Multinational Service Research Articles

Managing from the echo chamber

Purpose – This paper aims to explore the culture of working life in British financial services multinationals in the period leading up to the financial crisis of 2007-2008. Design/methodology/approach – Informed by labour process theory, the paper is based on a questionnaire survey and in-depth interviews with technicians and junior managers in British insurance and banking MNCs. Findings – The data demonstrate widespread employee disaffection with a new culture of corporate life that has emerged in the last two decades. Employees faced work intensification and were highly critical of what they saw as detached, ruthless, and often incompetent top leadership. Senior management is described as operating in an “echo chamber”, insulated from the “realities” of the workplace. Research limitations/implications – The paper argues that the unpleasant work culture experienced by employees at middle and lower levels closely mirrors the broader excesses and failings of banks and insurance firms during the recent financial crisis. Excessive risk-taking, short-termism, and inattention to detail are widely given as causes of the crisis. This paper argues that senior leadership failings are also manifest in short-sighted, undignified, and ethically unsound treatment of staff, leading to severe problems with staff morale. Originality/value – The paper provides detailed qualitative data on the realities of working life in financial services before the recent financial crisis, and suggests ways for labour process theory to consider how restructuring is not only challenging for employees but can also be debilitating for the organisation itself.

Influences of Frame Incongruence on Information Security Policy Outcomes

Despite the significant resources organizations devote to information security policies, the policies rarely produce intended outcome. Prior research has sought to explain motivations for non-compliance and suggested approaches for motivating employees for compliance using theories largely derived from psychology. However, the socio-cognitive structures that shape employees' perceptions of the policies and how they influence policy outcomes have received only modest attention. In this study, the authors draw on the socio-cognitive theory of frames and on literature on information security policies in order to suggest a theoretical and analytical concept of Information Security Policy Frames of Reference (ISPFOR). The concept is applied as a sensitizing device, in order to systematically analyze and interpret how the perceptions of policies are shaped by the frames and how they influence policy outcomes. The authors apply the sensitizing device in an interpretive case study conducted at a large multinational internet service provider. The authors’ findings suggest the frames shape the perceptions and can provide a socio-cognitive explanation for unanticipated policy outcomes. Implications for research and practice are discussed.

Techbits: IPEC 2012: Promoting Industry Diversity

Techbits The International Professionals in Energy Conference (IPEC 2012) “Empowering Women’s Leadership” was held recently in Kuwait under the patronage of the Kuwait Minister of Oil and Chairman of the Board of Kuwait Petroleum Corporation Hani A. Hussain. During the two days of IPEC 2012, attendees representing international oil companies, national oil companies, multinational service companies, consulting firms, and academia discussed topics related to gender diversity in the industry. More than 270 delegates representing 53 companies from 15 countries attended. The opening ceremony featured Farouk Al Zanki, deputy chairman of the Board of Directors and CEO, Kuwait Petroleum, and Hosnia Hashim, deputy managing director, North Kuwait, Kuwait Oil, who was also the conference chairperson. The executive plenary session included Sami Al Rushaid, chairman and managing director, Kuwait Oil; Maha Mulla Hussain, chairperson and managing director, Petrochemical Industries Company; Andrew Gould, chairman, BG Group; and Bernadette Spinoy, senior vice president, refining and petrochemicals Eastern Hemisphere, Total. The speakers shared their personal experiences and their companies’ strategies for creating balanced leadership. Held alongside IPEC was a Region-al Education Day, attended by 200 students from public and private schools in Kuwait. The aim was to introduce students to the discipline of petroleum engineering and the industry in general. Three key concepts arose during the conference: The inclusion, retention, and empowerment of women in the workforce is a clear business necessity. Companies need to ensure that all employees positively embrace the increased presence of women in the workforce. The implementation of gender-balanced guidelines for promotion processes is necessary. The inclusion, retention, and empowerment of women was described as important because the expansion plans of the industry to meet global energy demand will require new staff. The second concept, one met with surprise by several attendees, is the recognition of the need to train men in the industry to accept and embrace the incremental presence of women in all roles and ranks of the workplace, especially in field operations, where a female presence is still uncommon in many places of the world. In field operations, special accommodations and facilities may be needed to follow cultural acceptance. The third key concept will require implementation of gender-balanced guidelines for promotion to maintain managerial balance in companies. Panelists concluded that the industry’s workforce is in need of change to reach its potential, and that future energy challenges will require richer and more diverse viewpoints. The oil industry must incorporate concepts of diverse work teams as well as best practices in diversity and inclusion processes to enable and promote contribution from professionals with different experiences and perspectives. This diversity will allow for better decisions.

The Recruitment and Retention Challenges Faced by IT Services Multinationals in India

The IT services sector in India provides a rich arena in which to examine the development of people management strategies and practices among multinationals. For these firms, core personnel and the...

Strategy and structure of service multinationals and their impact on linkages with local firms

Drawing on case studies of two leading UK service firms in five host countries (Argentina, Brazil, China, Korea and Malaysia), we examine how the strategy and organization of service multinationals shape the development of linkages with local firms in host economies. We find that there is reduced autonomy of subsidiaries to engage with local firms as a result of relatively centralized strategies of multinationals. Because of global policies ensuring consistency of services or global sourcing policies to reduce costs, service multinationals tend to prefer global suppliers. Backward linkages occur in a few cases when the relationship can be a vehicle for market expansion for the multinational in a particular host market. Local governments play an important role in the cases where backward linkages are developed.

Impact of firm-level factors and market entry mode on performance: A study of service MNCs in an emerging economy

Article history: Received September 1, 2011 Received in Revised form November, 10, 2011 Accepted 10 November 2011 Available online 11 November 2011 The study examined the market entry strategies of multinational services companies into Ghana’s service sector and the linkages to firm level performance after entry. Literature was reviewed on market entry strategies, internationalisation, globalisation of service firms and resource-based theory. The study adopted a quantitative research approach in this study to enable empirical testing of Ekeledo and Sivakumar (2004) framework. The study found that firm specific factors affect the market entry strategy while the entry strategy also affects performance after it enters the market. Home country factors and the features of services are also seen to moderate on the effects mentioned. The study also found that the features of services were an industry wide issue not so much consideration is given to it.

The impact of e‐mail on work‐life balance

PurposeThis paper aims to illustrate how a company's current 24‐hour e‐mail culture impacts on employees' lives outside of their contracted working hours. There are two objectives of the study – first, to calculate the average time spent on work e‐mails by employees per day outside of working hours and, second, to identify what impact e‐mail had on employees' work‐life balance by addressing three research questions. These questions aims to focus on the relationships between: employees' thoughts about company culture and their belief that their work is dependent on them checking their e‐mails outside of working hours; employees' urges to check e‐mails out of working hours and their belief that spending time on e‐mails outside of work means they are neglecting their social life; and employees sending e‐mails out of office hours and their expectation of a quick reply or action.Design/methodology/approachA case study approach was taken. Employees from a multinational service organisation were invited to complete an online questionnaire and a seven‐day diary so as to collect qualitative and quantitative data about their use of e‐mail.FindingsData were analysed with respect to respondents' gender, role and length of service in the organisation and discussed with respect to the current literature.Research limitations/implicationsAlthough the limitations of exploring a single organisation are recognised, it is likely that some of the insights and lessons generated by the study will be transferable to other organisational settings.Practical implicationsThis study identified some short‐term recommendations as to how a particular company could limit the negative impact that e‐mails have on its employees' lives outside of contracted working hours. In addition, this study will also raise awareness of the pervasion of work‐related communications into employees' personal lives and, hopefully, trigger further research into the long‐term psychological and sociological effects of a 24/7 communication culture.Originality/valueThere are two novel aspects to this study: the use of diaries as a method of data collection and the notion of exploring e‐mail use “out of hours”.

New service development in India's business‐to‐business financial services sector

PurposeFew research studies have been done to investigate the issue of new service development (NSD) in an emerging market. To address this gap in the literature the aim of this paper is to document a study of the NSD process and the strategy of business‐to‐business financial service firms in India.Design/methodology/approachThe author conducted surveys of 148 multinational service firms operating in India and 126 local and indigenous Indian service firms belonging to the financial services industry.FindingsThe findings suggest that significant differences exist between multinational service firms operating in India and local/indigenous Indian firms. That is, service firms belonging to these two varied groups use different strategies to compete in the industry and emphasize different sets of development stages in service innovation.Research limitations/implicationsThe analysis has been restricted to one emerging market, i.e. India. This suggests the need for further studies of NSD in other emerging markets of the world.Practical implicationsThe findings of this research validate the initial contention that NSD practices vary from company to company, and thus there cannot be a “one size fits all” approach to service innovation. The insights from this study can help service managers to better understand and manage their NSD programs in an emerging market such as India.Originality/valueTo the best of the author's knowledge, this research represents the first attempt to investigate empirically the NSD practices of financial service firms in India.

Institutional and Sectoral Determinants of Headquarters-subsidiary Relationships: A Study of UK Service Multinationals in China, Korea, Brazil and Argentina

What is the nature of headquarters-subsidiary relationships in service multinationals? What factors, including sectoral and national features, affect these relationships? Drawing on a study of eight major UK service multinationals operating in four countries with distinctive institutional environments – China, Korea, Brazil and Argentina – we develop a conceptual framework of the determinants of headquarters-subsidiary relationships in service multinationals. We find that one of the determinants of headquarters-subsidiary relationships is the development by service multinationals of tools for integration and co-ordination, including corporate processes and global supply chain management, which reinforce centralisation. Two additional sets of determinants, however, account for variations among the cases in the autonomy of subsidiaries. A first set of factors relates to the characteristics of the different sectors, including whether the multinational serves global or local customers and the scale and diversity of subsidiary operations. A second includes the influence of institutions and regulations in the host country.

Process of customer interaction during new service development in an emerging country

Globalization has a major impact on the practice of innovation across a wide range of service industries. Yet, only limited attention has been paid to the issue of service innovation in a global context. To address this critique of the literature, a case study of new service development and customer interaction was conducted in a multinational financial services firm based in the USA. The case study investigates the development of new services with inputs from company's customers in India. It also traces the roles of local Indian subsidiary and local managers in developing and managing the overall service innovation process.

Exploring employee engagement from the employee perspective: implications for HRD

PurposeThe purpose of this paper is to examine an employee's unique experience of being engaged in their work.Design/methodology/approachFollowing Yin's case study design method, researchers collected documents, conducted semi‐structured interviews and recorded observations at a large multinational service corporation ranked as one of the best places to work. Post data collection, content analysis is used to interpret engagement efforts and experiences. Work by Kahn and Maslow are integrated as conceptual frameworks.FindingsPost analysis, three themes emerged: relationship development and attachment to co‐workers, workplace climate and opportunities for learning. Findings highlighted the development of relationships in the workplace, the importance of an employee's direct manager and their role in shaping organizational culture and the critical role of learning in an engaged employee's interpretation of their work. Scaffolding and discussion of an emergent model is provided.Research limitations/implicationsThree propositions for human resource development (HRD) research and practice are presented: first, environment and person interact to create engagement or disengagement; second, an employee's manager plays a critical role in developing engagement; and third, personality can effect engagement, however, everyone can engage. An integrated model is proposed as a synthesis of findings providing HRD researchers and practitioner's opportunity to re‐examine current engagement efforts. Specific action steps are outlined to spur further theory building and organizational practice.Originality/valueThe objective of the emergent model is to provide researchers and practitioners a new framework to consider, grounded in both early and contemporary theories of engagement. The emergent model could serve as the basis for new strategies and structures related to engagement development and could shed new light on how employees interpret the experience of engagement in work. This research is the first known qualitative study of employee engagement in the HRD literature, second only to the original qualitative research by Kahn.

Modeling Services Liberalization: The Case of Tanzania

This paper employs a 52-sector, small, open-economy computable general equilibrium model of the Tanzanian economy to assess the impact of the liberalization of regulatory barriers against foreign and domestic business service providers in Tanzania. The model incorporates productivity effects in both goods and services markets endogenously, through a Dixit-Stiglitz framework. It summarizes policy notes on the key business service sectors that were prepared for this work, and estimates the ad valorem equivalent of barriers to foreign direct investment based on these policy notes and detailed questionnaires completed by specialists in Tanzania. The authors estimate that Tanzania will gain about 5.3 percent of the value of Tanzanian consumption in the medium run (or about 4.8 percent of gross domestic product) from a full reform package that also includes uniform tariffs. The estimated gains increase to about 16 percent of consumption in the long-run, steady-state model, where the impact on the accumulation of capital from an improvement in the productivity of capital is taken into account. Decomposition exercises reveal that the largest gains to Tanzania will derive from liberalization of costly regulatory barriers that are non-discriminatory in their impacts between Tanzanian and multinational service providers.

Multinational enterprise acquisitions in emerging markets: linkage effects on local firms

This study focuses on the linkages occurring between UK service multinationals and their local suppliers in China and Korea. We consider the effects of linkage formation on domestic firms. Data collection was undertaken over a three-year period whereby qualitative in-depth interviews were carried out with managers in the UK headquarter, the subsidiary and the 'linked' local firm in order to facilitate a multi-perspective approach. Results indicate that the factors which facilitate linkage formation are subsidiary-related variables, primarily the mode of entry, subsidiary autonomy, level of embeddedness and subsidiary role. The key contribution of this paper is to extend the literature on linkages to consider services whilst developing a relevant conceptual framework. Overall, our study confirms the extreme importance of the subsidiary in linkage formation and also how the externalities occurring from linkage formation may benefit local firms and subsequently aid local economic development as a whole.

Strategic and Organisational Challenges of Internationalisation in Financial Services

The rapid international expansion by financial services firms since the early 1990s has occurred in the absence of any consistent evidence of such growth being associated with performance gains. Opportunism and imitation are identified as the key drivers of cross-border expansion, suggesting that internationalisation strategies need to be based on a more rigorous analysis of the sources of cross-border value creation. Applying Ghemawat's ‘Triple-A’ global strategy analysis framework identifies the sources of value creation from internationalisation in financial services, but also reveals the internal diversity of the financial services sector with regard to product and national market differences. Hence internationalisation strategies need to be uniquely tailored to the positioning and competitive advantages of individual financial services companies. These complexities of internationalisation strategy in financial services pose massive challenges to strategy implementation. The greatest management problem for financial services multinationals is to design structures and systems that can reconcile the (often very) divergent strategic requirements of different products and markets. The scale of this problem increases with additional product and international diversity. The organisational structures and systems of coordination and control that have proven effective for industrial multinationals have been less successful for financial services multinationals, partly because of the latters' greater strategic complexity and partly because the requirements for effective risk management create major barriers to decentralization. Given these challenges, financial services firms need to avoid the overconfidence that has characterised their aggressive international expansion of recent years, and adopt cross-border strategies that are sequential, experimental and adaptive.

‘A Question of Principle with Political Implications’ – Investigating Collaboration in the Chinese Maritime Customs Service, 1945–1946

AbstractIn the winter of 1945, the multinational Chinese Maritime Customs Service opened an inquiry into the cooperation of hundreds of its own employees with Japanese occupation forces in China. This was, as far as the historical record allows us to say, the most thorough investigation undertaken in China into collaboration during World War Two. This paper represents the first historical analysis of the Customs ‘Staff Investigation Committee.’ It argues that the investigation represented a new direction for the Customs Service in China. The investigation's underpinning rationale was that Customs staff, Chinese and foreign, served the Kuomintang government before any other notion of Chinese or Service interests—a dramatic change in direction for an organisation that had been emblematic of treaty-port China. The investigation thus offers historians an insight into the understudied final years of the Customs Service, into the late Republican government's efforts to deal with the legacy of imperialism, and into the extent and rationale of collaboration in Nationalist China.

Modeling services liberalization: The case of Kenya

This paper employs a 55 sector small open economy computable general equilibrium model of the Kenyan economy to assess the impact of the liberalization of regulatory barriers against foreign and domestic business service providers in Kenya. The model incorporates foreign direct investment in business services and productivity effects in imperfectly competitive goods and services markets endogenously, through a Dixit–Stiglitz framework. The ad valorem equivalent of barriers to foreign direct investment have been estimated based on detailed questionnaires completed by specialists in Kenya. We estimate very substantial gains to Kenya from regulatory liberalization in business services, and additional gains from uniform tariffs. The estimated gains increase to 50% of consumption in the long run steady state model, where the impact on the accumulation of capital from an improvement in the productivity of capital is taken into account. Decomposition exercises reveal that the largest gains to Kenya will derive from liberalization of costly regulatory barriers that are non-discriminatory in their impacts between Kenyan and multinational service providers.

Successful Web-Based IT Support Services

Web-based self-service systems (WSSs) are increasingly leveraged for the delivery of after-sales information technology (IT) support services. Such services are offered by IT service providers to customer firms and increasingly involve business partners. However little is known of the challenges faced by IT service providers as a result of the involvement of the other firms and their employees (end-users). This paper reports related findings from an interpretive study of IT service provider perceptions in six multinational IT service provider firms (Cooper, 2007). The findings highlight that, for IT service providers, (1) it is important to consider and resolve the needs and concerns of other key stakeholders, and (2) significant challenges exist in doing so. The main contribution of the paper is the identification of the key challenges involved. Important implications for theory and practice are discussed.

Impact of ownership and location factors on service multinationals' internalisation

Foreign direct investment in the service sector has been gaining importance in the past decade as more countries transform themselves into post-industrialised economies. The transition from a centrally planned economy to market-based economy has generated a surge of foreign direct investment from industrialised countries to Central and Eastern European Countries. This paper examines the impact of ownership and location factors on the extent of internalisation for service multinationals seeking to enter into the Czech Republic, Hungary, and Poland, as these countries launch their economies towards increased privatisation, deregulation, and liberalisation. Using foreign direct investment data of 76 firms during 1990–2000, we find significant support for our main hypotheses.

Geographical externalities of local real estate markets

PurposeDespite the recent trend of off‐shoring branches of UK services industry to remote locations, urban theory has yet to enlist a theory of industrial rents that formally takes into account the properties of substitution between locations. The purpose of this paper is to elaborate on the Fujita, et al. model in order to develop theoretical foundations for a pricing theory of contemporary commercial real estate markets.Design/methodology/approachThe paper employs panel data methods for the simultaneous estimation of local market rent structures, which include a complex of spill‐over effects from all other parts of the national market. The estimations are based on time series of locally adjusted estimates of tenancy demand and supply proxies for 48 UK office centres. Influences from the entity of UK regions are considered by applying a variety of deterministic and stochastic structural variability tests. The estimated structures are subjected to multivariate co‐integration tests for an examination of the stability of structural differentials.FindingsThe paper appears to find considerable support to the hypothesis that rental spill‐overs exist across the network of office centres in the UK. It suggests that the structure of these markets is characterised by certain properties of substitution and complementarity that have generally been observed in a wide range of real consumer or producer markets. This finding is critical to the development of a policy theory for national planning, which takes into account the impacts of local planning policies on national aggregate economic welfare.Research limitations/implicationsThis analysis is limited by the unavailability of a coherent theoretical micro‐economic framework, which may be the focus of further research.Originality/valueThe focus of this paper is on offices and business services industry but the principles can be extended to include industrial space. The paper questions some of the central assumptions and methodological approaches used in existing industrial location theory. It proposes a model that considers location pricing and allocation in relation to strategies to improve the spatial organisation of multinational services firms.

Service multinationals: Their past, present, and future

Abstract and Key Results This focused issue underscores the growing importance of service sector in the global economy and attempts to fill in the lacunae of research in internationalization of service industries. We stress the need for more systematic research both at the conceptual and empirical level to extend the frontiers of knowledge on service multinationals. Given the rising importance of service sector, it is imperative that international business scholars examine the internationalization of service firms in both developed and developing nations. The focused issue presents papers that delve into different aspects on service multinationals, namely surveying recent academic work on non-manufacturing sector, internationalization and performance, determinants of exports for service firms, regional versus global strategies for service firms, offshoring propensity in information technology industry, and value transformation model for location-intensive and information-intensive software services. Each paper offers a distinct insight into the services sector.