scholarly journals The mirage of upgrading local automotive parts suppliers through the creation of vertical linkages with MNEs in developing economies

2015 ◽  
Vol 11 (3/4) ◽  
pp. 301-318 ◽  
Author(s):  
Zaheer Khan ◽  
Yong Kyu Lew ◽  
Rudolf R. Sinkovics
Keyword(s):  
Technology Transfer ◽  
Automotive Industry ◽  
Value Chain ◽  
Multinational Enterprises ◽  
Developing Economies ◽  
Illustrative Case ◽  
Content Type ◽  
Vertical Linkages ◽  
Automotive Parts ◽  
Organizational Linkages

Purpose – This paper aims to explore inter-organizational linkages and the extent of technology transfer and develop propositions related to the linkages, technology transfer and upgrading of local suppliers in developing economies. Design/methodology/approach – The authors conduct a literature review and 50 exploratory interviews with senior managers and policymakers in the automotive parts industry of Pakistan. Findings – The data revealed that three major international joint ventures (IJVs) established in the automotive industry of Pakistan have created significant vertical linkages. However, advanced high-level technology transfer has not actually taken place due to the following reasons: IJV parents are reluctant to engage in technology transfer, there is limited support from local government and local suppliers exhibit limited improvement in their innovation capability. The vertical linkage creation and low-medium technology transfer contributes to incremental product upgrading of the local suppliers, rather than their process upgrading and insertion into the global value chain (GVC). Research limitations/implications – This research looked at technology interactions between IJVs and local tier-1 suppliers (not tier 2 and tier 3) in Pakistan’s automotive industry. This paper’ illustrative case indicates what is required for local suppliers in developing economies to make breakthrough upgrades of their products and processes through their vertical linkages with foreign-owned indigenous firms. Originality/value – Unlike prior research, the authors investigate the role of inter-organizational linkages and the extent of technology transfer, and how these affect local suppliers’ product/process upgrading in the local value chain. Highlighting the illusion of upgrading in the GVC, this paper reveals the difficulties involved in upgrading suppliers’ positions (e.g. insertion and functional upgrading in the GVC) through their vertical linkages with foreign multinational enterprises in developing economies. The illusion of upgrading sheds a rather disappointing light on the position of developing country supplier vis-à-vis their powerful international partners.

Building (or not building) dynamic capabilities: the case of Italian subsidiaries in China and India

2018 ◽  
Vol 26 (4) ◽  
pp. 337-360 ◽  
Author(s):  
Giuseppe Tattara
Keyword(s):  
Value Chain ◽  
Multinational Enterprises ◽  
Dynamic Capabilities ◽  
Case Study Research ◽  
Business Strategies ◽  
Future Research ◽  
Capability Development ◽  
Regional Effect ◽  
Content Type ◽  
Capability Building

Purpose The purpose of this paper is to examine the process of capability building at subsidiary level and the forces preventing such process. The paper discusses and tests three propositions governing this process. Design/methodology/approach This research is based on multiple case studies. A case study research is most useful when addressing issues about which little prior theory has been developed or empirical evidence collected. Findings Subsidiaries in Asia operate in a way substantially different from those in the West. Specifically what ways do market specificities in Asian economies serve to either inhibit or positively encourage the development of a subsidiary? What are the circumstances which could induce subsidiaries to outsource production? Research limitations/implications Future research should explore the regional effect on MNE subsidiary types and different flexibilities exhibited in the value chain. What are the specific aspects (macro and micro) that explain variations of business strategies at subsidiary levelboth over time and between countries? Practical implications Multinational enterprises (MNEs) should be aware of the strong potential for capability development at the subsidiary level. This increased awareness ought to induce consideration in MNEs about how best to encourage such know capability development and how to leverage these capabilities for a better MNE performance. Social implications Managers who knew the host country languages and culture, and have outward-looking attitudes, are in advantageous positions to learn about new opportunities. Originality/value The paper offers empirical insights into the state and drivers of subsidiary performance in Asia. Specifically it shows how neglect of external conditions can act to open people’s eyes and foster a capability-building process within subsidiaries.

scholarly journals Cross-cultural collaboration for inclusive global value chain: a case study of rattan industry

2019 ◽  
Vol 15 (1) ◽  
pp. 149-170 ◽  
Author(s):  
Aluisius Hery Pratono
Keyword(s):  
Technology Transfer ◽  
Multinational Corporations ◽  
Value Chain ◽  
Cross Cultural ◽  
Global Value Chain ◽  
Social Mechanism ◽  
Content Type ◽  
The Social ◽  
Innovation And Technology

Purpose The purpose of this paper is to understand how the cross-cultural collaboration between developed market and emerging economies promotes an inclusive global value chain (GVC) through innovation and technology transfer. Drawing on global rattan industry, this paper identifies the three typologies and social mechanism of cross-cultural collaboration in GVC. Design/methodology/approach This study uses a qualitative method with a case study of rattan industry. The case study analysis covers the linkages between upstream industries in emerging economies and downstream industries in developed countries. Findings The result shows that innovation and technology transfer play an essential role in the cross-cultural collaboration through presenting the creative value-adding process beyond the simple trade of rattan. This study identifies the social mechanism of cross-cultural collaboration in three GVC typologies of rattan industry. Research limitations/implications The study was undertaken between 2015 and 2017. The observed value chain in rattan industry context demonstrates the selected business network from Indonesia to the European countries. Practical implications There were some activities that worked well for decades, such as creative innovation and technology transfer from multinational corporations to small businesses. The initiative to promote brand seemed to work less well for the local designers in developing countries from being part of the GVC. The creative innovation and technology transfer from multinational corporations to rattan farmers continued to struggle. Originality/value This study draws a distinction between the typologies of GVC, where cross-cultural collaboration has developed slowly and those where it comes about quickly. This extends the discussion about creative value between players in developed and developing countries, including the social mechanism of cross-cultural collaboration in GVC.

Scale development and validation for measuring business-to-business Wasta relationships

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ron Berger ◽  
Bradley R. Barnes ◽  
Avi Silbiger
Keyword(s):  
Relationship Satisfaction ◽  
Organizational Performance ◽  
Multinational Enterprises ◽  
Developing Economies ◽  
Arab Countries ◽  
Content Type ◽  
Research Instrument ◽  
Business People ◽  
Relationship Performance ◽  
The Impact

Purpose Managers of multinational enterprises (MNEs) from developed economies are often cautious to understand the cultural environment where they do business. This is predominantly true in developing economies, and even more so in certain Arab countries where MNEs have limited knowledge and experience. The purpose of this study is to report on the development of a research instrument that is applicable to Arab business culture, following the 2011 Arab Spring. The investigation draws on data from three different groups of people, i.e. leaders (business professors and leading politicians), business people and postgraduate business students, all of Palestinian nationality. The article examines the Arabic culturally based business structure called Wasta, a system that relies on social networks and the reciprocal exchange of favors. A research instrument is developed to measure three dimensions of Wasta across these three different groups of people and examines their influence on relationship satisfaction and organizational performance. The findings reveal that the groups are affected differently by these dimensions and see different utility in Wasta. Such insights may be useful for MNE practitioners when entering Arab countries, when seeking to employ younger Arabs and when partnering with Arab businesses or dealing with government officials. Design/methodology/approach Research paper Findings This study has focused on the impact of Wasta on relationship satisfaction and on relationship performance for three different groups of individuals: business people, students and leaders. It was hypothesized that higher levels of each component of Wasta would contribute positively to relationship satisfaction, and that the latter would in turn lead to higher relationship performance. Findings generally supported these hypotheses with some variations among groups. Furthermore, it was predicted that the model would be relevant to all three groups, but would be structured differently reflecting their different views of business. The findings of this study help answer our research question about the socio-economic, cultural and political factors that influence the business process involving Arab and non-Arab business managers. Originality/value Original paper

From innovation to co-innovation? An exploration of African agrifood chains

2015 ◽  
Vol 117 (8) ◽  
pp. 2182-2199 ◽  
Author(s):  
Verena Bitzer ◽  
Jos Bijman
Keyword(s):  
Value Chain ◽  
Innovation Process ◽  
Value Chains ◽  
Illustrative Case ◽  
African Countries ◽  
Specific Knowledge ◽  
Content Type ◽  
Innovation Research ◽  
Effective Interventions ◽  
Successful Innovation

Purpose – Building on recent advances in innovation research on developing country agriculture, this paper explores the concept of co-innovation, i.e. innovations that combine technological, organisational and institutional changes and that encompass different actors in and around the value chain. The purpose of this paper is to contribute to a further conceptualisation of co-innovation and show its usefulness for analysing innovation initiatives in agrifood chains. Design/methodology/approach – The paper combines two streams of literature (innovation systems and value chains) and is based on a review of the experiences with innovation in three different value chains in three African countries: potato in Ethiopia, pineapple in Benin and citrus in South Africa. Findings – Co-innovation is the combination of collaborative, complementary and coordinated innovation. “Collaborative” refers to the multi-actor character of the innovation process, where each actor brings in specific knowledge and resources. “Complementary” indicates the smart combination of technological, organisational and institutional innovation. “Coordinated” draws attention to the importance of chain-wide adjustments and changes to make innovation in one stage of the chain a success. Practical implications – The identified dimensions of co-innovation (the triple “co-”) provide a practical guide for the design of effective interventions aimed at promoting innovation in African agrifood chains. Originality/value – The paper is the first to provide a comprehensive conceptualisation of co-innovation. On the basis of both theoretical arguments and evidence from three illustrative case studies it is argued that successful innovation in agrifood chains requires the innovation process to be collaborative, coordinated and complementary.

Developing a framework for the performance evaluation of sorting and grading firms of used clothing

2019 ◽  
Vol 12 (1) ◽  
pp. 82-102 ◽  
Author(s):  
Manoj Kumar Paras ◽  
Daniel Ekwall ◽  
Rudrajeet Pal
Keyword(s):  
Firm Performance ◽  
Transaction Cost ◽  
Value Chain ◽  
Success Factors ◽  
Transaction Cost Economics ◽  
Developing Economies ◽  
Base Of The Pyramid ◽  
African Countries ◽  
Resource Based View ◽  
Content Type

PurposeThis paper aims to propose a framework for evaluating the performance of reverse value chain activities in the clothing industry operating at base of the pyramid. Specifically, the research explores firm and supply chain factors influencing clothing reverse value chain activities with a focus on developing economies.Design/methodology/approachThe study adopted an explorative technique using direct observations and semi-structured interviews to collect information from eight companies and two traders. Internal resources and value chain capabilities were examined using theoretical underpinnings of resource-based view, transaction cost economics and base of the pyramid.FindingsThe paper identified multiple benefits of offshoring reverse value chain activities to the developing countries (at the base of the pyramid). Low operation cost, skilled manpower, business knowledge and location are found to be internal success factors. While favourable government legislation and domestic recycling markets are important external factors contributing to the success. Developing economies such as India contribute to firm performance by integrating, transforming, acquiring and co-creating the resources at base of the pyramid. Further, it was found that to achieve higher assets specificity, a few companies have opened their own shops in African countries, while others have opened sourcing branches in Canada or the USA to ensure good quality of raw materials. Collaboration and coordination among different value chain partners minimise cost and increases profitability. Innovation in the process such as clothes mutilation for recycling has created new business opportunities.Research limitations/implicationsInformation was collected from only eight organisations and two traders from India. Future scholars may extend the research to generalise the findings by documenting similar phenomena.Practical implicationsThe proposed framework can serve a basis for the practitioners to evaluate firm performance, and the insights can be used to achieve sustainability by engaging producers, employees, consumers and community using base of the pyramid approach.Originality/valueThe study provides unique insights into the prevalent export and re-exports phenomena of used clothing. The resource-based view, transaction cost economics and base of the pyramid strategy underpinned together to develop a framework for understanding reverse value chain activities of clothing.

Quality and innovation as drivers for manufacturing competitiveness of automotive parts suppliers

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
pp. 00-00
Author(s):  
Luz María Valdez-de la Rosa ◽  
Luis Alberto Villarreal-Villarreal ◽  
Gustavo Alarcón-Martínez
Keyword(s):  
Automotive Industry ◽  
Product Innovation ◽  
Manufacturing Sector ◽  
The State ◽  
Causal Relationships ◽  
Content Type ◽  
Tier 1 ◽  
Automotive Parts ◽  
Auto Parts ◽  
Parts Suppliers

PurposeThe purpose of this paper is to identify the causal relationship between the independent variables such as process quality and product innovation in regard to the dependent variable of competitiveness, in the manufacturing sector of the automotive industry, specifically for Tier 1 auto parts manufacturing companies in the state of Nuevo León, México.Design/methodology/approachBased on a thorough review of the literature, an instrument was designed to measure the competitiveness of automotive industry manufacturing; it was applied to Tier 1 suppliers of automotive parts in the state of Nuevo León, México. Various statistical analysis tests were applied to the results; first, Cronbach's alpha to determine the reliability of the instrument, and next, a factor analysis to measure construct validity. In addition, a multiple linear regression analysis was carried out to identify the causal relationships between the variables analysed.FindingsThis study found that process quality as well as product innovation have independent and positive causal relationships with respect to competitiveness in automotive manufacturing.Research limitations/implicationsThe limitations of this paper are its focus on a single manufacturing sector, application in a single country and small sample size.Practical implicationsCompanies that supply automotive parts will be able to invest in the key elements of quality and innovation while focusing their efforts on reinforcing their competitiveness.Originality/valueAuto parts suppliers will be able to perform specific actions to improve their quality processes through lean manufacturing and quality assurance practices and by designing new and innovative products that will enhance their competitiveness.

Technological entrepreneurship in India

2017 ◽  
Vol 9 (1) ◽  
pp. 65-84 ◽  
Author(s):  
Pamela Meil ◽  
Hal Salzman
Keyword(s):  
Value Chain ◽  
Multinational Enterprises ◽  
Service Providers ◽  
Knowledge Work ◽  
Business Environment ◽  
Innovative Technology ◽  
Value Chains ◽  
Individual Risk ◽  
Content Type ◽  
Development Trajectories

Purpose Is the rise of the Indian software industry simply another Asian state-dominated industrial growth story or is India distinctive, an economy where small technology entrepreneurs also find niches for development and can be drivers of innovation? Research has focused on the large integrated Indian and international service providers. This study examines the opportunity for growth among smaller innovative technology entrepreneurial firms. Two areas of inquiry are: What factors have been responsible for spurring growth in the Indian IT industry? What type of work is being carried out at Indian firms and is this profile changing? This paper aims to examine the emergence of technology entrepreneurs, particularly in terms of their links to multinational firms and their role and position in global value chains. The paper takes a multi-level approach to understanding development trajectories in the IT sector in India: a global value chain approach to the extent that company processes are seen in their larger networked context across organizations and an institutional approach in terms of state policies that influence the creation of infrastructure that, in turn, shapes organizational development trajectories. Additionally, it examines the role of the various actors within IT sector organizations – the workers, the managers and, in the case of the small companies in our sample, the owners – on the outcome of growth trajectories in the Indian IT sector. We find that the various levels of change and policy all contribute to the outcome in company trajectories: the dominance of multinational enterprises on the market, the entrepreneurial vision and survival strategies of returned technology expatriates, and the changing policies of the government in promoting indigenous business. Design/methodology/approach Qualitative research interviews; comparative case study; literature review; multi-tier analysis. Findings The technology entrepreneurial development in India appears to represent quite a distinctive path in terms of both firm development and broader economic development. It is focused on the IT sector, in which high skill “knowledge work” is carried out and which has been able to develop despite lack of basic infrastructure (roads and reliable electricity). Research limitations/implications After the opening up of the business environment to large Western multinational enterprises (MNEs), it was difficult for indigenous Indian entrepreneurs to compete in innovative product development markets. Developing such companies depended on individual risk taking, as no specific infrastructure existed for niche production. However, the knowledge base and innovation clusters did offer opportunities for obtaining contracts. The Indian entrepreneurs did have to make a lot of compromises about defining their business and the tasks they could undertake. More research is needed on the paths and development opportunities for these smaller Indian-owned firms. Practical implications Unique opportunities are emergent and defy easy policy prescriptions, other than precluding change that does not foreclose emergent possibilities (e.g. such as strong state controlled business development). Social implications Indian-owned innovative companies, although having difficulties competing with large Indian and Western MNEs, do put pressure on these MNEs to move work up the value chain, thereby providing more interesting and challenging opportunities for Indian knowledge workers. Originality/value This paper provides a unique company-level perspective about entrepreneurialism in the Indian software sector from the perspective of different actors in the process. It then links this company-level perspective to a larger context both in terms of trajectories of development at the macro level, as well as the role that the company’s place in multinational value chains has in its development perspectives. It gives a special insight into the motivations and obstacles facing entrepreneurs in India’s dynamic software sector.

Linkages between tourism and agriculture for inclusive development in Tanzania

2018 ◽  
Vol 1 (2) ◽  
pp. 168-184 ◽  
Author(s):  
Wineaster Anderson
Keyword(s):  
Supply Chains ◽  
Value Chain ◽  
Poverty Reduction ◽  
Developing Economies ◽  
Developed Countries ◽  
Lessons Learned ◽  
Inclusive Development ◽  
Value Chains ◽  
Least Developed Countries ◽  
Content Type

Purpose The purpose of this paper is to examine how local agricultural communities are integrated into the tourism value chains and provide insights into how this can contribute to poverty reduction. Design/methodology/approach The study employed the value chain approach to gain an understanding of the linkages between tourism and agriculture. Interviews involving local suppliers of agricultural products and tourism businesses (n=195) were conducted in Lushoto, Tanzania. The livelihood portfolios (range of activities – farming, employment, tourism, etc.) were analyzed in terms of the resources (economic, natural, human, physical and social assets) available to individuals and households and how these are optimally used to achieve inclusive growth. Findings The findings show that the form of tourism business ownership and the presence of specific social networks between tourism businesses and local suppliers dictate the mode of buying and the strength of supply chains. Community-based tourism is dominant in the area, allowing tourists to interact with agrarian rural communities. However, the optimal local linkages have been hampered by the quantitative and qualitative mismatch between locally supplied products and the tourism sector’s requirements. The failure of many initiatives aimed at addressing the mismatch creates a need for empowering local communities to enable them to take the opportunities that tourism provides. Practical implications Least developed countries need to build on the lessons learned from the development of tourism in their local settings, and pursue strategies which bring hope, confidence and real benefits to the majority of the struggling population. This study gives an insight on how inter-sectoral linkages could be embraced among the strategies or means of reducing rampant poverty. Originality/value Linking local agricultural production to tourism has long been seen as a promising way to make tourism more economically inclusive. However, the use of value chain approach in studying the tourism-agriculture linkages for inclusive development, especially in the developing economies is not common. While employing Porter’s value chains analysis, this study provides insights into how local farmers can be incorporated in tourism food supply chains in an ethical and beneficial way.

The dilemma of domestic suppliers on the periphery of the automotive industry global value chain

Kybernetes ◽  
2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jesús F. Lampón ◽  
Marta Rodríguez De la Fuente ◽  
José Antonio Fraiz-Brea
Keyword(s):  
Automotive Industry ◽  
Value Chain ◽  
Added Value ◽  
Primary Data ◽  
Global Value Chain ◽  
Content Type ◽  
Industry Value Chain ◽  
Global Presence ◽  
The Impact

PurposeUnder the global value chain (GVC) approach, this paper aims to analyze how domestic suppliers on the periphery of the automotive industry are affected by their relationship with foreign multinationals.Design/methodology/approachA case study with primary data collected from foreign multinationals operating in the Mexican automotive industry was used to analyze their relationship with domestic suppliers.FindingsThe evolution of the suppliers has been characterized by improved quality and added value in their products and more asset-intensive, efficient processes. This evolution has been driven by improvement in production capabilities and investment in new equipment by domestic suppliers and facilitated by knowledge transfer from foreign multinationals. However, it has not involved the acquisition of innovation capabilities or the internationalization of production activities. This has limited their position on the first levels of the value chain and their global presence, which are essential aspects when climbing the industry value chain to lead some activities at a global level. At the same time, most of these suppliers have become strategic and have a greater dependence on foreign multinationals. This poses a dilemma for domestic firms, as the relationship with these multinationals becomes more intense and dependent and at the same time reduces the possibility of leading activities in the value chain.Originality/valueThe paper analyzes the impact on domestic suppliers of their relationships with foreign multinationals, integrating traditional product, process and functional upgrading and new elements, in particular, participation in the GVC and dependence on multinationals.

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