Table Of ContentISBN 978-3-409-12447-8 ISBN 978-3-322-90995-4 (eBook)
DOI 10.1007/978-3-322-90995-4
Journal of International Business
Special
Issue
2 2003
Management
International Review
Niels G. Noorderhaven (Guest Editor)
Can Multinationals Bridge the Gap Between Global
and Local?
Guest Editor's Introduction
Manuel Becerra/Juan Santal6
An Empirical Analysis of the Corporate Effect in MNCs
Alfredo J. Mauri/Rakesh B. Sambharya
Performance Implications of Global Integration
Niels G. Noorderhaven/Anne-Wil Harzing
Country-of-origin Effect in MNCs
Peter J. Buckley/Jeremy Clegg/Hui Tan
Knowledge Transfer in China
Fiona Moore
Branch/Head Office Relations in a Financial MNC
D 21247 GABLER
EDITORIAL BOARD
Professor Raj Aggarwal, Kent State University, Kent - U.S.A.
Professor Jeffrey S. Arpan, University of South Carolina, Columbia - U.S.A.
Professor Daniel van Den Bulcke, Universiteit Antwerpen - Belgium
Professor John A. CantweIl, University of Reading - United Kingdom
Professor S. Tamer Cavusgil, Michigan State University, East Lansing - U.S.A.
Professor Frederiek D.S. Choi, New York University - U.S.A.
Professor Farok Contractor, Rutgers University, Newark - U.S.A.
Professor John D. Daniels, University of Miami, Coral Gables - U.S.A.
Professor Peter J. Dowling, University of Canberra -Australia
Professor Santiago Garcia Echevarr!a, Universidad de Alcala de Henares, Madrid - Spain
Professor Lawrence A. Gordon, University of Maryland, College Park - U.S.A.
Professor Sidney J. Gray, University of New South Wales, Sydney - Australia
Professor Geir Gripsrud, Norwegian Sehool of Management, Sandvika - Norway
Professor Jean-Fran~ois Hennart, Tilburg University -The Netherlands
Professor Georges Hirsch, Centre Franeo-Vietnamien de Formation a la gestion, Paris - France
Professor Neil Hood, University of StrathcJyde, Glasgow - United Kingdom
Professor Andrew Inkpen, Thunderbird, The American Graduate School of International
Management, Glendale - U.S.A.
Professor Eugene D. Jaffe, Bar-Ilan University, Ramat-Gan - Israel
Professor Erdener Kaynak, Pennsylvania State University, Middletown - U.S.A.
Professor Yui Kimura, University of Tsukuba, Tokyo -Japan
Professor Michael Kutsehker, Katholische Universität Eiehstätt, In goI stadt - Germany
Professor Reijo Luostarinen, Helsinki School of Economics - Finland
Professor Klaus Macharzina, Universität Hohenheim, Stuttgart - Germany
Professor Roger Mansfield, Cardiff Business School-United Kingdom
Professor Mark Mendenhall, University of Tennessee, Chattanooga - U.S.A.
Professor Rolf Mirus, University of Alberta, Edmonton - Canada
Professor Michael H. Moffett, American Graduate School, Phoenix - U.S.A.
Professor Krzysztof Y. Obloj, University of Warsaw - Poland
Professor Lars Oxelheim, Lund University - Sweden
Professor Ki-An Park, Kyung Hee University, Seoul - Korea
Professor Robert D. Pearce, University of Reading - Uni ted Kingdom
Professor Lee Radebaugh, Brigham Young University, Provo - U.S.A.
Professor Wolf Reitsperger, Universität Hamburg - Germany
Professor Edwin Rühli, Universität Zürich - Switzerland
Professor Alan M. Rugman, Indiana University, Bloomington, U.S.A.
Professor Rakesh B. Sambharya, Rutgers University, Camden, U.S.A.
Professor Reinhart Schmidt, Universität Halle-Wittenberg - Germany
Professor Hans Schöllhammer, University of California, Los Angeles - U.S.A.
Professor Oded Shenkar, The Ohio State University, Columbus _. U.S.A.
Professor Vitor Corado Simoes, Universidade Teeniea de Lisboa - Portugal
Professor John Stopford, 6 Chaleot Square, London NWI 8YB - United Kingdom
Professor Daniel P. Sullivan, University of Delaware, Newark - U.S.A.
Professor Norihiko Suzuki, International Christi an University, Tokyo -Japan
Professor Stephen Brucc Tallmann, University of Utah, Salt Lake City - U.S.A.
Professor George Tesar, Ume' University, Urne. - Sweden
Professor Jose de la Torre, Florida International University, Miami - U.S.A.
Professor Rosalie 1. Tung, Simon Fraser University, Burnaby, BC - Canada
Professor Jean-Claude Usunier, Univcrsity ofLousanne, Lousanne - Dorigny - Switzerland
Professor Alain Charles Verbeke, Vrije Universiteit Brussel - Belgium
Professor Lawrence S. Welch, Mt Eliza Business School, Melbourne, Australia
Professor Martin K. Welge, Universität Dortmund - Germany
Professor Bernard Yin Yeung, New York University - U.S.A.
Professor Masaru Yoshimori, Yokohama National University - Japan
BOOK REVIEW EDITOR
Professor Dr. Johann Engelhard, Universität Bamberg - Germany
EDITOR
MANAGEMENT INTERNATIONAL REVIEW, Professor Dr. Profs. h.c. Dr. h.c. Klaus Macharzina,
UniversitätHohenheim (510 E), Schloss-Osthof-Ost, D-70599Stuttgart, Germany, Tel. (0711)459-2908,
Fax (0711) 459-3288, E-mail: [email protected], Internet: http://wwwuni-hohenheim.de!-mir
Assistant Editors: Professor Dr. Michael-Jörg Oesterle, Universität Bremen, Germany, Professor Dr.
Joachim Wolf, Universität Kiel, Germany, Editorial office: Mrs. Sylvia Ludwig
•
mir
Management
International Review
© Gabler Verlag 2003
VOLUME 43 . SPECIAL ISSUE . 2003/2
CONTENTS
Guest Editor's Introduction 3
Manuel Becerra/Juan Santal6
An Empirical Analysis of the Corporate Effect: The Impact of the
Multinational Corporation on the Performance of Its Units
Worldwide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Alfredo J. Mauri/Rakesh B. Sambharya
The Performance Implications of aGIobaiintegration Strategy
in Globallndustries: An Empiricallnvestigation Using Inter-area
Product Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Niels G. Noorderhaven/Anne-Wil Harzing
The "Country-of-origin Effect" in Multinational Corporations:
Sources, Mechanisms and Moderating Conditions . . . . . . . 47
Peter J. Buckley/Jeremy Clegg/Hui Tan
The Art of Knowledge Transfer: Secondary and Reverse Transfer
in China's Telecommunications Manufacturing Industry 67
Fiona Moore
Internal Diversity and Culture's Consequences: Branch/Head Office
Relations in a German Financial MNC . . . . . . . . . . . . . . . .. 95
mir vol. 43 . Special Issue . 2003/2
GUIDELINE FOR AUTHORS
•
mir
welcomes articles on original theoretical contributions, empirical research, state-of-
the-art surveys or reports on recent developments in the areas of
a) International Business b) Transnational Corporations c) Intercultural Management d) Stra
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references, tables and figures should as a role not exceed 25 pages in a usual setting (ap
proximately 7000 words). Reply papers should normally not exceed 1500 words. The title
page should incJude the following elements: Author(s) name, Heading ofthe article, Abstract
(two sections of about 30 words each), Key Results (20 words), Author's line (author's
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- use endnotes for clarification sparingly. References to the literature are indicated in the
text by author's name and year of publication in parentheses, e.g. (Reitsperger/DanieI1990,
p. 210, Eiteman 1989). The references should be listed in alphabetical order at the end
of the text. They should include full bibliographical details and be cited in the following
manner: e.g.
Reitsperger, W. D.lDaniel, S. J., Dynamic Manufacturing: A Comparison of Attitudes
in the U.S. and Japan, Management International Review, 30,1990, pp. 203-216.
Eiteman, D. K., Financial Sourcing, in Macharzina, K./Welge, M. K. (eds.), Hand
wörterbuch Export und Internationale Unternehmung, Stuttgart: Poeschel 1989,
pp. 602-621.
Stopford, 1. M./Wells, L. T. Jr., Managing the Multinational Enterprise, New York:
Basic Books 1972.
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Management
International Review
© Gabler Verlag 2003
Guest Editor's Introduction
Multinational corporations (MNCs) are frequently pictured as being at the
vanguard of global integration. MNCs face strong incentives to maximize
economies of scale in research and development, purchasing, production and
marketing, and encounter low barriers in the dissemination of technologies and
best practices. The days are past that subsidiaries of MNCs operated as quasi-in
dependent companies, optimally adapted to local circumstances and with very
little interference from headquarters. Even in markets where adaptation to local
circumstances is mandatory, MNCs work hard to bridge the gap between global
and local, and to identify ways of reconciling global integration, e.g., in produc
tion, with the required extent of local responsiveness, e.g., in marketing
Thus, MNCs function as motors of a process of international convergence that
may ultimately make national differences rooted in institutional and cultural idio
syncracies less relevant or may even make these differences disappear. However,
very few studies have empirically gauged processes of global integration in MNCs.
Those studies that did seek to investigate global integration within MNCs found
that in addition to convergence due to company-widc policies there are also
enduring sources of divergence, such as attempts by local subsidiaries to become
centers of excellence (Belanger et al. 1999). Furthermore, there are also studies
demonstrating that cultural and institutional differences playa role in the manner
in which seemingly universal teehniques and procedures are implemented within
different countries (Hancke/Casper 2000).
This special issue of Management International Review brings togcther five
papers that focus on different aspects of the tension between global and loeal
within MNCs, and the attempts of MNCs to integrate internationally in spite of
these tensions. In the first paper, Beeerra and Santal6 study the question to what
extent heing apart of a particular MNC influences the performance of regional
mir vol. 43 . Special Issue . 200312 3
Ouest Editor's Introduction
units. This can be seen as an indicator of the extent to which the MNC is capable
of putting its corporate-level resources to work on aglobaI scale. Becerra and San
tal6 find that about ten percent of the variability of regional units is attributable
to corporate effects. The more internationalized the MNC is, the stronger the cor
porate effect. This suggests that the more internationalized MNCs are also more
successful in integrating their international operations, whether by employing
worldwide home-grown advantages, or by spreading over the entire organization
resources and capabilities developed by a particular subsidiary.
This integration within the MNC, that can be assumed to be responsible for
the stronger corporate effect in the more internationalized MNCs in Becerra and
Santal6's sampie, is the focus of Mauri and Sambharya's paper. These authors
study the effect of global integration on the performance of the MNC, operatio
nalizing global integration as the inter-area product flows within the multinatio
nal. They find a non-linear relation between global integration and MNC per
formance. At low levels of global integration, there is a negative relation with
performance, which turns positive at intermediate levels, but negative again at
very high levels of global integration. Their explanation is that at very low and
very high levels of integration the balance between the costs and benefits of global
integration activities is negative. At low levels this is because of the high setup
costs of international integrative devices, at very high levels the boundaries of
effectively managing of a network of specialized and geographicaIly dispersed
subsidiaries are reached. Only at intermediate levels global integration yields
surplus value.
In the third paper Noorderhaven and Harzing focus on an issue somewhat
related to that of both previous papers, but from a very different angle. MNCs not
only influence the performance of their subsidiaries and the entire organization
through the integration and transfer of resources and capabilities, they also exert
a homogenizing influence through company-wide management approaches and
control systems. These management approaches and control strategies, in turn,
are heavily influenced by the national origin of the MNC. This influence cannot
easily be described in the global versus local terminology, it is a dominance of
certain local approaches over others. In Noorderhaven and Harzing's paper the
soure es of these country-of-origin effects in MNCs are discussed, and proposi
tions are formulated concerning the home-country and MNC-related conditions
that moderate their strength.
Buckley, Clegg and Tan look more closely at the processes ofknowledge trans
fer within MNCs that so often are taken for granted. Focusing on two firms in the
telecommunication sector in China, the processes of knowledge transfer between
these firms and their western parent companies, as weIl as between these firms
and other subsidiaries of the same parent firms are studied. Their findings de
monstrate path-dependency: the ownership entry strategy of the western parent
firm locks their Chinese subsidiary or joint venture into constraints from wh ich
4 mir vol. 43 . Special Issue . 200312
Guest Editor's Introduction
it is diffieult to eseape. Buekley, Clegg and Tan's findings and analysis show that
MNCs eannot ehoose free1y in their integration strategies, in as far as knowledge
transfer is eoneerned, as they are eonstrained by previously made, seemingly un
related ehoiees.
The paper by Moore, finally, looks more closely at MNC integration strategy, in
her ease that of a German multinational bank as it is reeeived at its London braneh.
Her observations give yet another turn to the loeal-global diehotomy. Not only are
the integrative pressures exerted by head office embedded in a highly loeal per
speetive on the business (putting their 'global' eharaeter in doubt), but the respon
ses at the London braneh diverge between loeal sub-groups. This ease study shows
that it is not only too simplistie to think in terms of loeal-global dichotomies, it is
even too simplistie to think in terms of eonfrontation between loealities, as the iden
tities within MNCs transgress the boundaries of loeal units. MNCs that ignore these
diverse identities at loealities do so at their peril, as Moore's ease study illustrates.
Taken together the five papers in this special issue drive horne both the
importanee and the eomplexity of international integration within MNCs. Inter
national integration in multinationals is important, as it is related to the per
formance of the MNC (Beeerra and Santal6; Mauri and Sambharya). However,
this integration does not neeessarily make the MNC a harbinger of best praetices,
as the influenee of headquarters may be more like the dominanee of one partieu
lar loeal approach over others (Noorderhaven and Harzing). As far as the trans
fer of teehnology is eoneerned, the eapabilities of MNCs to perform this effee
tively eritieally depend on other eorporate strategies and management praetiees,
with the effeet that a eompany may get loeked into a trajeetory that seriously hin
ders further integration of eompetenees and eapabilities (Buekley, Clegg and Tan).
Finally, international integration within MNCs is best pietured not as the substi
tution of global for local praetiees, nor as an opposition between eompeting local
approaches, but as a process in which practices are shared and transferred smooth
Iy among eertain groups within the MNC, cutting through the boundaries of or
ganizational units, but not in others (Moore). All in all, these papers suggest that
it is time to leave behind thinking of MNCs in terms of 'Ioeal' and 'global', and
to come to grips with the much more eomplieated reality these organizations have
to deal with.
NIELS G. NOORDERHAVEN
References
Belanger, l/Berggren, C./Bjorkman, T./Kohler, C. (eds.),Being Local Worldwide: ABB and the Chal
lenge ofGlobal Management. Ithaca, NY: Cornell University Press 1999.
Hanckt~, B./Casper, S., Reproducing diversity; ISO 9000 and work organisation in the Freneh and
German ear industry. In S. Quack, G. Morgan and R. Whitley, (eds.), National Capitalisms,
Global Competition, and Economic Perfarmance. Amsterdam: lohn Benjamins, 2000,
pp. 173-188.
mir vol. 43 . Special Issue . 2003/2 5
Management International Review
Neuerscheinungen
Doris Lindner Anja Schulte
Einflussfaktoren Das Phänomen
des erfolgreichen der Rückverlagerung
Auslandseinsatzes Internationale Standortent
Konzeptionelle Grundlagen - scheidungen kleiner und mittlerer
Bestimmungsgrößen - Ansatzpunkte Unternehmen
zur Verbesserung 2002
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Andreas Wald
Tobias Specker Netzwerkstrukturen und
Postmerger-Management in den -effekte in Organisationen
ost· und mitteleuropäischen Eine Netzwerkanalyse
Transformationsstaaten in internationalen Unternehmen
2002 2003
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Internationale Public Affairs Management
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Hotellerie Unternehmungen
2002 2003
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