Strategic Alternative Responses to Risks of Terrorism

The terrorist acts of September 11, 2001 were a wake‐up call for changing our traditional response to risks of terrorism. Given that government and worldwide think‐tank organizations maintain that risks of terrorism will continue for the indefinite future, the following questions deserve strategic answers. How long can we respond to terrorism with tactical measures only, sustain current curtailments of some of our freedoms, travel, and quality of life, and absorb losses in human life and properties? Should not underlying strategic motivation lead to the tactical measures? Why do so many groups and individuals in some developing countries hate us? Is it because they fear that the ideas we export through television, movies, literature, and music have a corrupting influence on their cultures? Is it because of past operations that we conducted in such countries as Iran, Nicaragua, El Salvador, and Granada? Can the genesis of the risks of terrorism to the homeland be traced to the unfavorable socioeconomic conditions in less‐privileged and developing countries, where civil and religious freedoms are close to nonexistent, and sanitary conditions, health and education, and critical infrastructures of essential utilities are almost at the same level that existed in the United States almost a century ago? If we could make progress at improving the quality of life of the billions of people in the developing countries and become more sensitive to their needs, cultures, and heritage, would their hatred subside? What other measures can we take to reduce their hatred, without compromising our basic cultural and democratic principles or their cultural and social heritage?     

The impact of national culture on negotiating behaviors across borders

Recent declines in American competitiveness and the increasing globalization of American business underscore the importance of one's culturally-based negotiating ability in international business transactions. This paper examines the impact of cultural dimensions on negotiating effectiveness on three levels: the role of a single dimension of culture, the interactive effects between multiple dimensions of culture, and the degree of cultural compatibility between negotiating parties. Two existing models of negotiation are integrated, outlining the critical importance of culture in each stage of effective international business negotiations. The integrated model is then applied to the cultures of eleven nations. Propositions and suggestions for future research are provided.An earlier version of this paper was presented at the Academy of International Business Conference. The authors wish to thank two anonymous AIB reviewers and session participants at the AIB meeting for their constructive comments concerning the paper.     

Zombies and Originals: How Cultural Theory Informs Stakeholder Management

The question of stakeholder salience has recently resurfaced in the suggestion that the ethical foundations of corporate cultures result in stakeholder cultures that largely explain how firms allocate resources among stakeholders. The present article seeks to complement this novel approach to understanding stakeholder management by adding insights from the multilevel influences that create the corporate culture in the first place, and ultimately affect managers in their stakeholder decisions. This article draws on cultural theory to examine how the individuals who compose firms present group and grid solidarity that results in cultural biases in the corporate culture. These cultural biases—individualism, hierarchy, fatalism, and egalitarianism—are then paired with the stakeholder cultures they enable, and inferences are extracted concerning the salience managers are likely to accord to various classes of stakeholders as a result. Future research and managerial implications stemming from this new view on stakeholder management conclude this article.     

Are national levels of employee harassment cultural covariations of climato-economic conditions?

Conflict in a workgroup turns into harassment if a group member is persistently confronted with negative acts with few possibilities to retaliate. Cross-national differences in such intragroup harassment are considerable but wait to be understood. In this study, survey data from 44,836 employees in 44 countries revealed that a cultural in-group orientation was associated with lower employee harassment. In addition, and in agreement with Van de Vliert's climato-economic theory of culture, workforces reported more harassment in poorer countries with more demanding climates of colder-than-temperate winters, hotter-than-temperate summers, or both. Finally, it was found that the impact of climato-economic hardships on harassment suppressed the impact of cultural in-group orientation on harassment. Using the regression equation obtained for the sample of 44 countries, national levels of employee harassment for a broader pool of 103 countries were estimated and scrutinized for their validity for future research. Data from the World Values Surveys were used to validate the estimations. The results provide the basis for a further hypothesis, that employee harassment is more prevalent in countries with either survival or self-expression cultures than in countries with cultures that are intermediate between those two extremes. The results have implications for prevention and remedial measures.     

Cross-border M&As: The impact of cultural friction and CEO change on the performance of acquired companies

This study analyzes the impact of cross-border mergers and acquisitions (M&As) on the performance of target firms. Based on institutional theory, we hypothesize that performance deteriorates because of a lack of legitimacy, particularly when there is friction between the two national cultures and a higher risk of clashes between organizational cultures. We test our assumptions using an original dataset to compare the performance of Italian firms involved in inward cross-border M&As with that of continuing local firms that have a similar ex-ante likelihood of being merged or acquired. We apply coarsened exact matching (CEM) to establish the control group and a difference-in-differences (DID) approach to account for the possibility that target companies produce superior results simply because foreign investors “cherry-pick” the best-performing firms. Contrary to predictions, we find that foreign ownership does not deteriorate growth but enhances the profitability of target firms compared to purely domestic companies. In addition, we illustrate that the latter result remains applicable when cultural frictions between national cultures are high and when the CEO of the target company is replaced or joined by a new CEO after the deal.     

基于知识整合的企业进入模式研究

中国企业进入技术发达国家时往往采用收购模式,以满足技术学习的需要.基于相关文献,指出了这种进入模式存在的问题,并建立了ECKT模型.结合京东方集团收购韩国HYDIS公司的案例,分析了双方的战略动机和冲突演化,并归纳出其中的典型事件.在此基础上,分析了文化冲突和知识整合对收购过程的影响,提出了以动态观点建立低风险进入模式的重要性.     

Managing the new global workforce:: Fostering diversity, forging consistency

As a result of rapid foreign investment, many multinational firms now have workforces that are spread across continents and countries, and that include an increasingly complex blend of cultures and nationalities. Their challenge is to capture the benefits of a diverse workforce while also forging necessary consistency around the world. This article explores the concepts of diversity and consistency as they apply to multinational firms, and draws on examples from several leading multinationals to suggest how firms can better manage their global workforces.     

Liability of foreignness and membership in a regional economic group: Analysis of the European Union

This study examines the performance of foreign vs. domestic firms in a regional economic group. In particular, we focus on host country and foreign-owned firms in the European Union. Results provide evidence of a liability of foreignness—foreign-owned firms underperform host country firms. However, there is also evidence that liability of foreignness can vary across countries, and that foreign firms can overcome the liability of foreignness in some host countries, even industrialized ones. The results show the moderating effects of the host country and home country environments on the relative performance of foreign firms. Lastly, the results reveal that foreign-owned banks from highly competitive home countries underperform foreign firms from less competitive home countries.     

Blunders in international marketing: Fact or fiction

Popular literature on international marketing gives the impression that U.S. firms are insensitive, lack understanding of the unique socio-political, cultural and trade environments of foreign markets, and are probably blundering all the time. Is this really so? To find an answer to this question, this article reports the results of the study that was conducted to verify some of the more publicized blunders in international marketing.     

The Effect of Language Differences and National Culture on Operational Process Compliance

With increasing frequency, firms are locating their operations in disparate countries with distinct national cultures and languages. This study develops and empirically tests hypotheses relating an operation's process compliance performance to (1) the presence of a language difference between the location of the operation and that of headquarters and (2) the national culture of the location of the operation and that of headquarters. Employing an international sample of pharmaceutical manufacturing plants located primarily in Western nations, the analysis reveals that a language difference between the location of a plant and the firm's headquarters is consistently related to decreased process compliance at the plant level. Regarding national culture, only limited evidence of a direct relationship between national cultural dimensions (at either the plant or headquarters location) and process compliance exists. However, the analysis does suggest that cultural congruence between the location of the plant and that of headquarters can relate to improved compliance performance. Such a relationship depends on the specific national cultural dimension studied. While these results are obtained in a specific manufacturing setting, they potentially have implications for process compliance in any global operation.     

Cross-national differences in firms undertaking innovation initiatives: An application of institutional anomie theory

In this study, we seek to explain why firms' innovations vary across countries. Drawing on institutional anomie theory (IAT), we test cross-level hypotheses related to firm innovation. Specifically, we apply the fundamental tenets of IAT to argue that innovation is an outcome of positive deviance. Further, we posit that some social institutions (e.g., education, polity) may moderate the relationships between extant cultural dimensions such as achievement, uncertainty avoidance, and in-group collectivism and innovation. To empirically explore these possibilities, we leverage data from 26,859 firms in 27 countries. Through the use of Hierarchical Linear Modeling techniques, we reveal significant interaction effects of in-group collectivism and education, uncertainty avoidance and political stability, and in group-collectivism and political stability on cross-national levels of innovation. Finally, we discuss the theoretical and practical implications of this research and describe avenues for future scholarship in this area.     

The Boundary Spanning Effects of the Muslim Diaspora on the Internationalization Processes of Firms from Organization of Islamic Conference Countries

While scholarly attention to the role played by diasporans in facilitating cross-country trade has recently increased, the implicitness of this phenomenon has prevented many researchers from examining empirically how these processes actually work. Unlike previous studies that focus on diasporans from specific countries of origin, we take a different perspective on diasporans by looking beyond country boundaries. We focus on religious/cultural groupings, specifically on Muslim diasporans living in the West. We utilize a phenomenological driven qualitative research approach to investigate the effects of Muslim diasporans on the internationalization processes of firms from Organization of Islamic Conference countries in the context of the halal industry. Our exploratory study provides some evidence for (1) the boundary spanner roles played by Muslim diasporans within the halal industry across more than dyadic country contexts and (2) for Rahnema's (2006) triple identity theory.     

Ethics and human resource management and development in a global context: case study of an Indian multinational

A firm's orientation to ethics is influenced largely by its national and organizational culture. Research shows that a growing number of Indian firms place a distinct emphasis on long-term orientation to business strategy with a social mission, underpinned by firm commitment to core organizational values, employee development and welfare. Through a case study of a large Indian multinational conglomerate, this article provides preliminary evidence of how some emerging economy firms are successfully mixing and matching indigenous business and people management strategies with the Western emphasis on meritocracy and professionalism to compete in the contemporary global economy. It further shows how the human resource development (HRD) discipline can play a pro-active role in embedding ethics and values throughout the organizational and HR architecture. The HRD professionals in the case study firm also face several structural and cultural challenges in discharging their ethics-driven HR mandate, such as management's ethnocentric attitude to global staffing and clash of work cultures.     

It’s all about culture! Institutional context and ownership concentration across Europe

It is widely recognised that the formal institutional context affects firm ownership concentration. However, the impact of the informal institutional context has received less research attention. Drawing from institutional theory, we tested our hypothesis that both the formal and informal (cultural) institutional contexts simultaneously influence firm ownership concentration. Based on a firm-level database of the largest 600 listed companies in 19 European countries for the period 2009–2015, we found that both formal and informal institutional contexts, considered independently from each other, affect the level of firm ownership concentration. However, when these institutional contexts are considered together, the significance of the formal institutional context's effect on ownership concentration disappears while the informal (cultural) institutional context remains significant. Specifically, our findings indicate that high power distance, collectivism, uncertainty avoidance, restraint, and short-term orientation favour firm ownership concentration. Overall, our findings demonstrate that the diversity in European cultures explains firms' different levels of ownership concentration across European firms, signalling that the European Union's efforts towards a common regulatory frame may not necessarily lead to a convergence of European firms' ownership structures and, consequently, of corporate governance practices.     

信息化建设、供应链信息分享与企业绩效——基于中国制造业企业的实证研究

信息化建设是现阶段国家和企业都难以回避的问题,本文建立信息化建设-信息分享-企业绩效的分析框架,从信息传递的视角探讨信息化建设对企业绩效的影响机理,认为企业的信息化建设能够通过促进供应链上下游企业之间的沟通,带来更好的企业绩效。以我国制造业企业为样本进行的实证研究表明,企业信息化设备建设投入以及网站的建立能够促进其与供应链上下游企业有关需求、库存、产量等信息的分享,并通过这些有价值信息的分享推动企业绩效提升。进一步的分析表明,信息化建设使得信息分享在支持企业业务活动和提升企业绩效方面的效果更加显著。     

Similarity,Isomorphism or Duality? Recent Survey Evidence on the Human Resource Management Policies of Multinational Corporations

There is considerable debate as to the determinants of the human resource policies of human resource management: do they reflect national institutional or cultural realities, emerging common global practices, parent country effects or the dual effects of transnational and national realities? We use an extensive international database to explore these differences, assessing variations in a range of human resource practices. We find new evidence of national differences in the manner in which indigenous firms manage their people, but also evidence of a similarity in practice amongst multinational corporations. In other words, multinational corporations tend to manage their human resources in ways that are distinct from those of their host country; at the same time, country of origin effects seem relatively weak. Whilst there is some evidence of common global practices, sufficient diversity in practice persists to suggest that duality theories may provide the most appropriate explanation.     

International venture capital research: From cross-country comparisons to crossing borders

Venture capital (VC) has become an international phenomenon, and VC firms are a specific kind of service firm whose characteristics have distinctive implications for international behaviour. There is now a disparate body of research on international aspects of VC across a number of disciplines comprising finance, economics, strategy, entrepreneurship, international business and economic geography. A novel aspect of this paper is that we review and synthesize this disparate literature. A number of research gaps and limitations in the theoretical and methodological approaches involved in previous studies are identified and suggestions made for further research. We show that the vast majority of the literature relates to cross-country comparisons; that is, macro-level comparisons of VC industries across different countries and micro-level comparisons of VC behaviour across countries. From our review of the literature, we argue that an under-researched area concerns the influence of institutional contexts, especially the role of social networks and cultures. Furthermore, our review of the literature indicates that there is a major research gap in relation to work dealing with the crossing of country borders by VC firms. We suggest that resource-based, capabilities, institutional and network theories may be offer insights to further our understanding of the behaviour of VC firms in this area.     

Top Management's Transformational Leader Behaviors and Innovation Orientation: A Cross-Cultural Perspective in Eight Countries

This study builds upon the established relationship between top management's transformational leadership and firm-level innovation. It extends current research by determining how specific transformational-leader behaviors influence the firm's innovation orientation and how national culture moderates this relationship. The study examines these behaviors empirically in 954 firms from eight countries. Findings reveal that six transformational-leader behaviors positively influence innovation orientation but with differing levels of intensity. Only two of these relationships, “providing an appropriate model” and “accepting group goals,” are culturally independent, while the other behaviors' effects tend to be culturally dependent. For example, “providing intellectual stimulation” has a stronger effect in collectivist cultures, cultures with high power distance, and low uncertainty-avoidance cultures than in other cultures. Similar culture-dependent findings emerge for other leader behaviors.     

Conflicting Subcultures in Mergers and Acquisitions: a Longitudinal Study of Integrating a Radical Internet Firm into a Bureaucratic Telecoms Firm

Media and telecommunications companies face the problem of how to integrate diametrically opposite radical internet firms after acquisition. Extant mergers and acquisitions (M&A) studies report that differences in the organizational culture are important in the cultural integration process. Frequently, M&A research assumes organizational cultures to be homogeneous and unified, but a large body of organizational literature suggests that organizations should be understood as heterogeneous living worlds in which employees construct their own subcultures. The paper focuses on the question of how such subcultures affect the long‐term cultural integration of merged firms. A 12‐year longitudinal field study in the Netherlands examined the integration of iPioneer into Telcom. The findings of the study show how three subcultures in iPioneer influenced the cultural integration process. The paper makes a contribution to the academic debate on cultural integration in domestic M&A by acknowledging that the numerous coexisting subcultures influence cultural integration in the complex process of post‐acquisition integration.     

Distribution system choice in a service industry: An analysis of international insurance firms operating in the United States

Service firms play an increasingly important role in the global economy. However, the internationalization strategies of such firms, and especially their distribution system choices, have been underexplored in the international management literature. One specific service industry that has internationalized rapidly in recent years is the insurance industry. This paper examines the determinants and performance implications of the choice by international insurance firms between two rival distribution systems: direct writing and independent sales agents. Drawing on the transaction cost theory-based literature on resource commitment, control, and risk, we develop hypotheses on the determinants of the choice between these two distribution systems and on the performance implications of this choice for insurance firms. Analyzing a sample of 168 distribution entries into the United States by insurance firms from six foreign countries over the 1992–2000 period, we find that cultural distance has a U-shaped effect on the probability of direct writing, and that an insurer's intangible assets have a positive effect on this probability. We also find that the direct writing system performs better in terms of profitability, but that the independent agency system performs better in terms of market share growth.