This paper explores the rising tensions between efficiency and resilience in global value chains (GVCs) in the post-COVID-19 world and discusses their potential implications for managing and coordinating GVCs. It considers efficiency and resilience in GVCs in relation to each other and explores the possibility of tensions between the two concepts. Particularly, it is argued that, while efficiency and resilience in GVCs may be at odds with each other in the short-term, they are not necessarily mutually exclusive in the long run. The paper adds to the discussions of trade-offs involved in managing contemporary GVCs and offers a new perspective on the interplay between efficiency and resilience. Embedded in the discussion of resilience vis-à-vis efficiency, we also provide a long-term perspective to prepare for and deal with global pandemics - or other risks - in an increasingly interconnected world. We lay out decisions and steps involved in finding the balance between efficiency and resilience, as both need to be maintained concurrently over longer periods.
Multinationals (MNCs) need to find the balance between developing a globally standardized organizational culture and having multiple locally- adapted organizational cultures. Past literature embodies the bias that differences between MNC units, unless managed, would lead to adverse consequences. To counter this negative bias, we focus on cultural fit, which is the amount of difference yielding maximum benefit. We argue that depending on comparison criterion and desired outcome, fit could be achieved by establishing similarities or maintaining differences. Using evolutionary economics, we explore knowledge transfer within MNCs and test our hypotheses on fit using a unique dyadic dataset from 186 MNCs.
Overview: To maximize the rent-yield of the innovation and product development process, firms attempt to commercialize knowledge through activities that require effective knowledge transfer. Knowledge transfer remains a challenge for most firms, however, due to the recipient organization’s lack of ability to absorb and apply new knowledge. We examined four knowledge-transfer projects within a large multinational corporation. We identified important actions, lessons learned, and recommendations that practitioners can use to enhance their own knowledge-transfer processes.
The aim of this paper is to shed light on the concept of strategic consensus and its development connected to digital transformation for firm internationalization. Based on one in-depth case study we show that strategic consensus develops over time among top managers. Once strategic consensus has been achieved among the top management team (TMT), the work to implement the strategic consensus among the other organization members remains. This paper sheds light on the importance of resource-commitment in achieving strategic consensus, especially connected to digital transformation and internationalization. Resource-commitment is necessary to convince and motivate organizational members to partake in digital transformation processes, which often will have strong implications for the continued internationalization of firms.
Despite, or perhaps due to, its central role in international business research, cultural distance is a widely debated and criticized construct. In this paper, I will examine the conditions under which two specific assumptions regarding the cultural distance construct (viz., symmetry and discordance) can get illusionary and misleading. Understanding the reasons behind the (in)admissibility of these assumptions is especially important to guide future cross-cultural research to take necessary steps towards conceptual and methodological adjustments and remedies. Towards that end, I introduce the idea of status heterogeneities between social actors who interact in a multicultural context, and how these heterogeneities can mold the mutual perceptions and attitudes between individuals. As the primary means with which firms internationalize, cross-border mergers and acquisitions are used as the context within which dual roles and implications of status and cultural distance are theorized. Auxiliary insights provided by status theories can explain why and when assumptions of symmetry and discordance could be wrong and misleading. Furthermore, incorporating status into the extant literature can reconcile inconsistent empirical results and help future research avoid under-specified models that do not account for systematic biases in their sample sets.
Despite decades of research, the key factors for success in mergers and acquisitions (M&As) and the reasons why M&As often fail remain poorly understood. While attempts to explain M&A success and failure have traditionally focused on strategic and financial factors, an emergent field of inquiry has been directed at the sociocultural and human resources issues involved in the integration of acquired or merging firms. This research has sought to explain M&A performance and underperformance in terms of the impact that variables such as cultural fit, management style similarity, the pattern of dominance between merging firms, the acquirer's degree of cultural tolerance, and the social climate surrounding a takeover have on the postmerger integration process. In this article, we attempt to take stock of, and synthesize, the findings from research on sociocultural and human resources integration in M&A, to identify conflicting perspectives and unresolved questions as well as several underresearched areas, and then use our analyses to propose an agenda for the next stage of research in this field.
This paper complements existing research on the role of cultural similarity in cross-border M&As by examining their effects in conjunction with relative status positions of merging entities. Two experimental studies with senior managers were conducted and reported. Whereas status breeds competence-based trust between acquirer and acquired unit, similarity is conducive to benevolence-based trust. Furthermore, higher status position of acquirer is shown to have significant effect on acquired unit members’ social preferences toward the former (Study1). Lastly, similarity and status are found to have distinct and joint effects on knowledge transfer in M&As, which designate an interesting tradeoff between acquired unit members’ perceptions of the credibility of the acquirer and the usefulness of the advice it provides (Study 2). Theoretical and practical implications of the findings are discussed.
The concept of psychic distance has several entrenched assumptions that have not been put to sufficient systematic scrutiny. We address this gap by investigating the assumptions of symmetry (i.e., whether psychic distance from Country A to Country B is the same as that from Country B to Country A) and discordance (i.e., whether differences in psychic distance between two countries always lead to lack of fit) of psychic distance in cross-border mergers and acquisitions. We propose a new framework, which differentiates between the extent (i.e., the degree to which two countries are perceived to be similar/different) and effects (i.e., the degree to which distance perceptions create favorable or unfavorable attitudes and responses) of psychic distance perceptions. We argue that relative status positions affect extent and effects of psychic distance. To test our predictions, we collected data through policy …
Despite wide recognition of the central role of knowledge and its transfer, extant research has focused much on some important aspects of knowledge transfer and paid little attention to others. We focus on two underexplored issues in the knowledge transfer literature, namely: (a) compatibility of new knowledge with recipients’ needs, interpretations of its past experiences and its existing norms, and (b) organizational unlearning, which moderates the relationship between compatibility and extent of successful knowledge transfer. We examine different types and dimensions of knowledge compatibility and organizational unlearning within our proposed knowledge transfer process framework. We situate our discussion primarily within knowledge transfer in cross-border mergers and acquisitions. Based on the proposed model, we also offer propositions future research can test.
Institutional theory has been increasingly used to decipher implications of the liability of being a foreign firm. Earlier studies have argued that multinational corporations bear social costs arising from lack of legitimacy and thus need to engage in isomorphism to increase their likelihood of survival. Drawing on insights gained from transforming economies, this study reconsiders the espoused relationships among legitimacy, local isomorphism, and overcoming the liability of foreignness. We argue that idiosyncrasies of transforming economies could engender (1) varying levels of need for gaining legitimacy of local constituents and (2) alternative ways other than local isomorphism for gaining legitimacy from local institutional actors.
Although received research emphasizes direct experiential knowledge as a key driver of firms’ internationalization, the role of indirect experience has been increasingly recognized in recent studies. In this paper, we extend these studies by examining the role of source and context of experiential knowledge in relation to firms’ internationalization into specific host markets, and offer a fine-grained analysis of when and how indirect experience complement or substitute direct experience. We test our hypotheses with data from 1,478 Swedish SMEs. Our results reveal that a firm can address its knowledge gaps and increase its extent of internationalization into a host market by combining direct and indirect experience, especially when they yield different types of knowledge needed for internationalization. We further show that direct and indirect experience derived from comparable contexts could substitute for each other but may also create knowledge redundancies.
International diversification is a fundamental pillar of multinational corporations' (MNCs) growth strategies. Consequently, there is a considerable body of research on the performance implications of MNCs' international diversification strategies. We extend this literature by adopting a relational view where we compare the diversification profiles of firms in an inter-organizational context. We argue that the relative characteristics of firms' and their partners' diversification profiles is an indicator of parties' resource bases and thereby can explain if and when inter-organizational ties yield optimum performance outcomes. We examine these relative characteristics and propose a conceptual refinement by differentiating between the degree and content dimensions of international diversification. Analyzing data from 202 manufacturing firms from the S&P 500 list, we find that firms achieve optimum performance when their partners have moderately higher degrees of international diversification and a moderate overlap of presence in foreign markets.
Research Summary This paper examines an understudied aspect of network relationships-that is, direction of relational ties. Tie direction is important since it can shape when and how firms can benefit from the international experience of other firms. We focus on a specific type of network relationship-that is, interlocking directorates, which provides a clinical context to study directionality. We show that, due to their higher familiarity, identification, and executive power, focal firm directors serving in other firms' boards (i.e., outgoing ties) are more beneficial for utilizing partners' international experience. However, outside directors sitting on the boards of focal firms (i.e., incoming ties) can bring more useful first-hand experience and facilitate international expansion once these ties get stronger. Theoretical and practical implications of these results are discussed. Managerial Summary As they grow internationally, firms need to manage risks and uncertainties of doing business abroad. In this regard, they can potentially benefit from the international experience of other firms in their network. We show how firms can realize these benefits by means of interlocking ties (i.e., shared board memberships). To that end, we examine the directionality of interlocking ties. Specifically, we argue that a firm's ability to utilize partners' experience for its own international expansion is greater when its directors sit on the boards of other firms (so-called outgoing ties) compared to when other firms' directors sit on its own board (so-called incoming ties). However, experience coming through incoming ties is more effective for a firm's international expansion once these ties get stronger.
Absorptive capacity has received considerable scholarly attention due to its ability to explain heterogeneous degrees of learning from complex and dynamic knowledge environments. Extant absorptive capacity frameworks and models unmistakably take firms as the focal unit and level of analysis. Mounting empirical evidence, in contrast, shows the growing importance of teams in acquiring and utilizing external knowledge. Teams are not just scale models of firms; they have unique attributes and function as an active context of organizational learning. However, previous research does not consider such idiosyncrasies when conceptualizing absorptive capacity. We focus on absorptive capacity within the meso-level context of teams and problematize several entrenched assumptions behind existing models. We then propose a re-conceptualization of absorptive capacity with four new dimensions that collectively address these assumptions and pay systematic attention to the distinctive characteristics of teams as active learning contexts.
Concurrent increase in the degree of competition and access to information makes it both a challenge and necessity for firms to develop their ability to sense, seize and exploit knowledge-based advantages. Since absorptive capacity reflects an organization's ability to extract innovative ideas from its environment, it plays a critical role in fostering intrapreneurship and innovative performance within existing firms. In this paper, we adopt micro-foundations perspective and study how goal orientations of employees affect their individual-level absorptive capacity, which would in turn shape collective innovative performance. Furthermore, we examine conditions under which individuals' absorptive capacities can efficiently aggregate and leads to increased collective innovation performance. We tested our theoretical model using an original dataset collected from 648 knowledge workers from 126 functional areas. Our analysis show that individuals' learning and prove orientation are important predictors of their absorptive capacity, and that individuals' aggregate absorptive capacity would lead to positive innovation outcomes especially when their activities are highly coordinated.
While extant literature conceptually recognizes individuals as an integral part of the process with which organizations absorb new knowledge, past research has paid limited attention to the antecedents of individual -level absorptive capacity. In this paper, we address this research gap. We build on the interactionist perspective and propose that individual -level absorptive capacity is shaped by the joint effects of individual employees' dispositions (i.e., need for cognition and proactive personality) and their work context (i.e., time pressure and autonomy). Significantly, we also recognize the multidimensional nature of absorptive capacity, which suggests that individuals need different capabilities to learn and utilize new knowledge in their organizations. We test our predictions using a unique dataset from 646 employees working on knowledge -intensive tasks. Our results show that the joint effects of dispositional and contextual antecedents are not uniform across different dimensions of individual -level absorptive capacity.
Absorptive capacity has been marked as one of the most important capabilities of Multinational Corporations for effective management of knowledge. To address calls for research on micro-level origins of the concept, this paper focuses on the determinants of individual-level absorptive capacity. We examine the extent to which individuals’ capability to recognize, assimilate and exploit new knowledge from the environment is shaped by different forms of work motivation (i.e., intrinsic and extrinsic), overall ability, exposure to diverse country contexts and personal characteristics. Drawing on andextending the Motivation–Ability–Opportunity framework, we develop and test a set of hypotheses. Using a unique dataset collected from 648 individuals in a multinational corporation, we show that individuals’ intrinsic motivation and overall ability are the key antecedents of absorptive capacity. In contrast, extrinsic …
Transfer of knowledge-based resources from acquirers to the acquired units has been ubiquitously emphasized as an important driver of post-acquisition integration. Equally emphasized is the importance of recipient unit’s absorptive capacity for the success of knowledge transfer and the facilitating role of HRM practices in developing absorptive capacity. In this paper, we integrate different streams of research on post-acquisition integration, knowledge transfer, absorptive capacity and HRM practices. Different from most past research, we pay attention theoretically and empirically to the multi-dimensional nature of both knowledge transfer and absorptive capacity. We test our hypotheses on a sample of acquired Chinese subsidiaries of 181 multinational corporations from seven countries. We find that successful inflow and implementation of knowledge require the acquired unit to have distinct types of capabilities each of which can be developed by a specific HRM practice. These results contribute literature by recognizing absorptive capacity as a manageable capability and identifying how different components of this capability could be developed by specific HRM practices. Furthermore, our results shed light on human side of M&As by examining how companies can foster post-acquisition integration by fine-tuning the absorptive capacity of acquired units.