Multinational Firms and Management
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- 29 Sep 2017
- Working Paper Summaries
International Business and Emerging Markets: A Long-Run Perspective
This paper examines how strategies by Western multinational enterprises in emerging markets over the last century have been shaped by context. These strategies evolved from resolving logistical challenges to managing assertive governments. More recently the focus has been to locate activities in the lower end of global value chains, whilst responding to local competitors.
- 12 Sep 2016
- Research & Ideas
What Brands Can Do to Monitor Factory Conditions of Suppliers
For better or for worse, it’s fallen to multinational corporations to police the overseas factories of suppliers in their supply chains—and perhaps make them better. Michael W. Toffel examines how. Open for comment; 0 Comments.
- 29 Aug 2016
- Working Paper Summaries
Location Fundamentals, Agglomeration Economies, and the Geography of Multinational Firms
Understanding the location interdependence of multinational firms and how they agglomerate with one another is critical to designing and improving economic policies. These authors’ analysis, using a worldwide plant-level dataset and a novel index of agglomeration, yields a number of insights into the economic geography of multinational production. In addition to market access and comparative advantage motives, multinationals' location choices are significantly affected by agglomeration economies including not only vertical production linkages but also technology diffusion and capital-market externalities.
- 23 Jul 2012
- Research & Ideas
The Power of Conversational Leadership
Communication is always a challenge, especially in multinational corporations. Boris Groysberg and Michael Slind discuss why it makes sense to adopt the principles of face-to-face conversation in organizational communication. Closed for comment; 0 Comments.
- 08 Aug 2011
- Research & Ideas
The Death of the Global Manager
The "global manager" was a coveted job description sought by many leaders for many years, but times have changed—now we are all global managers, says Harvard Business School professor emeritus Christopher A. Bartlett, coauthor of the classic business book Transnational Management. He reexamines the ever-changing nature of running multinational corporations while confirming that, six editions and 20 years later, some challenges remain the same. Key concepts include: Multinational corporations must pursue three core strategies to build layers of competitive advantage: exploit worldwide operations to build global scale efficiency; develop sensitivity and responsiveness to national differences; and leverage the world for information, knowledge, and expertise. The organizational capability of a company to rapidly develop and diffuse innovation is incredibly important but difficult to cultivate. The term "global manager" is a misnomer—we all operate in a global environment. Closed for comment; 0 Comments.
- 25 Oct 2010
- HBS Case
Tesco’s Stumble into the US Market
UK retailer Tesco was very successful penetrating foreign markets—until it set its sights on the United States. Its series of mistakes and some bad luck are captured in a new case by Harvard Business School marketing professor John A. Quelch. Key concepts include: Entering the US, Tesco deserves credit for creating a neighborhood market approach—emphasizing fresh produce and meats, and good quality but value-priced prepared meals. By not partnering or hiring local executives, Tesco missed the opportunity to learn more about the habits and needs of target customers. Tesco rightly aimed to scale the concept as soon as possible so that fixed overhead investments in its own distribution centers could be spread across a larger number of stores. Perhaps Tesco's original rollout plan was too ambitious, with executives assuming that the company would get everything right on the first try. Tesco has listened to its customers, learned from its mistakes, and made appropriate midcourse corrections. Closed for comment; 0 Comments.
- 11 Oct 2010
- Research & Ideas
It Pays to Hire Women in Countries That Won’t
South Korean companies don't hire many women, no matter how qualified. So multinationals are moving in to take advantage of this rich hiring opportunity, according to new research by professor Jordan Siegel. Key concepts include: Employing women who are excluded by their own countries' labor markets is a growing trend for international affiliates of global multinational companies. Using data from South Korea, researchers showed that a 10 percent nominal increase in the percentage of female managers (at the level of the then-prevailing glass ceiling) was associated with a 1 percent nominal increase in ROA. Multinational firms that recruit females into management roles at their local affiliates face the possibility of upsetting local male employees, partners, and customers who don't approve of women in executive roles. In many instances, multinational firms hired and promoted female managers in a discriminatory host market at a far higher rate than they employed female managers in their own home markets. Closed for comment; 0 Comments.
- 26 Jan 2009
- Research & Ideas
Where is Home for the Global Firm?
Global markets are changing the relationship between firms and nation-states in important ways, says HBS professor Mihir A. Desai. His new working paper, "The Decentering of the Global Firm," offers a practical framework for business leaders to think strategically about where to locate their company's financial and legal homes, and managerial talent. Q&A with Desai. Key concepts include: Three critical aspects of a firm's national identity—its legal and financial home and its center for managerial talent—are increasingly distributed worldwide. There are benefits and costs to decentering, says Desai. The challenge for managers is to choose each home wisely. Firms that have left their traditional homebase include News Corporation, Shire Pharmaceuticals, Halliburton, and WPP Group, among others. Closed for comment; 0 Comments.
- 27 Sep 2006
- Working Paper Summaries
How Does Foreign Direct Investment Promote Economic Growth? Exploring the Effects of Financial Markets on Linkages
Does FDI help developing countries as much as we think? While theoretical models imply that FDI is beneficial for a host country's development—a belief widely shared among policymakers—the empirical evidence does not support this view. This paper bridges the gap between theoretical and empirical literature with a model and calibration exercises that examine the role of local financial markets. Ultimately, Alfaro and colleagues contribute to existing research that emphasizes how local policies and institutions may actually limit the potential benefits that FDI could provide to a host country. Key concepts include: Research shows that an increase in FDI leads to higher growth rates in financially developed countries compared to rates observed in financially poor countries. Local conditions, such as the development of financial markets and the educational level of a country, affect the impact of FDI on economic growth. Policymakers should exercise caution when trying to attract FDI that is complementary to local production. The best connections are between final and intermediate industry sectors, not necessarily between domestic and foreign final goods producers. Human capital plays a critical role in achieving growth benefits from FDI. Closed for comment; 0 Comments.
Shifting Centers of Gravity: Host Country versus Headquarters Influences on MNC Subsidiary Knowledge Inheritance
This study compares how multinational corporation subsidiaries inherit knowledge from both the headquarters and the local context. To do so the authors analyzed seven years of data (2005–2011) of US patents filed by all subsidiaries of the top 25 US headquartered multinationals.