Subnational Location Capital: The Role of Subnational Institutional Actors and Socio‐spatial Factors on Firm Location

Firms do not simply locate, but rather seek to accrue location‐based advantages such as knowledge, market insidership and resource utilization. Adopting the lens of social capital, this paper explores how subnational institutional actors facilitate location capital for firms. Using qualitative case study analysis of six multinational companies (MNCs), we highlight the important role of subnational institutional actors in fostering three dimensions of subnational location capital – structural, relational and cognitive. We show that subnational location capital, defined as the economic and social assets accessible through relationships within a subnational location, enable firms to derive advantages via subnational engagement. These findings contribute to the growing literature on the dynamic interaction of firms with subnational location, particularly the nuanced role of subnational institutional actors with MNCs.     

South African MNCs' HRM Systems and Practices at the Subsidiary Level: Insights From Subsidiaries in Ghana

Despite the extensive literature on the human resource management (HRM) systems and practices of multinational companies (MNCs) from developed countries, there are serious gaps in our understanding of emerging countries multinationals HRM practices and systems at both home and host countries. This study empirically examines the similarities and differences of South African (SA) MNCs' HRM systems and practices at both the headquarters in SA and at the subsidiaries operating in Ghana. The study reveals that with the exception of compensation and industrial relation practices which are localised, EMNCs HR systems and practices are mainly transferred to subsidiaries with minimal adaptation to contextual realities. Further research and practical implications are discussed.     

International HRM in South African multinational companies

With the paucity of published research on human resource management (HRM) policy and practice in the BRICS countries (Brazil, Russia, India, China and South Africa), the rationale for this article is to evaluate the nature of HRM practices, their development, application and diffusion in South African MNCs. It provides an exploratory analysis in a systematic literature review referring to qualitative case study research and research survey literature to better understand HRM strategies and practices developed and diffused by growing emerging market MNCs from South Africa.The findings underline significant challenges of human resource development and controversies regarding host country issues alongside a degree of ‘sophistication’ in the HRM practices of firms analysed. An aim of the article is to identify areas for further research on business and HRM models of Emerging Market MNCs (EMMNCs) in the African context and develop a set of seven research propositions.     

Subjective Measures of Employment Opportunities and Interregional Migration

Abstract. Empirical studies of interregional mobility routinely use regional unemployment differentials to characterize economic incentives to move between regions. In this paper, we present a new regional labour market indicator computed from survey data in which respondents are asked to evaluate local employment opportunities in their resident municipality and surroundings. The subjective measures of satisfaction with local employment opportunities have positive and significant impact on interregional migration flows, also when controlling for traditional measures of regional labour market conditions, including the regional unemployment rate. Contrary to most European studies, we find that regional labour market conditions have a strong effect on interregional migration flows.     

Politics and Power within Multinational Corporations: Mainstream Studies,Emerging Critical Approaches and Suggestions for Future Research

Given the increased public interest in the use and misuse of power in multinationals in the aftermath of the financial crisis, it is notable that power relations in multinational corporations (MNCs) have not gained enhanced attention in the academic community. What is missing so far in the study of MNCs is a systematic examination of how power and politics within MNCs have been addressed in mainstream international business (IB) and sociological research studying the MNC. This paper starts by critically reviewing these two mainstream approaches in the study of MNCs as organizations and seeking to understand the shortcomings of former research. Next, it reviews new emergent critical perspectives, which the authors call socio‐political studies of MNCs, where power and politics are addressed not just more prominently, but also differently, from a more bottom‐up and actor‐centred perspective. After reviewing this emergent stream of research, the authors propose that future studies should take a more micro‐political perspective and focus in more detail on the micro‐foundations of power relations. In the concluding section, the authors show how future studies of MNCs can learn from both critical interactionist and discursive theories when analysing organizational politics and power relations. A framework is proposed for the study of micro‐level political game‐playing in MNCs, based on a three‐dimensional framework for organizational power (episodic, rules of the game and domination), and some key research questions for future studies are suggested.     

A Structural Approach to the European Labour Market

The structure of the European labour market is highly differentiated by geo-graphical area. If the 1992 integration is likely to induce short-medium term adjustment effects on employment, these will mostly affect regional labour markets. Negative adjustments will follow different distribution patterns, probably exacerbating current regional disequilibria. On the other hand, still little known are the geographical features of the European economic, social and production structures. Although many studies have recently concentrated on the analysis of local labour markets, few of them have addressed the issue of Community regions. Through multivariate and cluster analyses of structural data on regional labour markets, the paper offers a confirmation of the explanatory power of local market analysis, as applied to the European area. The structural features of each elementary area are captured by three factors only that allow the construction of a coherent classification of EEC regions in four major clusters. This classification is used to identify the “weak areas” that, after a reconsideration in unified terms of European cooperation policies, should be the object of new development interventions.     

International work experience and compensation: Is more always better for CFOs?

The CFO is increasingly considered the second most important executive in the firm after the CEO. Still, little is known about the factors that determine CFOs' compensation. Recently, it has often been claimed that, in MNCs, CFOs should have international work experience. But is a CFO's international work experience also reflected in his or her compensation? We combine human capital and social capital perspectives to account for both the upside and the downside of international work experience. We suggest that working abroad provides CFOs with valuable knowledge and skills which increase compensation; however, staying abroad for too long has an adverse effect due to losses in social network ties. We thus propose an inverted U-shaped relationship between CFOs' international work experience and their compensation. Furthermore, we suggest that this relationship is contingent on the characteristics of the CEO. In testing our hypotheses on a sample of the largest MNCs in Europe, we find support for the proposed relationships. Our study contributes to the literature on top management characteristics and executive compensation, specifically by providing a comprehensive understanding of how and when international work experience pays off for CFOs.     

Human Resource Management under Institutional Constraints: The Case of Germany

Most human resource management (HRM) research has been conducted in countries that have relatively weak labour market institutions such as the UK and the USA. There is little research about the scope for and constraints on the adoption of HRM practices in countries with strong statutory regulations. The research presented here is based on 16 case studies of banks and chemical firms operating in Germany, that comply with the requirements of the German labour market institutions of collective bargaining, co-determination and initial vocational training, and hence operate under strong institutional constraints. The evidence presented shows that institutional features of the German system encourage the implementation of some ingredients of the HRM ‘recipe’ and inhibit others. It also indicates that constraining influences notwithstanding, a pluralist version of HRM appears to be quite compatible with the highly regulated German context.     

Social media led co-creation of knowledge in developing societies: SME’s roles in the adoption,use and appropriation of smartphones in South Asia

Abstract

Social media supports the creative economy through its involvement in the adoption and appropriation of new innovation and accelerates economic growth. The current paper expands on this notion by identifying and analyzing the interaction between social media-based communities and small and medium enterprises (SMEs), as it examines how social media contributes to the knowledge co-creation and supports the adoption, use and appropriation of smartphones in South Asian countries, which are inhabited by approximately 1.6 billion people. The findings obtained through virtual ethnography (VE) provide insights into the dynamics and kinetics of knowledge co-creation and how that benefits large multinationals, small local businesses and consumers in developing societies. As such, we advance the knowledge management scholarship by presenting a holistic model of co-creation of knowledge involving multiple stakeholders.     

Why Do Established Practices Deinstitutionalize? An Actor‐Centred Approach

Drawing on 63 in‐depth interviews from three American multinationals, we investigate how individual actors negotiate the interplay of insider and outsider pressures on the deinstitutionalization of four employment practices in an institutionally complex setting. Existing institutional theory highlights different degrees of deinstitutionalization, from complete abandonment of practices to partial erosion, with an underlying presumption of organizations and actors striving for stability and stasis. However, the present study finds that actor reconciliation of interacting insider and outsider pressures can result in three distinct phases of deinstitutionalization (complete, partial and negotiated deinstitutionalization), which crucially coexist, suggesting perpetual instability and change. The authors conceptualize the individual‐level enabling conditions for each of these different phases of deinstitutionalization, highlighting a range of actor responses as well as differences in how actors exercise agency across each phase. Examining actor negotiation of the interplay of insider and outsider pressures improves our understanding of how individuals engage in differential institutional work when responding to practice deinstitutionalization.     

Human resource strategy to improve organizational performance: a route for firms in Britain?

Performance, in the context of organization, is not only a broad concept which has been used synonymously with productivity, efficiency, effectiveness and, more recently competitiveness, it has also been a subject of study for social scientists from a wide range of disciplinary perspectives. More recently, efforts have been made by human resource management (HRM) theorists to try to establish a causal link between HRM and performance. This has led to a growing number of studies which examine the potential contribution that good human resource policy can make to improving organizational performance. This paper is not concerned with the conceptual debate of HRM and performance. Rather, it explores whether adopting good HR practices to improve performance is a practicable approach to organizations in the UK. Drawing on existing empirical evidence from other studies, the paper reviews the strategies British firms deploy to improve labour productivity. In particular, the issue of whether they use the 'high-road' HRM or 'low-road' HRM strategy to enhance performance is investigated. This paper concludes by suggesting that high-road HRM may lead to better organizational performance, but it may not be a strategy that firms opt for, given the historical, social and institutional context of employment relationships in Britain.     

The Social Embeddedness of Labor Markets and Cognitive Processes

Conventional economic theory explains labor market outcomes in terms of the interaction of autonomous individual actors who continually calculate the relative advantages of different possible actions they might take. But it has trouble explaining cooperation among individuals in these terms; and even individualistic behavior in this model is based upon a series of prior misunderstandings, or causal models, which the actors are simply assumed to possess. This paper utilizes cognitive theory to explore the nature of these prior understandings, how we got them and the way in which they are likely to be revised and updated through experience. This explanation suggests that economic behavior is much more dependent upon direct interaction among individuals than conventional theory implies and it makes trust and cooperation central to economic activity. But it raises serious questions about whether a dynamic economic system could ever be housed in the competitive institutional structure which conventional theory prescribes.     

The Economics of Equal Value

Equal pay for work of equal value has come to be seen as the policy most likely to reduce the gender earnings gap. This paper explores the theoretical basis for widespread undervaluation of women's work and argues that institutionalised discrimination in the labour market also affects internal pay and grading structures. Recent recognition of the scope for discretion in pay determination undermines the “market forces” argument against equal value. The current wage structure reflects an outdated model of social and family organisation. Much poverty is now the result of women seeking economic independence in a market which rewards them as subordinate family members. However, the main obstacles to equal value lie in labour market institutions. The increasing fragmentation of pay bargaining and moves to performance-related pay will reduce rather than promote the relationship between pay and job content.     

跨国经营海外子公司业务发展中企业的战略选择——辉瑞制药中国公司在华生产范围发展路径(1993~2002年)的启示

经济全球化给更多企业带来了跨国经营的机会与动力。本文着重分析在跨国经营中海外子公司在当地的业务范围如何演化、其发展路径通常受哪些因素的影响,而企业又可以通过做出哪些战略选择来更好地调节其发展路径。通过对辉瑞制药中国公司在1993￣2002年期间在华生产范围发展路径的描述和分析,本文提出两个观点。一是在跨国经营中企业通常面临保持公司在全球的业务整合以及适应当地市场具体条件的双重压力,当两者之间存在较大差异时,由于决策者的认知受有限理性的制约,海外子公司的业务并不会按现有文献中所提出的按母公司已有业务从强到弱顺序发展,而是呈现迂回发展的路径。二是企业可以通过对战略变量的参数的选择来调节其海外子公司的业务发展,而这样的参数调节过程有助于企业通过试探逐渐积累关于当地市场的知识,从而在跨国经营的双重压力中获取平衡。通过上述分析,本文希冀对中国企业开展国际化经营提供的启示是当企业在海外扩张中面临陌生的环境时,对当地市场的特性给予足够的关注并保持战略上的灵活性是取得成功的关键。     

Corporation taxes and the debt policy of multinational firms

This paper analyzes the impact of corporate taxes on the capital structure of foreign subsidiaries of multinational firms. The empirical investigation employs a large micro-level panel dataset of German multinationals covering 31 countries over a 10-year period. A special feature of this dataset is that it allows us to distinguish between internal and external debt financing. Our results confirm a positive effect of local tax rates on both types of debt. Moreover, while adverse local credit market conditions are found to reduce external borrowing, internal debt is increasing, supporting the view that the two channels of debt finance are substitutes. Our findings suggest that internal credit markets give rise to significant advantages and enhance multinationals?? opportunities to use debt as a tax shield.     

Transnational Diaspora and Civil Society Actors Driving MNE Internationalisation: The Case of Grameenphone in Bangladesh

Multinational enterprises (MNEs) are viewed as proactive global economic actors that enter new and emerging markets with intentional strategies, building on their inherent resources and firm-specific advantages. However, an international joint venture involves numerous actors in the market entry process. While emerging markets tend to feature complex institutional contexts and idiographic entry challenges, our study with a focus on emerging market presents two under-examined types of stakeholders as distinct social actors' that affect internationalisation process: the transnational diaspora and civil society actors. It provides evidence of the reactive internationalisation of an MNE, showing how the transnational diaspora drove the MNE's internationalisation and how a civil society actor, in conjunction with a diaspora member, facilitated the creation of an international joint venture (IJV) in Bangladesh. This case study analyses and describes the stages of development, documenting how Norwegian Telenor, American Gonophone, Japanese Marubeni and Bangladeshi Grameen Bank created an IJV named Grameenphone in Bangladesh, and how diaspora and civil society actors made up the prime movers and organisational capability base for this process, which would not have happened without their market-driving and enabling influence. The findings illustrate the central role of transnational diaspora entrepreneurship and the related innovation, motivation, contextual intelligence, networking and funding that supported this emerging-market IJV development. The study contributes to research on international joint ventures, transnational diaspora entrepreneurship and civil society actors and the internationalisation of MNEs.     

Making and Mending your Nets: Managing Relevance, Participation and Uncertainty in Academic–Practitioner Knowledge Networks

Making and mending your nets is concerned to examine, from an actor–network theory perspective, how the relevance debate concerning research and teaching is a significant non‐human actor in the development and management of industry–academic networks associated with UK business schools. By significant, we do not imply the most important because it is only one of many human and non‐human actors that may arouse interest, be problematized, enrolled and/or mobilized for such networks to become ‘obligatory passage points’ and ultimately irreversible collective assemblies. The paper then utilizes actor–network theory as a framework for examining our primary empirical research on academic–practitioner knowledge networks – nets that require a continuous making and mending in managing relevance, participation and uncertainty. We argue that the actor–network framework is more compatible than alternative knowledge diffusion or transfer models with the data we have collected on academic–practitioner knowledge networks in the UK. In accounting for the dynamic instability and precariousness of knowledge networks, it avoids raising false expectations about business knowledge and its relevance or effectiveness. If knowledge in the physical sciences and engineering unfolds slowly and unevenly in the face of many disputes, disruptions and setbacks, as actor–network theory has claimed, then how much more likely is this to be the case in the social sciences? Consequently there should be no expectations of one‐to‐one, direct causal chains between knowledge production and application, as some business school critics seemingly demand.     

Subnational Institutions and Location Choice of Emerging Market Firms

I examine how subnational institutions of emerging markets affect the location choice of emerging market firms. I argue that the weak institutions in emerging markets push firms to acquire the skills needed for survival in unfavorable institutional environments. When they start their international venturing, such knowledge, skills, and capabilities will become their unique advantage, which makes them more resilient to red tape, nepotism, and corruption in the host countries. Using a sample of 143 outward FDI events of Chinese multinationals, I test the relationship between subnational institutions at home and firm propensity to enter a target market with weak institutional systems and found robust empirical support for the use of different estimation strategies. Further, my results demonstrate that the effect of subnational institutions at home on location choice is more pronounced in private enterprises compared to state-owned enterprises. This study reveals the importance of home country effects in location choice research and tests empirically the existence of institutional advantage.     

Labour Market and Decentralized Decision-making: An Institutional Approach

The persistent failure in the labour market is due to uncertainty and asymmetric information, and relies on a reconsideration of the bargaining process. This process is not generated by individual action but rather by the behaviour of social groups and institutions in which State intervention can immprove the efficiency in matching demand and supply. In this framework we will discuss the ways by which institutional decentralization can be implemented in a labour market characterized by deep regional differences and by long-term unemployment persistence as in Italy. The main conclusion is that this policy option better fits the active labour policies. In fact the actual aim of such supply-side policies is to reduce the regional and skill mismatches and therefore it needs a substantial involvement of local public agencies.     

Labour Policy in the Federal Republic of Germany: Challenges and Concepts

ABSTRACT: This paper describes how German labour policy, both employment policy and active labour market policies, has developed between 1974 and 1987. Government intervention for full employment in a welfare state, a cooperative system of industrial relations, an active labour market policy, and a comparatively efficient system of vocational and adult education did not prevent the loss of full employment in 1974. But persistent labour market slack until today has not fundamentally changed the climate of relative political and social calm. The basic concepts, programmes and specific measures of labour policies pursued in the FRG are surveyed with special reference to their costs and effects on employment and the structure of unemployment. The challenges to labour policy stem from three complete business cycles around a slightly falling trend in employment and the bad prospectives of the German labour market until the year 2000. Four major measures of labour market policy now reduce registered unemployment by about 400,000 in the mid 1980s. Total costs of unemployment amounting to 57 billion DM per year offer financial alternatives to create jobs and to reduce working hours. Finally, actual proposals under discussion in Germany are examined in order to combat unemployment in a determined commitment to full employment immediately.