees, industry type, age of company, company financial year end, and audit opinion. The method of analysis in this research is multiple linear regressions. The results of this study shows that size of the company, debt to equity ratio, profitability, subsidiaries of multinational companies, audit firm size, audit fees, industry type, age of company, and audit opinion have significant influence on audit delay while financial year end does not have significant influence on audit delay.

Family Businesses in the Corporate Governance of MNCs

The issue of family businesses is currently a very topical theme in the academic world. The importance of family businesses increases with internationalization and is associated with business success in global market conditions. A fundamental part of business activities abroad is the correct application of the corporate governance of subsidiaries of multinational family businesses. The available findings do not cover this area sufficiently, especially in the context of transformed economies in CEE. In view of the nature of foreign business activities, the degree of centralization of competences transferred between subsidiaries and headquarters and the presence of expatriates from the headquarters of multinational companies represented by the family firm in statutory bodies can be regarded as important variables. The main aim of the present paper is, based on research carried out, to describe and analyze the degree of centralization and presence of expatriates in the corporate governance of subsidiaries of multinational family businesses operating in the Czech Republic. The paper presents the results of an empirical investigation with a description of the presence of expatriates in the statutory bodies of subsidiaries of multinational companies in the Czech Republic. The results obtained present the number of subsidiaries corresponding to the definition of a family business with an emphasis on SMEs of up to 250 employees and the degree of centralization and presence of expatriates in administrative or executive authority, or in other positions. The sample which was used to research the family business comprised 214 subsidiaries of multinational companies from the most important sectors of the Czech economy.

HR Management at Subsidiaries of Multinational Companies in Central-Eastern Europe in Light of Two Surveys of Empirical Research in 2008 and 2013

HR Management at Subsidiaries of Multinational Companies in Central-Eastern Europe in Light of Two Surveys of Empirical Research in 2008 and 2013

Works council effectiveness in subsidiaries of MNCs during reorganizations: Case study evidence from the Netherlands

Internationalization of organizations has been a threat for (national) industrial relations. This study compares three cases to test the influence of works councils on decision-making in multinational companies (MNCs), going through reorganizations. The authors argue it is important to take account of internal factors in the subsidiary, namely the power capabilities and interests of the actors involved. They study these by looking at the network partners of works councils and aligned interests of local management and works council. The findings show that aligned interests form an important prerequisite for positive management attitude, trust and informal relations, positively affecting reorganizations in subsidiaries of MNCs.

Domestic and foreign knowledge sources for innovation in internationalized Production Networks: the automotive and the iron and steel cases

Este artigo estuda a importância relativa de fontes de conhecimento domésticas para a inovação nas atividades de produção internacionalizadas em uma economia emergente. Duas redes de produção da Argentina, com diferentes formas de internacionalização, foram consideradas: uma delas organizada pela presença de filiais de empresas multinacionais nos núcleos da rede (indústria automotiva); e outra caracterizada pela existência de empresas locais nos núcleos da rede (caso da indústria siderúrgica). Foram utilizadas técnicas de análise fatorial múltipla e de agrupamento (clusters), aplicadas a dados de um levantamento de inovação junto a 163 empresas automotivas e siderúrgicas da Argentina, para o período 2001-2005, com o intuito de avaliar a importância relativa das fontes de conhecimento domésticas e internacionais. A principal constatação é que o melhor desempenho inovador das redes de produção organizadas em torno de empresas domésticas subestima a importância dos vínculos internacionais, em comparação com as redes organizadas em torno de subsidiárias estrangeiras.

Labour relations policies in multinational companies: A three-country study of power dynamics

It is generally assumed that multinational companies will, to some extent at least, adapt their practices to host country environments. However, recent work suggests that this process of adaptation is yet more complex and uneven. It is our contention that subsidiary policy on labour relations is not simply the product of adaptation from and to home and host institutional environments but is in fact shaped by the multiple power relations that characterize multinational company subsidiaries. This three country comparison between Argentina, Canada, and Mexico shows that a policy of strong engagement with trade unions requires the presence of actors that can mobilize power resources. It is when both management and workers have power resources that subsidiaries are more likely to develop a policy of strong engagement with trade unions.

INTERNATIONALISATION OF NEW PRODUCT DEVELOPMENT AND RESEARCH & DEVELOPMENT: RESULTS FROM A MULTIPLE CASE STUDY ON COMPANIES WITH INNOVATION PROCESSES IN GERMANY AND INDIA

A rich body of literature has emerged from research on Western new product development (NPD). However, the impact of country- and culture-specific influences on these processes has not been examined in detail yet. Hence, this study identifies the differences in NPD practices between the Indian and German research and development (R&D) subsidiaries of multinational companies (MNCs). Data have been generated by interviews with R&D executives in both countries across multiple cases. The study samples strategic, organisational, and operational aspects and indicates differences in process coordination, reward systems, NPD creativity techniques, market orientation, and the average age of NPD teams. Other aspects, such as top management support, the use of structured NPD processes, and the use of heterogeneous NPD teams, show no substantial differences between the countries. Our findings suggest that, while some aspects are universally applicable across cultural frontiers, Western companies must understand India's different expectations regarding NPD and adjust their practices accordingly.

An Analytical Overview Ofthe Transfer of Employee Remuneration Practices in Slovakia

An Analytical Overview of the Transfer of Employee Remuneration Practices in Slovakia Dr. Jana Cocuľová, PhD Abstract The article deals with the issue of transfer of selected human resource management (HRM) practices, employee remuneration, from the parent company to subsidiaries in the host country. This study compares the remuneration of workers in subsidiaries of multinational companies (MNCs) and local companies located in Slovakia, testing statistically significant differences in the use of specific forms of remuneration (extraordinary bonuses, regular bonuses, shares, cafeteria employee benefit system). The research sample consists of 194 HR managers of MNC subsidiaries and local companies operating in Slovakia, out of which 92 are managers of subsidiaries and 102 are managers of local companies. The rate of use of various forms of compensation was determined through a Likert scale, in which HR managers were asked to respond on a scale from 1 (not a commonly used form of compensation) to 5 (the most frequently used form of remuneration). In order to fulfil the objectives of the study, 4 hypotheses were formulated and tested using the Student's t-test. The research results confirmed only one hypothesis, which shows that the remuneration systems in the subsidiaries of MNCs and local companies do not differ significantly, thus we can speak of a low rate of transfer of HRM practices tested. Full Text: PDF DOI: 10.15640/jhrmls.v3n2a3

Strategic planning in subsidiaries of multinationals in China: an empirical analysis of intra-organisational knowledge transfer

This paper examines the transfer of a particular kind of knowledge: strategic planning competencies in subsidiaries of multinational companies (MNCs) in China. We develop an integrative research model on the facilitators of intra-organisational knowledge transfer between the MNC parent and their subsidiaries. To test our hypotheses, we draw on data from a survey among managers of German MNCs in China, using PLS structural equation modelling. Our findings suggest that the willingness to acquire strategic planning knowledge, measured as the proven value of knowledge, is the most important enabler of strategic planning competencies at local subsidiaries, followed by the management support of the MNC parent as indicator of the MNCs capacity to transfer strategic planning knowledge, as well as the relationship between the MNC parent and the subsidiary. Finally, our findings support the importance of decentralised strategic planning for the Chinese subsidiaries' performance.