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.

Linguistic skills and trust creation in international business relationships

Today’s international business in highly related to crossing national, cultural and linguistic borders making communication and linguistic skills a vital part of the trade. The purpose of the study is to understand the role of linguistic skills in trust creation in international business relationships. Subobjectives are to discuss the importance of linguistic skills in international business context, to evaluate the strategic value of trust in business relationships and to analyze the extent to which linguistic skills affect trust formation. The scope is restricted to business-to-business markets. The theoretical background consists of different theories and previous studies related to trust and linguistic skills. Based on the theory a new LTS-framework is created to demonstrate a process model of linguistic skills affecting trust creation in international B2B relationships. This study is qualitative using interviews as a data collection method. Altogether eleven interviews were conducted between October 2014 and February 2015. All of the interviewees worked for organizations operating in the field of international business in B2B markets, spoke multiple languages and had a lot of experience in sales and negotiations. This study confirms that linguistic skills are an important part of international business. In many organizations English is used as lingua franca. However, there are several benefits of speaking the mother tongue of the customer. It makes people feel more relaxed and it makes the relationship more intimate and allows to continue developing it at a more personal level. From the strategic point of view trust creates competitive advantage to a company adding strategic value to the business. The data also supported the view that linguistic skills definitely impact the trust formation process. Quickness and easiness could be stated as the main benefits. It was seen that trust forms faster because both parties understand each other better and they become more open about information sharing within a shorter period of time. These findings and the importance of linguistic skills in trust creation should be acknowledged by organizations, especially regarding the human resource management. Boundary spanners are in key positions so special attention should be put into hiring and educating employees which then take care of company’s relationships. Eventually, these benefits are economical and affect to the profitability of the organization

Do Methods Matter In Global Leadership Development? A Mixed-Methods Study Of A U.s.-Based International Mba Program

As world communication, technology, and trade become increasingly integrated through globalization, multinational corporations seek employees with global leadership experience and skills. However, the demand for these skills currently outweighs the supply. Given the rarity of globally ready leaders, global competency development should be emphasized in higher education programs. The reality, however, is that university graduate programs are often outdated and focus mostly on cognitive learning. Global leadership competence requires moving beyond the cognitive domain of learning to create socially responsible and culturally connected global leaders. This requires attention to development methods; however, limited research in global leadership development methods has been conducted. A new conceptual model, the global leadership development ecosystem, was introduced in this study to guide the design and evaluation of global leadership development programs. It was based on three theories of learning and was divided into four development methodologies. This study quantitatively tested the model and used it as a framework for an in-depth examination of the design of one International MBA program. The program was first benchmarked, by means of a qualitative best practices analysis, against the top-ranking IMBA programs in the world. Qualitative data from students, faculty, administrators, and staff was then examined, using descriptive and focused data coding. Quantitative data analysis, using PASW Statistics software, and a hierarchical regression, showed the individual effect of each of the four development methods, as well as their combined effect, on student scores on a global leadership assessment. The analysis revealed that each methodology played a distinct and important role in developing different competencies of global leadership. It also confirmed the critical link between self-efficacy and global leadership development.

Making internalization theory good for practice: the essence of Alan Rugman’s contributions to international business

This perspectives paper and its associated commentaries examine Alan Rugman's conceptual contribution to international business scholarship. Most significantly, we highlight Rugman's version of internalization theory as an approach that integrates transaction cost economics and ‘classical’ internalization theory with elements from the resource-based view, such that it is especially relevant to strategic management. In reviewing his oeuvre, we also offer observations on his ideas for ‘new internalization theory’. We classify his other novel insights into four categories: Network Multinationals; National competitiveness; Development and public policy; and Emerging Economy MNEs. This special section offers multiple views on how his work informed the larger academic debate and considers how these ideas might evolve in the longer term.

A globális értékláncok – a multinacionális vállalat, mint globális gyár. Fejezetek a nemzetközi üzleti gazdaságtanból 6. ----- It's title in English: Global Value Chains – Multinational Enterprise as Global Factory. Chapters from International Business 6

A tanulmánykötet a globális értékláncok névvel fémjelezett jelenséget veszi górcső alá. A fókuszban a multinacionális vállalatcsoportok ill. a nemzetközi cégek állnak. A tíz tanulmány különböző megközelítések alapján betekintést ad abba, hogy hogyan ragadhatják meg és vizsgálhatják a kutatók a globális értékláncokat a vállalatok, ill. vezetőik nézőpontjából, mi következik a kutatási eredményekből a vállalatok vezetői számára, és milyen következményei vannak a globális értékláncok karakteres és terjedő jelenlétének a nemzetgazdaságok gazdasági politikáit formálókra. A tanulmánykötet szerzői a 2012/2013.tanév tavaszi félévében a Nemzetközi üzleti gazdaságtan c. PhD kurzus hallgatói voltak. ______ The working paper is to provide a Hungarian language overview on the research finding s on Global Value Chain and global factory. The phenomenon behind them is recognized but under researched in Hungary. The chapters of the working paper are to cover as many angles and perspectives of Global Value Chain as many it is possible. Each chapter is based on a published English language paper. Theoretical and conceptual issues, considerations of MNEs and small- and medium sized enterprises and that of national policies are discussed. Authors of the working paper attended the International Business PhD course in the spring semester of 2012/2013.

Irish Credit Unions: Differential Regulation based on Business Model Complexity

This study examines the business model complexity of Irish credit unions using a latent class approach to measure structural performance over the period 2002 to 2013. The latent class approach allows the endogenous identification of a multi-class framework for business models based on credit union specific characteristics. The analysis finds a three class system to be appropriate with the multi-class model dependent on three financial viability characteristics. This finding is consistent with the deliberations of the Irish Commission on Credit Unions (2012) which identified complexity and diversity in the business models of Irish credit unions and recommended that such complexity and diversity could not be accommodated within a one size fits all regulatory framework. The analysis also highlights that two of the classes are subject to diseconomies of scale. This may suggest credit unions would benefit from a reduction in scale or perhaps that there is an imbalance in the present change process. Finally, relative performance differences are identified for each class in terms of technical efficiency. This suggests that there is an opportunity for credit unions to improve their performance by using within-class best practice or alternatively by switching to another class.

Strategic Management of Resources for International Business Operations in Small Consulting Firms - People, Processes and Tools in Managing International operations

Research on strategic management of resources for small consulting firms which are international or planning to operate internationally is scarce or not existing at all. It is however important to start generating the theories that will support managers in their decision making and planning. This thesis investigates how do small management consulting firms manage their internal and external resources while operating in international markets. Throughout the study, aspects related to internal and external resources management as well as management strategies in these firms have been examined in relations to firm’s internationalisation activities. A qualitative analysis was carried out whereby four small consulting firms in Export Management Consulting, Integration Services Consulting-, Software Development Consulting- and Business Solutions Consulting companies were interviewed. In order to generate the holistic understanding of the study, the thesis writer selected Value Enhanced Collaborative Working (VECW) model as an analysis framework. The model focuses on people, processes and tools as key elements that small consulting firms consider when thinking about managing their international operations. The findings of the thesis reveal that, internal and external resources in the interviewed consulting firms are viewed similarly, but managed differently depending on the nature and size of the firm. Firm’s management strategies concentrate on the adequate utilisation of the employees' motivation and experiences, effective stakeholders' management, various administrative evaluation processes and tools, the ability to realise useful networks, constant improvement through employee trainings, employees and customers’ feedbacks as well as enhanced freedom in order to support employees’ creativity. Further research to examine functional administrative tools and tools that small consulting firms could use to assess their resource capabilities when planning to become international would benefit the smaller businesses in terms of resources management and certainty in planning.

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.