Global financial crisis: implications for Chinese corporate governance

This paper analyses the role of corporate governance failures and weaknesses in the global financial crisis with reference to the evolution of post-crisis corporate governance arrangements in China. The current crisis presents China with an opportunity to analyse its governance problems, reflect on its weaknesses and implement a strategy to address areas which need attention. This paper opens with a description of China’s exposure to the current global financial crisis and continues to critically evaluate the effectiveness of a free market system on corporate governance. Bratton (2002) maintains that incentive structures that motivate the self-regulatory systems generate less powerful checks against abuse than scholars and practitioners have believed. The paper highlights the need for corporate regulatory bodies and policy makers to revise and re-develop financial services sector regulations. Finally, the paper discusses the need of ethics in organizations - an issue that is beyond legislation. In an increasingly interconnected global economy, it is imperative to increase our understanding of what constitutes an effective corporate governance system. The paper contributes to the corporate governance body of literature within the Chinese context by providing insights into the contributing factors to corporate governance failure that led to the global financial crisis. It also provides policy recommendations for China’s policy makers to seriously consider. The results suggest a need for the re-examination of corporate governance adequacy and the institutionalisation of business ethics.

Operating models for a multi-polar world: balancing global integration and local responsiveness

Purpose – Multinationals have always needed an operating model that works – an effective plan for executing their most important activities at the right levels of their organization, whether globally, regionally or locally. The choices involved in these decisions have never been obvious, since international firms have consistently faced trade‐offs between tailoring approaches for diverse local markets and leveraging their global scale. This paper seeks a more in‐depth understanding of how successful firms manage the global‐local trade‐off in a multipolar world. Design methodology/approach – This paper utilizes a case study approach based on in‐depth senior executive interviews at several telecommunications companies including Tata Communications. The interviews probed the operating models of the companies we studied, focusing on their approaches to organization structure, management processes, management technologies (including information technology (IT)) and people/talent. Findings – Successful companies balance global‐local trade‐offs by taking a flexible and tailored approach toward their operating‐model decisions. The paper finds that successful companies, including Tata Communications, which is profiled in‐depth, are breaking up the global‐local conundrum into a set of more manageable strategic problems – what the authors call “pressure points” – which they identify by assessing their most important activities and capabilities and determining the global and local challenges associated with them. They then design a different operating model solution for each pressure point, and repeat this process as new strategic developments emerge. By doing so they not only enhance their agility, but they also continually calibrate that crucial balance between global efficiency and local responsiveness. Originality/value – This paper takes a unique approach to operating model design, finding that an operating model is better viewed as several distinct solutions to specific “pressure points” rather than a single and inflexible model that addresses all challenges equally. Now more than ever, developing the right operating model is at the top of multinational executives' priorities, and an area of increasing concern; the international business arena has changed drastically, requiring thoughtfulness and flexibility instead of standard formulas for operating internationally. Old adages like “think global and act local” no longer provide the universal guidance they once seemed to.

Regional business networks in the multinational retail sector

This article examines the network relationships of a set of large retail multinational enterprises (MNEs). We analyze under what conditions a flagship-network strategy (characterized by a network of five partners – the MNE, key suppliers, key partners, selected competitors and key organisations in the non-business infrastructure) explains the internationalisation of three retailers whose geographic scope, sectoral conditions and competitive strategies differ substantially. We explore why and when retailers will adopt a flagship strategy. The three firms are two U.K.-based multinational retailers (Tesco and The Body Shop) and a French-based global retailer (Moët Hennessy Louis Vuitton). We find evidence of strong network relationships for all three retailers, although each embraces network strategies for different reasons. Their flagship relationships depend on each retailer's strategic use of firm-specific-advantages (FSAs) and country-specific advantages (CSAs). We find that a flagship strategy can succeed in overcoming internal and/or environmental constraints to cross-border resource transfers, which are barriers to foreign direct investment (FDI). We provide recommendations on why and when to use a flagship-based strategy and which type of network partners to prioritize in order to succeed internationally.

Follow the leaders? An analysis of convergence and innovation of faculty recruiting practices in US business schools

The debate associated with the qualifications of business school faculty has raged since the 1959 release of the Gordon–Howell and Pierson reports, which encouraged business schools in the USA to enhance their legitimacy by increasing their faculties’ doctoral qualifications and scholarly rigor. Today, the legitimacy of specific faculty qualifications remains one of the most discussed topics in management education, attracting the interest of administrators, faculty, and accreditation agencies. Based on new institutional theory and the institutional logics perspective, this paper examines convergence and innovation in business schools through an analysis of faculty hiring criteria. The qualifications examined are academic degree, scholarly publications, teaching experience, and professional experience. Three groups of schools are examined based on type of university, position within a media ranking system, and accreditation by the Association to Advance Collegiate Schools of Business. Data are gathered using a content analysis of 441 faculty postings from business schools based in the USA over two time periods. Contrary to claims of global convergence, we find most qualifications still vary by group, even in the mature US market. Moreover, innovative hiring is more likely to be found in non-elite schools.

Creating Prestige and Global Networks through Conference Rituals

An international conference is a secular ritual which serves to create, recreate and shape global-wide translocal cultural sharings. Social anthropological theories and methods are used to show that, besides being an information flow junction, the international conference is a network crossroad and a way of socialising new members into aninternational research community. It is also capable of creating prestige and honour for the individual researcher,for the arranging research team, university and city. Rituals do not merely reflect the social relations or cosmology of a society, but are events that in themselves do important things through ritual forms and symbolic statements.

The role of entrepreneurial networking on internationalization of a micro-sized Born Global Swedish fashion company : A narrative ethnographic research

Background: In recent studies a lot of attention is drawn to the connection between networking and entrepreneurship. Many scholars consider successful business and networking inseparable. Taking into consideration the topicality of the two notions discussed above the authors of this thesis decided to conduct the research dedicated to these phenomena in the field that interests them most – in the field of Swedish fashion. Purpose: The purpose of the thesis is to gain a deeper insight into entrepreneur’s experiences to point out the role of entrepreneurial networking in the process of internationalization of a micro-sized Swedish fashion company and to contribute to the research in this field by telling its unique story. Method: To achieve the purpose of the research a narrative ethnographic research was conducted. This research strategy was chosen because it suits the purpose best by giving an opportunity to get fresh insights into the field of entrepreneurial networking from the point of view of the entrepreneur. The data collected has a narrative nature therefore narrative analysis is used to present it. The methods of gathering the data are face-to-face interview and documents. Conclusion: we can define the most important role of entrepreneurial networking on the internationalization process of Odeur as an effective accelerator and a tool to fulfil the knowledge and expertise gaps in certain areas through other actors in the network.

Electronic Business Contracts between Services

Electronic contracts mirror the paper versions exchanged between businesses today, and offer the possibility of dynamic, automatic creation and enforcement of restrictions and compulsions on service behaviour that are designed to ensure business objectives are met. Where there are many contracts within a particular application, it can be difficult to determine whether the system can reliably fulfil them all, yet computer-parsable electronic contracts may allow such verification to be automated. In this chapter, we describe a conceptual framework and architecture specification in which normative business contracts can be electronically represented, verified, established, renewed, and so on. In particular, we aim to allow systems containing multiple contracts to be checked for conflicts and violations of business objectives. We illustrate the framework and architecture with an aerospace aftermarket example.

O global e o contextual no aprendizado gerencial de multinacionais: uma perspectiva brasileira

The major purpose of this thesis is to verify, from a Brazilian perspective, how global and contextual issues influence the management learning in Multinationals. The management learning derived from the interaction of holding and sidiaries/colligates of Multinational corporation is supposed to be subject to convergent and divergent forces, the former related to global and standardized organizational practices, and the latter, is seen as a social practice subject to cultural and organizational singularities. A model was constructed to relate the dichotomy between the universality of the management practices and technologies and the particularity of the contexts where they operate, to the dichotomy between the singularities in organization and national level. This model is composed of the international, global, managerial and inter-organizational dimensions related, respectively, to the cultural and political diversity; to the universal forces of practices and values; to the managerial capabilities and resources in the organization, consolidated as best practices and to the interaction between holding and subsidiaries and the resulted learning. The combined result of these dimensions influences the knowledge flow and the learning derived from it. The field research was constituted of five cases of internationalized Brazilian firms, with a solid experience in their management systems. The main subjects of this study were executives and ofessionals/managers who respond to the management development. The data were first collected in the headquarters and complemented with visits to subsidiaries/joint ventures in other countries, in loco or with expatriated people who return to Brazil. The central supposition was validated. So, the management learning ¿ is driven by the global capitalism practices and by the global culture where they are immersed, reproducing a hegemonic vision and a common language (global dimension); ¿ incorporates the more propagated and dominant managerial values, although there are some variations when they are applied in the subsidiaries/joint ventures; is the product of the assimilation of international recognized and planned managerial practices, with the acculturation power, although not completely; is the result mainly of the managerial practice in work; is impacted not only by cross-cultural and managerial factors, but also by the business environment of the firm; is given according to the capabilities and resources in the organization, guiding the form of assimilation of practices and technologies, with global application or not (managerial dimension); ¿ is affected by the cross-cultural diversity involving the countries of the holding and the subsidiaries/joint ventures where the firm is and is given as a reproduction of the political context of the holding and subsidiaries countries (international dimension); ¿ faces aligned concurrent institutional pressures between corporate or global systems, practices of other subsidiaries/joint ventures and local practices; is more difficult to reach when there is not permeability between organizational cultures and identities of a Multinational firm; is affected by how much the relationship process across these unities is self-referenced; is facilitated by the construction and improvement of the knowledge network (interorganizational dimension). Finally some contributions of this study are exposed, including extensions of the proposed model and suggestions, recommendations for future research.

Relações da orientação para o mercado com o alinhamento estratégico em e-business

Propõe-se que a Orientação para o Mercado, importante construto na área de Marketing, engloba o processo de Alinhamento Estratégico entre TI e negócios – e suas capacidades básicas de adequação estratégica e integração funcional. Portanto, o Alinhamento Estratégico seria um dos tipos de resposta ao mercado provenientes de uma Orientação para o Mercado. Este fenômeno seria mais evidente e significativo em negócios eletrônicos, que fazem uso intensivo da TI como recurso estratégico, competindo em um mercado global e dinâmico. A partir destas proposições, o estudo discute sobre como gerentes desejando promover as capacidades de um Alinhamento Estratégico em sua organização, podem ter sucesso, ao focar suas estratégias de negócio e TI no desenvolvimento de capacidades distintivas de Orientação para o Mercado. Os resultados da pesquisa empírica suportam estas proposições: indicando que o desenvolvimento de capacidades de Orientação para o Mercado, especialmente respostas coordenadas ao mercado, influenciam na promoção do Alinhamento Estratégico; e que investimentos em TI, principalmente em sistemas interorganizacionais, apóiam o desenvolvimento destas capacidades. Baseados nestes resultados apresenta-se: um modelo conceitual, recomendações práticas e sugestões para futuras pesquisas explanatórias.

Common factors in Latin America's business cycles

This paper constructs new business cycle indices for Argentina, Brazil, Chile, and Mexico based on common dynamic factors extracted from a comprehensive set of sectoral output, external trade, fiscal and financial variables. The analysis spans the 135 years since the insertion of these economies into the global economy in the 1870s. The constructed indices are used to derive a business cyc1e chronology for these countries and characterize a set of new stylized facts. In particular, we show that ali four countries have historically displayed a striking combination of high business cyc1e volatility and persistence relative to advanced country benchmarks. Volatility changed considerably over time, however, being very high during early formative decades through the Great Depression, and again during the 1970s and ear1y 1980s, before declining sharply in three of the four countries. We also identify a sizeable common factor across the four economies which variance decompositions ascribe mostly to foreign interest rates and shocks to commodity terms of trade.

Business diplomacy: the compass rose of foreign markets

With transnational corporations (TNCs) around the world today numbering over 60,000 and more than 800,000 affiliates working abroad, it is easy to understand how modern day international business could have transformed into a major global player serving at the axis of politics, social and environmental responsibility. Additionally, with accountability to a large variety of both public and private stakeholders, all exerting significant power and influence, today’s global corporate structure is reinventing modern international relations, and in some cases, dominating it. (Muldoon 2005) This transformative nature of globalization today can also serve as a source of friction among this growing chorus of players and is bringing irreversible change to these relationships and how they impact and influence business around the world. (Muldoon 2005) From the largest to the smallest international corporation seeking to expand into new international markets, the challenges that come with corporate ambition can mean the difference between success and failure and they find a home at the intersection of international relations, diplomacy and economics. To successfully navigate these challenges, especially in emerging economies, a company must now factor in more than just the “bottom line” and address complex issues that include human rights differences, environmental regulations, labor rights and values of each country. (Henisz, 2014) Combined with modern-day mobility achieved through technology and the Internet, corporations today have a great capacity to reach targeted audiences and establish a presence, but it is this same technology that also allows for immediate response to any corporate action. This constant, 24-hour news cycle, where everyone is made to be a real-time reporter through social media, has created a situation that demonstrably necessitates the ability to not only 3 respond immediately, but also to have real-time understanding of the challenges faced by a corporation as it looks toward global expansion. International Business Diplomacy, or simply Business Diplomacy as it will be referred to in this paper, combines all of these nuanced factors into a relatively new discipline that offers companies looking to expand into new markets, guidelines and directives so that they can more strategically map corporate direction, limit risk and achieve their objectives. This paper will examine the history of diplomacy and how the concept of statecraft became intertwined with the increasing globalization of business. Following a scholarly examination of how modern Business Diplomacy came into being, and the unique challenges that come with its application, particularly the liabilities needed to be overcome, this paper will apply the concept to the Brazilian aerospace manufacturer Embraer, tracking its strategic emergence from a small, regionally focused aircraft producer to global leader in the regional and executive jet market platforms. It will then examine Embraer’s entrance into the Chinese market, where the company suffered from several missteps and eventually had to refocus its business model from commercial to executive jets. Finally, as globalization continues to “emancipate international business from its institutional and social constraints,” (Muldoon 2005) this paper will address how the relatively new and emerging discipline of Business Diplomacy is continuing to mature and grow in stature and influence through the proposition of a new challenge or “liability” that corporations must also overcome as they expand into new markets. Through the analysis of Embraer in China, this paper will introduce the Liability of Governance to the lexicon of Business Diplomacy and propose specific steps that a company can undertake to avoid it.

Information asymmetry and transaction costs in a cross-cultural business transaction

The intent of this paper is to provide a practitioners insight into the present and foreseeable future of problem of transaction cost economics related to culture and business etiquette that may increase the of complexity of business communication. We will also explore whether it impacts participant's mindsets regarding opportunistic or passive aggressive behavior. We will study the role of culture, ethics, information asymmetry, and legal systems regarding their importance towards the business contracts and lack of knowledge in local environments. We will make connections to contract theory strategies and objectives and recommend business practices. Furthermore, economic theory explores the role of the impossibility of the perfect contract. Historical and present day operational factors are examined for the determination of forward-looking contract law indications worldwide. This paper is intended provide a practitioners view with a global perspective of a multinational, mid-sized and small corporations giving consideration in a non-partisan and non-nationalistic view, yet examines the individual characteristics of the operational necessities and obligations of any corporation. The study will be general, yet cite specific articles to each argument and give adequate consideration to the intricacies of the global asymmetry of information. This paper defends that corporations of any kind and size should be aware of the risk of international business etiquette and cultural barriers that might jeopardize the savings you could obtain from engaging international suppliers.

A qualitative study of the internationalization of born-global technology start-ups in Brazil

O fenômeno das empresas born globals e a internacionalização de empresas brasileiras de base tecnológica são tópicos recentes na literatura acadêmica, devido também ao fenômeno ser recente. Não existem muitos estudados feitos com foco no mercado brasileiro, e os poucos que foram feitos, possuem um viés quantitativo. Esse estudo, entretanto, tem como objetivo analisar startups de maneira qualitativa. Uma extensa revisão de literatura foi desenvolvida a fim de melhor analisar as fundações nas quais o estudo seria desenvolvido, revisando os métodos de internacionalização, empreendedorismo no Brasil, e o fenômeno born global no geral. Entrevistas foram conduzidas com empreendedores no Brasil, que passaram pelo processo de internacionalização de seus modelos de negócios, a fim de reunir introspecções a respeito das peculiaridades do mercado brasileiro. Foram também analisados os fatores de escalabilidade de modelos de negócios dependentes de tecnologia, motivadores para a internacionalização, critério de seleção de mercados, programas governamentais, e o papel das startups brasileiras em uma perspectiva global.

The consequences of the culture aspect and the power distance in the execution of global strategies in multinational companies in Brazil

One of the challenges presented by the current conjecture in Global Companies is to recognize and understand that the culture and levels in structure of the Power Distance in Organizations in different countries contribute, significantly, toward the failure or success of their strategies. The alignment between the implementation and execution of new strategies for projects intended for the success of the Organization as a whole, rather than as an individual part thereof, is an important step towards reducing the impacts of Power Distance (PDI) on the success of business strategies. A position at odds with this understanding by Companies creates boundaries that increase organizational chasms, also taking into consideration relevant aspects such as, FSAs (Firm-Specific Advantages) and CSAs (Country-Specific Advantages). It is also important that the Organizations based in countries or regions of low Power Distance (PDI) between its individuals be more flexible and prepared to ask and to hear the suggestions from Regional and Local Offices. Thus, the purpose of this study is to highlight the elements of effective strategy implementation considering the relevant aspects at all levels of global corporate culture that justify the influences of power distance when implementing new strategies and also to minimize the impacts of this internal business relationship. This study also recognizes that other corporate and cultural aspects are relevant for the success of business strategies so consider, for instance, the lack of alignment between global and regional/local organizations, the need for competent leadership resources, as well as the challenges that indicate the distance between the hierarchical levels ─ Headquarters and Regional Office ─ as some of the various causes that prevent the successful execution of global strategies. Finally, we show that the execution of the strategy cannot be treated as a construction solely created by the Headquarters or by only one Board and that it needs to be understood as a system aimed at interacting with the surroundings.