A Study on the Impact of Differentiated Incentives on the Performance of Core Employees in China’s Multinational Corporations

2019 ◽  
Vol 6 (2) ◽  
pp. 51-66
Author(s):  
Ming-Xin Yu
Keyword(s):  
Multinational Corporations ◽  
The Impact

Mcdonald’s versus Vikram Bakshi

2021 ◽  
Vol 11 (4) ◽  
pp. 1-27
Author(s):  
Nitin Pangarkar ◽  
Neetu Yadav
Keyword(s):  
Emerging Markets ◽  
Multinational Corporations ◽  
Service Industry ◽  
Executive Development ◽  
Content Type ◽  
Academic Level ◽  
Quick Service ◽  
Term Performance ◽  
The Impact

Learning outcomes The case illustrates the challenges of managing JVs in emerging markets. specifically, after going through the case, students should be able to: i.Analyze the contexts in which firms need to form JVs and evaluate this need in the context of emerging markets such as India; ii.Understand how multinational corporations can achieve success in emerging markets, specifically the role of strategic (broader than the product) adaptation in success; iii.Evaluate the impact of conflict between partners on the short-term and long-term performance of a JV; and iv.Create alternatives, evaluate each alternative’s pros and cons, and recommend appropriate decisions to address the situation after a JV unravels and the organization is faced with quality and other challenges. Case overview/synopsis McDonald’s, the global giant in the quick service industry, entered India in 1993 and formed two JVs in 1995 one with Vikram Bakshi (Connaught Plaza Restaurants Ltd or CPRL) to own and operate stores in the northern and eastern zones, and another with Amit Jatia (Hardcastle Restaurants Private Limited or HRPL) to own and operate stores in the western and southern zones. Over the next 12 years, both the JVs made steady progress by opening new stores while also achieving better store-level metrics. Though CPRL was ahead of HRPL in terms of the number of stores and total revenues earned in 2008, the year marked the beginning of a long-running dispute between the two partners in CPRL, Bakshi and McDonald’s. Over the next 11 years, Bakshi and McDonald’s tried to block each other, filed court cases against each other and also exchanged recriminations in media. The feud hurt the performance of CPRL, which fell behind HRPL in terms of growth and other metrics. On May 9, 2019, the feuding partners reached an out-of-court settlement under which McDonald’s would buy out Bakshi’s shares in CPRL, thus making CPRL a subsidiary. Robert Hunghanfoo, who had been appointed head of CPRL after Bakshi’s exit, announced a temporary shutdown of McDonald’s stores to take stock of the current situation. He had to make a number of critical decisions that would impact the company’s performance in the long-term. Complexity academic level MBA, Executive MBA and executive development programs. Supplementary materials Teaching Notes are available for educators only. Subject code CSS 11: Strategy.

scholarly journals Measuring the Effects of Corporate Tax Cuts

2018 ◽  
Vol 32 (4) ◽  
pp. 97-120 ◽  
Author(s):  
Alan J. Auerbach
Keyword(s):  
Multinational Corporations ◽  
Income Tax ◽  
Capital Investment ◽  
Corporate Income Tax ◽  
Tax Law ◽  
Corporate Tax ◽  
The Law ◽  
Jobs Act ◽  
The Impact ◽  
Tax Cuts

On December 22, 2017, President Donald Trump signed the Tax Cuts and Jobs Act (TCJA), the most sweeping revision of US tax law since the Tax Reform Act of 1986. The law introduced many significant changes. However, perhaps none was as important as the changes in the treatment of traditional “C” corporations—those corporations subject to a separate corporate income tax. Beginning in 2018, the federal corporate tax rate fell from 35 percent to 21 percent, some investment qualified for immediate deduction as an expense, and multinational corporations faced a substantially modified treatment of their activities. This paper seeks to evaluate the impact of the Tax Cuts and Jobs Act to understand its effects on resource allocation and distribution. It compares US corporate tax rates to other countries before the 2017 tax law, and describes ways in which the US corporate sector has evolved that are especially relevant to tax policy. The discussion then turns the main changes of the Tax Cuts and Jobs Act of 2017 for the corporate income tax. A range of estimates suggests that the law is likely to contribute to increased US capital investment and, through that, an increase in US wages. The magnitude of these increases is extremely difficult to predict. Indeed, the public debate about the benefits of the new corporate tax provisions enacted (and the alternatives not adopted) has highlighted the limitations of standard approaches in distributional analysis to assigning corporate tax burdens.

scholarly journals Board and corporate social responsibility disclosure of multinational corporations

2019 ◽  
Vol 27 (1) ◽  
pp. 77-98 ◽  
Author(s):  
Hanh Thi Song Pham ◽  
Hien Thi Tran
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Multinational Corporations ◽  
Board Independence ◽  
Content Type ◽  
Csr Reporting ◽  
The One ◽  
Csr Disclosure ◽  
Corporate Social ◽  
The Impact

Purpose This paper aims to investigate the effects of board model and board independence on corporate social responsibility (CSR) disclosure of multinational corporations (MNCs). Design/methodology/approach The authors developed an empirical model in which CSR disclosure is the dependent variable and board model (two-tier vs one-tier), board independence (a proportion of independent directors on a board) and the interaction variable of board model and board independence together with several variables conventionally used as control variables are independent variables. The authors collated the panel dataset of 244 Fortune World’s Most Admired (FWMA) corporations from 2005 to 2011 of which 117 MNCs use the one-tier board model, and 127 MNCs use the two-tier board model from 20 countries. They used the random-effect regression method to estimate the empirical models with the data they collated and also ran regressions on the alternative models for robustness check. Findings The authors found a significantly positive effect of a board model on CSR disclosure by MNCs. Two-tier MNCs tend to reveal more CSR information than one-tier MNCs. The results also confirm the significant moderating impact of board model on the effect of board independence on CSR disclosure. The effect of board independence on CSR disclosure in the two-tier board MNCs tends to be higher than that in the one-tier board MNCs. The results do not support the effect of board independence on CSR disclosure in general for all types of firms (one-tier and two-tier board). The impact of board independence on CSR disclosure is only significant in two-tier board MNCs and insignificant in one-tier board MNCs. Practical implications The authors advise the MNCs who wish to improve CSR reporting and transparency to consider the usage of two-tier board model and use a higher number of outside directors on board. They note that once a firm uses one-tier model, number of IDs on a board does not matter to the level of CSR disclosure. They advise regulators to enforce an application of two-tier board model to improve CSR reporting and transparency in MNCs. The authors also recommend regulators to continue mandating publicly traded companies to include more external members on their boards, especially for the two-tier board MNCs. Originality/value This paper is the first that investigates the role of board model on CSR disclosure of MNCs.

scholarly journals Assessing impact of base erosion and profit shifting on performance of subsidiaries of multinational corporations in Baltic countries

Equilibrium ◽  
2019 ◽  
Vol 14 (2) ◽  
pp. 277-293
Author(s):  
Egidijus Kundelis ◽  
Renata Legenzova
Keyword(s):  
Multinational Corporations ◽  
Empirical Research ◽  
Tax Avoidance ◽  
Empirical Literature ◽  
Company Performance ◽  
Tax Rates ◽  
Profit Shifting ◽  
Baltic Countries ◽  
The Baltic ◽  
The Impact

Research background: The problem of base erosion and profit shifting by multi-national corporations has been debated from different perspectives because of its multiple impact on the key actors in the economy. Studies refer to its positive impact on companies via corporate taxes saved, but its negative impact on governments via reduced tax collection. A number of empirical studies conducted in different countries support the substantial BEPS impact on company performance, but report differences in its magnitude. Other authors claim that, despite a wide range of tax avoidance opportunities available, tax avoidance is limited due to institutional measures imposed (tax audits, penalties for non-compliance) and high implementation costs. A majority of the previous empirical research covered large countries (USA, Germany) or regions (e.g. Europe), but there is a gap in the re-search assessing the BEPS impact on multinational corporations’ subsidiaries’ performance in countries with lower corporate income tax rates such as the Baltic countries. Purpose of the article: To assess the impact of base erosion and profit shifting on multinational corporations’ subsidiaries’ performance in the Baltic countries. Methods: Empirical research is conducted based on the framework employed by Hines and Rice (1994) to measure BEPS impact on company performance. Regression analysis with fixed effects was applied to a sample of 3,422 Latvian, Lithuanian and Estonian subsidiaries of multinational corporations, which are characterized by low corporate tax rates.  The data for the period of 2007–2015 was retrieved from the Amadeus database. Findings & Value added: The research revealed that Baltic countries’ tax differentials between multinational corporations’ parent and subsidiary countries might have a significant impact on the subsidiary’s financial performance. When the tax rate differences between Baltic and the foreign countries decrease by 1%, reported profits in Baltic countries increase by 2.3%, indicating profit-shifting behaviour. This is in line with the empirical literature and practices applied by multinational corporations. It is also in favour of anti-tax avoidance measures introduced by the EC to be adopted by Baltic and other EU countries.

scholarly journals Corporate Income Shifting in an Era of Tax Multilateralism: The Impact of Exchange-of-Information Agreements

2021 ◽  
Vol 69 (2) ◽  
pp. 357-389
Author(s):  
Devan Mescall ◽  
Paul Nielsen
Keyword(s):  
Multinational Corporations ◽  
Multinational Enterprises ◽  
Transfer Pricing ◽  
Empirical Studies ◽  
Annual Reports ◽  
Income Shifting ◽  
Exchange Of Information ◽  
Pricing Rules ◽  
Using Data ◽  
The Impact

Using data from the annual reports of over 100,000 subsidiaries of multinational enterprises (MNEs) from 55 countries between 2003 and 2012, the authors of this article investigate the impact of exchange-of-information agreements ("EOI agreements") on tax-motivated income shifting. Transparency created by the signing of EOI agreements is expected to reduce the tax-motivated shifting of income by multinational corporations. Whether such agreements affect the income-shifting behaviour of multinational corporations is an unanswered question. The authors find evidence that, on average, EOI agreements do have an impact on tax-motivated income shifting. Additionally, they find that more advanced, modern EOI agreements are associated with a larger decrease in tax-motivated income shifting compared to the impact of early EOI agreements. This evidence challenges the prevalent assumption in empirical studies that EOI agreements are homogeneous. Supplemental analyses suggest that factors that affect the information asymmetry between MNEs and tax authorities, such as corporations with high levels of intangibles and tax authorities with strong transfer-pricing rules and enforcement, can diminish or enhance the effectiveness of EOI agreements in moderating tax-motivated income shifting. The evidence provided by this study shows that consideration of the tax authorities' information environment and the substance of an EOI agreement is essential when assessing the impact of such an agreement on the tax behaviour of sophisticated taxpayers such as multinational corporations.

scholarly journals HOW DOES THE INSTITUTIONAL CONTEXT OF AN EMERGING ECONOMY SHAPE THE INNOVATION TRAJECTORY OF DIFFERENT TYPES OF COMPANIES? A CASE STUDY OF INDIA

2020 ◽  
Vol 14 (2) ◽  
pp. 36-51
Author(s):  
Harini Mittal
Keyword(s):  
Multinational Corporations ◽  
Institutional Context ◽  
Emerging Economy ◽  
Qualitative Assessment ◽  
Primary Data ◽  
Institutional Voids ◽  
Innovation Strategies ◽  
Start Ups ◽  
The Impact

Institutional voids faced by emerging economies have received a lot of attention in recent literature. However, the impact of institutional voids in an emerging economy on the level of company innovation strategies and output is a less researched topic. Using India as a case study, this paper presents a qualitative assessment of the impact of the institutional context of this emerging economy on innovation strategies and consequent outputs of private Indian companies of various sizes and ages. Primary data for the study were collected by means of surveys, in-depth interviews, and secondary data sources including government reports, World Bank and United Nations reports, research articles, and in-depth industry surveys. The paper concludes that in India, large companies and start-ups are more innovative. Most innovations are imitative in nature, and/or driven by customer requirements, and/or international quality norms. “New-to-the-world” innovations are scarce and are mostly driven by multinational corporations (MNCs), government institutions, and to some extent large Indian companies. The paper concludes that in a rapidly emerging economy like India, large companies are more innovative because of their resilience, internal systems, and capabilities that can overcome voids, and exploit opportunities. The fast-paced transitions have created more opportunities for start-ups than small and medium-sized enterprises (SMEs), thereby creating unequal innovation opportunities for companies of different sizes and ages, as distinct coping strategies are required for innovation to occur.

IMPACT OF LEADERSHIP STYLES ON EMPLOYEE PERFORMANCE: A MODERATING ROLE OF GENDER

2020 ◽  
Vol 5 (12) ◽  
pp. 27-52
Author(s):  
Omkar Dastane
Keyword(s):  
Transformational Leadership ◽  
Leadership Styles ◽  
Multinational Corporations ◽  
Online Survey ◽  
Employee Performance ◽  
Future Research ◽  
Democratic Leadership ◽  
Autocratic Leadership ◽  
Laissez Faire ◽  
The Impact

The impact of different leadership styles on employee performance was investigated in this study, whereby the proposed styles included transformational leadership, Laissez-Faire leadership, democratic leadership, and autocratic leadership. Concomitantly, the moderating effect of gender between such leadership styles and employee performance was also tested. The required data were collected by utilising a structured questionnaire and disseminating it through an online survey, engaging a sample size of 211 employees of multinational corporations in Malaysia selected using convenient sampling. Accordingly, IBM SPSS 24 was employed to conduct the reliability and normality assessment, while IBM SPSS AMOS 24 application was for the purpose of conducting the confirmatory factor analysis (CFA), structural equation modelling (SEM), and moderation analysis. As a result, a positive and significant relationship was found between the transformational, Laissez-Faire, and democratic leadership styles towards employee performance in Malaysia, respectively. Furthermore, the relationship between autocratic leadership and employee performance was statistically insignificant following the hypothesis testing. Meanwhile, the impact of transformational and Laissez-Faire leadership styles on employee performance was fully moderated by gender, whereas the correlation between democratic leadership and employee performance was only partially moderated. In contrast, gender posed a statistically insignificant impact for autocratic leadership and employee performance association. Moreover, the effect of transformational leadership on employee performance was more pronounced in males compared to females. The effect of Laissez-Faire leadership on employee performance is more pronounced in �female� compared to �male�. Meanwhile, the effect of democratic leadership on the variable was more pronounced in females compared to males, but with a minimum difference. The managerial implications, limitations, and future research avenues are discussed accordingly.

The Internet and Global Markets

2008 ◽  
pp. 417-448
Author(s):  
José Manuel Ortega Egea ◽  
Manuel Recio Menedez
Keyword(s):  
Multinational Corporations ◽  
Marketing Channel ◽  
Point Of View ◽  
The Internet ◽  
Theoretical Point ◽  
Global Marketing ◽  
Marketing Activities ◽  
Business To Consumer ◽  
Global Nature ◽  
The Impact

This chapter examines the impact of the Internet and related technologies on global marketing activities (global e-marketing), under consideration of the following aspects: • Special implications for multinational corporations (MNCs) and small and medium-sized companies (SMCs) • Distinction between business-to-consumer (B2C) and business-to-business (B2B) markets • Role of the Internet as a complementary or supplementary marketing channel In order to clarify the special characteristics and challenges involved in global e-marketing practices, the authors have carried out a review of related empirical and conceptual research. The following conclusions can be drawn with regard to the characteristics of reviewed studies: 1. Due to the global nature of the Internet, relatively little research explicitly accounts for the differences between domestic and global e-marketing practices. Further research is needed on issues directly related to the Internet “global reach.” 2. Relatively more studies analyze global Internet marketing from a theoretical point of view. Academics are recently recognizing the need to carry out empirical research, both in B2C and B2B online environments.

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