Abstract
A special issue is an opportunity to view a topic in a relatively holistic fashion rather than from a narrower perspective that generally occurs with a single article. This special issue addresses the subject of issues and decisions in international management, primarily in emerging markets and in some cases developed markets. It does so from a number of perspectives, and from three levels of analysis including the individual manager or employee, the firm, and the national economy. Additionally, it addresses various topics, one being the often-competing loyalties of employees to different constituencies including the home office, the subsidiary, and the host country. A second topic is the market entry strategies of emerging market firms, while a third is the broader issue of the internationalization strategies of those firms. The internationalization process is again considered in an article analyzing the role of the quality of human assets in that process in small and medium-sized, family-owned firms. A fifth topic also deals with growth strategies, but in the context of innovation ambidexterity in both multinational subsidiaries and domestic firms, as well as organizational arrangements that facilitate or hinder that capability. A sixth topic is how deteriorating institutions in an emerging economy can affect leadership at the firm level. A related, and closing article, reveals how such a deteriorating institutional situation can create a brain drain that weakens the country, but benefits other countries as well as individuals who decide to leave such negative environments.
One particular insight emerges from having multiple articles, many of which focus on a particular level of analysis. It is that regardless of the level of focus, all levels clearly become involved in the issues and decisions being considered. This is especially evident in the articles involving Russia, but on closer analysis can be seen in all seven of the articles in the special issue. Whatever level is the central focus, all issues and decisions affect firm policies and strategies, individual productivity and satisfaction, and the overall prosperity of the national economies involved.
Adding to the richness of this special issue, and contributing to the overall topic of issues and decisions in emerging markets, is the range of countries covered. The breadth stems from a single country view of Chinese firms’ market entry strategies to coverage of the broader internationalization strategies of firms from Russia, India, and China. The Latin American country of Brazil is the locale of a study on innovation dexterity in the automobile industry, while a developed economy, Spain, is the setting for an article on the internationalizing of small and medium-sized family-owned enterprises. An additional single-country view involves Russian institutions’ weaknesses and the effects on managerial leadership, while another study considers those weaknesses in Russia primarily from the perspective of institutional voids. That article considers the potentially positive effects of those conditions on individual entrepreneurs and other professionals who relocate to the United States, as well as the benefits gained by the U.S. innovation economy. Another article on the topic of competing employee loyalties does not address any particular emerging market nation nor developed country. Rather, it provides insights that are highly pertinent for both multinational enterprises (MNEs) and emerging market MNEs (EMNEs) as they seek to internationalize with subsidiaries staffed by managers having potentially conflicting loyalties not only to that subsidiary but also to headquarters or the host country.
An additional benefit from a special issue like this one is the opportunity to feature a wide range of methodologies in one journal issue. The two articles dealing with employee loyalties and internationalization of emerging market firms are conceptual, with one providing a new framework for assessing that process based on personal interviews with executives of various firms. The internationalization process of Chinese firms, however, is based on an empirical study, as is the article analyzing the role of human asset quality in the internationalization efforts of Spanish small and medium-sized family firms. The article analyzing innovation ambidexterity of firms in the Brazilian automobile industry is once again an empirical study of such firms. The article covering institutions and managerial leadership in Russia is conceptual, augmented by the experience of a highly regarded management consultant who experienced the changes firsthand. The other article covering Russia’s institutions is also conceptual, but it is grounded in interviews with Russian professionals who left the country and are contributing to the innovation economy of the United States. Extensive caselets are provided describing three such individuals working in Silicon Valley.
Individual Articles
The opening article, “Subsidiaries of Multinational Corporations: A Framework for Analyzing Employee Allegiances,” by Michailova, Mustaffa, and Barner-Rasmussen is a conceptual piece focusing not only on individual managers but also necessarily on the firm and national economy levels. It provides a novel view of employee loyalty by considering three potential objects of organizational loyalty rather than the generally studied two objects. The authors analyze the potentially divided loyalties of subsidiary managers of MNEs or EMNEs as they engage in their work while removed from the locational influences of the home office. These managers must deal with the often-competing tugs and pulls of the home office while attempting to satisfy the differing demands of the local subsidiary. Complicating the situation for some individuals, however, is their relation, often in the form of national citizenship, to the country hosting the subsidiary, a role that can clearly influence their decisions and activities. The article thus adds a third dimension to the more often considered two-dimensional loyalty conflict faced by subsidiary managers, whether from emerging market firms or from those of developed economies.
In “Internationalization Strategies of Emerging Market Multinationals: A Five M Framework,” Fey, Nayak, Wu, and Zhou focus on emerging market firms from three BRIC countries, Russia, India, and China. These authors offer a new 5 M framework for use in theoretical analysis, as well as for guiding managers as they undertake internationalization practices and strategies in their firms. The 5 Ms represent the motivations, markets, entry modes, methods, and management practices that have allowed these firms to be successful. The 5 M analysis shows that emerging market multinational companies (EMNCs) typically internationalize for different reasons, use different entry mode ordering, and initially enter different countries than would their Western counterparts. The authors conclude that these EMNCs should be taken seriously in the global business arena since they represent the vanguard of such firms that are poised to engage in international competition. Although conceptual in nature, the article is based on numerous in-depth interviews with managers of 18 firms in those emerging BRIC countries. Quotes from those managers, often within the article’s 18 mini case studies, discuss their internationalization experiences. This technique enriches the narrative of the article and personalizes the topics at an individual level, although the primary focus is the firm level.
The article, “Resources and Emerging Markets,” by Xie, Huang, Peng, and Zhuang, analyzing the internationalization strategies of Chinese firms is an excellent complement to the article by Fey et al. that deals with internationalization approaches of EMNEs, but is based on a study of Russian and Indian firms as well as those from China. The article is an empirical study that adopts both the resource-based view and the behavioral theory of the firm as its foundation. Their analysis of 257 publicly traded Chinese firms sought to determine whether their present array of technological resources or marketing resources directly fostered internationalization efforts. Their results showed that they do not, contrary to what earlier research has found to be the case with firms from developed economies. Rather, they conclude that these firms may initially consider whether performance is meeting aspirations, and if not, they might internationalize to gain valuable assets and increase performance. This research demonstrates that in considering EMNEs, it is not sufficient to rely on studies focusing on firms from developed economy countries, whether for research purposes or for managers seeking to internationalize their firms.
“The Internationalization of Small and Medium-Sized Family Enterprises: The Role of Human Asset Quality” by Almodovar, Verbeke, and Rodriguez-Ruiz is another empirical piece analyzing the subject of internationalization. The authors studied the export intensity of 610 Spanish firms, and is the first empirical study, to their knowledge, linking human asset quality available to the firm and internationalization efforts, in the context of small and medium-sized family-owned firms. They tested whether internationalization of such firms, evidenced by higher export intensity, was associated with higher levels of human asset quality. They found that it was not consistently the case. Instead, they found an S-shape relationship between the quality of the human assets and export intensity, whether those assets were generic and generally available, or whether the assets were specialized and highly firm specific. The authors used the educational level of the employee base to represent generally available human asset quality, and the ratio of R&D staff to total employees to represent those that were firm specific. Their finding of an idiosyncratic relationship between human asset quality and export intensity has substantial implications for management research as well as for managerial decisions involving human asset quality.
The article by Dunlap, Parente, Geleilate, and Marion, “Organizing for Innovation Ambidexterity in Emerging Markets: Taking Advantage of Supplier Involvement and Foreignness,” also deals with the broader topic of firms seeking growth opportunities, specifically by analyzing innovation dexterity in Brazil’s automobile industry. Their empirical piece is based on a study of 123 firms covering both domestic Brazilian firms and subsidiaries of developed countries’ automobile companies operating in the country. The authors tested the two dimensions of innovation ambidexterity, the balanced dimension and the combined dimension. Adopting the knowledge-based view, they examined the moderating influences of supplier involvement and foreignness on the relationship of innovation ambidexterity with performance. Results showed that firms with higher levels of supplier involvement experienced higher performance benefits, but only from the combined dimension. Additionally, the subsidiaries of developed country firms experienced better levels of performance than the domestic Brazilian firms. The authors explain the reasons for the results, how their study illustrates some of the possibilities and complexities of managing innovation ambidexterity, and provide implications for theory and practice.
Institutional weaknesses in Russia and the decay that has occurred under President Putin of a once promising institutional environment is the subject addressed in the article, “Institutional Erosion and Its Effects on Russia’s Corporate Leadership,” by May, Rayter, and Ledgerwood. The authors provide an analysis of that decay by creating a timeline of events for a number of crucial elements of the country’s institutional environment. They conclude that the institutional environment had not only been weakened by policies and actions enacted under Putin but had also dangerously eroded as the oppressive weight of these changes gained enormous and destructive influence over the period of Putin’s time in office. The managerial focus of the article is the debilitating effects of this erosion on the leadership style and practices of Russian enterprise leaders, seen primarily through a case study of a leading Russian bank. Although a conceptual piece, the article has the advantage of having had access to a consultant who was involved firsthand in the deteriorating institutional situation, and lived through its destructive effects on the leadership of that bank. His reflections and descriptions of that experience add richness and individuality to the article’s narrative of a topic so important to a country and its organizations.
McCarthy and Puffer also recognize Russia’s deteriorating institutional situation as the foundation for their article, “Institutional Voids: From Problem to Opportunity.” Based in institutional theory, these authors provide a novel positive insight into the topic of institutional voids, in contrast to the generally negative literature on the topic. While recognizing the problems involved, much as does the article by May et al., the article focuses more on the potential positive outcomes that can result from an otherwise deeply negative circumstance. Their primarily conceptual piece is, however, based on interviews conducted in 2015 with 75 technical professionals in Silicon Valley who had migrated from countries of the former Soviet Union. These individuals had found professional success in large U.S. technical firms like Facebook, Apple, and Google, or had founded their own startups. In essence, they found opportunities after leaving the problems of institutional voids in their home countries, and in the process they have also made contributions to the U.S. innovation economy by actualizing their considerable talents. The article provides substantial profiles of three such individuals from Russia including their experiences in that country as well as in the United States.
Conclusion
Countless issues and decisions can be considered as being within the domain of international management. These become even more numerous when the contexts of both emerging and developed economies are included. This special issue addressed such complexity by presenting a rich selection of these issues and decisions in a variety of ways. It contains articles from both types of environments with the majority from emerging market nations. Additionally, it includes different topics set in a number of different countries, as well as articles employing different types of research methodologies and focusing on different levels of analysis. In so doing, we hope to have contributed to the literature on the complex and ever-changing domain of international management, and we thank the authors and editors who have contributed so much to this worthy effort.
Footnotes
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: The authors gratefully acknowledge that the research for this special issue was partially funded by the Alan S. McKim and Richard A. D’Amore Distinguished Professorship of Global Management and Innovation at Northeastern University.