International Business Strategy (eBook)

S. Raghunath is Professor of Corporate Strategy and Policy at Indian Institute of Management Bangalore, India, and Chair of the AIB-India Chapter. A specialist in international strategy, his visiting appointments have included Stanford University, INSEAD, and HEC Paris, and he has consulted with major Indian companies and multinational corporations. Elizabeth L. Rose is Professor of International Business at the University of Otago, New Zealand, Visiting Professor at Aalto University, Finland, and Adjunct Professor at Indian Institute of Management Udaipur, India. She is a Fellow, and former Vice President, of the AIB, and has held elected positions in the Academy of Management and the Strategic Management Society.  

Acknowledgments 5
Contents 7
Notes on Contributors 11
List of Figures 16
List of Tables 18
1: International Business in the Context of Emerging Markets 21
Introduction 21
International Strategy in the Emerging-Market Context: The Big Picture 27
Strategic Changes in Organizational Forms 28
Entrepreneurship and Exporting 29
Finance and Technology 30
Managing People in Emerging-Market Firms 31
Doing Well or Doing Good? Two Views of CSR in India 32
Conclusion 33
References 34
Part I: International Strategy in the Emerging-Market Context: The Big Picture 35
2: Taking Stock of the Principal–Principal Agency Perspective: A Review and the Way Ahead 36
Introduction 36
Principal–Agent and Principal–Principal Conflicts 38
Corporate Governance in Emerging Economies 40
The State of Research in Principal–Principal Conflicts 42
Primary Drivers of Conflict 43
Dominant Ownership 43
Means of Expropriation by Controlling Shareholders 46
Other Areas 47
Principal–Principal Agency Costs and Firm Performance 47
Overview of Recent Empirical Studies and Methodology 48
Methodology 53
Discussion and Future Research Direction 54
Implications and Future Research Direction 54
References 57
3: Internationalization of Emerging-­Market Firms: The Contingent Role of Board Capability 62
Introduction 62
Literature Review 64
Effect of Board Characteristics 65
Internationalization of Emerging-Market Firms 67
Development of Propositions 69
Internationalization–Performance Relationship in Emerging-Market Firms 69
Board Capability as a Moderator of the Internationalization–Performance Relationship 71
Board Potential 72
Board Tenure 73
Experience as CEO or General Manager 74
Industry-Specific Experience 75
International Backgrounds of Board Members 76
Academic Achievement 77
Board Interactions 77
Conclusion 79
References 79
4: Research in Multipoint Competition: What Do We Know and Where Are We Headed? 87
Introduction 87
Review Method 89
Multipoint Competition: Historical Roots and Subsequent Progress 90
What Is Multipoint Competition and How Is It Distinct from Competitive Dynamics? 97
Both Firm and Industry Considerations Are Important 98
Multipoint Competition as a Corporate-Level Strategy 99
Future Research Directions 100
Conclusion 103
References 103
Part II: Strategic Changes in Organizational Forms 110
5: Internalization of IJVs and Institutions 111
Introduction 111
Literature Review 114
JV Termination and Internalization 115
Institutions 118
Regulation 119
Institutional Environment for Firms in India 119
Theory 122
Motivating Through New Institutional Economics 122
Impact of Regulations 123
Impact of International Trade Relationships 125
Impact of Corruption 125
Methodology 126
Sample 126
Results 128
Discussion 131
References 133
6: Do Spin-Offs Really Create Value? Evidence from India 144
Introduction 144
Factors that Explain the Wealth Effects from Spin-Offs 147
Data Description and Methodology 150
Data Description 150
Methodology 150
Results 151
Summary and Conclusions 152
References 154
7: The Influence of Liabilities of Origin on EMNE Cross-Border Acquisition Completion 157
Introduction 157
The Liabilities of Origin 159
Theory and Hypotheses 161
The Advantages and Disadvantages of MNEs 161
Liabilities of Origin Versus the Liability of Foreignness 162
Theoretical Underpinnings 163
The Role of Organizational Learning 164
Conceptual Model 165
Capability Liability and Acquisition Completion 167
First Experience in a Nation 167
The Influence of Language 168
Prior Acquisition Experience 169
Geographic Acquisition Experience 169
Bureaucratic Constraints 170
Credibility Liability and Acquisition Completion 170
Legitimacy of Public Sector Firms 171
Methodology 172
Data and Sample 172
Measures 174
Results 176
Discussion 178
Limitations and Further Research 181
References 182
8: International Strategic Alliances for Innovation in the Indian Biotechnology Industry 189
Introduction 189
Research Question 191
Methodology 192
Sample Description 193
Interviews 193
Data Collection 193
Findings 194
Growth Potential/Opportunities 194
Technological Competence and Learning Capacity 195
Risk-Taking Ability 195
Organizing Cost 196
Structure and Propensity for Change 196
The Intensity of the Exchange: Communication 197
Internalization and Reduction in Dependence 197
Governance Cost 197
Strategic Intent and Choice of Governance Form 199
Conclusion 199
References 201
Part III: Entrepreneurship and Exporting 205
9: Emerging-Market Born Globals: The Influence of Product-Related Factors on Internationalization Mode in the Indian Apparel Industry 206
Introduction 206
Theoretical Framework 209
Research Methodology 211
Cross-Case Study and Analysis 212
Data Collection 212
The Case Companies 213
Low Committers 218
Discussion 220
References 223
10: Innovation and Entrepreneurship in the Informal Economy: Insights from the Ground Zero 227
The Nature of Informal Economy 229
Entrepreneurship in the Informal Economy 231
State of Country’s Economic Development 233
Gender-Based Participation in Informal Entrepreneurial Activities 233
Perpetuity in the Informal Economy or Graduation to Formal Economy 234
Opportunity-Driven or Necessity-Driven Entrepreneurship 234
Entrepreneurship in India’s Informal Economy 235
The Study 238
The Tentative Findings 241
Conclusion 243
Appendix 1 244
Appendix 2 246
References 249
11: Determinants of Export Performance: An Empirical Analysis of the Indian Pharmaceutical and Automobile Industries 252
Introduction 252
Industry Overviews 255
The Indian Pharmaceutical Industry 255
The Indian Automobile and Components Industry 256
Indian Pharmaceutical and Automobile Exports 257
Literature Review 258
Research Gap 260
Objectives of the Study 260
Methodology 261
Data and Sample Selection 261
Variable Selection 261
Analysis and Discussion 261
Conclusions 266
References 267
Part IV: Finance and Technology 269
12: FDI and Economic Growth Nexus for the Largest FDI Recipients in Asian Emerging Economies: A Panel Co-integration Analysis 270
Introduction 270
Literature Review 272
Methodology 274
Selection of Countries 274
Data 275
Econometric Approach 275
Results of the Analysis 276
Conclusion 280
References 281
13: Global Financial Markets Integration: A Comparative Study Between Developed and Emerging Economies 285
Introduction 285
Literature Review 287
Data 291
Methodology 292
Normality Test 292
Correlation 293
Unit Root Tests 293
Augmented Dickey–Fuller Test 294
Phillips-Perron (PP-Test) 294
Co-integration Test 294
Johansen Co-integration Test 295
Trace Statistic 296
Maximum Eigen Value Statistic 296
Analysis 296
Conclusion 305
References 306
14: Vicious Cross-licensing Strategy for Technology Spread: Case Study of Samsung Electronics 308
Introduction 308
Review of Literature 309
Aim and Methodology 309
Cross-Licensing Strategy 310
Justification of CLA 310
Virtuous Cross-Licensing Model 311
Vicious CL Model 313
Effect of the Agreement 315
Market Implication 316
Competitive Environment 316
Impact on Profit 317
Subsequent Agreements 317
Apple Versus Samsung Case 318
Implications 318
Conclusion 320
References 320
Part V: Managing People in Emerging-Market Firms 323
15: Repatriates’ Organizational Commitment in the Indian Information Technology (IT) Environment 324
Introduction 324
Literature Review 326
Affective Commitment 327
Continuance Commitment 329
Normative Commitment 329
Research Gap and Hypotheses 329
Methodology 330
Results and Discussion 333
Limitations of the Study 335
Managerial Implications and Contribution to the Literature 336
References 336
16: Challenges in Employee Engagement in Emerging Economies 340
Introduction 340
Objective 343
Review of Emerging Economies 343
Decline in Employee Engagement in the Last Decade 343
Recuperating from Decline: Rising Employee Engagement of Emerging Economies 343
Employee Engagement in Emerging Markets: Status in BRICS 346
Employee Engagement in India and Brazil 348
Employee Engagement in China 350
Employee Engagement in Russia 353
Employee Engagement in South Africa 353
Improving Global and Regional Employee Engagement Practices 355
Discussion and Conclusion 359
Limitations of the Study 361
References 361
17: The Combined Use of Formal and Informal Ethics Training in the Indian IT Companies 365
Introduction 365
Literature Review 369
Ethics Training and Perception of Importance of Ethics 370
Impact of Ethics Training on Individual Ideologies 371
Impact of Ethics Training on Organizational Ethical Values 372
Contextual Research Gives Focused Results 373
Research Method 374
Reliability and Validity 376
Findings 376
Analysis of Open-Ended Question 380
Discussion 381
Limitations and Future Scopes of Research 382
Conclusion 383
Appendix 1 385
References 388
18: Leadership Excellence in Organizations in the Mekong Region: A Comparative Study of Thailand, Cambodia, Lao, and Vietnam 394
Introduction 394
Literature Review 395
Review of Leadership Studies 395
Theoretical Framework 396
Hypotheses 398
Managerial Behavior: Organizational Commitment 398
Managerial Behavior: Effective Decision-Making 399
Managerial Behavior: Organizational Climate 400
Managerial Behavior: Taking Initiative 401
Organizational Demand: Deference for Authority 401
Personal Qualities 402
Environmental Influences: Environmental Harmony 403
Research Methodology 404
Results 406
Discussion 409
Implications for Theory and the Practice of International Business 410
Conclusion 412
Appendices 413
References 416
Part VI: Doing Well or Doing Good? Two Views of CSR in India 422
19: Mandated Corporate Social Responsibility (mCSR): Implications in Context of Legislation 423
Introduction 423
Expectation from Business: By Governments with Pressing Developmental Needs 426
Hard Legislation on CSR in India 427
CSR in India 428
Problems and Implications of mCSR 430
Will mCSR Be Effective? 431
Will Mandatory CSR Increase Company Cost? 433
Will mCSR Result in Competitive Disadvantage? 434
Amelioration of Problems and Implications 435
Conclusion 436
References 437
20: Connecting the Base of the Pyramid to Global Markets Through E-commerce: A Case Study of BAIF (India) 442
Introduction 442
Review of the Literature 445
An Overview of BAIF: An NGO Providing Integrated Livelihood Solutions to the Poor 447
The Context 447
What Is the Wadi Model? 448
The Rationale 449
The BAIF–Snapdeal.com Tie-Up: Foray into the E-commerce Space 450
Challenges Encountered by the NGO Following the Snapdeal (E-commerce) Tie-up 451
The Future of the Glo-Cal Marketplace and the BOP 453
Theoretical Model 455
Conclusions 458
Appendix 20.1: List of Abbreviations 459
Appendix 20.2: About BAIF Development Research Foundation 460
About Producer Company: VAPCOL 461
References 465
Index 467