Environmental practices and firm performance in emerging markets: the mediating role of product quality

Environmental practices have not received as much research attention in emerging market contexts as traditional topics like quality. However, the importance of environmental practices for a firm’s production strategy has been increasing at an unprecedented level across the globe. Our research objective is, therefore, to investigate the interplay between environmental practices and quality in the pursuit of firm performance. Relying on 492 responses from Turkish manufacturers to test our hypotheses, we show that environmental practices directly improve the quality of products over and above the effect of quality management practices in emerging markets. Product quality, in turn, is important for increasing firm performance, acting as a mediator for the positive effects of environmental practices on performance. Thus, we reveal that product quality functions as an instrumental conduit between environmental practices and firm performance in emerging markets like Turkey where stakeholder pressures are weak, and regulations are often not properly enforced.     

Adapting a Lean Production Program to National Institutions in Latin America: Danone in Argentina and Brazil

This article argues that national institutions identified in the varieties of capitalism approach have a significant impact on the degree of fidelity and extensiveness of best practices adapted by geocentric multinational corporations in host countries in emerging markets. To illustrate this argument it shows how differences in national institutions between Brazil and Argentina caused Danone to adapt a lean production in radically different ways in each of these countries. Both of the programs implemented had low degrees of fidelity and extensiveness to the original best practice. This article contends that in Argentina strong labor laws and the ability of unions to negotiate significant salary increases combined with a desire of workers to have individual pride in their jobs caused Danone to empower them individually instead of creating teams as foreseen in this company's original lean production program. In Brazil the weakness of unions combined with labor laws that promote employee turnover and the desire of workers to improve their salaries caused this company neither to empower workers nor create teams. Instead, it motivated workers by providing them the previously unavailable opportunity to become a manager.     

Cluster life cycle and diaspora effects: Evidence from the Indian IT cluster in Bangalore

The role of local clusters has been of interest to scholars and policymakers in international business alike. Research found that clusters enable a region to develop faster compared to dispersed economic activity, based mainly on a local concentration of competing and cooperating firms and sophisticated domestic demand. Locating in a cluster has certain benefits for firms stemming from pooling of human capital and supporting institutions varying by industry and international specialization.In this paper, we extend the local view of clusters and emphasize the complementary role of non-local linkages, in particular diasporas, illustrating our model employing the case of the evolution of the Bangalore IT cluster. The novelty of our paper lies in its longitudinal character. We are thereby able to identify how the roles of local and non-local networks differ across life-cycle phases; moreover, we find that diasporas can trigger or accelerate local development. We discuss implications for managers and policy makers.     

Countervailing institutional forces: corporate governance in Turkish family business groups

This longitudinal study investigates the impact of national and international pressures to improve corporate governance in an emerging economy from an institutional theory perspective. Recently, family business groups (FBGs), the dominant form of organizing in emerging economies, have been criticized by policy makers for their poor governance structures. A common recommendation to FBGs has been increasing the number of independent, outsider directors on their boards. Thus, change in the board compositions of the quoted subsidiaries of the six biggest FBGs is analyzed over 2002–2006. One-way-ANOVA and t-tests were used as statistical tools. Findings reveal that there has not been a statistically significant change in board compositions over the research period. FBGs were found to resist institutional pressures through ‘avoidance’, ‘defiance’ and “manipulation” strategies due to the absence of coercive pressures and multiple forms of ‘institutional work’ for change.     

MNCs and micro-entrepreneurship in emerging economies: The case of Avon in the Amazon

This article examines the activities of multinational corporations (MNCs) in the direct sales industry through an ethnographic case study of micro-entrepreneurship in the Brazilian Amazon. In large emerging economies, intra-country heterogeneity poses challenges for MNCs. Because national trends often obscure regional variations, the case study highlights the realities of the rural Amazon, and the specific challenges and potential for MNCs. Findings from the case study support three propositions. The development of direct sales networks in remote areas facilitates: (1) additional entrepreneurship, and encourages a progression from necessity to opportunity entrepreneurship; (2) social change in gender norms, including higher level of female empowerment and decision-making within families and communities; and (3) a reconciliation of local and global values on beauty and fashion for customers, leading to stronger brand relationships. By leveraging micro-entrepreneurship, MNCs can compete with local firms, even in rural areas lacking basic infrastructure, to the benefit of communities and individuals.     

A rainbow of colors: The value of embeddedness for understanding actor entrepreneurship in organizational LGBTQ+ communities

Integrating the expanding organizational LGBTQ+ communities’ literature on actor entrepreneurship, we advance a conceptual framework theoretically grounded in the concept of embeddedness. Specifically, we highlight the contextual antecedents that clarify how homophily and prominence in organizational LGBTQ+ communities drive actor entrepreneurship. Our framework also illustrates the moderating role of actor attributes (i.e., personality traits), organizational environment, and the mediating role of resource acquisition in the actor embeddedness – entrepreneurship linkage.     

The challenge of introducing low-carbon industrial practices: Institutional entrepreneurship in the agri-food sector

Contemporary agricultural practices account for a significant share of greenhouse gas emissions. Inspired by the emergent literature on institutional entrepreneurship, we seek to explore mechanisms that affect an actor’s propensity to act in ways that imply suggesting and promoting emission-reducing practice changes. As influences originating outside the organizational field are assumed to constitute such mechanisms, the paper explores their role through a case study of a project run by a public agency. Unlike extant theory, results show that the agency’s propensity to act is not necessarily enhanced by extra-field influences but that such influences also limit the scope for suggesting change that challenges existing industrial practices.     

Complex technological capabilities in emerging economy firms: The role of organizational relationships

Formal organizational relationships are important sources for capability building in emerging economy firms eager to move up the value chain. We examine how access to valuable knowledge available to firms via organizational relationships creates learning opportunities necessary for the development of complex technological capabilities. Using a sample of 852 observations of emerging economy firms from the Indian software industry between 1992 and 2000, we find that developing strong domestic intra-organizational relationships, through affiliation with a moderately diversified business group or operating in a related industry, promote more complex technological capabilities. In the case of foreign inter-organizational relationships, we find that greater foreign client contact enhances the complexity of firm technological capabilities. However, accessing knowledge from domestic inter-organizational relationships appears to hinder the development of firm complex technological capabilities. An interesting result from our research was that having greater access to knowledge from foreign intra-organizational relationships, embedded within foreign subsidiaries, did not lead to the development of complex firm technological capabilities. The results of our study highlight that for emerging economy firms wanting to improve their complex technological capabilities, there may be diminishing benefits to learning from and acquiring knowledge available within specific types of formal organizational relationships.     

Developing new innovation models: Shifts in the innovation landscapes in emerging economies and implications for global R&D management

Over the past two decades, there has been a substantial shift in the global innovation landscape. Multinationals from developed economies are increasingly globalizing their R&D activities and are developing an “open innovation” model to source innovations from outside the firm, including from emerging economies such as those in Asia. In addition, emerging economy firms, which traditionally have played a secondary role in the global innovation landscape, have now begun to catch up in developing their own innovative capabilities. This study explores the implications of this new innovation landscape for CEOs of multinationals and emerging economy firms, as well as for international management scholars and educators. While the multinationals might appropriate rents from their existing capabilities and source new ones in emerging economies, they may be threatened by weak intellectual property rights regimes and unintended knowledge spillovers to local firms, creating potential competitors. Firms in the emerging economies can learn from and catch up with investing multinationals, but to do so they need to develop their own innovative capabilities and move from a process to a product focus and from imitation to innovation.     

A motivation and ability perspective on engagement in emerging digital technologies: The case of Internet of Things solutions

In this study, we advance two mechanisms that lead firms to engage in emerging digital technologies, namely, the dominant coalition's motivation and its ability to deploy the resources needed to pursue such motivation. Building on the performance and strategic development, and on board capital literature streams, we construe prior economic performance as a proxy of the firm's motivation, and human and social board capital as proxies of the firm's ability, analyzing their effect on adding emerging digital technologies, such as Internet of Things solutions, to the firm's resource base. Longitudinal analyses on a panel of Fortune 500 manufacturing firms between 2002 and 2012 reveal that these mechanisms highlight two important aspects of firm influence that can shape its digital technology behavior, explaining the heterogeneity and variability in firms engaging in emerging digital technologies.     

Engaging Stakeholders Through Corporate Political Activity: Insights From MNE Nonmarket Strategy in an Emerging African Market

As interest increases in the political engagement between multinational enterprises (MNEs) and emerging economy host governments, less is known about wider MNE stakeholder engagement and the development of nonmarket capabilities in institutionally fragile environments. This study investigates how MNEs engage stakeholders through corporate political activity (CPA) during the pro-market reform of Uganda's electricity generation sector. Data is collected through semi-structured interviews, archival materials and fieldwork notes, and is analyzed using an NVivo-supported grounded analytic method. We find both proactive and reactive leveraging of CPA to manage diverse stakeholders. We argue that the host government remains the most important political stakeholder in the early phases of reform, but changes in institutional and political environments necessitate strategic adaptations as the reform process progresses. These adaptations include the need for local engagement and the accommodation of multi-level stakeholder pressures. Our findings contribute to an understanding of corporate political capabilities in Africa's emerging markets, and illustrate how these capabilities can be strategically leveraged to effectively manage diverse stakeholders.     

The role of networks in early internationalizing firms: A systematic review and future research agenda

Despite considerable research, the international entrepreneurship (IE) literature lacks systematic knowledge of how early internationalizers use networks to overcome their resource deficits in different phases of internationalization. Further, a systematic guide for future research to expand the current knowledge of early internationalizers' network dynamics throughout their internationalization process is missing to date. To fill these voids, the present paper conducts a systematic review of sixty-one journal articles on the role of networks in the cross-border expansion of early internationalizing companies. We contribute to existing research by taking stock of the current state of knowledge regarding the role of networks in early internationalizing firms in different faces of internationalization. We also use the findings obtained from our review as a platform to systematically identify opportunities for future research regarding early internationalizers’ network dynamics throughout the internationalization process.     

R&D internationalization,product diversification and international performance for emerging market enterprises: An empirical study on Chinese enterprises

One motivation behind R&D internationalization for emerging market multinationals (EM MNEs) is to expand international markets. This paper analyzes whether the R&D internationalization of EM MNEs contributes to an improvement in international performance measured by foreign sales as a percentage of total sales (FSTS). Using panel data on China's listed companies, this paper introduces more scientific and normative indicators for measuring R&D internationalization in terms of geographic distribution (breadth) and overseas investment (depth). The results reveal an inverted U-shape relationship between R&D internationalization and international performance that is initially positive and eventually becomes negative. Product diversification has a significant moderating effect on the relationship between R&D internationalization breadth and international performance.     

Developing new avenues for growth: Challenges presented by five trends in the global environment

This paper documents five major trends in the global environment, and examines the impact of each on the corporate strategies of multinational firms striving for higher rates of growth in corporate earnings. The five trends documented are: 1. shifts in economic activity and growth between and within regions of the world; 2. increasing demand for goods and services among the very poor in emerging markets; 3. a faster pace and wider locus of technological innovation; 4. Increasingly global labor markets; and 5. increasingly ubiquitous and inexpensive access to information and knowledge.Each of these trends presents multinational firms with a potentially new avenue for growth, or an avenue down which they should consider moving further and/or faster. These potentially new avenues for growth are encouraging managers of multinational firms to challenge the current corporate strategies of their firms, and examine the need to reorient or renew them. The paper discusses the strategic challenges associated with these new avenues for growth, and the need for more research on the concept of country risk, on the concepts of the transnational strategy and organizational structure, and on the challenges of very limited sustainable capacity to consume among the very poor.