The evolution of innovation capability in multinational enterprise subsidiaries: dual network embeddedness and the divergence of subsidiary specialisation in Taiwan

This paper examines how innovation-related capabilities for production, design and marketing develop at the subsidiary level within multinational enterprises (MNEs). We focus on how subsidiary autonomy and changing opportunities to access internal (MNE) and external (host country) sources of capability contribute in a combined way to the accumulation of specialist capabilities in five Taiwan-based MNE subsidiaries in the semiconductor industry. Longitudinal analysis shows how the accumulation process is subject to discontinuities, as functional divisions are (re)opened and closed during the lifetime of the subsidiary. A composite set of innovation output measures also shows significant variations in within-function levels of capability across our sample. We conclude that subsidiary specialisation and unique subsidiary-specific advantages have evolved in a way that is strongly influenced by the above factors.

The drivers of multinational enterprise subsidiary entrepreneurship in China: a new resource-based view perspective

This paper extends the resource-based view (RBV) of the firm, as applied to multinational enterprises (MNEs), by distinguishing between two critical resource dimensions, namely relative resource superiority (capabilities) and slack. Both dimensions, in concert with specific environmental conditions, are required to increase entrepreneurial activities. We propose distinct configurations (three-way moderation effects) of capabilities, slack, and environmental factors (i.e. dynamism and hostility) to explain entrepreneurship. Using survey data from 66 Canadian subsidiaries operating in China, we find that higher subsidiary entrepreneurship requires both HR slack and strong downstream capabilities in subsidiaries, subject to the industry environment being dynamic and benign. However, high HR slack alone, in a dynamic and benign environment, but without the presence of strong capabilities, actually triggers the fewest initiatives, with HR slack redirected from entrepreneurial experimentation towards complacency and inefficiency. This paper has major implications for MNEs seeking to increase subsidiary entrepreneurship in fast growing emerging markets.

Multinational subsidiary sales and performance in South East Asia

We extend the theory of the multinational enterprise (MNE) by exploring the concept of subsidiary-specific advantages (SSAs) as a driver for subsidiary performance. We investigate the relationship of host country-specific advantages (host CSAs) in the form of market attractiveness, SSAs and subsidiary sales as they affect subsidiary performance. From an original primary dataset of 101 British multinational (MNE) subsidiaries in six South East Asian countries, our analysis reveals three significant findings. First, host market attractiveness has a statistically positive impact on the performance of subsidiaries. Second, the three traditional SSAs of general management, marketing capabilities and invested capital enhance subsidiary performance. Third, we examine geographic direction and types of customers for subsidiary sales by following international accounting standards. We find that these subsidiaries generate on average 95 percent of total sales from the Asia Pacific region and 91 percent of total sales from external customers. Our findings have important research and managerial implications.

The bi-cultural option for international human resource management: the Japanese/Brazilian Nikkeijin example

This paper reports on an important subgroup of international boundary-spanners – immigrants and second or third generation migrants from the MNC's home country living in the subsidiary host country. We take as our example the Nikkeijin (Japanese immigrants and their descendants) in Brazil. Such bi-cultural people are a largely unexplored source of boundary-spanning internationally competent talent for multinational enterprises. Using two different surveys, we find that this group is recognized as a source of talent by Japanese MNCs, but that their HRM practices are not appropriate to attract and use them in their global talent management programmes.

The dream’s door: a case of MNC in Poland

Globalisation inevitably led to attempts to transfer know‐how and expertise to markets in different locations and cultures, where the particular organisation is willing to begin to operate. Hence, the need for understanding the conditions for successful knowledge transfer is especially important. The globalisation process in the Eastern bloc, which began in 1990, is a good example of knowledge transfer where the mutual meaning creation played a crucial role. This case study illustrates the process of international knowledge transfer between Western Europe and an emerging economy using the example of DAK Corporation and quality transfer to Poland. The case is especially useful for undergraduate and postgraduate students, including MBA students, studying general management as well as more specialised courses stemming from international management, for example, cross‐cultural management and organisational behaviour. Since the material focuses on people management and development as well as organisational culture creation, current and future practitioners from the human resources department will find it particularly useful. Students considering a career in a multinational company can also use this case in their preparation for the challenges of operating in a global business environment.

Fifty years of international business theory and beyond

As the field of international business has matured, there have been shifts in the core unit of analysis. First, there was analysis at country level, using national statistics on trade and foreign direct investment (FDI). Next, the focus shifted to the multinational enterprise (MNE) and the parent’s firm specific advantages (FSAs). Eventually the MNE was analysed as a network and the subsidiary became a unit of analysis. We untangle the last fifty years of international business theory using a classification by these three units of analysis. This is the country-specific advantage (CSA) and firm-specific advantage (FSA) matrix. Will this integrative framework continue to be useful in the future? We demonstrate that this is likely as the CSA/FSA matrix permits integration of potentially useful alternative units of analysis, including the broad region of the triad. Looking forward, we develop a new framework, visualized in two matrices, to show how distance really matters and how FSAs function in international business. Key to this are the concepts of compounded distance and resource recombination barriers facing MNEs when operating across national borders.

The development of a real-time PCR to detect pathogenic Leptospira species in kidney tissue

A LightCycler(R) real-time PCR hybridization probe-based assay that detects a conserved region of the 16S rRNA gene of pathogenic but not saprophytic Leptospira species was developed for the rapid detection of pathogenic leptospires directly from processed tissue samples. In addition, a differential PCR specific for saprophytic leptospires and a control PCR targeting the porcine beta-actin gene were developed. To assess the suitability of these PCR methods for diagnosis, a trial was performed on kidneys taken from adult pigs with evidence of leptospiral infection, primarily a history of reproductive disease and serological evidence of exposure to pathogenic leptospires (n = 180) and aborted pig foetuses (n = 24). Leptospire DNA was detected by the 'pathogenic' specific PCR in 25 tissues (14%) and the control beta-actin PCR was positive in all 204 samples confirming DNA was extracted from all samples. No leptospires were isolated from these samples by culture and no positives were detected with the 'saprophytic' PCR. In a subsidiary experiment, the 'pathogenic' PCR was used to analyse kidney samples from rodents (n = 7) collected as part of vermin control in a zoo, with show animals with high microagglutination titres to Leptospira species, and five were positive. Fifteen PCR amplicons from 1 mouse, 2 rat and 14 pig kidney samples, were selected at random from positive PCRs (n = 30) and sequenced. Sequence data indicated L. interrogans DNA in the pig and rat samples and L. inadai DNA, which is considered of intermediate pathogenicity, in the mouse sample. The only successful culture was from this mouse kidney and the isolate was confirmed to be L. inadai by classical serology. These data suggest this suite of PCRs is suitable for testing for the presence of pathogenic leptospires in pig herds where abortions and infertility occur and potentially in other animals such as rodents. Crown Copyright (C) 2007 Published by Elsevier Ltd. All rights reserved.

A new framework for understanding inequalities between expatriates and host country nationals

An interdisciplinary theoretical framework is proposed for analysing justice in global working conditions. In addition to gender and race as popular criteria to identify disadvantaged groups in organizations, in multinational corporations (MNCs) local employees (i.e. host country nationals (HCNs) working in foreign subsidiaries) deserve special attention. Their working conditions are often substantially worse than those of expatriates (i.e. parent country nationals temporarily assigned to a foreign subsidiary). Although a number of reasons have been put forward to justify such inequalities—usually with efficiency goals in mind—recent studies have used equity theory to question the extent to which they are perceived as fair by HCNs. However, since perceptual equity theory has limitations, this study develops an alternative and non-perceptual framework for analysing such inequalities. Employment discrimination theory and elements of Rawls’s ‘Theory of Justice’ are the theoretical pillars of this framework. This article discusses the advantages of this approach for MNCs and identifies some expatriation practices that are fair according to our non-perceptual justice standards, whilst also reasonably (if not highly) efficient.

Mapping the platelet profile for functional genomic studies and demonstration of the effect size of the GP6 locus

BACKGROUND: Evidence suggests the wide variation in platelet response within the population is genetically controlled. Unraveling the complex relationship between sequence variation and platelet phenotype requires accurate and reproducible measurement of platelet response. OBJECTIVE: To develop a methodology suitable for measuring signaling pathway-specific platelet phenotype, to use this to measure platelet response in a large cohort, and to demonstrate the effect size of sequence variation in a relevant model gene. METHODS: Three established platelet assays were evaluated: mobilization of [Ca(2+)](i), aggregometry and flow cytometry, each in response to adenosine 5'-diphosphate (ADP) or the glycoprotein (GP) VI-specific crosslinked collagen-related peptide (CRP). Flow cytometric measurement of fibrinogen binding and P-selectin expression in response to a single, intermediate dose of each agonist gave the best combination of reproducibility and inter-individual variability and was used to measure the platelet response in 506 healthy volunteers. Pathway specificity was ensured by blocking the main subsidiary signaling pathways. RESULTS: Individuals were identified who were hypo- or hyper-responders for both pathways, or who had differential responses to the two agonists, or between outcomes. 89 individuals, retested three months later using the same methodology, showed high concordance between the two visits in all four assays (r(2) = 0.872, 0.868, 0.766 and 0.549); all subjects retaining their phenotype at recall. The effect of sequence variation at the GP6 locus accounted for approximately 35% of the variation in the CRP-XL response. CONCLUSION: Genotyping-phenotype association studies in a well-characterized, large cohort provides a powerful strategy to measure the effect of sequence variation in genes regulating the platelet response.

Management compensation systems in MNCs and domestic firms. Cross-national empirical evidence

• This is a study of the relationship between institutional settings and managerial compensation systems, based on extensive cross-national survey evidence. • We compare differences in practices between Multinational Corporations (MNCs) and domestic firms across a range of capitalist archetypes. • We find that MNCs are more likely to promote compensation systems that incentivise managers in line with organisational performance compared to domestic firms. Our findings also reveal persistent diversity reflecting firm type and institutional setting. We find that the gap between MNCs and domestic firms in terms of the usage of incentive-related compensation is less pronounced in Liberal Market Economies than in other settings. This suggests that it is a combination of being an MNC and the specific home locale that moulds approaches to managerial compensation. This reflects considerable hybridisation of practices within and between settings.

South Korean MNEs' international HRM approach: hybridization of global standards and local practices

This paper analyses the international Human Resource Management (HRM) approaches of Korean Multinational Enterprises (MNEs). Through a study of nine major Korean MNEs’ approaches to subsidiary-HRM, it is argued that the firms pursue hybridization through a blending of localization and global standardization across detailed elements in five broad HRM practice areas. Local discretion is allowed if not counter to global HRM system requirements and “global best practices” used as the template for global standardization of selected HRM elements. This strategic orientation appears to be part of a deliberate response to the “liabilities of origin” born by firms from non-dominant economies.