Success Factors of Regional Strategies for Multinational Corporations: Appropriate Degrees of Management Autonomy and Product Adaptation

310 Pages·2011·4.24 MB·English

by  Patrick Heinecke (auth.)

Contributions to Management Science
Forfurthervolumes:
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Patrick Heinecke
Success Factors of Regional
Strategies for Multinational
Corporations
Appropriate Degrees of Management
Autonomy and Product Adaptation
PatrickHeinecke
ThisworkwasoriginallypublishedasdoctoralthesiswiththetitleSuccessfactorsofregionalstrategies
for Multinational Corporations: The appropriate degree of regional management autonomy and
regionalproduct/serviceadaptation.
Thisworkwasacceptedasdoctoralthesisin2010attheUniversityofErlangen-Nu¨rnberg.
ISSN1431-1941
ISBN978-3-7908-2639-5 e-ISBN978-3-7908-2640-1
DOI10.1007/978-3-7908-2640-1
SpringerHeidelbergDordrechtLondonNewYork
#Springer-VerlagBerlinHeidelberg2011
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Abstract
Toenhanceunderstandingofsuccessfactorsofregionalstrategies,weexaminethe
effectsofregionalmanagementautonomyandregionalproduct/serviceadaptation
on the regional success of Multinational Corporations (MNCs) as well as the
interactioneffectsofregionalorientationandinter‐regionaldistance.
BasedonconceptualinsightsfromdifferentInternationalBusiness(IB)scholars
andrecentworkinthefieldofregionalizationtheory,wedevelopacomprehensive
regional success factor model, which is evaluated by means of the partial‐least‐
squares(PLS)methodonthebasisofasurvey-basedinquiryoftheFortuneGlobal
500firmswithsuccessindicatordataforaperiodof9years(2000–2008).
Our findings suggest that low degrees of regional management autonomy and
high levelsofregional product/serviceadaptationareappropriate forMNCs tobe
regionallysuccessful.Possibleadverseeffectsofhighdegreesofregionalmanage-
ment autonomy on regional success are found to be mitigated by a MNC’s inter-
regional distance. Furthermore, our results indicate that the regional performance
associated with high levels of regional product/service adaptations is positively
influencedbybothaMNC’sregionalorientationanditsinter-regionaldistance.
Inanexplorativeanalysisofthemainvariablesthatinfluencethesuccessfactors
ofregionalstrategies,wefindthattheregionalstrategiesandtheregionalsuccessof
MNCs are restricted mainly to their home region. In addition, a trend to expand
outsideofthehomeregioncouldbeidentified,whereMNCsfollowingbi-regional
strategieswerefoundtoachievetherelativelyhighestcorporatesuccessaccording
to our evidence for an S-curve development of the regional strategy-performance
relationship.
Forcorporatepractice,theseresearchfindingsimplythatMNCsshouldoptimize
theirregionalsuccessbyvaryingtheirregionalmanagementautonomyandregional
product/service adaptation in light of their organizational and environmental con-
text, and taking into consideration their specific regional strategy as well as their
regionalexpansionplans.
v
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Preface
This work was submitted in March 2010 as a dissertation to the Institute of
Economics of the University of Erlangen-Nu¨rnberg. Here, it was realized under
thesupervisionofProf.Dr.DirkUlrichGilbert–mainlyduringmysabbaticalfrom
FebruarytoDecember2009,whichIwasgrantedfromtheVolkswagenGroup.The
completionofthisworkwaspartlymadepossiblebythesupport,cooperationand
encouragementofseveralindividualstowhomIwouldliketoexpressmygratitude.
First and foremost I would like to thank my doctoral advisor and academic
teacherProf.Dr.DirkUlrichGilbert.Hehassupportedmyacademicdevelopment
ever since I first worked for him during my earlier studies in the field of Interna-
tionalManagementattheEuropeanBusinessSchoolinOestrich-Winkel.Through-
outtheentiredissertationprocess,aswellasencouragingmyconceptualideasinan
open-mindedfashion,heprovidedthoughtfulguidanceforthiswork.Ihavelearned
much from his suggestions regarding structure and content that will remain valu-
ableforyearstocome.IalsothankProf.Ju¨rgenKa¨hlerforbeingthesecondadvisor
ofmydissertationandparticularlyforhishelpfulmethodological advicethrough-
outtheentireprocess.
In addition, I want to thank Hans Dieter Po¨tsch, member of the Board of
Management of Volkswagen AG, responsible for “Finance and Controlling”. He
enabledandencouragedmetotakemysabbaticaltorealizemydissertation.Over
more than 2 years as his personal assistant, I have learned much from him about
how to design strategies for different regions and how to manage them appro-
priately.Withrespecttohistremendousanalyticalcapabilities,aswellashishighly
motivatingandinspiringmanagementstyle,hewillalwaysbeaveryimportantrole
modelformyfutureprofessionalcareer.
In the midst of realizing this work, I was given support and encouragement by
manyindividualstowhomIwanttoexpressmyspecialthanks:
l MyfriendandcolleagueIngoSchedelforhissupportofmywork.Hehasalways
beenaveryvaluableadvisoroncontentandstyle,inanexemplaryanddedicated
manner, even during some very difficult moments of my dissertation. Many
thanks,Ingo!
vii
viii Preface
l Prof. Dr. Michael Behnam for his conceptual advice and helpful comments on
thecontentofthiswork.ManythanksforallthatIhavelearnedfromyou,Prof.
Behnam,aboutthetheoreticalunderpinningsofthefascinatingfieldofInterna-
tionalBusiness.
l Professors Alan M. Rugman and Alain Verbeke, as well as Dr. Andre´
Sammartino, for their helpful comments on the theoretical approach of this
dissertation during the IB conference at the University of Reading in the
United Kingdom (30–31 March, 2009) and concerning the content of the
survey-basedinquiryofthiswork.
l Dr.ArneSchneider(AssociatePrincipal,McKinsey&Company)forhisfriend-
shipandsupport,alsoregardinghisparticipationinthepretestofthesurveyof
this work. Concerning the latter, I want to express further special thanks to
Dr.DetlefMohr(Director,McKinsey&Company),Dr.MartinReitz(Headof
Investment Banking, Rothschild GmbH), Gerhard Mennecke (Head of Corpo-
rate Strategic Planning, Volkswagen Passenger Cars), Roberto Siotto (Head
of Corporate Strategic Planning, Volkswagen Group), Dr. Hendric Hallay
(Head of Brand Management and Strategy, Volkswagen Passenger Cars),
Dr.Mattha¨usSielecki(VicePresident,DeutscheBankAG),andDr.-Ing.Julian
Eckert (Head of Service-Oriented Computing Research Group, E-Finance Lab
FrankfurtamMaine.V.).
l Dr.UweElsner(HeadofMacroandCompetitiveAnalysis,VolkswagenGroup)
forprovidingmewithmacroeconomicdataonregions.
l MyfriendsDemianNelli(AssistantoftheHeadofSalesSteering,Volkswagen
Passenger Cars) and Markus Grothe from the Institute for Technology and
Innovation Management at the Hamburg University of Technology for their
methodological advice on a proper utilization of the partial-least-squares
method.
l StefanWindtforhiseffortsinsettingupaverywell-structuredInternetplatform
thatfacilitatedthecollectionandevaluationofthesecondarydataofmywork.
l JohannesFriedl,ManuelHeidecke,andmywifeLizfortheirdedicatedsupport
incollectingthesecondarydataofthiswork.
l Dr.JochenEßmannforshowingmehowtoproperlyevaluatemydataviaExcel.
l HelenBeckermannforherthoroughlinguisticreviewofthisbook.
l Allofmyfriendsfortheirsupportandenjoyable“distractions”duringthattime.
Mydeepestgratitudebelongstomywife,myparentsandstep-parentsfortheir
encouragementandunconditionalsupportduringthisdissertationperiod,andmore
broadly,duringeveryphaseofmylife.MywifeLizhaslivedthroughallofmyups
anddownsduringtheentiredissertationproject.Herloveandpatiencegavemethe
strengthtomakemythinkingandwritingmoreprecisewithinthiswork.Idedicate
thisbooktoher.
Erlangen,Germany PatrickHeinecke
Contents
PartI TheoreticalSettingforRegionalStrategiesandRegional
Success
1 Introduction ............................................................... 3
1.1 IntroductionandMotivation ........................................... 3
1.2 ProblemSetandAimofAnalysis ..................................... 4
1.3 CourseofAnalysis ..................................................... 9
2 TheoreticalFoundationandLiteratureReview ....................... 13
2.1 MultinationalCorporationsandRegionalStrategies ................. 13
2.1.1 MultinationalCorporationsandTheirRegional
DimensionsofStrategyandOrganization ..................... 15
2.1.2 RegionalStrategiesandTheirTheoreticalFoundation ....... 18
2.2 TheRugmanRegionalStrategyMatrix .............................. 33
2.2.1 TheDevelopmentoftheRegionalStrategyMatrix ........... 33
2.2.2 Home-RegionalStrategy ...................................... 37
2.2.3 Host-RegionalStrategy ........................................ 38
2.2.4 Bi-regionalStrategy ........................................... 39
2.2.5 Multi-regional(orGlobal)Strategy ........................... 40
2.2.6 FurtherRegionalStrategies .................................... 40
2.2.7 RegionalManagement ......................................... 43
2.2.8 RegionalProducts/Services .................................... 45
2.3 ContingencyApproach ............................................... 50
2.3.1 ContingencyTheory ........................................... 50
2.3.2 ContingencyVariables ......................................... 53
2.4 ConceptofRegionalCorporateSuccess ............................. 57
2.4.1 SuccessFactorTheory ......................................... 57
2.4.2 RegionalCorporateSuccess ................................... 60
ix