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Article

Yih-Teen Lee and Nana Yaa Gyamfi

Cultural identity, a specific form of social identity that refers to a person’s degree of identification and sense of belonging to a specific cultural group, has been extensively examined as a kind of social identity over the past decades, especially in the fields of migration, cross-cultural psychology, and applied international management. Meanwhile, exposure to settings with different cultures typically triggers a process of acculturation, enabling individuals to develop multicultural identities, whereby people see things from multiple cultural groups’ perspectives, feel at one with the cultural groups, and act according to the norms of those cultural groups. Individual organizational members serve as the conduit by which culture influences and is influenced by organizational life. There exist various forms of multicultural identities with different psychological and behavioral implications on individuals. In terms of plurality, to date, extant studies accumulated extensive knowledge on biculturalism, which focuses on individuals having two distinct cultural identities and how these identities intersect and influence the individual. Beyond biculturalism obtained through birth, ancestry, or immersive foreign experience, individuals may become multicultural by being simultaneously immersed in more than two cultures: a situation common among children of immigrants (i.e., second-generation immigrants), children raised in multicultural households, third culture individuals who spend their formative years outside their passport country, and individuals living within multicultural societies. A key to understanding multicultural identities is how these multiple identities are structured within individuals. Scholars largely agree that the structural pattern of identities affects the outcomes and degree of synergy among multiple identities. Widely accepted modes of structuring multiple identities include relative strength of identities involved and how multiple identities relate to each other. Scholars have built on these lines of thinking to examine specific forms of multicultural identities and their outcomes. Furthermore, research indicates that multiculturals possess unique identity resources relevant to organizational life, including cognitive strengths, relational capital and belonging, and leadership-related competencies. Although there is evidence for responsiveness of multicultural identity to situational cues, there are also strong arguments made in favor of the agency of individuals over their multiple identities. The foregoing notwithstanding, individuals with multicultural identities must balance their agentic enactments of identity with societal requirements of legitimacy. In particular, business organizations play a vital role in providing identity workspaces and other enabling factors which legitimize multicultural identities. Additionally, business organizations play the role of balancing power, status and other dynamics between multicultural and non-multicultural members.

Article

Internationalization of R&D facilitates knowledge sourcing of multinational corporations (MNCs) on a global scale. As MNCs internationalize R&D, they not only engage in domestic-driven R&D but are actively involved in overseas-driven R&D. And accordingly, the role of overseas R&D laboratories often evolves, from applying the HQ-generated innovation to local market, to innovating locally and contributing to the parent company. Within an MNC boundary, knowledge flows have become multidirectional: on top of the most typical knowledge flows from headquarters (HQ) to a subsidiary, reverse knowledge flows from a subsidiary to HQ as well as horizontal knowledge flows among overseas subsidiaries have become more salient. In addition to knowledge flows within a firm, increasing attention has been paid to external knowledge sourcing, i.e., knowledge sourcing from foreign locations outside the firm. MNCs commonly engage in local knowledge sourcing, i.e., sourcing knowledge from an overseas local environment, to tap into local hotbeds of innovation. But MNCs are also increasingly conducting global knowledge sourcing, i.e., sourcing knowledge from around the world, to practise global open innovation. Theoretically, knowledge sourcing in international R&D has often been examined from the capability and embeddedness perspectives. The effect of capability has been discussed in connection with motivation, autonomy, and mandates of subsidiaries. The effect of embeddedness has been discussed in connection with complementarity between external and internal embeddedness. As future research agenda, the following are suggested. First, cross-fertilization among the research fields of international R&D, global innovation, and open innovation deserves further attention. Second, greater research focus can be placed on managerial processes of global knowledge sourcing. Third, further research can be advanced on global knowledge sourcing at the team level. Fourth, the association between corporate governance and global knowledge sourcing can be investigated further. Fifth, much more attention needs to be paid to microfoundations of global knowledge sourcing. And lastly, further evolving patterns of global knowledge sourcing by advanced country multinationals (AMNCs) and emerging economies multinationals (EMNCs) continue to be relevant.

Article

Tanusree Jain and Jiangtao Xie

Having a Code of Ethics (COE) has become a common practice within large companies since the 1980s. A COE serves multiple functions for organizations: as an internal control mechanism to guide employees during ethical dilemmas, a benchmark for fostering ethical corporate culture, and as a communication tool to signal organizational commitment to stakeholders. Four major theoretical frameworks underpin the extant academic scholarship on COEs. In particular, organizational justice and stakeholder theories highlight the role of individuals in adopting and shaping a COE, and the institutional theory emphasizes the influence of the exogenous environment on the convergence and/or divergence of COEs across firms and contexts. Integrative social contracts theory captures the significance of both individuals and the institutional environment and views COEs as a contractual obligation that guides managers and employees to manage contradictions between local and global norms. Within these theoretical framings, significant variations in the nature and stakeholder orientations of COEs have been detected across the developed and developing world. In the developed contexts, a comparative institutional analysis using the national business system approach shows that while in the compartmentalized cluster (the United States, United Kingdom, Canada, Australia, and Japan), expectations of market participants and firm owners are key drivers of COEs; in the collaborative cluster (Germany, Ireland, and the Netherlands), firms develop COEs that have a wider focus oriented towards multiple stakeholders such as employees, suppliers, and the environment. Whereas in the state-organized cluster (South Korea, Spain, Greece, and Slovakia) the role and the nature of the state are important guiding factors. The coordinated industrial district cluster (Italy) characterized by alliances among smaller artisanal firms demonstrates a human-centric view of business embedded within their COEs. Excluded from the national business systems categorization, the Nordic cluster displays a unique distinctiveness in its approach to COEs through the presence of a structured moral apparatus within firms. In the developing world, country-specific institutional characteristics play a vital role behind adoption of localized a COE, yet nonstate actors—namely multinationals enterprises, and international and supranational institutions—promote the diffusion of hyper-norms. Given the pervasiveness of corporate misconduct despite the global diffusion of COEs, scholars must pay heed to understand the conditions under which gaps between a COE adoption and implementation arise. Equally, more scholarly attention needs to be accorded to a systematic investigation of COEs in transitional and emerging contexts. This becomes particularly necessary in the face of sociological changes, a fast-evolving landscape of local and transnational regulations including those arising from global events such climate change, and COVID-19, and the co-existence of multilevel COEs at the industry, firm, and professional levels.

Article

Corporate governance research has a long and varied history, having evolved from a broad number of scholarly disciplines, including sociology, law, finance, and management. Across these various disciplines, it is maintained that governance is essential to corporate success, as it provides strategic and ethical guidance to the company. While research has largely focused on internal mechanisms through which governance is enacted (such as ownership arrangements, board structures, managerial rewards and incentives, etc.), external forces and mechanisms are increasingly important to modern businesses. External corporate governance mechanisms emanate from outside the organization and support forces that promote governance structures, processes, and practices by top executives and board directors. Institutions, industries, markets, networks, and strong individual external stakeholders all work to influence corporate governance decisions and behaviors both directly and indirectly. The external forces induce mechanisms that influence desirable behaviors or intervene when internal mechanisms are compromised or ineffective. Recent literature on external governance mechanisms can help scholars and practitioners develop a better understanding of this important area of inquiry, and future research should consider three broad suggestions to move the field forward: differentiating between forces and mechanisms; recognizing unique stakeholders, boundaries, and levels of analysis; and improving empirical designs to better recognize and understand what factors matter in instituting governance adjustments and behavior changes.

Article

In international business, teams can take on a variety of forms, including domestic collocated teams, multinational collocated teams, global virtual teams, and multicultural teams. All of these types of teams offer the potential for developing innovative products and services, but they also may face substantial challenges with respect to collaboration and coordination. Team members are likely to identify with a variety of affiliations, based on dimensions such as gender, family roles, ethnicity, culture, nation, profession, organization, and team. Identification with each of these social groups brings with it the opportunity for diverse insights and perspectives, skill breadth, and broad social connections. However, this can lead to both benefits and challenges for teams. As a result, the ability to negotiate identities has become critical in international business. Drawing upon concepts of social identity, an identity lens can be used to document the promise and problems of teams in international business. An understanding of how multiple identity interactions within an individual can affect processes and outcomes for the team has the potential to create a more nuanced comprehension of international teams.

Article

In 1975, the phrase “vertical dyad linkage” (VDL) was introduced to begin examining the quality of the roles between the leaders and direct reports, and it was soon discovered that the linkages ranged between high quality and low quality. That linkage progressed into “leader–member exchange” (LMX) in 1982. In essence, research reached a point where it found a continuum of the quality of the relationship between the two members. High-quality relationships put the employees into the leader’s “ingroup,” while low-quality relationships left employees on the outside looking in. It followed that those in the ingroup would have some say in the decision-making, would have easier access to the leader, and would garner more respect and “liking.” Researchers have used the LMX-7 to examine how the quality of superior/subordinate relationships affects individual, interpersonal, and organization factors like job satisfaction, communication motives, and organizational identification (as did the original LMX scale). Although the LMX-7 remains one of the most prominent psychometric measures of LMX, researchers still debate whether the construct should be considered unidimensional or multidimensional. While the intricacies of LMX-7 versus LMX have been argued, and with teams becoming more of an organizational resource, team–member exchange (TMX) was found to be a supported extension of LMX. While at this point TMX is lacking in the volume and pace of research, due to the difficulties of measurement among a group of people who might have a variety of leaders during the process, the existing research has produced some results that are extremely relevant, now and in the future. Examples of what has been found when the team exchange relationship is high include reduced stress, increased psychological empowerment, increased creativity, increased team performance, increased individual performance, increased organizational citizenship behaviors, increased organizational commitment, and increased job satisfaction, just to name a few. In sum, the investigation into LMX provides a history of the field of LMX and its many iterations and the role it plays in leadership studies. This research includes LMX antecedents, consequences, moderators, mediators, and outcomes, as any field in which over 4,500 papers have been published needs an effective way to highlight the progress and pathways.

Article

Sherry E. Sullivan and Shawn M. Carraher

The kaleidoscope career model (KCM) was developed by Mainiero and Sullivan in 2006 based on data from interviews, focus groups, and three surveys of over 3,000 professionals working in the United States. The metaphor of a kaleidoscope was used to describe how an individual’s career alters in response to alternating needs for authenticity, balance, and challenge within a changing internal and external life context. As a kaleidoscope produces changing patterns when its tube is rotated and its glass chips fall into new arrangements, the KCM describes how individuals change the pattern of their careers by rotating the varied aspects of their lives to arrange their work–nonwork roles and relationships in new ways. Individuals examine the choices and options available to create the best fit among various work demands, constraints, and opportunities given their personal values and interests. The ABCs of the KCM are authenticity, balance, and challenge. Authenticity is an individual’s need to make choices that reflect their true self. People seek alignment between their values and their behaviors. Balance is an individual’s need to achieve an equilibrium between the work and nonwork aspects of life. Nonwork life aspects are defined broadly to include not only spouse/partners and children but also parents, siblings, elderly relatives, friends, the community, personal interests, and hobbies. Challenge is an individual’s need for stimulating work that is high in responsibility, control, and/or autonomy. Challenge includes career advancement, often measured as intrinsic or extrinsic success. All three parameters are always active throughout the life span, and all influence decision-making. One parameter, however, usually takes priority; this parameter has greater influence in shaping an individual’s career decisions or transitions at that point in time. Over an individual’s life, the three parameters shift, with one parameter moving to the foreground and intensifying in strength as it takes priority at that time. The other two parameters will lessen in intensity, receding into the background, but they remain active.

Article

Donald R. Lessard and D. Eleanor Westney

Strategy in a global setting involves competition in industries that extend across national boundaries and among firms with different national home bases that may tap into strategic resources in more than one location. The resources that the firm accesses from its home country provide it with international competitive advantage only if they are relevant in other markets, if the value they create is appropriable, and if they are transferable to those markets (RAT), These resources include tangible assets and factors of production, but, importantly, also the capabilities the firm develops. Similarly, the resources that it taps from other contexts provide it with further competitive advantage only if these resources are complementary to the firm’s existing resources, appropriable, and transferable to the locations where it can exploit them (CAT). These two sets of factors—RAT and CAT—provide a framework for international strategic decisions that emphasizes developing, acquiring, and transferring capabilities.

Article

George M. Puia and Mark D. Potts

Although risk is an essential element of the business landscape and one of the more widely researched topics in business, there is noticeably less scholarship on strategic risk. Business risk literature tends to only delineate characteristics of risk that are operational rather than strategic in nature. The current operational risk paradigm focuses primarily on only two dimensions of risk: the probability of its occurrence and the severity of its outcomes. In contrast, literature in the natural and social sciences exhibits greater dimensionality in the risk lexicon, including temporal risk dimensions absent from academic business discussions. Additionally, descriptions of operational risk included minimal linkage to strategic outcomes that could constrain or enable resources, markets, or competition. When working with a multidimensional model of risk, one can adjust the process of environmental scanning and risk assessment in ways that were potentially more measurable. Given the temporal dimensions of risk, risk management cannot always function proactively. In risk environments with short risk horizons, rapid risk acceleration, or limited risk reaction time, firms must utilize dynamic capabilities. The literature proposes multiple approaches to managing risk that are often focused on single challenges or solutions. By combining a strategic management focus with a multidimensional model of strategic risk, one can match risk management protocols to specific strategic challenges. Lastly, one of more powerful dimensions of risky events is their ability to differentially affect competitors, changing the basis of competition. Risk need not solely be viewed as defending against potential losses; many risky occurrences may represent new strategic opportunities.

Article

Niels Viggo Haueter

Reinsurance is perceived to have a stabilizing effect on the direct insurance industry and thereby on the economy overall. Yet, research into how exactly reinsurance impacts various areas is scarce. Traditionally, studying the impact of reinsurance used to be in the domain of actuaries; since the 1960s, they have tried to assess how different contract elements can provide what came to be called “optimal reinsurance.” In the 2010s, such research was intensified in developing countries with the aim to deploy reinsurance to support economic growth and security. Interest in reinsurance increased when the industry became more visible in the 1990s as the impact of natural catastrophes started being linked to a changing climate. Reinsurers emerged as spokespeople for climate-related issues, and the industry took a lead role in arguing in favor of implementing measures to reduce environmental deterioration. Reinsurers, it was argued, have a vested interest in managing the impact of natural catastrophes. This triggered discussions about the role of reinsurance overall and about how to assess its impact. In the wake of the financial crisis of 2007 and 2008, interest in reinsurance again surged, this time due to perceived systemic impacts.