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Joseph L. C. Cheng is Professor of International Business and Management and Director of the Illinois Global Business Initiative (IGBI) in the College of Business at the University of Illinois, Urbana-Champaign. During the 2008–2009 academic year, he was a visiting professor at the University of Hong Kong on leave from the University of Illinois.

Taken together, these three chapters cover three important building blocks in the effective management of headquarters–subsidiary relations: corporate structure, executive attention, and resource allocation. A common theme across the three chapters is their focus on system flexibility and how this can be achieved for the MNE. Specifically, their research suggests that through the use of matrix structures coupled with conflict resolution training for managers, promoting subsidiary initiatives and profile building to capture headquarters attention, and allocating resources with limited committedness to foreign operations would enable the MNE to better scan and respond to a fast-changing external environment. This system flexibility is particularly important for MNEs that adopt the differentiated network model, which among other things, requires subsidiaries to share knowledge and resources in the formulation and implementation of company-wide response actions as demanded by the circumstance.

In 1991, the Academy of Management Review (AMR) published a special issue whose focus was on the dearth of internationally oriented management theory and studies addressing this. The management literature was filled with theories formulated primarily by scholars from the United States or other Westernized areas of the world and with studies whose samples were generally, also, from these Western areas. After noting the trend toward international diversity in the “American workforce,” AMR special guest-editors Doktor, Tung, and Von Glinow (1991) noted that the need for theory that tests the international-applicability of management theories was – not only desirable, but – urgent.

At the time of this writing, the world was experiencing its worse recession and financial crisis since the Great Depression of the 1930s. After half a century of world growth and two decades of transformation to capitalism by much of Eastern Europe and Asia, world national product and trade will fall this year. For the first time since the postwar growth miracle, multinational enterprises (MNEs) are restructuring, cutting their foreign investments and subsidiary operations. Many senior expatriate managers, particularly those working in the global finance industry, have lost their jobs or been repatriated. All eyes are on the upcoming G20 meeting in April, where the new U.S President Barack Obama will be meeting his counterparts from China, the United Kingdom, Germany, Japan, and other member nations to discuss and formulate globally coordinated fiscal and monetary policies to help reverse the course of the current world economic turmoil.

The early research on multinational enterprises usually relied on traditional economic theory or relatively simple, but powerful, theories developed in the field of international business. They were developed to help us understand why firms entered international markets (e.g. Dunning’s eclectic theory). However, as the field of international management (and international business) has developed further, with more scholars from adjacent disciplines conducting research on issues of importance to international markets and multinational firms, newer, more diverse and complex theoretical perspectives have been developed and diffused. The purpose of this volume is to explore some of these important and newer theoretical perspectives. For example, herein, we examine the recent theoretical work on the metanational that emphasizes knowledge-sharing among subsidiaries on a global basis. We also explore theoretical issues related to international entrepreneurship, a new, important, and growing perspective in the field of international management. Additionally, we include work focused on the liabilities of foreignness and other critical issues in the management of multinational enterprises. As such, we believe that this volume provides a basis for future research on the multinational enterprise, and we hope that the work contained herein serves as a catalyst for such research using the different theoretical perspectives examined herein.