Global Value Chain Governance in the MNE: A Dynamic Hierarchy Perspective

The pandemic crisis caused a severe shock to global value chains and led to supply shortages for complex medical goods such as respiratory ventilators. What followed were calls to reshore production for security, and the loss of efficiencies from foreign global value chain (GVC) operations for the multinational enterprise. This article merges internalization and GVC theory to demonstrate a dynamic hierarchy managerial response to these crisis conditions. An optimally configured GVC under hierarchy governance can resiliently eliminate global supply line ruptures yet maintain the benefits of global efficiency.

Proactive Corporate Sustainability via Social Innovation—A Case Study of the Hennes & Mauritz Grand Challenge in Bangladesh

The purpose of the study is to explore how a multinational enterprise can use social innovations to drive change and solve grand challenges in an emerging market context. This paper brings market-shaping literature into a sustainability context, particularly by studying the implementation of social innovations in an emerging market context. Specifically, the study involves an in-depth qualitative study of H&M’s fair living wages program in Bangladesh. We find that H&M is tackling utterances of grand challenges revealed by orchestrating social innovation in collaborations with local stakeholders. Social innovation is carried out in ongoing projects involving multiple stakeholders. The study contributes to current literature by revealing that multinational enterprises indeed can use social innovation to drive change in emerging markets, although this requires long-term commitment, an ability and willingness to shape the surrounding business environment, and a prominent standing among key stakeholders.

Multinational Enterprise Organizational Structures and Subsidiary Role and Capability Development: The Moderating Role of Establishment Mode

Multinational enterprises (MNEs) develop structural configurations for managing their geographically dispersed and disaggregated activities. These structures can be classified as (a) simple headquarters configurations (involves corporate, regional, divisional headquarters and mandated units) involving few direct reporting relationships; (b) network organizations involving no direct reporting relationships; and (c) matrix configurations involving multiple reporting relationships. While these structures are built for handling various complexities and purposes, it is unclear how they influence subsidiary role and capability development. We hypothesize how these structures influence subsidiary development and propose a moderating role of MNE establishment mode on the direct structure-subsidiary development relationship. Based on data from 429 foreign subsidiaries in New Zealand, our results show that subsidiary development varies across the structures such that simple headquarters configurations experience the least opportunities to develop. While the matrix and network structures as complex configurations offer distinct paths to subsidiary development, subsidiaries managed under the former are more likely to follow the developmental path of networking and interunit learning, and the subsidiaries managed under the latter are more likely to follow the path of autonomy and innovation. Furthermore, the positive association of network structure with subsidiary initiatives and autonomy is stronger for greenfield subsidiaries, whereas the positive association of matrix structure with subsidiary mandates is stronger for acquired subsidiaries.

Arbitrage spaces in the offshore world: Layering, ‘fuses’ and partitioning of the legal structure of modern firms

In this article, we discuss the way offshore financial centres are used by the multi-subsidiary, multi-jurisdictional group structure known as the ‘multinational enterprise’ to arbitrage between social geographies of political jurisdictions. We define arbitrage as the use of corporate legal entities located in diverse jurisdictions to arbitrate a third country's rules and regulations. Using a new method to categorize firm-level data from Van Dijk’s Orbis, we operationalize the notion of arbitrage to systematically detail and compare the structural sequencing choices firms are making, likely in part for reasons of arbitrage. We base our techniques on legal theory of the firm, acknowledging the underpinning of social technologies of law and accounting by which business enterprises are constructed and maintained. We conclude that two specific types of entities, ‘standalones’ versus ‘in-betweeners’, are qualitatively different from others in the activities they perform. We also highlight the existence of liability structures, or ‘fuses’, which typically take the form of a split ownership arrangement. Ultimately, we demonstrate that the position of a firm’s subsidiary within the overall network ecology of that firm is as important as its jurisdictional registration location.

Corporate Governance And A Paradigm Strategy By Multinational Enterprises In Emerging Markets

This qualitative investigation meticulously identified challenges to corporate governance in operations of Multinational Enterprises (MNEs) in diverse situational positions in emerging markets. These challenges are weak macro institutions, strict government interest and influence, over formalized institutional structure, and overbearing political influence and the obvious; information asymmetries. A flexible mixed allegiance paradigm strategy was identified. It provides alignment of diversities and equilibrium based on micro operational efficacies of the multinational enterprise which are experienced and skilled workforce, related to locality of interest, management of loyalty, trust and negotiation hinged on acceptable agreements to member countries. Trust is emphasized as important for international business.