Does context really matter? The influence of deficient legal services on the intensity of political ties in the regulatory and legal arenas

2020 ◽  
Vol 28 (3) ◽  
pp. 277-305 ◽  
Author(s):  
George O. White III ◽  
Thomas A. Hemphill ◽  
Tazeeb Rajwani ◽  
Jean J. Boddewyn
Keyword(s):  
Service Sector ◽  
The Philippines ◽  
Foreign Subsidiary ◽  
Legal Services ◽  
Legal Service ◽  
Foreign Subsidiaries ◽  
Institutional Voids ◽  
Content Type ◽  
Political Ties ◽  
Managerial Perceptions

Purpose The purpose of this study is to apply the institution-based view and resource dependence theory in arguing that perceived deficiencies in a legal service sector where a foreign subsidiary operates will influence the intensity of its political ties with actors in both the regulatory and legal arenas. The authors further theorized that these relationships will vary across governance environments. Design/methodology/approach The research context for this study was multinational enterprises (MNE) wholly owned foreign subsidiaries and international joint ventures (IJVs) operating in the Philippines and Thailand. Data for most variables in this study came from primary survey data collected in 2018 from senior managers of MNE WOSs and IJVs operating in the Philippines and Thailand. Findings The authors’ analysis of 352 foreign subsidiaries operating in the Philippines and Thailand show that, in a flawed democracy, perceived deficient legal services enhance the intensity of foreign subsidiary political ties with government actors in both the regulatory and legal arena. However, in a hybrid regime, perceived deficient legal services enhance only the intensity of foreign subsidiary political ties with government actors in the regulatory arena. The authors’ findings also suggest that the relationship between perceived deficiencies in legal service sector and the intensity of political ties is stronger for foreign subsidiaries that operate in heavily regulated industries across both a flawed democracy and hybrid regime. Conversely, the authors do not find the market orientation of these foreign subsidiaries to play a role in this process. Research limitations/implications The authors’ study was unable to control for whether managerial perceptions of deficient legal services were well informed at the local or federal level. This issue raises the question of will the presence of an in-house legal department influence managerial perceptions with regard to deficiencies within a legal service sector? Based on these limitations, the authors suggest that future research can further extend political ties research by using a fine-grained analysis in investigating the antecedents of managerial perceptions of legal services within different legal jurisdictions. Originality/value The political ties literature has largely argued that political ties are more prevalent in environmental contexts comprising institutional voids as MNEs attempt to mitigate volatility associated with the lack of developed institutional infrastructure (e.g. Blumentritt & Nigh, 2002; Bucheli et al., 2018). However, the concept of institutional voids is very broad and still rather abstract in nature. Hence, scholars have yet to fully understand what types of institutional voids may drive MNE foreign subsidiary political tie intensity in varying governance contextsThe authors’ study attempts to contribute to this important line of research by investigating how one type of institutional void, namely, perceived deficiencies in the legal service sector, can influence the intensity of political ties in varying governance environments.

Determinants of the level of foreign subsidiaries’ localization of Korean MNCs and performance in China

2017 ◽  
Vol 21 (1) ◽  
pp. 2-21
Author(s):  
Byoung-Goo Kim ◽  
Gyu-Bae Kim
Keyword(s):  
Survey Data ◽  
Empirical Analysis ◽  
Corporate Culture ◽  
Business Strategy ◽  
Local Network ◽  
Foreign Subsidiary ◽  
Foreign Subsidiaries ◽  
Content Type ◽  
Network Embeddedness ◽  
The Relationship

Purpose The purpose of this paper is to empirically analyze what effects the headquarters’ (HQ) business strategy and corporate culture, the local network embeddedness of the foreign subsidiary, and HQ-subsidiary communication have on the staff localization of foreign subsidiaries. The authors carry out empirical analysis on how localization of foreign subsidiaries ultimately affects the performance of foreign subsidiaries. Design/methodology/approach This study is an empirical analysis on the determinants of staff localization and the relationship between staff localization and corporate performance. In this study, the five hypotheses were proposed and tested using survey data. The authors randomly selected a total of 800 companies as subjects and conducted a survey. The final 222 survey data including HQs and subsidiaries were used for empirical analysis. The statistical analyses such as reliability test, factor analysis and regression were used. Findings This study shows that there was a higher level of staff localization by the foreign subsidiary when the investment goal was market-oriented investment, the Korean foreign subsidiary had stronger local network embeddedness and there was better HQ-subsidiary communication. In addition, the relationship between localization and subsidiary performance shows an inverted U-shape. Such results will give various implications to companies. Originality/value The research that takes a multilayered consideration on factors of the HQ, subsidiaries, and the HQ-subsidiary relationship is rare. To overcome such limitations, this study carried out a survey in order to find more in-depth decision factors. Specifically, this study analyzed the effects of three large aspects of investment goals and corporate culture from the aspect of the HQ, local network embeddedness from the aspect of foreign subsidiaries, and the level of HQ-subsidiary communication from the aspect of HQ-subsidiary relations, and how they affect staff localization.

Effects of two staffing decisions on the performance of MNC subsidiaries

2014 ◽  
Vol 2 (1) ◽  
pp. 85-101 ◽  
Author(s):  
Naoki Ando ◽  
Yongsun Paik
Keyword(s):  
Multinational Corporations ◽  
Foreign Subsidiary ◽  
Foreign Subsidiaries ◽  
Data Set ◽  
Subsidiary Performance ◽  
Content Type ◽  
Host Country Nationals ◽  
Negative Effect ◽  
Curvilinear Relationships ◽  
The Relationship

Purpose – The purpose of this paper is to examine the relationship between foreign subsidiary staffing and subsidiary performance by focussing on two staffing practices: first, the ratio of parent country nationals (PCNs) to foreign subsidiary employees and second, the number of PCNs assigned to the foreign subsidiary. Design/methodology/approach – Hypotheses predicting curvilinear relationships between the assignment of PCNs and subsidiary performance are tested using a panel data set consisting of 4,858 foreign subsidiaries of Japanese multinational corporations (MNCs). Findings – The results demonstrate that the two staffing practices have different effects on subsidiary performance. The ratio of PCNs to foreign subsidiary employees has an inverted U-shaped relationship with subsidiary performance, while the number of PCNs assigned to the subsidiary has a linear and negative effect on subsidiary performance. Research limitations/implications – The results of this study are subject to limitations. First, the sample used in this study consists solely of the foreign subsidiaries of Japanese firms. This research design limits the generalizability of the findings of this study. Second, other decisions related to subsidiary staffing such as the ratio of PCNs in the subsidiary's top management team need to be examined to advance understandings of the relationship between subsidiary staffing and subsidiary performance. Practical implications – MNCs need to identify the appropriate number of PCNs at which they can achieve the optimal trade-off with the PCN ratio to enhance the competitiveness and the performance of a foreign subsidiary. In doing so, they need to take into consideration that an increase in the number of PCNs has an immediate negative effect on the workplace morale of host country nationals. Originality/value – This study incorporates two staffing practices into its analyses and shows that they have different implications for subsidiary performance. The results suggest that focussing on one staffing practice alone limits understanding of the complex relationship between foreign subsidiary staffing and subsidiary performance.

Internal mimetic behavior of MNCs with respect to foreign subsidiary staffing

2015 ◽  
Vol 3 (1) ◽  
pp. 46-61 ◽  
Author(s):  
Naoki Ando
Keyword(s):  
Multinational Corporations ◽  
Institutional Distance ◽  
Foreign Subsidiary ◽  
Foreign Subsidiaries ◽  
Research Gaps ◽  
Data Set ◽  
Content Type ◽  
Economic Rationale ◽  
Mimetic Behavior ◽  
Practical Implications

Purpose – The purpose of this paper is to fill the following research gaps. First, few studies have examined isomorphic behavior of multinational corporations (MNCs) with respect to foreign subsidiary staffing. Second, the adoption by an MNC of its internally preferable practices, which is referred to as internal mimetic behavior, has been less extensively investigated when compared with the imitation of practices adopted by a large number of peer firms. Lastly, factors that facilitate internal mimetic behavior have not been extensively explored. Design/methodology/approach – This study hypothesizes that internal mimetic behavior is affected by both formal and informal institutional distance. The hypotheses are tested using the panel data set that consists of 3,981 foreign subsidiaries of Japanese MNCs. Findings – This study finds that as the formal institutional distance between the host country and the home country increases, MNCs are more likely to adopt internal mimetic behavior. Furthermore, it demonstrates that as the informal institutional distance increases, the likelihood that MNCs adopt internal mimetic behavior decreases. Practical implications – This study suggests that MNCs need to consider the consequences of internal mimetic behavior when they adopt it without having economic rationale. It also suggests that when uncertainty can be mitigated, MNCs should avoid internal mimetic behavior. Originality/value – This study fills the aforementioned research gaps by examining what factors facilitate internal mimetic behavior. It suggests that both economic rationale and isomorphic behavior need to be considered to advance an understanding of foreign subsidiary staffing.

India’s services: sector, trade and employment

2018 ◽  
Vol 60 (6) ◽  
pp. 1377-1392 ◽  
Author(s):  
Moinak Maiti
Keyword(s):  
Service Sector ◽  
Policy Decision ◽  
Study Finding ◽  
Legal Services ◽  
Indian Government ◽  
Employment Services ◽  
Content Type ◽  
Services Sector ◽  
Policy Content ◽  
Internal Trade

Purpose The purpose of this study is to detail about the India’s service sector with different aspects of services and the opportunities or challenges that lie within it. Design/methodology/approach Preliminary part of the study covers the following details of the India’s services sector: services gross domestic product (GDP), individual states/union territories’ services contributions, services foreign direct investment (FDI), services export, services employment, services inflation and overall service performance. Then the study compares India’s services sector performances with the top 15 services performance countries in the world in terms of GDP. Findings Study found R&D services, legal services, media and broadcasting services and “internal trade and repairs services” to be the potential services sub-sectors that will boost the services sector growth in future. Finally, the study concluded with the implication of the present study finding/results for the present Indian Government policies related to the services, trade, FDI for economic growth and employment. Practical implications The study has significant public policy content. The research focuses on the economic and commercial impact, mainly by practice. Originality/value The paper is original and brings out some valuable finding that will help the policymakers and economists to make policy decision regarding India’s services: sector, trade and employment. The study has found R&D services, legal services, media & broadcasting services and internal trade and repairs services as the potential services sub-sectors which are new and not addressed by any other studies.

scholarly journals The reverse transfer of knowledge in MNEs: the perspective of foreign subsidiaries in a post-transition country

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Barbara Jankowska ◽  
Małgorzata Bartosik-Purgat ◽  
Iwona Olejnik
Keyword(s):  
Knowledge Transfer ◽  
Transition Economy ◽  
Foreign Subsidiary ◽  
Computer Assisted ◽  
Foreign Subsidiaries ◽  
Transition Country ◽  
Content Type ◽  
Managerial Knowledge ◽  
Reverse Knowledge Transfer ◽  
Strategic Autonomy

PurposeThe aim of the paper is to identify the determinants of the marketing and managerial knowledge transfer from a foreign subsidiary located in a post-transition country to its headquarters established in a developed country.Design/methodology/approachThe authors combined the critical literature studies and empirical research, where the method of Computer-assisted Telephone Interview (CATI) was applied. The empirical data was gathered from 231 manufacturing foreign subsidiaries established in Poland (as one of the post-transition economy). To test the hypotheses logistic regression was applied.FindingsThe knowledge accumulated in the foreign subsidiary, the amount and level of novelty of innovation in the foreign subsidiary and its strategic autonomy is crucial for the occurrence of the reverse knowledge transfer. However, the more powerful the foreign subsidiary is, the less eager it is to transfer marketing and managerial knowledge to the headquarters.Research limitations/implicationsThe study is concentrated just on the manufacturing sector in the Polish economy. The results are based on the opinions and perception of managers, but they represent the corporate perspective (not their individual ones).Practical implicationsThe study provokes asking the question about the proper level of strategic autonomy of a foreign subsidiary. The implication related to the autonomy is much about the proper strategy for human resources management. The obtained results indicate that the intensity of innovation in a foreign subsidiary “translates” to the outflow of knowledge from a foreign subsidiary to its headquarters. Thus, encourages headquarters to let their subsidiaries innovate still monitoring their power.Social implicationsFSs are entities more or less embedded in the host markets, thus their strength and sustainable existence is important for their stakeholders, in particular – internal entities such as employees and external entities such as suppliers, and other cooperating organisations and institutions in the host market. The contribution of FSs to the innovation performance and knowledge pool of external partners is determined much by their absorptive capacity. Thus, the results obtained indirectly point to the importance of external agents ability to absorb and exploit the knowledge.Originality/valueThe originality of the paper concerns three issues. Firstly, the previous studies are mainly focused on either developed or emerging markets and as a result, the peculiarity of post-transition economies, like Poland has been neglected. Secondly, the determinants of reverse knowledge transfer are presented from the corporate perspective. Thirdly, authors focus on marketing and management knowledge distributed from a foreign subsidiary to its headquarter.

scholarly journals The influence of multinational enterprises on subsidiaries: context matters

2018 ◽  
Vol 31 (2) ◽  
pp. 703-724 ◽  
Author(s):  
Inya Egbe ◽  
Emmanuel Adegbite ◽  
Kemi C. Yekini
Keyword(s):  
Social Capital ◽  
Control Systems ◽  
Institutional Environment ◽  
Multinational Enterprise ◽  
Foreign Subsidiary ◽  
Foreign Subsidiaries ◽  
Content Type ◽  
And Control ◽  
The Relationship ◽  
Coordination And Control

Purpose The purpose of this paper is to examine how differences in the institutional environments of a multinational enterprise (MNE) shape the role of management control systems (MCSs) and social capital in the headquarter (HQ)-subsidiary relationship of an emerging economy MNE. Design/methodology/approach A case study design was adopted in this research in order to understand how the differences in the institutional environments of an MNE shape the design and use of MCSs. Data were gathered by means of semi-structured interviews, document analysis and observations. Interviews were conducted at the Nigerian HQ and UK subsidiary of the Nigerian Service Multinational Enterprise (NSMNE). Findings The study found that the subsidiary operated autonomously, given its residence in a stronger institutional environment than the HQ. Instead of the HQ depending on MCSs means of coordination and control, it relied on social capital that existed between the HQ and subsidiary to coordinate and integrate the operation of the foreign subsidiary studied. Research limitations/implications The evidence from this research indicates that social capital could be effective in the integration and coordination of multinational operations. However, where social capital becomes the main mechanism of coordination and integration of HQ-subsidiary operations, the focus may have to be, as in this case, on organisational social capital and the need to achieve group goals, rather than specifically designated target goals for the subsidiary. The implication of this is that it may limit the potential of the subsidiary to explore its environment and search for opportunities. These are important insights into the relationship between developed country-based subsidiaries and their less developed countries-based HQs. Practical implications A practical implication of this research is in the use of local or expatriate staff to manage the operation of the subsidiary. While previous studies on the MNE, from the conventional perspective of multinational operation, suggest that expatriates may be sent to the subsidiary to head key positions so as to enable the HQ to have control of the subsidiary operation, it is different in this case. The NSMNE has adopted a policy of using locals who have the expertise and understanding of the UK institutional environment to manage the subsidiary’s operation. Social implications This research sheds some light on how development issues associated with a multinational institutional environment may shape the business activities and the relationship between the HQ and subsidiary. It gives some understanding of how policies and practices may have different impacts on employees as businesses attempt to adjust to pressures from their external environment(s). Originality/value The reliance on social capital as a means of coordination and control of the foreign subsidiary in this study is significant, given that previous studies have indicated that multinational HQs normally transfer controls and structure to foreign subsidiaries as a means of control. Also, while previous studies have suggested that MNEs HQ have better expertise that enables them to design and transfer MCSs to foreign subsidiaries, this study found that such expertise relates to the institutional environment from which the HQ is operating from. Through the lens of institutional sociology theory, these findings directly contribute to the literature on the transference of practices and control systems in international business discourse.

Performance of Chinese foreign subsidiaries: the role of national distance, organizational learning and overseas Chinese networks

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jie Yu ◽  
Changjun Yi ◽  
Jian Huang ◽  
Huiyun Shen
Keyword(s):  
High Performance ◽  
Qualitative Comparative Analysis ◽  
Secondary Data ◽  
Foreign Subsidiary ◽  
Foreign Subsidiaries ◽  
Subsidiary Performance ◽  
Content Type ◽  
Factors Affecting ◽  
Antecedent Conditions ◽  
Chinese Mncs

PurposeThe current literature lacks discussion on the effects of synergy among multiple factors at different levels on foreign subsidiary performance. The purpose of this paper is to explore the configuration of factors affecting foreign subsidiary performance.Design/methodology/approachThe methodology adopted in this paper is the fuzzy-set qualitative comparative analysis (fsQCA). The data are obtained from 125 foreign subsidiaries of Chinese MNCs through questionnaire surveys and secondary data.FindingsThe research results reveal that five configurations of antecedent conditions predict high foreign subsidiary performance, and the other two configurations predict not-high performance.Research limitations/implicationsThis paper’s main limitation is its only focus on foreign subsidiaries of Chinese MNCs, which means that the findings should be generalized with precaution. The most valuable implication is to identify the configurations that lead to high and not-high foreign subsidiary performance.Practical implicationsThis paper addresses the question of how interdependent factors at the national and corporate level are beneficial to foreign subsidiaries’ performance.Originality/valueThis study makes the following contributions to current theories: It provides (1) new insights for understanding the complex causality between antecedent conditions and foreign subsidiary performance and (2) a practical reference for the multinational operations of foreign subsidiaries.

scholarly journals Improving professional service operations: action research in a law firm

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Krishna Chaitanya Balthu ◽  
Ben Clegg
Keyword(s):  
Action Research ◽  
Systems Thinking ◽  
Service Sector ◽  
Service Operations ◽  
Abductive Reasoning ◽  
Professional Service ◽  
Legal Service ◽  
Systems Methodology ◽  
Effect Change ◽  
Content Type

PurposeThe purpose of this paper is to demonstrate how action research-based interventions can effect change in a complex and challenging professional service environment (Lewis and Brown, 2012). This paper presents a successful way to do this. First, by eliciting factors for change driven by deregulation in the United Kingdom’s (UK) legal service sector (Falconer, 2005). Second, by designing and implementing context-sensitive change in a selected legal service firm.Design/methodology/approachThis research adopts a participatory action research methodology involving the use of systems thinking (namely the PrOH modelling methodology) to design suitable interventions and catalyse change.FindingsThis study has generated new knowledge on three fronts–to the legal service operations, to methodology and to the intellectual framework used for abductive reasoning (Checkland and Poulter, 2006). Lessons are transferable to wider professional service operations research. Findings indicate, despite traditional challenges of delivering typical professional services, there is potential for rationalising processes and service delivery commodification, mainly in the low volume, high variety legal service typology (Silvestro et al., 1992).Research limitations/implicationsThis research uses data from an in-depth study of a single organisation.Practical implicationsThis research helped legal service professionals to improve overall efficiency and effectiveness and create new management tools.Social implicationsThis research could help improve legal service operations and make them more accessible.Originality/valueThis research applies a novel, systems thinking based methodology for the first time in a complex professional service operations environment leading to three-fold contributions in the areas of practice, theory and methodology. The paper uses a change management framework (the Change Kaleidoscope), a soft systems methodology (PrOH modelling) and applies these to legal services.

scholarly journals Rough diamonds in emerging markets: legacy, competitiveness, and sustained high performance

2019 ◽  
Vol 26 (3) ◽  
pp. 363-386
Author(s):  
Seung Ho Park ◽  
Gerardo R. Ungson
Keyword(s):  
Human Capital ◽  
Emerging Markets ◽  
High Performance ◽  
Core Competencies ◽  
Market Potential ◽  
Government Support ◽  
Screening Tests ◽  
Institutional Voids ◽  
Content Type ◽  
Over Time

Purpose The purpose of this paper is to uncover the underlying drivers of sustained high performing companies based on a field study of 127 companies in Brazilian, Russian, Indian and Chinese (BRIC) and Association of Southeast Asian Nations (ASEAN) emerging markets. Understanding these companies provides a complementary way of appraising the growth, development and transformation of emerging markets. The authors synthesize the findings in an overarching framework that covers six strategies for building and sustaining legacy that leads to the succession of intergenerational wealth over time: overcoming institutional voids, inclusive markets, deepening localization, nurturing government support, building core competencies and harnessing human capital. The authors relate these strategies to different levels of development using Prahalad and Hart’s BOP framework. Design/methodology/approach This study examines the underlying drivers of sustained high-performance companies based on field studies from an initial set of 105,260 BRIC companies and close to 500 companies in ASEAN. The methods employed four screening tests to arrive at a selection of the highest-performing firms: 70 firms in the BRIC nations and 58 firms from ASEAN. Following the selection, the authors constructed cases using primary interviews and secondary data, with the assistance of Ernst & Young and with academic colleagues in Manila. These studies were originally conducted in two separate time periods and reported accordingly. This paper synthesizes the findings of these two studies to arrive at an extended integrative framework. Findings From the cases, the authors examine six strategies for building and sustaining legacy that lead to high performance over time: overcoming institutional voids, creating inclusive markets, deepening localization, nurturing government support, building core competencies and harnessing human capital. To address the evolving state of institutional voids in these countries, the authors employ similar methods to hypothesize the placement of these strategies in the context of the world economic pyramid, initially formulated as the “bottom of the pyramid” framework. Originality/value This paper synthesizes and extends the authors’ previous works by proposing the concept of legacy to describe the emergence and succession of local exemplary firms in emerging markets. This study aims to complement extant measures of nation-growth based primarily on GDP. The paper also extends the literature on institutional voids in shifting the focus from the mix of voids to their evolving state. Altogether, the paper provides a complementary narrative on assessing the market potential of emerging markets by adopting several categories of performance.

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