Transnational corporations (TNCs) are recognizing the necessity of stratifying countries according to level of risk exposure so that they may optimize planning for:
Strategic variables affecting business more strongly today than in the past are inflation, global competition, and an increasingly restrictive business environment resulting from…
Abstract
Strategic variables affecting business more strongly today than in the past are inflation, global competition, and an increasingly restrictive business environment resulting from governmental laws and regulations. However, in the years ahead impact from shortages could be greater than that from all the others combined. Companies have been able to adjust to changes in most of the variables, but the threat of stockouts poses tremendous difficulties and challenges for business.
Charles W. Hofer and Terry P. Haller
How do you balance the rewards against the risks when you're thinking of new international operations? Here's a technique that works for domestic businesses looking to put a toe…
Abstract
How do you balance the rewards against the risks when you're thinking of new international operations? Here's a technique that works for domestic businesses looking to put a toe in the water overseas as well as for established multinationals.
Introduction In the management literature there are numerous discussions of how managers may be affected by their cultural and social backgrounds as well as by behavioural and…
Abstract
Introduction In the management literature there are numerous discussions of how managers may be affected by their cultural and social backgrounds as well as by behavioural and economic factors. The family structure and the relationship between family members, rate of acceptance of authority in the society, economic condition and overall standard of living, as well as personal and behavioural characteristics of managers contribute to differences in their management styles in different nations. Despite this general proposition about the factors which affect management styles, studies dealing with practices in developing countries are virtually non‐existent. Whatever is available for one country or one industry, specific studies demonstrate very little managerial orientation. The purpose of this article is to point out management styles prevailing among managers of both private and public sectors of the Middle Eastern countries, particularly Turkey. To this end, applicability of different management systems is discussed and managerial implications are suggested for orderly decision‐making purposes.
The end of World War II brought about many economic changes, among them the tremendous increase of US manufacturing activities in Western Europe. This astronomical increase of…
Abstract
The end of World War II brought about many economic changes, among them the tremendous increase of US manufacturing activities in Western Europe. This astronomical increase of foreign direct investment (FDI) required a new theory ‐ an economic theory of foreign direct investment. International economic theory, which traditionally had ignored the FDI decision, was not able to explain the FDI decision, nor could it explain the phenomena of multinational corporation (MNC). In a world of perfect competition, foreign direct investment would be absent. And when all markets operate efficiently, when there are no external economies of production and marketing, when information is costless and there are no barriers to trade or competition, international trade is the only possible form of international involvement. Logically, it follows that it is the departures from the models of perfect competition that must provide the rationale for foreign direct investment. Since, according to the Heckscher‐ Ohlin‐Samuelson (neoclassical) model, trade of goods will equalize factor prices in a world of factor immobility. In fact, the FDI decision is even ignored by new international economics which, since the late 1970's, has utilized new developments in the field of industrial organization. Proponents of these new theories have developed models that emphasize increasing returns and imperfect competition and see the possibility that government involvements in trade (trade restrictions, export subsidies, etc.) may under some circumstances be useful. All of this is done while foreign direct investment is ignored.
The disagreement concerning basic concepts and definitions is still characteristic of strategic management as a field of study. Strategic plans can be elaborated within different…
Abstract
The disagreement concerning basic concepts and definitions is still characteristic of strategic management as a field of study. Strategic plans can be elaborated within different frameworks, for example, the descriptive or prescriptive (Mintzberg 1987, pp. 2–6). Since varying, even conflicting paradigms and methodologies are employed, strategic plans for the same organisation elaborated by independent researchers are different. Varying solutions show strengths and weaknesses, unavoidably inherited from the frameworks within which they were formulated. This circumstance, in turn, creates problems in comparing different strategic plans in order to choose the best alternative, or to make use of their strengths in an attempt to prepare somewhat eclectic, but comprehensive, plans. Such a situation is reinforced by the lack of meta‐paradigm which allows us to evaluate different outcomes resulting from different paradigms.
This paper presents the results of an empirical investigation into the capital budgeting practices of UK multinationals for foreign direct investment, with particular reference to…
Abstract
This paper presents the results of an empirical investigation into the capital budgeting practices of UK multinationals for foreign direct investment, with particular reference to the use of a conceptual framework of risk and return. Drawing upon Robock's (1965) criticisms of the lack of a conceptual framework for businessmen within which to make international financing and capital budgeting decisions, we assess briefly the developments in the theoretical framework of risk and return since Robock's address. We then review the existing empirical literature (mainly from America) and combine this with our own research involving 59 UK multinationals, to conclude that the developments in the theoretical framework of risk and return have not been translated into practice. We offer suggestions as to why this is the case.
The iterative nature of the industrial engineering (IE) processrequires that it be given managerial direction. This can be achievedthrough the development of IE policies as an…
Abstract
The iterative nature of the industrial engineering (IE) process requires that it be given managerial direction. This can be achieved through the development of IE policies as an integral component of corporate policies. Not only does this render perspective to IE policies, but it also serves as a motivating force in their implementation. Implementation is essentially a change process and this approach to the analysis of the function is to treat the organisation as an information processing unit in which both the formal and informal channels of organisational communication are utilised to transmit the substance of policy. Further, the relationship thus established between the needs of the organisation and those of its employees can lead to a better understanding and a greater probability of acceptance of policy.
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Llewellyn D. Howell and Donald Xie
States that foreign investors have clamoured into Asia in the 1990s hoping to tap into the spectacular economic growth, but have often done so without awareness of existing or…
Abstract
States that foreign investors have clamoured into Asia in the 1990s hoping to tap into the spectacular economic growth, but have often done so without awareness of existing or likely future political and social conditions which could affect their investments and business operations. Adds that political risk insurance is available from agencies such as the World Bank’s MIGA or the US government’s OPIC, but projecting needs for such insurance has not been a consistent practice. Reveals that business publications, such as The Economist, and firms such as Business Environment Risk Intelligence, Inc. (BERI), provide regular projections of political risk based on a variety of observed political and social variables. Examines choice of these variables in an Asian context and assesses statistically the forecasting capability of The Economist and BERI models. Finds that the existence of underlying theory makes a positive difference in the ability of the models to forecast correctly and to provide useful advice to foreign investors. Indicates that both models include variables representing conditions that clearly indicate future trouble for investors. Shows that, with some revisions, existing models of political risk can be useful in guiding investment and trade.
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Yunlong Duan, Lei Huang, Hao Cheng, Lisheng Yang and Tianzhou Ren
The key to the success of multinational corporations’ (MNCs) business models is the improvement of their innovation quality. From the cross-border knowledge management…
Abstract
Purpose
The key to the success of multinational corporations’ (MNCs) business models is the improvement of their innovation quality. From the cross-border knowledge management perspective, this paper aims to analyze the improvement path of innovation quality of MNCs and construct the functional path of the relationships among the knowledge creation, knowledge application and innovation quality of MNCs in the cross-border knowledge management process, so as to achieve the success of their business models. Based on this, this paper introduces cultural distance to further analyze how such relationships will change with the cultural distance level.
Design/methodology/approach
Using data from Chinese A-share listed MNCs with production operations located in the Asia-Pacific region from 2014 to 2018, this paper constructs a panel data model to test the mediating effect of knowledge application and the moderating effect of cultural distance on such relationships.
Findings
This paper obtains the following research findings: knowledge creation and knowledge application each have a significant, inverted U-shaped relationship with innovation quality; knowledge creation has a significantly positive correlation with knowledge application and knowledge application has a partial mediating effect on the relationship between knowledge creation and innovation quality; cultural distance has a moderating effect on such relationships. The specific moderating direction depends on the extent of the knowledge creation and knowledge application.
Practical implications
The findings are helpful to MNCs’ managers, providing guidance and serve as a reference for them to make strategic decisions on cross-board knowledge management and business models innovation.
Originality/value
The theoretical contributions are summarized as follows: First, it further enriches and expands the theoretical of knowledge management and innovation quality relationship. Second, it further enriches and expands the theoretical framework of knowledge management. Third, it further enriches the theoretical framework of cross-cultural management.