Dual paths to performance: the impact of global pressures on MNC subsidiary conduct and performance

Over the last decade, the international business literature has placed ever-greater emphasis on the role that learning and innovation play in determining multinational and multinational subsidiary performance. The present research seeks to understand the organizational paths leading to such desirable outcomes as greater learning, increased innovation and improved performance. Using a model tested with data collected through a survey of managers in subsidiaries of multinational firms, we find dual, independent paths to improved performance - one through networking and inter-unit learning and the other through subsidiary autonomy and innovation. A particular feature of these findings is that they can be shown to be robust after controlling for a wide range of environmental pressures and firm and industry factors. However, in the absence of environmental controls the dual path finding is rejected. These conflicting findings support the imperative to test models that include a diverse range of environmental pressures so that the true effects of organizational factors on learning, innovation and performance can be identified.

Contribution of MNCs to subsidiary stakeholders

The international business literature has evolved from addressing the question of how MNCs are more efficient organizations for exploiting innovations globally – to the issue of how MNCs are more effective in creating new products, processes and technologies worldwide. However, the question of how MNCs contribute to, and share benefits with, the host country stakeholders has received little attention in the literature. Our research shows that the contribution of MNCs to the subsidiary company and country stakeholders in the form of R&D, exports and royalty earnings is significantly less than expected. Insufficient compensation to local subsidiary stakeholders may undermine the motivation of subsidiary managers to discover new sources of advantage for the MNC. It may also discourage subsidiary country governments from offering incentives to MNCs for inward FDI.

Australian divestiture activity: An examination of gains to sell-off announcements

This study examines the source of gains associated with Australian divestiture activity, defined as a voluntary modification of the firm's productive assets by a sell-off of a complete operating division or wholly-owned subsidiary of the divesting firm The sell-off announcement produces positive average abnormal returns of 1.15% over the two-day announcement period. We conclude that the gains arise predominantly from divestitures that have a strategic focus as demonstrated by, first, the divested unit is unrelated to the firm's core activities (a strategic divestiture), second, the significance of the strategic variable in explaining the positive market reaction in regression analysis, and third, the finding of more significant results where the intended use of proceeds of the sell-off is for strategic purposes.

Corporate governance options for the local subsidiaries of multinational enterprises

While the corporate governance literature generally focuses on the parent legal entity, many organisations are now multinational enterprises (MNEs) with subsidiaries that are most often legal entities in their host countries. Despite the strengthening of corporate governance regimes internationally, the boards of these subsidiaries are in many instances perfunctory. This paper examines the question of whether developments in corporate governance theory and practice can add value for the local subsidiaries of MNEs. This paper provides a theoretical basis for evaluating governance models in MNEs. The paper commences with a review of the key concepts from the MNE and conglomerates literature with respect to core MNE strategies. The paper then discusses what the "governance roles" are that must be performed in MNE subsidiaries. We propose four governance frameworks for subsidiary corporations. These frameworks are: (1) Direct Control; (2) Dual Reporting; (3) Advisory Board; (4) Local Board. We consider the strengths and weaknesses of each model in relation to international strategy theory. We conclude with recommendations for the conditions under which the various models may be appropriate and practical guidelines for the utilisation of corporate governance theory to improve MNE performance.

Organic Matter Dynamics in the Wet Tropics Under Different Sugarcane Residue Management Regimes

Retention of sugarcane leaves and tops on the soil surface after harvesting has almost completely replaced pre- and post-harvest burning of crop residues in the Australian sugar industry. Since its introduction around 25 years ago, residue retention has increased soil organic matter to improve soil fertility as well as improve harvest flexibility and reduce erosion. However, in the wet tropics residue retention also poses potential problems of prolonged waterlogging, and late-season release of nitrogen which can reduce sugar content of the crop. The objective of this project is to examine the management of sugarcane residues in the wet tropics using a systems approach. Subsidiary objectives are (a) to improve understanding of nitrogen cycling in Australian sugarcane soils in the wet tropics, and (b) to identify ways to manage crop residues to retain their advantages and limit their disadvantages. Project objectives will be addressed using several approaches. Historic farm production data recorded by sugar mills in the wet tropics will be analysed to determine the effect of residue burning or retention on crop yield and sugar content. The impact of climate on soil processes will be highlighed by development of an index of nitrogen mineralisation using the Agricultural Production Systems Simulator (APSIM) model. Increased understanding of nitrogen cycling in Australian sugarcane soils and management of crop residues will be gained through a field experiment recently established in the Australian wet tropics. From this experiment the decomposition and nitrogen dynamics of residues placed on the soil surface and incorporated will be compared. The effect of differences in temperature, soil water content and pH will be further examined on these soils under glasshouse conditions. Preliminary results show a high ammonium to nitrate ratio in tropics soils, which may be due to low rates of nitrification that increase the retention of nitrogen in a form (ammonium) that is less subject to leaching. Further results will be presented at Congress.