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We extend the internalization literature by theorizing on how public disclosure of corporate social irresponsibility (CSI) can damage reputation-based firm-specific advantages of multinational companies (MNCs) and how foreign subsidiary governance can subsequently be used as strategic responses. Specifically, we distinguish between two foreign subsidiary governance mechanisms – information control and ownership control – that the prior literature has often assumed operate in parallel, and posit that they function in divergent directions in this context. Furthermore, we explain how two host-country characteristics – press freedom and regulatory quality – amplify the need for MNCs to utilize different governance mechanisms as responses to CSI disclosure.

Organizations face a common intertemporal choice problem, where actions suitable in the shortterm are different from those that work in the longterm. Building on the organizational ambidexterity theory, we argue that organizations can reconcile their short‐term and long‐term tensions, but this does necessitate managerial endeavours that orchestrate this reconciliation. We introduce the concept of temporal ambidexterity and define four intertemporal tensions involving an organization’s objectives, resources, markets, and uncertainty. We examine how firms can address these tensions successfully in the context of new ventures, and to do so we focus on three managerial capabilities of founder‐CEOs: expertise breadth, external connectivity, and empowering leadership. Results from 243 new ventures in China suggest that temporal ambidexterity improves with these managerial capabilities, and more so for younger ventures. Our findings shed light on solutions and mechanisms by which intertemporal balance is fulfilled, particularly for new ventures in a dynamic environment.

Developing compositional capability is critical for small-and-medium enterprises to compete in emerging markets. We advance a strategy tripod model embedding compositional capability in three conditions that promote the compositional blend of imitation and innovation. In a sample of 163 SMEs from China, we find that industry-level competitive intensity and intermediate market openness, firm-level cooperation orientation and upgrading orientation, and institution-level government support and weak IPR protection positively influence the development of compositional capability which stimulates firm performance with respect to both objective and subjective performance indicators. These findings have strong implications for the composition-based view and the growth of SMEs.

This article examines an important yet understudied issue—the governance mode for business process offshoring (BPO). By applying transaction cost economics and organizational control perspective in the global BPO context, we suggest that BPO's governance mode (foreign captive, joint venture, and independent vendor) is determined by task features, such as knowledge specialization, information security, and process codifiability, and by needed process integration, horizontally between departments and units within the provider and vertically between the provider and its global client and its local subcontractor. Findings from our analysis of 308 global BPO units in India and China confirm our hypotheses.

This article theoretically proposes and empirically verifies an understudied issue in the business ethics (BE) and corporate social responsibility (CSR) literature—how moral degradation (MD) in a society influences the relationship between BE or CSR and firm performance (i.e., corporate legitimacy and competitive advantage). Building on strategic choice theory, we propose that both BE and CSR become more important in enhancing business success when the perceived MD is heightened. Our analysis of 300 firms operating in China statistically confirms our hypotheses: first, under high MD, firms’ engagement in CSR results in higher corporate legitimacy and competitive advantage, and second, their adherence to ethical business codes leads to higher corporate legitimacy. We conclude the article by outlining the implications for both theory and practice.

We explore how home country conditions affect outward foreign direct investment (OFDI) strategies (scale, timing, location) employed by developing country multinational corporations (DMNCs). Extending from the springboard and LLL (leverage, linkage, and learning) perspectives, we illustrate that DMNCs rely on their home base during their internalization process in a unique fashion compared with traditional multinationals due to their well-established strengths at home and competitive weaknesses overseas. Our survey of 153 DMNCs from China shows that, beyond the host country impacts that have been widely studied, DMNCs' overseas investment strategies are influenced by home country environment parameters, including economic growth, perceived institutional hardship, competitive pressure, and by their home country operational characteristics, including inward internationalization, innovation orientation, and business development stage.

Guanxi, a social network tie drawing on connections in business relations, has been identified as a powerful strategic tool helping organizations maintain competitive advantages and achieve superior performance. However, prior empirical studies on die gM/m-performance link provide indefinite conclusions. The purpose of this study is to systematically review and quandfy theguanxi-performance link in a meta-analytic framework by decomposingguanxiinto business ties (i.e.,guanxiwith business partners) and government ties (i.e.,guanxiwith government authorities) and organizational performance into economic performance and operational performance. Based on effect sizes from fifty-three studies encompassing 20,212 organizations, we estimate that the overall effect size of theguanxi-pertormance relationship is positive and significant, thus endorsing the argument thatguanxidoes enhance organizational performance. Specifically, our meta-analysis results demonstrate that both business and government ties lead to both economic and operational performance. However, business ties have a bigger impact on operational performance, whereas government ties exert larger effects on economic performance. Further meta-analytic regression results suggest that ownership (state-owned vs. non-state-owned) and location (Mainland vs. overseas China) explain some of the variations of theguanxi-performance link. Both business and government ties are more important to organizations in Mainland China than to those in overseas China. Government ties are more important to state-owned than to non-state-owned organizations. Lasdy, while business ties remain a valuable strategic tool in China, the importance of government ties is time-variant and has been declining with the development of the institutional environment in China.

Executive Overview Emerging economy enterprises nowadays relentlessly scale the value chain in a quest to compete on the world stage in part by copying the products of others. They develop new products and services that are dramatically less expensive than their Western equivalents. In this article we discuss what these copycats are and how they have grown in their unique trajectory. We emphasize their unique capabilities and weaknesses, internal and external conditions that foster growth, and strategies and paths that transform them along a continuum from duplicative imitators to creative imitators and ultimately to novel innovators. To this end, we present the CHAIN Framework (combinative, hardship-surviving, absorptive, intelligence, and networking) capabilities to showcase the copycats' capabilities and discuss STORM conditions (social, technological, organizational, regulatory, and market) that spur their growth. Finally, we present four case studies of copycats and discuss future research on this issue.

We extend the internalization literature by theorizing how the public disclosure of corporate social irresponsibility (CSI) by multinational companies (MNCs) can damage their firm-specific advantag...

We analyze how multinational subsidiaries overcome deficiencies in infrastructure in developing economies. Drawing insights from the resource dependence theory, we explain how a subsidiary‟s dependence on host country‟s soft infrastructure or institutions and hard or physical infrastructure becomes a critical constraint under which it has to strategically respond. We propose three ideas. First, we propose that the degree of infrastructure deficiencies in a developing economy constrains the subsidiary‟s investment scale in the country. Second, the subsidiary can overcome these constraints using three strategies: adaptation, or gaining experience in operating with deficient infrastructure; influencing or lobbying the government to reduce uncertainty in investment; and escape, or reducing exposure to deficient infrastructure by seeking foreign markets. Third, the first two strategies are more effective in addressing hard infrastructure deficiencies and the last strategy is more effective in redressing soft i...

Building on signaling theory, we analyze how firms from emerging countries can address the negative impact of the liability of emergingness in exports. Because of information asymmetries, firms fro...

We study how home-country institutions influence multinationals’ foreign direct investment locational strategies. We argue that the influence of home institutions is stronger when home countries ha...

We analyze how capability upgrading impacts the performance of emerging market firms. Building on the organizational learning literature to theorize upgrading as a problem-solving process, we propo...

Institutional change in emerging economies provides both enabling and constraining forces for firm to upgrade capabilities rapidly to underpin organizational competitiveness. In this paper, I propo...

Prior research on organizational capability upgrading has limited its focus on the upgrading means and outcomes, leaving the upgrading process under studied. To fill the gap, in this paper, we theoretically explain and empirically test the process during which firms decide on two alternative capability upgrading directions: capability-deepening or capability-broadening upgrading. We propose that firms choose a certain capability upgrading direction as a deliberate problem-solving process, and that an effective learning mechanism is needed to facilitate the process. Specifically, a firm with high perceived proprietary resource constraints tends to have high engagement in capability-deepening upgrading, while a firm that possesses high ordinary resource slack will have high engagement in capability- broadening upgrading. Further, international benchmarking serves as an important mediating mechanism that guides the firm to a specific capability upgrading pattern to resolve the identified problem. The finding...

Seeking natural resource remains a critical motivation for multinationals’ foreign direct investment. Yet, few studies have investigated why firms differ in their location choices in seeking for na...

In this paper, we present a temporal ambidexterity view to theorize how firms operating in emerging markets improve their performance over time. Specifically, we conceptualize that temporal ambidex...