Political Capital and MNE Responses to Institutional Voids: The case of Chinese state-owned enterprises in Africa

2020 ◽  
pp. 017084062095401
Author(s):  
Dan Wang ◽  
Lin Cui ◽  
Thin Vu ◽  
Taiwen Feng
Keyword(s):  
Host Country ◽  
Multinational Enterprises ◽  
Political Identity ◽  
Management Strategies ◽  
Political Capital ◽  
Institutional Voids ◽  
Political Dimension ◽  
Home Based ◽  
Chinese State ◽  
Closed Door

This study explores how multinational enterprises (MNEs) take advantage of their ownership-based political capital – political ties and political identity – in responding to institutional voids in host country contexts. Investigating multiple cases of central and local Chinese state-owned enterprises in Africa, we identify unique responding strategies comprising allied fleet and co-dependent alliance formations to overcome human capital voids, and dual management and closed-door management strategies to address industry standard voids. We propose a typology which extends the theory of MNE responses to institutional voids not only by adding the political dimension to strategy formation in responding to institutional voids, but also by providing greater insights into MNE strategies to convert home-based political capital for better response to host country institutional voids.

scholarly journals Early global Trotters and their entrepreneurial employment practices

2016 ◽  
Vol 8 (3) ◽  
pp. 378-384 ◽  
Author(s):  
Qianqian Chai ◽  
Cherry Wun Mei Cheung ◽  
Caleb Kwong
Keyword(s):  
Host Country ◽  
Multinational Enterprises ◽  
Design Methodology ◽  
Wage Differential ◽  
Governance Structure ◽  
Employment Practices ◽  
Content Type ◽  
Blue Book ◽  
Host Country Nationals ◽  
Internal Context

Purpose Questions have often been asked of the ethicality of multinational enterprises (MNEs) with the conducts of many being classified as exploitative. This is particularly so the internal context, where MNEs are often reluctant to employ host country nationals at important positions and treat their host and parent countries employees differently. This study aims to examine whether the locals are really getting the raw end of the deal. Design/methodology/approach Utilising a unique record book that is available about the employment details of civil servants in Hong Kong known as the blue book, this study intends to examine whether first-moving multinational organisations treated their local employees in an ethical and reasonable manner, for the employees entering the service between 1845-1850. Findings The data suggests that, overall, host country nationals earn much less than not only the British but also those from third countries. Moreover, parent country nationals were placed at important officer and supervisory roles, as oppose to host country nationals at the bottom, forming a typically ethnocentric governance structure (Perlmutter, 1969). Furthermore, even divided by grade, the starting salary difference between host and parent country nationals remain considerable. However, the reason for this is complex, and the authors do not have a quick and precise answer as to whether there has been discrimination. Research limitations/implications The findings perhaps explain the dilemma faced by the early-movers because they tend to feel the strong need of adopting an ethnocentric approach, which can be extremely costly as a result of the large wage differential. A balance needs to be struck between this and utilising host country nationals, which might not necessarily possess all the essential qualities but might be cheaper. Originality/value This is the first study examining the employment practices of fast-moving MNEs.

Country-of-origin and CSR initiatives: a social dominance perspective

2018 ◽  
Vol 14 (3) ◽  
pp. 501-515
Author(s):  
Leyla Orudzheva ◽  
Nolan Gaffney
Keyword(s):  
Competitive Advantage ◽  
Host Country ◽  
Social Dominance ◽  
Multinational Enterprises ◽  
Home Country ◽  
Country Of Origin ◽  
Developed Countries ◽  
Less Developed Countries ◽  
Content Type ◽  
Business Context

Purpose Research on corporate social responsibility (CSR) continues to proliferate, but why and how multinational enterprises (MNEs) from different parts of the world engage in CSR is still unclear. The purpose of this study was to investigate whether there are differences in behavior based on the status of the MNE’s home country relative to the host country. Design/methodology/approach Applying a social dominance theory (SDT) framework, the authors explain variations in MNE behavior because of perceived hierarchical differences between a MNE’s home country and that of the host country. It is posited that these hierarchical differences trigger a country-of-origin bias that affects stakeholders’ expectations for the MNE, as well as that firm’s response to those expectations. In this integrative conceptual paper, we propose a testable framework derived from a deductive approach that applies the tenets of SDT to predict outcomes of CSR implementation by MNE’s subsidiaries. Findings MNEs from less developed countries are subject to lower expectations and engage in self-debilitating behavior, which may hinder their attempts to implement CSR initiatives in more developed countries. Paradoxically, engaging in CSR initiatives could help reduce liability of foreignness and increase chances for competitive advantage. Practical implications MNEs from developing countries should be aware of a potential country-of-origin bias affecting decisions on CSR implementation and that could also be detrimental to their competitive advantage when operating in more developed countries. Conversely, MNEs from developed countries should be ready for higher expectations of their CSR initiatives in less developed countries. Originality/value This paper strives to contribute to two extant literatures. First, it contributes to the social dominance literature by applying the perspective in the international business context, specifically research on MNE liability of origin. Second, this perspective offers testable propositions on how perceived hierarchies and liability of origin affect firm decision-making, specifically in the context of developing country MNEs. Third, this paper seeks to expand the discussion of MNE subsidiary CSR behavior to account for the relative context of the home and host country.

scholarly journals How to Attract Talented Expatriates: The Key Role of Sustainable HRM

2019 ◽  
Vol 11 (19) ◽  
pp. 5373 ◽  
Author(s):  
Gahye Hong ◽  
Eunmi Kim
Keyword(s):  
Emerging Markets ◽  
Family Support ◽  
Direct Effect ◽  
Host Country ◽  
Multinational Enterprises ◽  
Moderating Effect ◽  
Country Image ◽  
The Us

Retaining talented expatriates is important for multinational enterprises (MNEs) to maintain knowledge sustainability between their headquarters (HQ) and subsidiaries. However, depending on the host country image of a subsidiary, the attractiveness of the subsidiary may make it challenging to recruit prospective expatriates. Based on the sustainable human resource management (HRM) perspective, this study examines the direct effect of the host country image of a subsidiary and the moderating effect of family support policies on a subsidiary’s attractiveness, by comparing subsidiaries in the US and Vietnam. The results are based on data from 434 Korean potential expatriate applicants and show that the host country image of a subsidiary has a direct effect on the subsidiary’s attractiveness. Specifically, expatriate applicants are less attracted to a Vietnam-based subsidiary than to a US-based one. Further, the positive moderating effect of family support policies on subsidiary attractiveness is more relevant for the Vietnam-based subsidiary. This result suggests that family support policies can be a key strategy for overcoming the less preferred host country images of subsidiaries in emerging markets, thus improving subsidiary sustainability in the long term. The implications of these findings are provided in the context of sustainable HRM and the existing expatriate literature.

Political Strategies of subsidiaries of multinational Enterprises

2020 ◽  
pp. 311-337
Author(s):  
Maria A. De Villa
Keyword(s):  
Host Country ◽  
Multinational Enterprises ◽  
Future Research ◽  
The Political ◽  
Political Strategy ◽  
Political Strategies ◽  
Different Types ◽  
And Performance ◽  
Corporate Political Strategy ◽  
Choice Approach

This chapter analyzes the political strategies of subsidiaries of multinational enterprises (MNEs). In doing so, I review the literature at the crossroads of corporate political strategy and international business (IB) strategy and identify four relevant themes. First, the types of political strategies deployed by subsidiaries dichotomize into engaged and non-engaged; and into legal and illegal. Second, the responses of subsidiaries to host political contexts, involve exercising voice, exit, or loyalty through different types of political strategies. Third, the determinants that explain the choice, approach (transactional or relational), level of participation (individual or collective), intensity, or dissimilarity of the political strategies of subsidiaries, can be clustered into five levels of analysis: home country, host country, multinational, subsidiary, and managerial. Fourth, the main outcomes of subsidiary political strategies are legitimacy in the host country and performance. The chapter concludes with promising opportunities for future research on political strategies from a subsidiary perspective, a growing area of study in IB strategy.

Environmental conditions, subsidiaries’ autonomy and global innovation in multinational enterprises

2020 ◽  
Vol 11 (2) ◽  
pp. 247-262
Author(s):  
Rafael Morais Pereira ◽  
Felipe Mendes Borini ◽  
Leandro Lima Santos ◽  
Moacir de Miranda Oliveira Jr
Keyword(s):  
Host Country ◽  
Environmental Conditions ◽  
Multinational Enterprises ◽  
Competitive Dynamics ◽  
Equation Modeling ◽  
Local Market ◽  
Market Conditions ◽  
Local Conditions ◽  
Content Type ◽  
Global Innovation

Purpose The purpose of this study is to analyze the influence of environmental conditions of the subsidiaries’ host country in the process of developing global innovation. It is argued that, even though the local environment in which subsidiaries are placed must be taken into account, this is not the only important factor to directly create global innovation, but it also becomes necessary for the subsidiaries to be endowed with autonomy, in this sense allowing them to enjoy the local conditions for innovation purposes. Design/methodology/approach A quantitative approach is opted for the research development, while the hypotheses were evaluated from the analysis of the relationship between four constructs: global innovation, local market conditions, local competitive dynamics and autonomy to innovate. The structural equation modeling technique is applied, using data from 172 foreign subsidiaries located in Brazil. Findings The validity and reliability parameters analyzed in the proposed model were suitable (average variance extracted, Cronbach’s alpha, composite reliability and discriminant validity). H1 (the better the market conditions of the host country, the greater the subsidiary’s autonomy to innovate) was not supported. However, both H2 and H3 were supported, suggesting the influence of local competitive dynamics on autonomy to innovate, and also the influence of autonomy to innovate on global innovation, respectively. Originality/value This paper provides some contributions for the advance in researches about the global innovation management, considering the subsidiaries’ perspective, showing the relevance of the subsidiary’s autonomy for the development of global innovation given a favorable local competitive dynamic.

scholarly journals Strategic Asset Seeking and Innovation Performance: The Role of Innovation Capabilities and Host Country Institutions

2020 ◽  
Vol 13 (3) ◽  
pp. 42 ◽  
Author(s):  
Lili Mi ◽  
Xiao-Guang Yue ◽  
Xue-Feng Shao ◽  
Yuanfei Kang ◽  
Yulong Liu
Keyword(s):  
Host Country ◽  
Multinational Enterprises ◽  
Emerging Market ◽  
Institutional Quality ◽  
Innovation Performance ◽  
Innovation Capability ◽  
Moderating Effects ◽  
Strategic Intent ◽  
Strategic Fit ◽  
Two Factors

Peering through the lenses of the strategic intent perspective and strategic fit paradigm, in this study, we seek to examine the contingent conditions under which emerging market multinational enterprises (EMNEs) with strategic asset seeking (SAS) intent can achieve improved innovation performance. We developed a contingency model of how the relationship between SAS intent and innovation performance is contingent on the moderating effects of firms’ innovation capability and institutional quality in the host country, as well as on the synergistic interaction of independent moderating effects from these two factors. We combined survey data from 320 Chinese MNEs with archival data to test our hypotheses. Our results show that SAS intent can lead to positive innovation performance when (a) the investing firm has developed high levels of innovation capability, and (b) synergistic interactions exist between institutional quality and firms’ innovation capability regarding their moderating effect on the SAS intent-innovation performance link.

MNEs Management Strategies in Developing Countries

2016 ◽  
pp. 1-33
Author(s):  
Mohammad Ayub Khan
Keyword(s):  
Developing Countries ◽  
Multinational Enterprises ◽  
Management Strategies ◽  
Sustainable Growth ◽  
Global Dynamics ◽  
Management Styles ◽  
Strategic Direction ◽  
National Environment ◽  
Corporate Social ◽  
Political Economic

Multinational Enterprises (MNEs) operating in emerging or developing countries face a variety of complex and multifaceted challenges categorized into two broader spheres: conventional and contemporary. Conventional challenges are market forces (i.e., demand, supply, prices), industrial trends (structure, degree of competition, bases of competition) and national environment (i.e., political, economic, cultural and legal). Contemporary challenges include growth paths, strategic direction, new management styles, risk management, corporate social responsibility and new environmental dynamics in the context of the emerging global dynamics. The real challenge for MNEs therefore, is to achieve sustainable growth and profitability and facing effectively all these multi-faceted challenges simultaneously.

When social movements close institutional voids: Triggers, processes, and consequences for multinational enterprises

2022 ◽  
Vol 57 (1) ◽  
pp. 101283
Author(s):  
Lutz Preuss ◽  
Diego Vazquez-Brust ◽  
Natalia Yakovleva ◽  
Hamid Foroughi ◽  
Diana Mutti
Keyword(s):  
Social Movements ◽  
Multinational Enterprises ◽  
Institutional Voids
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