Top management teams within multinational corporations: Effects of cultural heterogeneity

This research examined the relationship of cultural heterogeneity with team and organizational performance, as mediated by selected aspects of group processes. The study was done with top management teams (TMTs) in international subsidiaries of multinational corporations (MNCs). It was found that cultural heterogeneity within the TMT is positively related to both the level of issue-based conflict the team experiences and to TMT performance. The TMT performance and the subsidiary's performance were positively related. Issue-based conflict affected negatively TMT performance but had a positive effect on subsidiary performance. The hypothesis that cultural heterogeneity would be negatively related to TMT cohesion was not supported. The results provide general support for the importance of cultural heterogeneity for the functioning of TMTs and their international subsidiaries.     

Culture and cross-functional coopetition: The interplay of organizational and national culture

Scholars now recognize coopetition—the joint occurrence of cooperation and competition—between functional units as an important factor for a firm's learning and performance. We know little, however, about the drivers of cross-functional coopetition and in particular the roles of organizational culture and national culture. This study introduces cross-functional coopetition to the international management literature by illuminating the cultural antecedents of cross-functional coopetition. Specifically, we develop a cross-cultural model to analyze the influence of organizational and national culture on cross-functional coopetition. Drawing on a dataset of 646 companies from seven countries, we theoretically advance and empirically validate the influence of organizational culture and the moderating role of individualism and uncertainty avoidance on cross-functional coopetition. Organizational cultural dimensions directly enhance cross-functional coopetition. Furthermore, strong social values of individualism and uncertainty avoidance weaken the relationship between organizational culture and cross-functional coopetition. This study provides a novel perspective on how organizational culture can represent a strategic resource by illuminating the cultural mechanisms that influence coopetition within the firm.     

Hofstede's cultural dimensions in the GCC countries: An empirical investigation

Managerial values are not the same across the world. Therefore, Multinational Corporations may be making costly decisions if they assume that corporate policies will receive the same attention, understanding or acceptance in their branches over the world. This paper applies Hofstede's four cultural dimensions to the Gulf Cooperation Council (GCC) countries. It also compares Hofstede's results with regard to these four cultural dimensions with our findings. The results of this study show that countries change. They reemphasize the concept that ethnocentric management theories have been untenable. This implies the necessity that Multinational Corporations should study the culture of the country they plan to do business with before starting the negotiations process that precedes the operations in that country and also to monitor changes in the life style of these countries over time. When Multinational Corporations become aware of the international workforce management and the differences between different cultures, they will save themselves costly troubles, loss of qualified personnel as well as loosing international customers. Therefore, it is important for Multinational Corporations to utilize management theories available to them through research and experience.The program leading to this article was supported in part by a grant from KFUPM.     

Cross-cultural influences on organizational learning in MNCS: The case of Japanese companies in China

This paper draws on the social construction perspective and on social learning theory to examine the cross-cultural influences on organizational learning in MNCs. Social learning theory suggests that constructive engagement and member solidarity are key constituents of organization-based collective learning. Literature suggests, however, that cross-cultural differences in assumptions about social participation by organization members may impair organizational learning. The paper also reports a qualitative study, conducted at five Japanese-invested manufacturing companies in the Pearl River Delta, China. The research found that managers perceived Chinese frontline workers as lacking constructive engagement and member solidarity as compared with their Japanese counterparts, thus limiting organizational learning, and attributed these perceived differences to deep-seated cultural values. Attempts in two of the companies to ‘Japanize’ the workforces were reported to have had some impact, but appeared not to have substantially changed this picture. Urging caution regarding cross-cultural stereotyping and home country bias, we consider the implications for organizations with international manufacturing operations.     

外来者劣势与国际并购绩效研究

基于外来者劣势和组织学习理论,从外来者劣势的固有来源合法性缺失和信息不对称两个维度出发,分析外来者劣势对跨国企业国际并购绩效的影响,探索种群密度、文化交流、股权比例和企业年龄4个情境因素的调节作用,构建外来者劣势与国际并购绩效关系的概念模型,选取2004年至2010年中国企业国际并购事件为样本,利用SPSS软件进行大样本实证检验。研究结果表明,合法性缺失和信息不对称导致的外来者劣势对国际并购绩效产生显著的负向影响,种群密度、文化交流和企业年龄皆能显著弱化信息不对称对国际并购绩效的负向影响,股权比例越大则越强化信息不对称对国际并购绩效的负向影响。从提高目标国选取的合理性、考量东道国环境、采取内部股权治理战略和平衡组织学习模式等角度给出降低外来者劣势进而提高国际并购绩效的管理启示。     

Investment attributes and learning from failure in foreign direct investments

This study examines the learning effect of multinational enterprises' (MNEs) failure experience in foreign direct investment (FDI). We also examine the contingent effects of two key investment attributes: cultural distance between the host countries and the MNE's home country and entry mode. Using a longitudinal dataset of Korean foreign direct investments during 1990–2011, we find that an MNE's prior FDI failure experience is negatively related to the failure likelihood of a focal subsequent FD, indicating a learning effect of FDI failure experience. Our results show that this learning effect weakens, as the cultural distance between the host countries of prior failed FDIs and South Korea, or the joint venture percentage among prior failed investments increases; however, those interaction effects become insignificant when a focal subsequent FDI is in a culturally different country, or a JV. This study enriches the literature on learning from failure and research on experiential learning in FDI by demonstrating the boundary conditions of the learning effect of the FDI failure experience of MNEs.     

Unravelling Learning within Multinational Corporations*

This article explores the impact of institutional variation on the extent to which subsidiary firms learn from multinational corporations. Learning is conceptualized here as consisting of two aspects: knowledge flow and reinforcement of or change in routines to incorporate the behaviourist assumptions of learning into the international business field. The research is based on in‐depth case studies that systematically compare the ways in which parent company knowledge diffuses to Polish, Turkish, Italian and German subsidiary firms in the chemical industry. The findings show that even though firms face the same global pressure to integrate and pursue the same international strategy, their learning outcomes are not the same. There is heterogeneous learning as a result of differences in the institutional context of home countries. Where institutional structures are not favourable to learning, the proactive or reactive orientation of actors to identifying future needs and modifying existing schemata – which highlight the importance of human agency – is significant in explaining learning.     

Cultural values and innovation: The mediating role of entrepreneurial learning capacity

Although both cultural values and innovation are widely acknowledged as collective embodiments of individual values and assets, little is known about the mechanisms through which cultural values influence the likelihood of innovation by some entrepreneurs rather than others. We argue that institutional pressures arising from cultural values affect entrepreneurial learning capacity which in turn impacts innovation activities. Our multi-level analysis of entrepreneurs from 19 countries between 2006 and 2011 suggests that entrepreneurial learning capacity serves as a mediator through which entrepreneurs maximize the innovation-related benefits of cultural values to their businesses.     

Learning and Knowledge Transfer in Africa-China JVs: Interplay between Informalities,Culture, and Social Capital

This study examines 29 Africa-China JVs from 12 African countries to explore the ways in which African partners gain knowledge and learn from their Chinese counterparts. Based on the perspectives of social capital, cultural difference, and informalities, we analyze the strategies, behaviors, and tactics employed by Africans both at the individual and at the organizational levels to gain knowledge within JVs. By using a multiple case study method with semi-structured interviews, we find that African partners actively take advantage of multiple cultural and social capital-related factors to support learning. Africans often use informal, even clandestine, mechanisms to manage cultural differences and build trust in order to gain knowledge. Theoretically, the structural, relational, and cognitive aspects of social capital are found to be important in exploiting opportunities through informal actions and the creation of informal contexts more conducive to learning and knowledge transfer. The presented findings provide new insights into knowledge-seeking JVs, particularly in the Africa-China context, because they propose a not-yet-explored perspective that explains learning through the exploitation of informalities.     

International offshoring of services: A parity study

Conventional wisdom suggests that firms engage in international offshoring of services primarily to reduce wage costs associated with a given service activity. Drawing on international business research on the costs of doing business abroad (CODBA), liability of foreignness (LOF), and institutional theory, we investigate the factors that contribute to the location choices for services offshoring activity, including wage differentials between the home and host countries. We find that consistent with a parity perspective but contrary to conventional expectations, a country is more likely to be a destination of services offshoring as the average wage of a country increases. We also find that education level and cultural similarity are significant drivers of offshoring location choices, again consistent with a parity perspective. This study contributes to debates about the economic impact of services offshoring by showing that firms locate offshoring facilities in destinations that are closer in wages to the home country and those with higher education levels and cultural similarity.     

Culture as a consequence: A multi-level multivariate meta-analysis of the effects of individual and country characteristics on work-related cultural values

Culture as a consequence is a neglected topic. Addressing this, we explore what factors are related to and potentially shape culture, what explains cultural variations within countries, and what the relationship is between cultural values at the individual and national levels. To answer these questions, we use a multi-level multivariate meta-analysis of 508 studies. The findings indicate that national and individual cultural values may be determined by the micro characteristics of age, gender, education, and socio-economic status as well as the macro characteristics of wealth and freedom. This provides a basis for explaining cultural change, both at the individual and national levels. Also, up to 90% of the variance in cultural values is found to reside within countries, stressing that national averages poorly represent specific individuals.     

The antecedents of psychic distance

This study investigates the antecedents of psychic distance. Building on original data in 25 of the world's largest economies, we investigate potential drivers of perceived psychic distances to foreign countries. The results show these perceptions to be influenced by a range of cultural, geographic, political and economic factors. Among these, absolute geographic distance accounts for the largest share of the explained variance, suggesting that physical distance should be given a more prominent role when it comes to empirically investigating international business decisions for which psychic distance perceptions may be important. The findings also suggest that, used in isolation, ‘cultural distance’ – as measured by the so called Kogut and Singh index – is a poor predictor of such perceptions.     

THE WELFARE GAINS OF FINANCIAL LIBERALIZATION: CAPITAL ACCUMULATION AND HETEROGENEITY

Research has shown that, absent individual heterogeneity and under complete markets, the welfare impact of financial openness is quantitatively limited. Not only are inequalities in wealth and labor productivity a feature of most societies, but also financial markets suffer from many well‐known frictions. This paper demonstrates that, when households face borrowing constraints and uninsurable idiosyncratic shocks to income, the welfare implications of financial liberalization are considerable. For instance, the average increase in welfare of a typical emerging market economy that switches from a closed capital market to perfect capital mobility is equivalent to a permanent increase in average consumption of roughly 5.4%. This is about 3.9 times more than the welfare gains of the same policy under a complete markets environment without any individual heterogeneity. We show that individual heterogeneity accounts for two thirds of this additional increase in the average welfare gain; market incompleteness accounts for the remaining third. In our calibration, the median household in capital‐scarce countries is in favor of international financial integration. However, if the pivotal voter is wealthy enough then such reform might not be implemented, since richer households have a vested interest in capital market closedness.     

Knowledge recontextualization by returnee entrepreneurs: The dynamic learning perspective

Effective knowledge recontextualization is key to successful knowledge transfer in cross-cultural context. This paper explores how returnee entrepreneurs in Vietnam learn to recontextualize their overseas knowledge while establishing new ventures back in their home country. Our dynamic learning process model suggests that (1) in the pre-founding phase, an interactive vicarious learning and intuitive learning mechanism enables returnees to make sense of overseas knowledge; (2) during the founding phase, blended learning mechanism – the balancing act between market response versus market imposing - helps returnees manage the paradoxical cross cultural tension, importantly (3) in the growth phase, the cycling between unlearning and relearning helps them discard, select and recreate new knowledge in the pursuit of sustainable entrepreneurial growth. The study advances the literature on knowledge recontextualization by clarifying key underpinning learning mechanisms essential for ensuring “effectiveness” outcomes. It also contributes to the work on returnee entrepreneurship and entrepreneurial learning by demonstrating how international entrepreneurs learn overtime to thrive in a conflicting cultural context.     

COMMON COMPONENTS OF RISK AND UNCERTAINTY ATTITUDES ACROSS CONTEXTS AND DOMAINS: EVIDENCE FROM 30 COUNTRIES

Attitudes towards risk and uncertainty have been indicated to be highly context‐dependent, and to be sensitive to the measurement technique employed. We present data collected in controlled experiments with 2,939 subjects in 30 countries measuring risk and uncertainty attitudes through incentivized measures as well as survey questions. Our data show clearly that measures correlate not only within decision contexts or measurement methods, but also across contexts and methods. This points to the existence of one underlying “risk preference”, which influences attitudes independently of the measurement method or choice domain. We furthermore find that answers to a general and a financial survey question correlate with incentivized lottery choices in most countries. Incentivized and survey measures also correlate significantly between countries. This opens the possibility to conduct cultural comparisons on risk attitudes using survey instruments.     

多人从经验中学习模型研究：基于信息和分析方法的异质性视角

多人从经验中学习时,常常出现由于不同个体掌握的信息和分析方法不同,而导致的学习效率低的现象。基于时空理论,本文分析了多人从经验中学习时的信息异质性和分析方法异质性,并构建了信息结构异质性和信息内容异质性的桥梁结构,以及分析方法集。本文还对导致信息和分析方法错误的因素和对应的解决方法进行了阐述。进一步地,本文构建了基于信息和分析方法的异质性视角的多人从经验中学习过程机制模型,认为在可用的资源的制约下,多人可以通过“清洗”和“清除”信息和分析方法来提高信息真实性和分析方法可用性,通过“寻找”提高信息和分析方法的完整性,以达到学习目标的具体要求,从而提升学习效率,并列举了一些实践工具。本文从信息和分析方法的异质性视角出发,对多人从经验中学习时可能遇到的问题和解决方法进行探索,为提升学习效率提供理论依据和实践建议。     

Subjective machines: Probabilistic risk assessment based on deep learning of soft information

For several years machine learning methods have been proposed for risk classification. While machine learning methods have also been used for failure diagnosis and condition monitoring, to the best of our knowledge, these methods have not been used for probabilistic risk assessment. Probabilistic risk assessment is a subjective process. The problem of how well machine learning methods can emulate expert judgments is challenging. Expert judgments are based on mental shortcuts, heuristics, which are susceptible to biases. This paper presents a process for developing natural language-based probabilistic risk assessment models, applying deep learning algorithms to emulate experts’ quantified risk estimates. This allows the risk analyst to obtain an a priori risk assessment when there is limited information in the form of text and numeric data. Universal sentence embedding (USE) with gradient boosting regression (GBR) trees trained over limited structured data presented the most promising results. When we apply these models’ outputs to generate survival distributions for autonomous systems’ likelihood of loss with distance, we observe that for open water and ice shelf operating environments, the differences between the survival distributions generated by the machine learning algorithm and those generated by the experts are not statistically significant.     

Where Do We Go from Here?: Globalizing Subsidiaries Moving Up the Value Chain

This paper studies the international expansion of local subsidiaries of multinational enterprises (MNEs). The main questions asked are why and how MNEs' local subsidiaries in developing economies undertake international expansion. Drawing from the global value chain (GVC) perspective, I argue that local subsidiaries that were initially established to undertake production activities for export-oriented industries do not want to remain at the lowest-value-added position forever. They therefore undertake initiatives to get out of that position. The literature on initiative-taking subsidiary has predominantly focused on them becoming centers of excellence via R&D and innovation in the host country. I propose a different route of local subsidiary upgrading via foreign direct investment in more advanced countries. This strategy helps not only to gain internal prominence within the MNE network, but also to improve its external position within the GVC vis-à-vis the lead firms. The paper uses an in-depth case study of a Thai subsidiary of a Taiwanese electronic MNE to explore the transformation of the subsidiary from simply manufacturing for exports to becoming a strategic international expansion arm for the parent MNE.     

Is experience valuable in international strategic alliances?

This study investigates whether firms benefit from prior alliance experiences as they undertake international strategic alliances. Different from previous studies that mostly focus on equity joint ventures, this study investigates non-equity alliances. This specific investigation is essential, because the complexity and uncertainty associated with such alliances potentially magnify the benefits of experiential learning. With a sample of 629 international, non-equity alliances formed by US firms, our results confirm the contribution of ISA experience in general, as well as that of experience specific to partner's country of origin and alliance activity type. The results also reveal a contingent benefit of ISA experiences, where experience of technological cooperation and experience with alliance partners from emerging countries both add more to firm value. We derive consistent evidence, as performance is assessed either by the market's perception of ISA value creation, or by the post announcement operating earnings in practice.     

Researching the Roles of Internal-change Agents in the Management of Organizational Change

There has been relatively little empirical research on the roles played by internal-change agents in the processes of developing and managing organizational and cultural change, or on their learning needs. There is a particular dearth of research on these issues in the public-service sector. This paper discusses an innovative methodology for studying the work of internal-change agents within local government. It describes an action-research project, the learning laboratory, which the authors piloted with a small group of senior managers involved in developing programmes of corporate organizational and/or cultural change in their own local authorities. Using a variety of action-research and action-learning techniques within the laboratory, together with before and after interviews with the participants and their line managers in their authorities, the project was able to explore the roles, perceptions and learning needs of these internal-change agents. The research makes a contribution to the study of internal-change agents in their organizational context, and draws attention in particular to the implications for change agents of the political context of public-service organizations. The value of the learning-laboratory methodology for assessing the learning needs of internal-change agents is also assessed.