INTERNATIONALIZATION OF STATE-OWNED ENTERPRISES THROUGH FOREIGN DIRECT INVESTMENT

ABSTRACT State-owned enterprises (SOEs) are created to focus on domestic needs, and yet recent evidence points to increasing outward foreign direct investment by SOEs. Existing International Business (IB) theories focus on efficiency-based motives for internationalization; therefore, they do not fully capture SOEs' internalization dynamics, which are driven largely by political factors and social welfare considerations. We integrate public management and IB theories to develop propositions that combine these questions: why SOEs internationalize; what are their motivations; and what are the main managerial outcomes of SOEs' internationalization. Our findings suggest that SOEs display little hesitancy in entering international markets, and that SOE international expansion is not contradictory with the goals of state-ownership if the purpose is to adjust the company to changing institutional environments both in the domestic and international markets. Our propositions about SOE internationalization are based on an in-depth case study of the outward foreign direct investment conducted by Brazil's Petrobras over the past three decades.

Interpreting social enterprises

Institutional and organizational variety is increasingly characterizing advanced economic systems. While traditional economic theories have focused almost exclusively on profit-maximizing (i.e., for-profit) enterprises and on publicly-owned organizations, the increasing relevance of non-profit organizations, and especially of social enterprises, requires scientists to reflect on a new comprehensive economic approach for explaining this organizational variety. This paper examines the main limitations of the orthodox and institutional theories and asserts the need for creating and testing a new theoretical framework, which considers the way in which diverse enterprises pursue their goals, the diverse motivations driving actors and organizations, and the different learning patterns and routines within organizations. The new analytical framework proposed in the paper draws upon recent developments in the theories of the firm, mainly of an evolutionary and behavioral kind. The firm is interpreted as a coordination mechanism of economic activity, and one whose objectives need not coincide with profit maximization. On the other hand, economic agents driven by motivational complexity and intrinsic, non-monetary motivation play a crucial role in forming firm activity over and above purely monetary and financial objectives. The new framework is thought to be particularly suitable to correctly interpret the emergence and role of nontraditional organizational and ownership forms that are not driven by the profit motive (non-profit organizations), mainly recognized in the legal forms of cooperative firms, non-profit organizations and social enterprises. A continuum of organizational forms ranging from profit making activities to public benefit activities, and encompassing mutual benefit organizations as its core constituent, is envisaged and discussed.

The generation and re-generation of social capital and enterprises in multi-stakeholders social cooperative enterprises: a system dynamic approach

Theories on social capital and on social entrepreneurship have mainly highlighted the attitude of social capital to generate enterprises and to foster good relations between third sector organizations and the public sector. This paper considers the social capital in a specific third sector enterprise; here, multi-stakeholder social cooperatives are seen, at the same time, as social capital results, creators and incubators. In the particular enterprises that identify themselves as community social enterprises, social capital, both as organizational and relational capital, is fundamental: SCEs arise from but also produce and disseminate social capital. This paper aims to improve the building of relational social capital and the refining of helpful relations drawn from other arenas, where they were created and from where they are sometimes transferred to other realities, where their role is carried on further (often working in non-profit, horizontally and vertically arranged groups, where they share resources and relations). To represent this perspective, we use a qualitative system dynamic approach in which social capital is measured using proxies. Cooperation of volunteers, customers, community leaders and third sector local organizations is fundamental to establish trust relations between public local authorities and cooperatives. These relations help the latter to maintain long-term contracts with local authorities as providers of social services and enable them to add innovation to their services, by developing experiences and management models and maintaining an interchange with civil servants regarding these matters. The long-term relations and the organizational relations linking SCEs and public organizations help to create and to renovate social capital. Thus, multi-stakeholder cooperatives originated via social capital developed in third sector organizations produce new social capital within the cooperatives themselves and between different cooperatives (entrepreneurial components of the third sector) and the public sector. In their entrepreneurial life, cooperatives have to contrast the "working drift," as a result of which only workers remain as members of the cooperative, while other stakeholders leave the organization. Those who are not workers in the cooperative are (stake)holders with "weak ties," who are nevertheless fundamental in making a worker's cooperative an authentic social multi-stakeholders cooperative. To maintain multi-stakeholder governance and the relations with third sector and civil society, social cooperatives have to reinforce participation and dialogue with civil society through ongoing efforts to include people that provide social proposals. We try to represent these processes in a system dynamic model applied to local cooperatives, measuring the social capital created by the social cooperative through proxies, such as number of volunteers and strong cooperation with public institutions. Using a reverse-engineering approach, we can individuate the determinants of the creation of social capital and thereby give support to governance that creates social capital.

The succession process at social enterprises in Brazil

This research was based on a study of social enterprises in Brazil, to find out if and how these organizations plan and manage the succession process for their senior positions. The study investigated the subset of the associations dedicated to collectively producing goods and services, because they are formally set up and aimed at speeding up the dynamism of local development. The empirical research consisted of two stages. The first was a survey covering a sample of 378 organizations, to find out which of those had already undergone or were undergoing a succession process. The second interviewed the main manager of 32 organizations, to obtain a description of their succession experience. In this stage, the research aimed to analyze how the Individual, Organization and Environment dimensions interact to configure the succession process, identifying which factors of each of these dimensions can facilitate or limit this process. The following guiding elements were taken as the analytical basis: Individual dimension - leadership roles, skill and styles; Organization dimension - structure, planning, advisory boards, communication (transparency), control and evaluation; and Environment dimension - influence of the stakeholders (community, suppliers, clients, and business partners) on the succession process. The results indicated that succession in the researched associations is in the construction stage: it adapts to the requirements of current circumstances but is evidently in need of improvement in order for more effective planning and shared management of the process to be achieved.

Origens e desenvolvimento das Township and Village Enterprises (TVEs) chinesas

Origins and development of Chinese Township and Village Enterprises. Township and Village Enterprises (TVEs) performed an important role during China’s rapid economic development. Based on a review of the recent literature on these "engines of growth", this study characterizes TVEs and their contribution to China’s development trajectory. It draws attention to institutions that are key to explaining TVEs, including responsibility contracts and organizational structure. It concludes that the paradigmatic experiences of TVEs have played an important role in terms of employment and export generation which contributed to China’s sustained levels of economic growth and development.

The Brazilian Business World: the difficult adaptation to globalization

The article deals with the internationalization of Brazilian businesses in the current decade. In the 1990s, Brazil embraced economic neoliberalism and promoted a huge opening up of its economy. At that time, Brazilian companies had to adapt rapidly. Twenty years later, the country has reinforced its presence in Latin America and has ensured a better position in the global markets, especially by through agricultural exports.

Chinese multinational corporations in Brazil: strategies and implications in energy and telecom sectors

This study aims to understand how Chinese enterprises acted in Brazilian energy and telecommunication sectors in the past ten years and whether they would be leading to an increase in the asymmetries between Brazil and China. It argues that the asymmetries presented in the relations are due in large part to successful Chinese enterprises' strategies.

International transfer pricing restrictions: impact on corporate financial policy

Transfer pricing is a pervasive issue that presents significant tax savings potential concerning international enterprises. The authors discuss company incentives to manage transfer prices in an article appearing in the preceding issue of this journal. In response to these incentives, governments have increasingly enacted and enforced domestic restrictions on transfer prices. In this article, contemporary norms restricting transfer pricing are analyzed. The OEGO and US pricing standards are assessed and Brazil's recent application of these standards is considered. Transfer pricing methods are described and evidence of their use is presented. We conclude by describing an intercompany transfer pricing policy intended to facilitate internaI financiaI management and minimize externaI tax threats.

Taking the "cross" out of cross-cultural transfer of management practice

Multi-national enterprises often attempt to replicate successful management practices in "foreign" environments. However, such practices may be ethnocentric because they fit the assumptions, behaviors, expectations, and values of the home cultural environment. Unless the underlying assumptions are shared, transfer to a differing environment may fail. Even if the focus is shifted from cultural differences to implementation, implementation approaches may also be criticized as ethnocentric for the same reasons. In this article, a non-ethnocentric model is expanded and used to test the portability of one management practice, performance appraisal, from the USA to Brazil. This "Test of Portability" may help managers understand which management practices are portable, and, perhaps even more valuable, provide a rationale for adaptation or rejection.

The relevance of subsidiary initiatives for Brazilian multinationals

The purpose of this paper is to analyze relationship patterns between headquarters and subsidiaries of Brazilian Multinationals Enterprises (BrMNEs). The key construct for that investigation is Subsidiary Initiative, which comprises Subsidiary Entrepreneurial Orientation, Autonomy, Integration, Local Competitive Context and Business Network. A survey was carried out in a sample of 65 subsidiaries of 29 BrMNEs. The main outcome is that subsidiaries are highly integrated and receive Entrepreneurial Orientation from Headquarters (HQs), but Initiative is limited. Actually, the main determinants of subsidiary's initiatives are Local Context and Business Networking in the host country. This apparent paradox may be explained by what we call 'rebellious subsidiaries', which take initiatives based on their business environment and connections, regardless of their HQs' directions or delegation of autonomy.

Is the International Business Environment the actual context for international business research?

The International Business Environment (IBE) has been argued to be the essential context for international business (IB) studies and the distinguishing factor from other management studies and studies of large enterprises. Two content analysis show that many papers published in top tier IB journals either lack reference to any dimension of the IBE or tend to be uni-or bi-dimensional when addressing the IBE; it is not a surprise that the cultural dimension is the most often used. We suggest that: (a) there is need to developed more uni-and multi-dimensional environmental constructs; (b) a more holistic view of the IBE provides richer insights on the actual complexity underlying IB research. Future studies that provide more comprehensive models of the IBE that overcome the usual broad classifications of the international environment as undefined and uncontrollable factors are warranted to advance conceptual and empirical research.

Competitiveness of tourist destinations: the study of 65 key destinations for the development of regional tourism

Tourism has reached world importance in the economy. The competition in tourism has intensified between destinations, whether the destinations are cities, regions or countries. In this sense, the evaluation of the tourism competitiveness of these destinations may be helpful in planning and prioritizing actions that will benefit the industry. This article discusses the concept of competitiveness by the multidimensional view of performance, efficiency and unit analysis. Using the theoretical framework lifted, this article shows the 'Study on the competitiveness of the 65 destinations inducers of regional tourism development' prepared by the Tourism Ministry, the Brazilian Support Service to Micro and Small Enterprises (Sebrae) and Getulio Vargas Foundation (FGV), its assumptions that guided this study as well its methodological aspects. Based on this methodology, it was carried out a diagnosis of these 65 destinations selected by the Brazilian Ministry of Tourism to be inducers of tourism in their respective regions. The result of competitiveness reached by these 65 inductors destinations is presented in this article, providing a map of the level of competitiveness of tourism in Brazil.