Presented On: July 5, 2013 - 13:20-14:35 Chair: Peter Li, Copenhagen Business School
The Interplay between Dynamic Capabilities and Entrepreneurial Processes and their Impact on the SME Exporters’ Performance Improvement during Recession
Dario Miocevic, University of Split
From marketing logic context, this article investigates the interplay between dynamic capabilities and entrepreneurial processes and their overall impact on exporting firm’s performance improvement during the recent economic downturn (2008-2011). The baseline model inspects the role of entrepreneurial cognition (opportunity recognition), and behavior (opportunity exploitation) on performance improvement and is extended by analyzing the indirect effects through the mediating role of dynamic capabilities (DCs) and the moderating effects of exporting resources. In line with the main research problem, the theoretical framework along with a set of research hypotheses has been developed. The study was carried out on the sample of 118 SMEs in Croatia that have continuous export activity. With the survey data and objective indicators (e.g., performance indicators, export diversity, export intensity, level of diversification, etc.), the findings show that DCs mediate the relationship among the entrepreneurial processes and performance improvement. Also, the findings from the post-hoc moderated-mediation analysis suggest that export resources are significant moderator in the
Page 143
AIB 2013 Conference Proceedings
mediating relationship between opportunity exploitation, adaptive capabilities, and performance improvement.
In the end, this study offers valuable theoretical and practical implications within the constituent fields of international business. (For more information, please contact: Dario Miocevic, University of Split, Croatia:
Competing on Service Advantage based on Service Capabilities: An Empirical Study of the Antecedents of Performance in International New Ventures
Silvia Martin, Lynchburg College
Rajshekhar (Raj) G. Javalgi, Cleveland State University
In the context of high-technology international new ventures (INVs) the literature on has failed to consider informational resources and its impact on service capabilities within the strategy interplay in approaching new markets overseas. Building upon the resource based view of the firm (RBV) this study examines empirically the relationships among informational resources on service capabilities and service advantage. The study sampling frame consisted on 260 INV firms from Mexico. Structural equation modeling was used to test measurement veracity and proposed relationships between the constructs constrained in the measurement model. Findings show that informational resources play a central role in the process of attaining superior performance when developing a service advantage. These results indicate that the rapid environment that INVs find themselves produces a need to develop new philosophies and strategies from which to attain service advantage.
Informational resources help INVs to focus on a service advantage based on marketing differentiation and delivery differentiation to achieve superior performance. The study findings have important implications for research on new venture decision-making and international marketing. (For more information, please contact:
Silvia Martin, Lynchburg College, USA: [email protected])
Dynamic Capabilities for Internationalization: from Market Entry to Sustainable Internationalization Margaret Fletcher, University of Glasgow
Simon Harris, University of Edinburgh Volker Mahnke, University of Edinburgh
Internationalization process research historically has focused on market entry, without considering the longer term consequences for firms. This paper investigates the dynamic capabilities firms may need for sustainable internationalization. We draw on Teece’s (2007) framework which distinguishes sensing, seizing and
reconfiguring dynamic capabilities, and from dynamic capabilities that have been implicit in internationalization process and international entrepreneurship research to identify the dynamic capabilities for internationalization.
We study the development of these in a single longitudinal case study of a firm as it developed from being an international new venture to its evolution as a successful international enterprise. We find sensing and seizing capabilities for market entry and for network relationships are most important at early and growth stages of internationalization and reconfiguration capabilities are imperative for sustainability and profitability. Teece’s framework is a useful perspective for extending internationalization process research to consider sustainable internationalization. Managerial relevant research would show managers the dynamic capabilities they need as they internationalize their firms, and help them to develop sustainably and avoid costly mistakes. (For more information, please contact: Margaret Fletcher, University of Glasgow, United Kingdom:
The Speed of Internationalization and the Capabilities Development: From a Collection of Individual-level Capabilities to a Bundle of Firm-level Organizational Routines
Masahiro Kotosaka, Ritsumeikan University
This research investigates the process in which smaller, younger internationalizing firms explore and exploit the required knowledge and capabilities. This research adopted an exploratory, case-based theorising approach,
Page 144
AIB 2013 Conference Proceedings
and conducted a longitudinal empirical case study of four firms, each of which took a different
internationalization path. The analysis focuses on how the four firms developed the firm-level organizational routines for exploring and exploiting external knowledge and capabilities, by investigating and comparing the level of routines development at the time of initial internationalization and these two years after this. As a result, this research finds that the level of the development of the firm-level organizational routines for internationalization is low, regardless of the timing and pace of internationalization, at the time of
internationalization. Further, by analyzing the complete list of knowledge sources and knowledge types, this research argues the advantages of grafting for developing a wider variety of firm-level organizational routines to accelerate the pace of internationalization. Moreover, the distinction between ordinal and change routines has enabled this study to investigate the exploitation aspect of capabilities, and discusses the value of analyzing the higher-level routines that foster the exploitation, which distinguish rapidly internationalizing firms from slowly internationalizing firms. (For more information, please contact: Masahiro Kotosaka, Ritsumeikan University, Japan: [email protected])
Session: 2.3.9 - Competitive
Track: Track: 9 - Cross-Cultural Management and HRM
Expatriate Adjustment
Presented On: July 5, 2013 - 13:20-14:35
Chair: Benjamin Bader, University of Hamburg Expatriate Skills for Cross-Cultural Competence
Dan Wang, Monash University
Taiwen Feng, Northwestern Polytechnical University Susan Freeman, University of Adelaide
Di Fan, Victoria University
Cherrie Jiuhua Zhu, Monash University
International management literature identifies several important skill sets that are important for expatriates’
cross-cultural management. However, the direct and indirect effects of these skills on cross-cultural competence (CCC) and the interrelationships of skill clusters are not well examined. Drawing on social learning theory, we test the relationships among important skill clusters, and the mechanisms through which they contribute to CCC of expatriate managers based on a survey of Chinese expatriate managers in their overseas assignments. Using structure equation modeling, we demonstrate that self-maintenance skills and communication skills are
significantly and directly related to CCC, while perceptual skills and interpersonal skills relate to CCC indirectly.
Principally, perceptual skills contribute to CCC via interpersonal skills and communication skills, while
interpersonal skills are conducive to CCC through communication skills. (For more information, please contact:
Dan Wang, Monash University, Australia: [email protected])
Expatriate Work and Family Role Adjustment: Scale Development and Validation Margaret Shaffer, University of Wisconsin-Milwaukee
Sebastian Reiche, IESE
Mihaela Dimitrova, University of Wisconsin-Milwaukee Mila Lazarova, Simon Fraser University
Shoshi Chen, Tel Aviv University Mina Westman, Tel Aviv University
Expatriate adjustment is viewed as one of the most important determinants of successful global assignments.
While there are several conceptualizations and instruments created to capture adjustment to the foreign Page 145
AIB 2013 Conference Proceedings
environment, the majority of past research has taken a stress perspective. In contrast, it has not examined how expatriates adjust to their new and redefined work and family roles. Using role theory we develop a scale of work and family role adjustment and validate it through two interlocking studies. We find general support for the psychometric properties of the scale and for its positioning within the nomological network of demands faced by expatriates and resources available to them. The development of the work and family role adjustment scale has important implications for both expatriate research and practice. (For more information, please contact: Mihaela Dimitrova, University of Wisconsin-Milwaukee, USA: [email protected])
Seniority as an Asset? The Moderating Effect of Age on the Relation between Emotional Intelligence and Cross-Cultural Adjustment of Expatriates
Heidi Marie Wechtler, Macquarie University Alexei Koveshnikov, Hanken School of Economics Cecile Dejoux, CNAM Paris
This paper focuses on the moderating effects of age on the relationship between emotional intelligence (EI) and cross-cultural adjustment (CCA) of expatriates. Grounded in lifespan development theory and more particularly socioemotional selectivity theory, our research shed additional light on one of this under-researched areas in expatriation research. Our hypotheses are tested through hierarchical models using data from 254 expatriate managers. Our findings show that age is a facilitator of regulation and utilization of emotions on general living adjustment and of regulation of emotions on interactional adjustment. Complementary analyses show that previous expatriates’ experience is not a substitute of age: the moderating effect of experience on the
relationship between EI and CCA appears to be less prominent than that of age. (For more information, please contact: Heidi Marie Wechtler, Macquarie University, Australia: [email protected])
Multidimensionality and Subjectivity of Culture Shock: A Contingent Approach of Cross-Cultural Dynamic Processes
Heidi Marie Wechtler, Macquarie University Olivier Wurtz, Vaasa University
This study examines the trajectory of cross-cultural adjustment based on the multidimensional and subjective aspects of culture shock. We focus on six intrapersonal diversity factors that affect international adjustment in order to build a taxonomy of expatriates. On the basis of a sample of 584 observations, we show that these different groups of expatriates follow different patterns of adjustment. In some specific cases a U-curve is observed. (For more information, please contact: Heidi Marie Wechtler, Macquarie University, Australia:
Session: 2.3.10 - Competitive
Track: Track: 5 - MNC Management and Organization
Structuring Multinationals and Multinationality
Presented On: July 5, 2013 - 13:20-14:35 Chair: Birgitte Grogaard, University of Calgary
Conformity or Differentiation in Multinationality? The Case of the Italian Ceramic tile Manufacturers Claudio Giachetti, Ca' Foscari University of Venice
Ettore Spadafora, University of South Carolina
Page 146
AIB 2013 Conference Proceedings
Many studies in international management have addressed the issue of whether and how multinationality influences firms’ economic performance. However, no general consensus about the multinationality–
performance relationship has been reached by scholars In order to address the multinationality–performance relationship, we introduce the construct of strategic deviation in multinationality, which expresses the extent to which a firm’s multinationality differs from the multinationality of its peers at a particular point in time, and test a set of hypotheses concerning its effect on firm performance. We find that a higher profitability results from either low or high levels of strategic deviation in multinationality. By contrast, lower profitability is associated with moderate levels of strategic deviation in multinationality. Hypotheses are tested with data on 57 Italian ceramic tile manufacturers over the 2005–2009 time period. (For more information, please contact: Claudio Giachetti, Ca' Foscari University of Venice, Italy: [email protected])
How Should MNCs Control the Breath and Depth of their International Diversification?
Gongming Qian, Chinese University of Hong Kong Lee Li, York University
This study explores how the breadth and depth of international diversification interact with each other to affect the performance of multinational enterprises. Evidence collected in this study suggests that the interaction effect is positive and significant when the level of both breadth and depth is moderate. When either dimension increases further, the interaction effect is still positive and grows even more significant. However, the positive and significant effect reverses and becomes negative (although non-significant) when a high level of both dimensions is reached. These relationships indicate that the adoption of international diversification strategy should take into consideration breadth and depth simultaneously as they affect each other mutually in
determining firm performance. Findings of this study provide important guidelines for managers to manage the breadth and the depth of their international business in their efforts to maximize profits. (For more information, please contact: Gongming Qian, Chinese University of Hong Kong, Hong Kong, SAR-PRC:
An Evaluation of Matrix Structures in Today’s MNCs William G. Egelhoff, Fordham University Joachim Wolf, University of Kiel
As international strategies become more complex, there is a growing interest on the part of MNC managers in matrix structures. Recent exploratory research on matrix structures in 15 German MNCs reveals that a new form of matrix, the rule-based matrix, appears to be emerging. The paper contrasts the information-processing capabilities of the new rule-based matrix against those of the classical balanced matrix. They are different and appear to address different situations. The paper suggests that MNCs may be able to employ both types of matrix structure on a contingency basis. (For more information, please contact: William G. Egelhoff, Fordham University, USA: [email protected])
Multinational Structure and Legal Systems
Elizabeth Rose, Aalto University and University of Otago Kiyohiko Ito, University of Hawaii at Manoa
Amanda E.K. Budde-Sung, University of Sydney Tanya Peacock, University of Hawaii at Manoa
While past research has emphasized control issues between headquarters and subsidiaries, we consider a different aspect of firm structure and foreign direct investment, building on law and finance theory, the
resource-based view of the firm, and models derived from the governance mode literature. Our findings suggest that U.S. multinational corporations (MNCs) tend to have fewer foreign subsidiaries in countries whose legal systems are not based on common law and that a MNC’s total number of foreign subsidiaries are positively
Page 147
AIB 2013 Conference Proceedings
related to the size of the parent, but negatively related to employee productivity and experience. Country-level subsidiary numbers of MNCs are related to host country attributes that include political risk, corporate tax rates, market size, and geographic and cultural distances. This research contributes to the corporate governance literature and extends the eclectic paradigm by incorporating a consideration of MNCs’ legal structures and host-country legal environments into the explanation of foreign direct investment. (For more information, please contact: Amanda E.K. Budde-Sung, University of Sydney, Australia: [email protected])
Session: 2.3.11 - Interactive
Track: Track: 1 - Institutions, Governance, and CSR
Corporate Social Responsibility
Presented On: July 5, 2013 - 13:20-14:35
Chair: Susan Elizabeth Feinberg, Temple University
CSR Strategy within the FSA/CSA Matrix: an Institutional and Resource-based View Arilova A Randrianasolo, Saint Louis University
This research takes on the perspective that corporate social responsibility (CSR) is an organizational process that internationalizing firms partake in to concurrently boost firm-specific advantages (FSA) as well as decrease the liability of foreignness. In this research, MNE CSR activity is viewed as part of the firm’s internationalization strategy. A model of how FSA and country-specific advantages (CSA) affect CSR activity is conceptualized.
Furthermore, CSR activity is examined within Rugman’s (1981, 2007) FSA/CSA matrix in order to fully analyze how CSR is embedded within internationalization strategy. The relationships proposed leads to theoretical propositions made within the paper. Methodology for future research is proposed in order to empirically test the proposed relationships. A 2-study analysis is proposed. First, a hierarchical multiple regression analysis is proposed to test the relationships proposed within the conceptual model. Second, an analysis of covariance (ANCOVA) is proposed to test the relationships within the FSA/CSA matrix. Contributions and implications are discussed. (For more information, please contact: Arilova A Randrianasolo, Saint Louis University, USA:
Lagging Behind? The CSR Character of Nestle Ulf Henning Richter, Nottingham University
In this in-depth case study, I analyze and discuss the CSR character of Nestlé, applying the theoretical
framework developed by Basu and Palazzo (2008). I conducted thirteen in-depth, semi-structured interviews in two rounds with senior managers from Nestlé which were analyzed using qualitative (multiple coding) and quantitative (ANOVA, ?2 analysis, correspondence analysis) techniques. The findings indicate that Nestlé’s CSR approach can be characterized as that of a “laggard” which is only slowly closing the gap to other world-leading companies facing similar serious environmental and social challenges. The study shows that understanding the cognitive processes underlying the CSR decision making process is of fundamental value of analyzing and changing the CSR approach of a firm. (For more information, please contact: Ulf Henning Richter, Nottingham University, China: [email protected])
Corporate Social Responsibility, Smoking Bans and Market Seeking FDI in the Tobacco Industry.
Chris Jones, Aston University Nigel Driffield, Aston University
Jo Crotty, University of Salford Manchester
Page 148
AIB 2013 Conference Proceedings
This paper seeks to examine the relationship between smoking bans and the propensity of tobacco firms to engage in FDI. Using a firm level database of all tobacco firms, we examine the FDI decision in this sector through the combined lenses of CSR and institution theory to show that smoking bans at home are an
important institutional intervention, as they appear to reduce the propensity of FDI in developing countries. Our analysis also suggests that a higher proportion of the global tobacco industry will be dominated by firms from countries without a smoking ban. (For more information, please contact: Chris Jones, Aston University, United Kingdom: [email protected])
Understanding the Words of Relationships: Language as an Essential Tool to Manage CSR Risk in Communities of Place
W. Travis Selmier, II, Indiana University
Aloysius Newenham-Kahindi, University of Saskatchewan Chang Hoon Oh, Simon Fraser University
Multinational enterprises (MNEs) encounter relentless stakeholder pressures operating across linguistic and cultural boundaries, particularly where communities of place at the base of the pyramid are involved. Using (micro)sociolinguistics - the study of how language influences society and business relations – we explore how language empowers some MNEs to successfully manage stakeholder relationships while other MNEs falter.
Surveying corporate social responsibility strategies of 15 MNEs from Australia, Canada, China, South Africa, and the U.K. operating across four Swahili-speaking East African countries, our research examines how a regional lingua franca, like Swahili, may be employed to build sustainable forms of MNE–stakeholder interactions. (For more information, please contact: W. Travis Selmier, II, Indiana University, USA: [email protected])
The Drivers of Global Corporate Social Responsibility: The Community-Event-Firm Triangle Luis Ballesteros, University of Pennsylvania
I contribute to the study of corporate social responsibility (CSR) at the international level with a theoretical model comprising three systems: the firm, the beneficiary community, and the event. I test the theoretical value of my approach by using a panel of 2012 multinational corporations and analyzing data of donations to the relief fund of natural catastrophes (corporate philanthropic catastrophe response or CPCR) that affected different countries in the last 10 years. I show that the institutional and socioeconomic development of the beneficiary community, in addition to measures of cross-national distance, exert a nontrivial influence in the variance of donation. Additionally, I demonstrate that the salience of the event for the global community is positively associated with the likelihood of a firm engaging in catastrophe response. Understanding the factors that affect CPCR behavior not only has relevant theoretical implications for the study of global CSR. Information of the firm-community linkages and the political and institutional arrangements that foster and help predict
I contribute to the study of corporate social responsibility (CSR) at the international level with a theoretical model comprising three systems: the firm, the beneficiary community, and the event. I test the theoretical value of my approach by using a panel of 2012 multinational corporations and analyzing data of donations to the relief fund of natural catastrophes (corporate philanthropic catastrophe response or CPCR) that affected different countries in the last 10 years. I show that the institutional and socioeconomic development of the beneficiary community, in addition to measures of cross-national distance, exert a nontrivial influence in the variance of donation. Additionally, I demonstrate that the salience of the event for the global community is positively associated with the likelihood of a firm engaging in catastrophe response. Understanding the factors that affect CPCR behavior not only has relevant theoretical implications for the study of global CSR. Information of the firm-community linkages and the political and institutional arrangements that foster and help predict