El enfoque interactivo de la motivación del alumno

Presented On: July 4, 2013 - 13:20-14:35 Chair: Gary Knight, Willamette University

MNEs’ Learning from FDI Exit Experience – If and When It May Happen: Evidence from Korean MNEs Yuping Zeng, Southern Illinois University Edwardsville

Sangcheol Song, Saint Joseph’s University Soonkyoo Choe, Yonsei University

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This study is intended to fill the research gap of a lack of understanding of whether and under what conditions MNEs learn from their prior FDI exits. Drawing on literature on learning from failures, we argue that unintended prior FDI exits are effective stimulants of learning and this learning reduces subsequent subsidiary mortality.

Furthermore, we identify four contingency factors that may moderate the effect of an MNE’s FDI exit experience by influencing the magnitude of learning barriers the MNE faces and/or the MNE’s ability to overcome these barriers. We test our hypotheses using a dataset containing the life history of FDIs by Korean MNEs during 1990 and 2006. We find a negative relationship between an MNE’s FDI exit experience and subsidiary mortality, but this relationship only holds true when the cultural distance between the host countries of the exited FDIs and the MNE’s home country is small, the percentage of JVs among the exited FDIs is low, the MNE’s geographic scope is high, and peer MNEs’ exit experience is low. (For more information, please contact: Yuping Zeng, Southern Illinois University Edwardsville, USA: [email protected])

Exploring the Type and Locus of Embeddedness for Global Innovation Kazuhiro Asakawa, Keio University

Bjoern Ambos, University St. Gallen

This papers aims to shed light on the question how embeddedness impacts the potential of international R&D subsidiaries to create innovations for the global – rather than the local – market. We examine the kinds (business vs. research) and the locus (local vs. global) of external ties that international R&D subsidiaries maintain and test their relationship with the unit’s global innovation potential drawing on a sample of 99 overseas R&D subsidiaries belonging to Japanese multinational corporations. Our results reveal that certain ties enable overseas R&D subsidiaries to pursue innovation for global markets more than others: Collaborating with overseas business organizations is positively related to subsidiary innovation for global markets; whereas ties with local business organizations turns out to be negatively associated with subsidiary innovation for global markets. While collaborating with research institutions is not directly associated with subsidiary innovation for global markets, such association becomes salient for subsidiaries with absorptive capacity. Our findings partly reconfirm the established wisdom on subsidiary embeddedness and innovation but also challenge the value of host market embeddedness vis-à-vis other forms of ties. (For more information, please contact: Kazuhiro Asakawa, Keio University, Japan: [email protected])

Learning Diversity and Product Innovation in an Emerging Economy Zhenzhen Xie, Hong Kong University of Science & Technology Jiatao Li, HKUST

Prior research has shown mixed findings on the relationship between international market diversification and a firm’s innovation performance. Drawing on the learning theory and organizational diversity literature, we argue that one reason for explaining this mixed finding could be the confusion of combining a positive effect of

“knowledge variety” and a negative effect of “knowledge separation” in international market diversification.

Firms that compete in both domestic and overseas markets can have a better opportunity to build a diverse set of knowledge, the novel combination giving rise to innovation. However, when the two markets are highly separated from each other, there tends to be substantial difficulties in knowledge transfer, sharing and

integration. We expect that firms that compete in less separated domestic and overseas markets benefit most in innovation performance. Data on 6,805 Chinese auto manufacturers generally supported our arguments. Our research contributed to the growing literature on organizational learning, innovation of emerging economy firms, and global strategy. (For more information, please contact: Zhenzhen Xie, Hong Kong University of Science & Technology, Hong Kong, SAR-PRC: [email protected])

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AIB 2013 Conference Proceedings Session: 1.3.7 - Competitive

Track: Track: 5 - MNC Management and Organization

Communication Inside and Outside MNEs

Presented On: July 4, 2013 - 13:20-14:35 Chair: Felipe Monteiro, INSEAD

How MNCs May Improve the Efficiency of Language Communications and its Global Competitiveness:

Implications from a Laboratory Study Minyoung Kim, University of Kansas

Midam Kim, University of Kansas and Northwestern University Ann Bradlow, Northwestern University

Tailan Chi, University of Kansas

When a firm conducts business across borders to exploit location, scale or scope economies, it inevitably encounters nontrivial costs of language communication that can dissipate the value that it attempts to create through its international activities. As such, mitigating the detrimental influences of language distance has important performance implications for any multinational corporation (MNC). Applying recent theories in psycholinguistics, this paper investigates the relationship between language distance and communicative efficiency and, more importantly, the moderating role of linguistic convergence on the relationship. Empirical findings corroborate the main thesis of the paper that language distance is detrimental to communicative efficiency but linguistic convergence between talkers can mitigate this detrimental effect. Implications on the MNC as a superior vehicle for the transfer of knowledge are also discussed. (For more information, please contact: Tailan Chi, University of Kansas, USA: [email protected])

Friend or Foe? The Effects of English as Lingua Franca on Cooperative versus Competitive Choices – An Experimental Study

Katrin Muehlfeld, Utrecht University Diemo Urbig, University of Wuppertal Arjen van Witteloostuijn, Tilburg University Vivien Procher, University of Wuppertal

This study develops and tests theory about the multifaceted causal effect of foreign language on individuals’

cooperative behavior and confidence therein. Based on mediation and moderation arguments, we disentangle two mechanisms: Language-induced information barrier and language-related cultural

accommodation/alienation effect. While language proficiency mitigates the information barrier effect identified through the mediating lack of understanding, a larger ‘cultural accommodation gap’ ? a novel, individual-level concept ? enhances the direct culture-related language effect. Results of a randomized experiment with 238 Dutch participants support our predictions: Using a foreign language (here, English) affects cooperation through both mechanisms, and moderators display the predicted signs. (For more information, please contact: Katrin Muehlfeld, Utrecht University, Netherlands: [email protected])

Perceived Global Mindset: The Effect of National Social Identities and Demographic Characteristics Orly Levy, IMD Business School

Sully Taylor, Portland State University Schon Beechler, INSEAD

Nakiye A. Boyacigiller, Sabanci University Maury Peiperl, IMD

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Drawing on social identity theory, this study examines the influence of national social identity on perceived global mindset, defined as the judgment that the multinational company (MNC) offers all employees the same career and promotion opportunities irrespective of nationality or location. Using survey data from 2,039 employees in seven MNCs, our analysis reveals two significant findings. First, perceived global mindset is significantly lower among host and third country nationals compare with parent country nationals. Second, these perception gaps increase with three moderating factors: gender, tenure, and education, although these results are inconsistent. These findings indicate that the national social identity of employees is salient in the context of the MNC, thereby affecting sense-making and perceptions of global mindset (For more information, please contact: Orly Levy, IMD Business School, Switzerland: [email protected])

Business Diplomacy in MNCs: An Exploratory Study

Huub Ruel, Windesheim University of Applied Sciences/University of Twente Tim Wolters, University of Twente

Raymond Loohuis, University of Twente

In order to survive, multinational corporations (MNCs) need the ability to manage complex interactions with governments, while at the same time they should be sensitive to the wishes and demands of the increasing number of local and international NGOs. Although the relevance of business diplomacy is evident, it is not clear how MNCs actually conduct business diplomacy. This research contributes to the existing literature by

answering the question: How is business diplomacy enacted by and embedded in MNCs? Based on a multi-dimensional operationalization of business diplomacy semi-structured interviews were carried out with eight MNCs. The findings showed that seven of the eight MNCs conduct business diplomacy intensively. None of them applied a clear and organization-wide business diplomacy policy. Instead, general guidelines existed in five MNCs. In all MNCs, the responsibility for business diplomacy was largely decentralized to the foreign subsidiaries. All MNCs deployed a wide range of business diplomacy means: direct stakeholder dialogues, events, forums, meetings, industry associations, social projects and social partnerships. The findings further suggest that industry-specific factors affect business diplomacy intensity of MNCs and that companies operating in countries with weak institutions recognize the importance of business diplomacy more and hence implement it more intensively. (For more information, please contact: Huub Ruel, Windesheim University of Applied Sciences/University of Twente, Netherlands: [email protected])

Session: 1.3.8 - Competitive

Track: Track: 9 - Cross-Cultural Management and HRM

HR Issues in Transnational and MNC Contexts

Presented On: July 4, 2013 - 13:20-14:35

Chair: Elaine Farndale, Pennsylvania State University / Tilburg University Developments in Knowledge Transfer Activities of Expatriates and Inpatriates

Anne-Wil Harzing, Melbourne University Markus Pudelko, Tuebingen University Sebastian Reiche, IESE

Drawing on the knowledge-based view of the firm, this paper provides the first empirical study that explicitly investigates the relationship between different categories of international assignees and knowledge transfer in MNCs. Specifically, we examine the changes in patterns of international staffing over time as a means to support MNC knowledge flows; the relative prevalence of one particular group of international staff, parent country national (PCN) expatriates, across a variety of functional areas; and the relative extent to which different categories of international assignees contribute to knowledge transfer from and to headquarters. We

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base our investigation on a large scale survey, encompassing data from more than 800 subsidiaries of MNCs in thirteen countries. We find that the proportion of PCNs has declined over time, whereas the proportion of third country nationals (TCNs) and former inpatriates has increased; demands for knowledge transfer differ according to the functional area and international staffing responds to these differing demands; the relevance of PCNs and former inpatriates varies for knowledge flows from and to headquarters. (For more information, please contact:

Markus Pudelko, Tuebingen University, Germany: [email protected])

Financial Incentivization in Transnational Contexts Chris Brewster, University of Reading James Walker, University of Reading Geoffrey Wood, University of Warwick Elena Beleska-Spasova, University of Reading

We study the relative utilization of share ownership schemes and individual performance related pay paying particular attention to context and whether or not a firm is a multinational subsidiary. The international business literature on institutions has focused more on the implications for firms of entering and operating in a particular context, rather than the nature of national institutional frameworks and which specific sets of organizational practices are clustered where. We show that firms operating in differing capitalist economies exhibit large and significant differences in how they incentivise their employees financially. We also show that MNC subsidiaries are more likely to use incentives. The findings indicate that a more nuanced understanding of transnational contexts in general, and of capitalist varieties in particular, would expand scholars’ understanding of international business. (For more information, please contact: Chris Brewster, University of Reading, United Kingdom: [email protected])

The Role of Parent-Country Nationals in Reducing the Adverse Effect of Perceived Value Inconsistency on the Commitment of Foreign Subsidiary Employees

Dana Minbaeva, Copenhagen Business School Larissa Rabbiosi, Copenhagen Business School Guenter K. Stahl, WU Vienna and INSEAD

Use of the parent country nationals as work group leaders is an important tool for creating alignment within the MNC network. We argue that the parent country expatriates have a key role in mitigating the adverse effects of perceived values’ inconsistency on affective commitment of employees in foreign subsidiaries, and ultimately MNC performance. Drawing on data from a global survey of 1567 work groups in a large European MNC, we demonstrate the adverse effects of perceived gaps in corporate core values and demonstrate that by acting as culture carriers and translators of corporate messages, parent country expatriates can create alignment around core espoused values and limit the negative consequences of values’ inconsistency at subsidiary level. (For more information, please contact: Dana Minbaeva, Copenhagen Business School, Denmark: [email protected])

Are We There Yet? Comparing Adoption, Internalization, and Effectiveness of High-Investment HR Values among Local Firms and MNC Subsidiaries of U.S. Firms in South Asia

Saba Colakoglu, Berry College and Koc University Matt Allen, Babson College

Khasro Miah, North South University Allan Bird, Northeastern University

Grounded in institutional theory, this study investigates the differential adoption, internalization, and

effectiveness of high-investment HR values by indigenous companies and by subsidiaries of U.S. firms located throughout South Asia. Results suggest that MNC subsidiaries have a higher rate of adoption of

high-investment HR values compared to indigenous firms and that both types of firms are similar in the level of Page 39

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internalization of their respective HR values. While high-investment HR values are related to company performance across the board, this relationship tends to be stronger for MNC subsidiaries compared to local South Asian firms. Theoretical and practical implications for the successful transfer, implementation, and diffusion of high-investment HR values, policies, and practices in institutionally distant contexts are discussed.

(For more information, please contact: Saba Colakoglu, Berry College and Koc University, USA:

[email protected])

Session: 1.3.9 - Competitive

Track: Track: 8 - Developing Country MNCs