Imitation in foreign location choice: The role of upper echelons' diversity

<p>This research investigates how the Top Management Team (TMT) characteristics impact the imitation of home country firms’ Foreign Direct Investment (FDI) location choice. A review of the FDI location choice research was performed, and various viewpoints for the selecting locations were identified. Amongst these viewpoints, the institutional perspective suggests that lack of cognition coupled with uncertainty about host markets compels firms to follow the FDI decisions of other home country firms. The review identified that the current literature in the cognitive domain had overlooked the role of TMTs. Upper echelon theory suggests that TMTs are not only a unique source of cognitive resources but also help to overcome challenges associated with internationalisation. This research applies institutional theory and the upper echelon theory to advance the argument of how and why TMT characteristics may impact the imitation of location choice decisions. Various TMT attributes like TMT international experience, TMT international experience diversity, TMT tenure diversity, TMT education diversity and TMT functional diversity were hypothesised to moderate the imitation in FDI location choice. This research applied quantitative methods to assess the proposed hypotheses. First, a sample of 202 US-based firms (which invested in 11 Asia-Pacific countries from 2009 to 2014) was collected from FDI Markets database. This sample generated a panel dataset of 12,771 observations. Nearly 11,000 unique top manager profiles were created to compute the TMT data for the firms in the given period. Through logistic regression, this study assessed whether TMT attributes moderate the extent of imitation in FDI location choice. The findings from this research contribute to institutional theory by highlighting the role of upper echelons. In particular, the findings show that while TMT tenure diversity weakens the effect of imitation, TMT functional diversity further exacerbates the effect of imitation in location choice. It was also found that when firms do not have a prior presence in the host country, then TMT international experience also strengthens the effect of prior FDI by other home country firms. The research also supports that the effect of various TMT attributes could be subject to environmental conditions. In particular, it shows that deep-level characteristics cause a more profound impact when host country uncertainty is high, while surface-level characteristics are impactful when host country uncertainty is low.</p>

Sailing too close to the wind in 1880s Wellington

The 1880s and early 1890s have been widely recognised as a time of depression in New Zealand. While well-known architects with substantial clienteles were generally able to survive the downturn in business, others struggled to make ends meet, showed signs of extreme stress, or occasionally resorted to sharp practices. Few in-depth studies have been able to show the broad spectrum of architects working in Wellington at a particular time as, until recently, it has been extremely difficult to accumulate the necessary data. The introduction of Papers Past has considerably simplified this task. We can now find and assess almost all the architects who made the news in different ways. Although more than 30 men claimed to be Wellington architects in the 1880s, not all of them were working. Some, such as Frank Mitchell, produced relatively large numbers of plans throughout the decade; many others appear to have been less successful, and to have turned their hands to other activities, for better or worse. In this paper we select a few of the more colourful "architects" residing in Wellington in the 1880s. Our candidates range from the aforementioned Frank Mitchell, through to Christopher Walter Worger, who being bankrupted in Christchurch, moved to Wellington in 1889. Leaving no record of any building designs, he had gone to Dunedin by 1906. Another enigmatic character was James Henry Schwabe, who escaped Dunedin and a rather public humiliation for Wellington in the late 1870s. Similarly, we discuss the erratic behaviour of W.J.W. Robinson, also escaping scandal in Dunedin to practise in the capital. Charles Zahl we find making a fleeting visit in early 1887, before absconding with a large sum of investors' money en route to Rio de Janeiro or Britain. We finish with the case of Ernest Wagner, released into the community after a year's hard labour in 1880. He never practised as an architect again - preferring, or being forced, to live as a farmer in the country south of Auckland. The examples we discuss are the exception rather than the rule. Of the bankruptcies recorded at the time, few came from the upper echelons of society. Some architects who were later prominent in Wellington moved offshore to better conditions in Australia (such as Joshua Charlesworth), whereas others such as William Turnbull were protected to some extent in successful partnerships in which they had a junior role.

Imitation in foreign location choice: The role of upper echelons' diversity

<p>This research investigates how the Top Management Team (TMT) characteristics impact the imitation of home country firms’ Foreign Direct Investment (FDI) location choice. A review of the FDI location choice research was performed, and various viewpoints for the selecting locations were identified. Amongst these viewpoints, the institutional perspective suggests that lack of cognition coupled with uncertainty about host markets compels firms to follow the FDI decisions of other home country firms. The review identified that the current literature in the cognitive domain had overlooked the role of TMTs. Upper echelon theory suggests that TMTs are not only a unique source of cognitive resources but also help to overcome challenges associated with internationalisation. This research applies institutional theory and the upper echelon theory to advance the argument of how and why TMT characteristics may impact the imitation of location choice decisions. Various TMT attributes like TMT international experience, TMT international experience diversity, TMT tenure diversity, TMT education diversity and TMT functional diversity were hypothesised to moderate the imitation in FDI location choice. This research applied quantitative methods to assess the proposed hypotheses. First, a sample of 202 US-based firms (which invested in 11 Asia-Pacific countries from 2009 to 2014) was collected from FDI Markets database. This sample generated a panel dataset of 12,771 observations. Nearly 11,000 unique top manager profiles were created to compute the TMT data for the firms in the given period. Through logistic regression, this study assessed whether TMT attributes moderate the extent of imitation in FDI location choice. The findings from this research contribute to institutional theory by highlighting the role of upper echelons. In particular, the findings show that while TMT tenure diversity weakens the effect of imitation, TMT functional diversity further exacerbates the effect of imitation in location choice. It was also found that when firms do not have a prior presence in the host country, then TMT international experience also strengthens the effect of prior FDI by other home country firms. The research also supports that the effect of various TMT attributes could be subject to environmental conditions. In particular, it shows that deep-level characteristics cause a more profound impact when host country uncertainty is high, while surface-level characteristics are impactful when host country uncertainty is low.</p>

How Do Upper Echelons Perceive Porter’s Five Forces? Evidence From Strategic Entrepreneurship in China

Porter’s five forces model is an authoritative management tool used in analyzing the profitability and attractiveness of industries through an outside-in viewpoint. In the past decade, dramatic and rapid changes have prompted some criticism of the model. The comparison between new and old economy analysis makes the fundamentals of the model seem weak. Moreover, the past decade has shown that strategy and entrepreneurship in China are not completely dependent on the model. This study first aims to verify the sustainability of the five forces model and analyze its integration into China’s entrepreneurial economy. By conducting in-depth interviews among the upper echelons from various industries, it was found that along with the competitive factors emphasized by the model, Chinese entrepreneurs attend to cooperative factors such as Guanxi, the Chinese term for relationship, and the possibilities of technology integration with the five forces. They also tend to enlarge the strategic view to consider factors such as how the market evaluates the forces. To verify these findings, the authors carried out a large-scale survey with a modified questionnaire analyzing the data collected using exploratory factor analysis with SPSS 22. The outcome shows that Porter’s model is still valid to some extent. Companies are still working in a network of buyers, suppliers, substitutes, new entrants, and competitors. However, reinventions are necessary to include the new factors of Guanxi, technology (e-commerce and logistics), and marketing and branding, which have changed the structure of the industry. These factors arise from the cooperative nature of Chinese culture and may have equal or even larger significance compared with their competitive counterparts in today’s business world.

Craft breweries’ environmental proactivity: an upper echelons perspective

Purpose Centered on upper echelons theory, this study aims to examine the interplay of US craft brewery owners’ green consumption values, environmental attitudes and environmental proactivity of their craft breweries. In addition, the moderating role of business challenges on the effect of environmental attitudes on environmental proactivity is assessed. Design/methodology/approach An online questionnaire was distributed to a convenience sample of US craft brewers through the Brewers Association Brew Forum Blog. A total of 237 valid responses were received. Structural equation modeling was used for testing hypothetical relationships among key constructs in the proposed research model: environmental values, environmental involvement, environmental sustainability practices and business challenges. Findings The results showed that green consumption values positively and significantly influenced environmental attitudes and environmental proactivity. Findings also confirmed the significant positive influence of environmental attitude on environmental proactivity. Furthermore, business challenges moderated the relationship between owners’ environmental attitudes and environmental proactivity of the breweries such that the higher the extent of business challenges weaker is the relationship between environmental attitudes and environmental proactivity. Originality/value It is accepted that upper management’s individual beliefs surrounding environmentalism are a contributing factor to the environmental management policy of their company. However, there is very little empirical evidence to demonstrate the impact that these values have in a tangible sense. To satisfy this deficit in the research, the study aims to analyze the relationship between the brewery owners’ environmental outlook and the sustainability practices of their brewery, regarding the former as a key psychological characteristic, which influences and motivates the direction of the latter.

Strategic Directions for AI: The Role of CIOs and Boards of Directors

This paper applies upper echelons theory to investigate whether chief information officers (CIOs) and boards of directors affect the development of AI orientation, which represents firms’ overall strategic direction and goals regarding the introduction and application of artificial intelligence (AI)technology. We tested our model using a dataset drawn from 1,454 publicly listed firms in China. Our findings show that the presence of a CIO positively influences AI orientation and that board educational diversity, R&D experience, and AI experience positively moderate the CIO’s effect on AI orientation. Our post hoc analysis further demonstrates that these board characteristics represent contingencies that impact AI orientation but not conventional IT orientation. This paper contributes to the upper echelons literature and IT management research by offering contextualized arguments that explain new business and IT strategies such as AI orientation. Further, our findings suggest important implications about how to build top management teams and boards capable of effectively developing AI orientations