Awards: JIBS Decade Award

Article:

"The Impact of National Culture and Economic Ideology on Managerial Work Value: A Study of the United States and Russia"

JIBS Vol. 28 No. 1, 1997 (Download PDF - 1.9MB)

Abstract:

This study assesses the impact of economic ideology and national culture on the individual work values of managers in the United States, Russia, Japan, and China. The convergence-divergence-crossvergence (CDC) framework was used as a theoretical framework for the study, while the Schwartz Value Survey (SVS) was used to operationalize our investigation of managerial work values across these four countries. The findings largely support the crossvergence perspective, while also confirming the roleo f national culture. Implications from the findings are drawn for the convergence-divergence-crossvergence of values, as well as for the feasibility of multidomestic or global strategies for a corporate culture.

Article:

"Knowledge Acquisition from Foreign Parents in International Joint Ventures: An Empirical Examination in the Hungarian Context"

JIBS Vol. 27 No. 5, pp. 877-903, 1996 (Download PDF - 1500KB)

Abstract:

In this paper we examine organizational characteristics, structural mechanisms and contextual factors that influence knowledge acquisition from the foreign parent in international joint ventures (IJVs). We in turn relates assessments of knowledge acquisition to IJV performance. The data come from a survey of IJVs in the Hungarian context, where learning and knowledge acquisition from the foreign parent is thought to be particularly critical. Adaptation mechanism, such as capacity to learn, articulated goals, and structural mechanisms, such as the provision of training, technology and managerial assistance by foreign parents, all were positively associated with the degree to which IJVs reported acquiring knowledge from their foreign parents. We also found limited support for the belief that cultural conflicts can impede knowledge acquisition, but only two-party joint ventures with 50/50 equity arrangements. We also looked at the relationship between knowledge acquisition and different dimensions for evaluating IJV performance. The relationship between knowledge acquisition and performance was significant for all indicators of performance, through knowledge acquisition from the foreign parent and the organizational characteristic hypothesized to enhance IJV knowledge acquisition affected assessments of some dimensions of performance more than others. Our findings contribute to advancing knowledge about the relationship between organizational characteristics and organizational knowledge acquisition in IJVs, as well as relationships between knowledge acquisition and different dimension of IJVs performance.

Article:

"Revisiting Multinational Firms’ Tolerance for Joint Ventures: A Trust-Based Approach"

JIBS Vol. 26, No. 1, pp. 117-137, 1995 (Download PDF - 1385KB)

Abstract:

In spite of the increasing popularity of international joint ventures, managers express a high level of dissatisfaction with them. This paper argues that overemphasis on the outcome has resulted in a neglect of the social processes underlying the outcome. The paper elaborates upon the rationale for a cooperative approach towards interorganizational collaborative relationships based on trust, and discusses it in the context of joint ventures. This is then applied towards understanding multinational ownership preferences and tolerance for joint ventures. It is argued that trust-centered logic is largely consistent with approaches that emphasize the issue of ownership, and deepens and enriches the insights provided by the latter. A shift in focus from ownership to relational dynamics is encouraged.

Article:

"Toward a Theory of International New Ventures"

JIBS Vol. 25, No. 1, pp. 45-64, 1994 (Download PDF - 1177KB)

Abstract:

The formation of organizations that are international from inception -international new ventures- is an increasingly important phenomenon that is incongruent with traditionally expected characteristics of multinational enterprises. A framework is presented that explains the phenomenon by integrating international business, entrepreneurship, and strategic management theory. That framework describes four necessary and sufficient elements for the existence of international new ventures: (1) organizational formation through internalization of some transactions, (2) strong reliance on alternative governance structures to access resources, (3) establishment of foreign location advantages, and (4) control over unique resources.

Article:

"Knowledge of the Firm and the Evolutionary Theory of the Multinational Corporation"

JIBS Vol. 24, No. 4, pp. 625-645, 1993 (Download PDF - 1154KB)

Abstract:

Firms are social communities that specialize in the creation and internal transfer of knowledge. The multinational corporation arises not out of the failure of markets for the buying and selling of knowledge, but out of its superior efficiency as an organizational vehicle by which to transfer this knowledge across borders. We test the claim that firms specialize in the internal transfer of tacit knowledge by empirically examining the decision to transfer the capability to manufacture new products to wholly owned subsidiaries or to other parties. The empirical results show that the less codifiable and the harder to teach is the technology, the more likely the transfer will be to wholly owned operations. This result implies that the choice of transfer mode is determined by the efficiency of the multinational corporation in transferring knowledge relative to other firms, not relative to an abstract market transaction. The notion of the firm as specializing in the transfer and recombination of knowledge is the foundation to an evolutionary theory of the multinational corporation.

Article:

"Choice of Foreign Market Entry Mode: Impact of Ownership, Location And Internalization Factors"

JIBS Vol. 23, No. 1, pp. 1-28, 1992 (Download PDF - 1800KB)

Abstract:

Firms interested in servicing foreign markets face a difficult decision with regards to the choice of an entry mode. The options available to a firm include exporting, licensing, joint venture and sole venture. Several factors that determine the choice of a specific foreign market entry mode have been identified in previous literature. These factors can be classified into 3 categories: 1. ownership advantages of a firm, 2. location advantages of a market, and 3. internalization advantages of integrating transactions. An examination is made of the independent and joint influences of these factors on the choice of an entry mode. A multinomial logistic regression model is employed to test the hypothesized effects.

Article:

"Interfirm Diversity, Organizational Learning, and Longetivity in Global Strategic Alliances"

JIBS vol. 22, no. 4, pp. 579-602, 1991 (Download PDF - 1160KB)

Abstract:

Organizational theorists have correctly argued that the emergence and maintenance of robust cooperation between global strategic alliance partners is related to the diversity in the partners' characteristics. Yet previous research has failed to systematically delineate the important dimensions of interfirm diversity and integrate the dimensions into a unified framework of analysis. A multilevel typology of interfirm diversity is developed, focusing on organizational learning and adaptation as critical processes that dynamically moderate diversity's impact on alliance longevity and effectiveness.

Article:

"Firm Ownership Preferences and Host Government Restrictions: An Integrated Approach"

JIBS vol. 21, no.1, pp. 1-22, 1990 (Download PDF - 1300KB)

Abstract:

An integrated approach to explaining how multinational enterprises (MNE) select ownership structures for subsidiaries is proposed. The approach integrates 2 previously proposed approaches: 1. MNEs prefer structures that minimize the transaction costs of doing business abroad. 2. Ownership structures are determined by negotiations with the host government, and the outcome depends on the MNE's bargaining power. Statistical analysis is used to separate the effects of the 2 approaches within the integrated approach. The results support one of the more important hypotheses of the bargaining power approach, which holds that attractive domestic markets increase the relative power of host governments. The analysis does not support other hypotheses of this approach, such as those predicting that firms in marketing and research and development (R&D)-intensive industries will have more bargaining power than others. The results also show that relatively large firms and firms with high intrasystem sales are more deterred by government ownership restrictions.

Article:

"Control and Performance of International Joint Ventures"

JIBS vol. 20, no.2, pp. 235-254, 1989 (Download PDF - 1221KB)

Abstract:

Control is a critical concept for successful management and performance of international joint ventures (IJV). A review and synthesis of prior studies suggest that it is possible to distinguish 3 dimensions of IJV control: 1. the focus of control, 2. the extent of control achieved by parent firms, and 3. the mechanisms that parents use to exercise control. Most studies on IJV control have had a limited perspective on the control concept, or they have only looked at one of its dimensions. A review of the literature also suggests that the empirical evidence regarding the control-performance relationship in IJVs is still limited. A model of the study of IJV control is proposed, based on an integrative concept of IJV control that takes into account its different dimensions. It is organized around the concept of strategy. In the model, IJV performance is mainly a function of the fit among the international strategy of the parents, the IJV strategy, and the parameters of control.

Article:

The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions

JIBS vol. 19, no. 1, pp. 1-32, 1988 (Download PDF - 2009KB)

Abstract:

The eclectic paradigm of international production, a concept introduced in 1976, offers a holistic framework by which to identify and evaluate the significance of the factors influencing both the initial act of foreign production by enterprises and the growth of such production. Despite much criticism, the eclectic paradigm remains a useful and robust general framework for explaining and analyzing not only the economic rationale of international production, but many organizational and impact issues relating to multinational enterprise (MNE) activity. New theorizing, however, is likely to take a different form in the next decade due to the changing character and organization of international trade. The eclectic paradigm could contribute to these new theories by being further developed in several possible directions. Among the possible directions are: 1. a more formal modeling of the paradigm, 2. inclusion of dynamic and development aspects of international production, 3. locating the locus of decision making, and 4. examining the impact of MNE activity on home and host country economic goals.

Co-Winner:

Bruce Kogut & Harbir Singh

Article:

The Effect of National Culture on the Choice of Entry Mode

JIBS vol. 19, no. 3, pp. 411-423, 1988 (Download PDF - 1209KB)

Abstract:

An analysis of 3 kinds of entry modes -- acquisitions, joint ventures, and wholly owned greenfields (start-ups) -- finds support for the belief that national culture affects entry choice. Firm-level variables are diversification, country experience, multinational experience, and US and non-US asset size. Industry-level variables are research and development (R&D), advertising, manufacturing, and services. Country-level variables are cultural distance from the US and uncertainty avoidance. The analysis shows that, the more culturally distant from the US the nation of the entering firm, the more likely the firm will choose a joint venture. The greater the size of the US partner, the more likely the entry will be a joint venture. The more uncertainty-avoiding a culture is, the more likely it is to prefer joint venture or greenfield entry. Manufacturing firms are more likely to prefer greenfield entry. R&D-intensive firms prefer joint venture and greenfield entry.

Article:

Equity Joint Ventures and the Theory of the Multinational Enterprise 

JIBS vol. 18, no.2 1987 (Download PDF - 1052KB)

Abstract:

The internalization approach is extended to the theory of multinational enterprise (MNE) to include an expanded role for equity joint ventures (JV). Using the transaction cost paradigm of Williamson (1975), an explanation is offered of why JVs sometimes may be preferred over wholly owned subsidiaries. Under particular arrangements, the potential threats posed by opportunism and small numbers can be reduced to a point where JVs become a more efficient means of dealing with environmental uncertainty even in the face of bounded rationality. Previous research of JV performance provides support for this view. Not all JVs are necessarily unstable or unprofitable arrangements for MNEs. Beamish (1984) has demonstrated that, not only are there clearly discernible differences in the characteristics of successful and unsuccessful JVs, but these characteristics also are consistent with the predictions of internalization theory in its expanded form.

Article:

Modes of Foreign Entry: A Transaction Cost Analysis and Propositions

JIBS vol. 17, no.3, pp. 1-26, 1986 (Download PDF - 2689KB)

Abstract:

When a firm seeks to perform a business function outside its domestic market, it must first choose the best ''mode of entry'' into the foreign market. Entry modes differ greatly in advantages and drawbacks. Because the trade-offs involved are difficult to evaluate, a transaction cost framework is proposed for investigating the entry mode decision. The theory is specifically concerned with maximizing long-term efficiency. The framework provides a theoretical basis for systematically interrelating the literature into propositions. It also provides propositions about interactions that resolve the apparently contradictory arguments advanced to date. The feasibility of clustering 17 entry modes into the degree of control the mode provides the entrant is illustrated. It is concluded that the most appropriate entry mode is a function of the trade-off between control and the cost of resource commitment.