Images of the multinational firm

A compilation of perspectives from leading authors from international business studies and organisation studies, including John Dunning, Eleanor Westney, John Cantwell, Richard Whitely and Alan Rugman.

The regional focus of Asian multinational enterprises

In recent issues of this Journal a debate has raged concerning the appropriate nature of academic research in the Asia Pacific region. While we support the desire for both rigor and regional relevance in this research, we wish to demonstrate a strong commonality between the performance of large Asian firms and others from Europe and North America. This prompts us to question the need for a new theory of the MNE based on the experience of Asian firms. Like their counterparts elsewhere, the large Asian firms mostly operate on an intra-regional basis. While in the literature it has been assumed that the path to success for Asian firms is globalization, we show that the data supporting this is confined to a handful of unrepresentative case studies. We also present a bibliometric analysis which shows an overwhelming case study sample selection bias in academic studies towards this small number of unrepresentative cases

Inertia in Japanese organizations: knowledge management routines and failure to innovate

This paper argues that features of Japanese organizations, previously held to be the foundations of innovation, change and flexibility, can equally be significant barriers to change, innovation and adaptation in turbulent economic environments. This paper draws on two in-depth case studies of Japanese organizations. It shows how, in both cases, these firms displayed specific weaknesses in the ways in which they integrate and bundle knowledge, in particular around their research and development (R&D) functions. Despite the adoption of strategies of technological innovation and internationalization, the data suggest that the pursuit of both strategies is beset by barriers of inertia. Embedded internal network connections and knowledge-sharing routines between central R&D and other divisions are inappropriate for the revised strategy. Existing external connections, with preferred suppliers and customers within keiretsu structures, and close relationships with existing R&D partners retard these firms' strategic flexibility. With a limited variety of latent routines, knowledge, capabilities and agency to draw on when needed, these firms have limited organizational responsiveness and high levels of path-dependency.

Race-to-the-bottom or -top at home or abroad: Health and safety standards and the multinational firm

We develop a model to illustrate potential complexities in the relationship between corporate geographical diversification and the health and safety (H&S) standards set in national jurisdictions. A firm, that initially has a plant in its home country, may choose to also have one or two foreign plants in order to improve its bargaining position versus local governments, and so ensure reduced H&S standards, i.e. a race-to-the-bottom. However, contrary to the main focus of the popular debate on this topic, we note the potential for the race-to-the-bottom tendency to be exerted on H&S standards in the multinational company’s home rather than host country, and also for an upward push on H&S to instead result.

The regional and global competitiveness of multinational firms

International competitiveness ultimately depends upon the linkages between a firm’s unique, idiosyncratic capabilities (firm-specific advantages, FSAs) and its home country assets (country-specific advantages, CSAs). In this paper, we present a modified FSA/CSA matrix building upon the FSA/CSA matrix (Rugman 1981). We relate this to the diamond framework for national competitiveness (Porter 1990), and the double diamond model (Rugman and D’Cruz 1993). We provide empirical evidence to demonstrate the merits and usefulness of the modified FSA/CSA matrix using the Fortune Global 500 firms. We examine the FSAs based on the geographic scope of sales and CSAs that can lead to national, home region, and global competitiveness. Our empirical analysis suggests that the world’s largest 500 firms have increased their firm-level international competitiveness. However, much of this is still being achieved within their home region. In other words, international competitiveness is a regional not a global phenomenon. Our findings have significant implications for research and practice. Future research in international marketing should take into account the multi-faceted nature of FSAs and CSAs across different levels. For MNE managers, our study provides useful insights for strategic marketing planning and implementation.

The effects of institutional distance and headquarters’ financial performance on the generation of environmental standards in multinational companies

This article combines institutional and resources’ arguments to show that the institutional distance between the home and the host country, and the headquarters’ financial performance have a relevant impact on the environmental standardization decision in multinational companies. Using a sample of 135 multinational companies in three different industries with headquarters and subsidiaries based in the USA, Canada, Mexico, France, and Spain, we find that a high environmental institutional distance between headquarters’ and subsidiaries’ countries deters the standardization of environmental practices. On the other hand, high-profit headquarters are willing to standardize their environmental practices, rather than taking advantage of countries with lax environmental protection to undertake more pollution-intensive activities. Finally, we show that headquarters’ financial performance also imposes a moderating effect on the relationship between environmental institutional distance between countries and environmental standardization within the multinational company.