Social value creation by multinational enterprises

Purpose In this viewpoint, the author critically aims to examine the papers by Sinkovics and Archie-Acheampong (2019, this issue) “The social value creation of MNEs – a literature review across multiple academic fields” and by Rygh (2019, this issue) “Social value creation by multinational enterprises: the next “big question” for international business research?” and offer an appraisal of the papers’ merits as well as thoughts for further development of research on social value creation, critical international business and work that can conceivably contribute to scholarship on global grand challenges. Design/methodology/approach The author’s approach is a reflexive review of two papers in the Critical Perspectives on International Business special issue “social value creation of MNEs.” The underpinning tenet is that by shifting the domain of international business (IB) research from an exclusive focus on the MNEs’ economic success or failure to the role and responsibility of MNEs in global communities, IB’s contributions can be strengthened. Findings A reorientation of the IB disciplinary focus toward global grand challenges will contribute by improving the engagement with other allied disciplines such as political science, sociology and international relations and exchanging ideas and insights with those disciplines, providing a platform to speak to not just business communities but also policy and civil society communities and bring a sophisticated knowledge base to those discussions, and connecting some of our personal interests, beliefs and values with those of our disciplinary research. Research limitations/implications The papers covered in this special issue on social value creation underscore the diversity, plurality and richness of IB. In the early days of IB, scholars such as Hymer (1960), Vernon (1971) and others naturally position IBs and MNEs within a broader societal context and were open to exploring the various interactions and cross currents between and among business, government and civil society in the global environment. Against this background, this special issue and its papers thus widen the scope of our field again. Practical implications IB scholars may be able to broaden their contributions to include values-based and even normative judgements into their research process. Social implications If assumptions and biases are made explicit, critical and normative issues may suitably be incorporated in IB work and thus contribute to tackling grand societal challenges. Originality/value The papers discussed in this viewpoint and the “social value creation” special issue more broadly offer contemporary contributions regarding the role and responsibilities of business in the global commons. This is of significant value for further conceptual and empirical work that is critically and societally engaged.

International business research has tried vividly to advance through several efforts to establish a theoretical base and agreed lines of analysis. The international product life cycle described by Raymond Vernon (1966) probably was the first major theory of the movement of firm’s production overseas, rather than just to explain international trade; since then, several theories have been put forward without any of them gaining acceptance. The theories currently in use in international business research have been borrowed from different disciplines with different views and assumptions underlying their theoretical construct. Each is partial in some significant sense, however, none addresses holistically the essential nature of international business. Therefore, the development of a common theoretical base to provide rich framework to investigate the discipline should be considered among international business scholars and researchers. Key Words International Business, Theories, International Trade, Behavioural theories, Government Policies

The United Nations Conference on Trade and Development’s (UNCTAD) annual World Investment Report (WIR) provides crucial yearly updates on global foreign direct investment (FDI) and investment policy trends, as well as insights into the sustainable investment landscape. It also introduces readers to a pertinent and contemporary topic that sits at the heart of today’s global investment agenda. This year’s 35th report focuses on investment in the digital economy (for previous WIR reviews in this journal, see, for instance, Giroud (2024) on investing in sustainable energy for all or Giroud &amp; Bonilla-Feret (2025) on investment facilitation and digital government). The review follows the usual structure, where Chapter 1 covers global trends in FDI and multinational enterprise (MNE) activities over the past year; Chapter 2 presents national and international investment policies; Chapter 3 introduces recent changes in sustainable finance and responsible investment; whilst Chapter 4, the thematic chapter, deepens the readers’ understanding of international investment in the digital economy. In this review, we examine the recurring chapters (i.e. chapters 1, 2, 3), offer a critique of Chapter 4, and conclude with suggestions for future International Business (IB) research related to this chapter. Specifically, we develop suggestions on how IB research can create impact by engaging with research on investments in the digital economy and discuss how the ‘new reality’ of a more digital economy provides fruitful avenues for research in IB, specifically on global strategy and global sustainability.<br/><br/>

The purpose of this focused issue is to advance understanding of qualitative research methods in the international business context. Debates on qualitative research methods in the key international business (IB) journals have been rare. There has been no focused issue on this topic previously, either in mir or in other journals in the field, making this a 'special' issue. During the process of editing a recent handbook on qualitative research methods (Marschan-Piekkari/Welch 2004), we realized that while this collection covered many topics, often for the first time in the IB field, there were many others still outstanding. There was thus scope for continuing a dialogue about qualitative methods in the IB research community. The challenge of making qualitative research count in the quantitative world of IB remains. Qualitative research is difficult to define, since the term encompasses many different research traditions, research strategies and methods for data collection and analysis (Prasad 2005). A typical definition is that everything non-numerical is qualitative research (Marschan-Piekkari/Welch 2004, p. 19). However, even this very simplistic definition soon breaks down, since research strategies which are typically considered to be qualitative, such as case studies, can combine numerical with non-numerical data (Hurmerinta-Peltomaki/Nummela 2004). There is also no clear divide between qualitative and quantitative research in terms of research traditions, with much qualitative research in management and IB sharing the positivist assumptions of quantitative research (Prasad/Prasad 2002). This focused issue is not about reporting the empirical findings of IB studies applying qualitative methods; rather it is about the process of undertaking qualitative research in the IB field. Of course, there is a large volume of literature on qualitative research methods already. However, we would argue that the IB context warrants special treatment. As the authors of this focused issue discuss, the distinctiveness of the field stems from its multiple linguistic and cultural settings; organizational complexity; and its intellectual roots in post-War academic institutions in the USA. These issues receive little treatment in general texts on qualitative methodology. There has been some methodological debate in previous issues of mir. Earlier articles in mircan be grouped into three categories: first, reviews of existing methodological practices in IB publications (e.g., Cavusgil/Das 1997, Nasif et al. 1991); second, proposals for new quantitative techniques (e.g., the use of key informants in cross-cultural studies, as proposed by Lenartowicz and Roth 2004 and a linguistic-based measure of cultural distance as developed by West and Graham 2004); and third, calls for new methodological approaches (Boddewyn/Iyer 1999). The absence of qualitative research methods in this debate perhaps reflects the limited amount of empirical qualitative research published in this journal. A recent analysis of mir issues between 1990 and 1999 revealed that only 5 percent of articles published in this period used qualitative methods (Welch/Welch 2004). This focused issue is therefore a response to those, such as Boddewyn and Iyer (1999) in this journal, who have called for alternatives to surveys and secondary data analysis. This focused issue attracted 39 submissions from more than 15 countries. Given that there have been limited outlets for methodological articles in IB, this is a considerable number. It perhaps suggests a level of interest to which IB journals have not responded to date. Of the total number of submissions, 11 were selected for review. On the basis of reviewers' comments, six of these papers were ultimately rejected. The final five papers underwent two and, in some cases, up to four rounds of revisions. In selecting the articles, we used the following criteria: appropriateness of the topic for the focused issue; demonstrated knowledge of IB and methodological literature; quality of argument; originality and innovativeness of the contribution to IB methodology; organization and clarity of the paper; and potential application to research practice in IB. …

Purpose– The purpose of this paper is to critically assess the theoretical underpinnings and extant progress of the research on regional multi-national enterprises (MNEs) and offer a blueprint for future research by re-conceptualizing how (regional) boundaries relate to the international diversification of MNEs.Design/methodology/approach– The paper integrates key insights from the theory of the regional MNE and economic geography to re-orient the treatment of regional borders within international business (IB) literature.Findings– The paper suggests that the (L) component within the ownership location and internalization (OLI) paradigm should be disaggregated into continuous “distance effects” and discrete “border effects”. Within this rubric, regional borders represent discrete border effects that generate discontinuities that are permeable, fluid and firm specific. Such reconceptualization opens up avenues for future research and more tightly integrates the research on regional MNEs with other research streams.Research limitations/implications– IB scholars need to make concerted effort to think of regions as one among several parameters in studying the strategy and structure of MNEs. A stronger focus on internal processes and mechanisms elucidating the main drivers of MNEs strategies is needed.Originality/value– The paper offers innovative ways in which future research can advance the study of how regions matter in the internationalization strategy of MNEs.

The Sustainable Development Goals (SDGs) were adopted in 2015 by all UN member states and have been embraced by many multinational enterprises (MNEs) and international NGOs. They created a ‘hybrid governance’ platform in which companies, governments, NGOs, and knowledge institutes can work on achieving common goals through targeted action and serve as the leading global sustainable development framework until 2030. By the year 2020, however, progress towards the goals proved slow, prompting the UN to announce a ‘Decade of Action’. The slow or limited adoption and implementation of the SDG Agenda by MNEs – in close interaction with government policies – is one of the root causes for delayed progress. The question is no longer ‘why’ MNEs should develop sustainability strategies, but rather ‘how’. A number of related questions arise. What have been the roles of MNEs in progress towards the SDGs, what is needed from them in the future, and what can be the role of international business (IB) scholarship in shaping discussion and action? This Special Issue tackles these questions from four angles: (1) identifying and helping to fill theoretical gaps in IB research on the SDGs; (2) asking which SDGs and targets provide promising venues for societally relevant IB research topics; (3) assessing and helping to fill empirical gaps by using, complementing, and upgrading relevant SDG indicators; and (4) showing how IB research and policy practice can become better aligned.

Differences in informal and or cultural environments of host and home countries influence the choices and international strategies of multinational enterprises (MNEs) significantly. The Hofstede and Global Leadership and Organization Behavior Effectiveness (GLOBE) cultural dimensions have undoubtedly been two of the most widely applied indices in measuring and operationalizing differences in institutional environments of countries in international business research. The objective of this article is twofold; to offer a detailed review and analysis of the Hofstede-GLOBE cultural dimensions as applied in international business research and to offer suggestions towards their improvement and enhancement in works of similar nature. To help improve knowledge in this area our methodology involves a comprehensive review of the empirical studies on the use of Hofstede-GLOBE cultural dimensions in international business research. This study will help researchers who wish to conduct cross-cultural research in international business to be able to overcome some of the perceived biases and flaws embedded in the two studies. The research is expected to contribute to the institution-based view of international business (IB) strategy and cross-cultural studies.

Purpose — We investigate the contribution of international business as a distinct academic area whose domain spans comparative and cross-border environments and institutions and the business behaviour of their major players. Methodology/approach — We investigate knowledge flows into and from international business, using cross-citations between the Journal of International Business Studies (JIBS) and leading management journals over a 13-year period. Findings — We find JIBS to be a net importer, especially of strategy; however, in the most recent period, the journal has become a net knowledge exporter. Despite the improvement over time in JIBS' network position, international research published in JIBS appears to have less impact on management knowledge than management outlets have on international business research. Practical implications — Findings confirm that international business is at a crossroads and international business scholars would do well to capitalise on global presence, by expanding into areas of growth and developing integration and cross-fertilisation capabilities. Specifically, international business should build on its comparative advantages to develop theory that is useful to scholars in other areas through multidisciplinary research. Originality/value of chapter — This study is a pioneering attempt to extensively review and conduct an aggregate analysis of all papers in a range of journals in order to identify the narratives that comprise the field of international business.

Corporate governance is concerned with how firm performance may be affected by how the organization is governed. Corporate governance is a multifaceted concept that ranges in scholarly interest from the composition of boards to ownership and relational issues of power dependency, control, and decision-making within an organization. International business (IB) researchers have employed multiple theoretical lenses across institutional, resource dependency, and agency theories to examine corporate governance in the multinational enterprise (MNE). As the organizational form of the MNE shifted from hierarchical to heterarchical, and responsibility for sourcing market and innovation knowledge was increasingly devolved to competent subsidiaries, governance arrangements in the MNE came under increased scrutiny. Much IB research into corporate governance examined the balance of power within the MNE and how decision making is influenced by both headquarters (HQ) and its subsidiaries. A parent-subsidiary governance dilemma became apparent around the degree of freedom and control that HQ should leverage over its foreign subsidiaries to maximize the survival and performance of these economically, culturally, and politically dispersed units. Agency theory and resource dependence theory were to the fore in examining the parent-subsidiary dilemma around how control over decision-making scope and processes shaped subsidiary governance around the strategies and operations with the MNE governance architecture. In essence, subsidiary governance and strategy can be seen to represent two sides of the same coin. Subsidiary governance and strategy become complex issues the minute we step outside the hierarchical domain and allow for subsidiaries to have a greater contributory role in the MNE. As a subsidiary is mandated to pursue certain activities in the environment where it has been located, it also is granted some autonomy to strategize around its assigned activities and responsibilities. Opportunities may surface through the embeddedness of its activities in the local environment and the resources this can provide to the subsidiary and MNE. Acting on these opportunities by taking initiatives can result in increased influence and an elevated role in terms of mandate gain and enlarged responsibilities. The issue of subsidiary governance first emerges in relation to how the subsidiary strategy is aligned or not aligned with HQ strategy. Subsidiary managers can decide to solely perform their assigned mandate, or they can choose to generate a resource endowment that may help them become indispensable for HQ, but crucially to guarantee their own survival. The mechanisms available to subsidiaries to achieve this strategic aim are evidenced via initiative taking, seeking autonomy, increasing their role, appropriating power and influence, and embedding themselves in the local and internal environments. In this chapter we approach corporate governance from the perspective of the subsidiary (subsidiary governance) and examine the relationship between subsidiary governance and what we determine to be the prime elements of subsidiary strategy. We respectively define subsidiary governance as the gamut and interplay of control and operations around which management strategize and subsidiary strategy as a process of continuous, deliberate upgrading of knowledge and capabilities to thrive and survive. IB literature on MNE subsidiary governance and strategy to date is incomplete insofar as there are disparate steams of research that warrant integration into a grand theory of subsidiary governance and strategy.

International business (IB) research is designed to explore and explain the inherent complexity of international business, which arises from the multiplicity of entities, multiplexity of interactions, and dynamism of the global economic system. To analyze this complexity, IB scholars have developed four research lenses: difference, distance, diversity, and disparity. These four lenses on complexity have created not only unique research opportunities for IB scholarship but also unique research methodological challenges. We therefore view complexity as the underlying cause of the unique methodological challenges facing international business research. We offer several recommendations to help IB scholars embrace this complexity and conduct reliable, interesting, and practically relevant research.

To set the scene, we will start by providing a compact overview of the emergence and further development of international business studies. Shenkar (2004) suggests that initial theory in international business owed much to context-sensitive academic disciplines such as anthropology, sociology, political science and area studies. We posit that only shortly afterwards, however, international business research established itself by seeking legitimacy through emulating the “hard disciplines” of international economics and subsequently strategy, a discipline that itself was heavily influenced by economics. As such, its main concern became to produce mostly quantitative, generalizable results on the narrow basis of concepts and paradigms from economics-based strategy and largely irrespective of contextual specificities. This is in our view all the more deplorable as international business scholars should possess the strongest competitive advantage to unearth valuable context-embedded insights (Brannen &amp; Doz, 2010), given that they are “more knowledgeable about foreign and international environments and about ‘cross-bordering’” (Boddewyn, 1999: 13). Yet, with the understanding that international economic activities can only be fully understood by considering human behavior, a significant number of scholars shifted their attention from economics-based to human-centered, psychology-based research (Evans et al., 2002). It was also increasingly understood that societal context, and in particular culture, was of relevance and therefore had to be included in the study of international business phenomena. As a result, the dominating research paradigm shifted from a “culture-free” orthodoxy (Lammers &amp; Hickson, 1979) to what we call a “culture-inclusive” paradigm. These developments, we argue, provided a fertile ground from which cross-cultural management studies gradually emerged in the 1980s, joining strategy as a second pillar of international business (Brannen &amp; Doz, 2010). A further powerful stimulus proved to be one particular development in the world economy: the rise of the Japanese economy in the 1980s and the painful realization for Western 86business people and business scholars that economic success could be achieved on the basis of management principles that were very different from those common in the West (Ouchi, 1981).

A contemporary challenge for the international business (IB) field is to maintain a link between the global activity of firms and the local concerns of regions and communities. In this essay, we reflect on how the IB scholarship of the late Stephen Young, which was embedded in (but not confined to) Scotland, offers valuable insight into how this might be done. With an overarching interest in the role of IB in economic development, the common thread in his work on multinational enterprise (MNE) subsidiaries and internationalizing small- and medium-sized enterprises (SMEs) is the significance of locally relevant entrepreneurial behavior in internationalized firms, which we refer to as “the local roots of global entrepreneurship”. We highlight three facets of his work: (1) the scholarly approach, which was sustained, engaged, and broad-based, (2) the conceptual ideas around the purpose, process and people involved in MNEs and SMEs, and (3) the resonance of these ideas with contemporary IB topics. Our analysis indicates that the emergent body of work on cooperation between MNEs and SMEs (especially new ventures) constitutes an extension and integration of Young’s IB scholarship. An overall implication of our essay is that perhaps, counterintuitively, the future interests of IB research may be served well by paying closer attention to one’s own backyard.

Introduction During the latter part of the twentieth century the global business environment changed significantly, owing to drastic economic reforms in China in the late 1970s, the neoliberal wave that swept Latin America in the 1980s, and the decade of reform that followed the opening up of Central and Eastern European countries, along with India, in the 1990s. This trend of economic liberalization in the emerging economies gathered further momentum in the 2000s as more countries have opened up their markets to the majority of the world’s multinational enterprises (MNEs). For example, in 2006, emerging economies received approximately $448.40 billion in foreign direct investment (FDI) inflows, registering a growth rate of 26.13 percent over the 2005 figure (UNCTAD, 2007). This change was brought about by the government policies of these countries favoring pro-market reforms ranging from international policy (international trade, exchange regime and foreign investment) to the macroeconomic environment (price liberalization, labor markets and fiscal policy), and finally to privatization in specific sectors. For conceptual clarity an emerging economy is defined as a low-income country that satisfies two criteria: a rapid pace of economic development, and government policies favoring economic liberalization and the adoption of a free-market system (Arnold and Quelch, 1998). A list of sixty-four such emerging economies was identified by Hoskisson et al. (2000).1 Moreover, Dunning has defined an MNE as a firm that “engages in foreign direct investment and owns or controls value-adding activities in more than one country” (1992: 1). The growing importance of FDI inflows in these emerging economies is reflected in an upsurge of international business (IB) research on this topic. However, most of the published scholarship addresses the interdependencies between the MNEs and the economic environment of the emerging economies and pays relatively less attention to theories that can explain interdependencies between MNEs and the political environment of emerging economies. Nevertheless, a well-managed MNE must deal effectively with the political and legal dynamics of its environment as well as the more traditional product-and marketfocused variables (Baron, 1995). Vernon (1971) suggests that MNEs have strongincentives to influence host-country government policies on an ongoing basis to safeguard their often substantial investments, particularly given the threat of repatriation of earnings, immigration laws, trade laws and investment laws. Similarly, Dunning asserts that “any theory of MNE activity which does not explicitly seek to understand and explain the role of governments, not just another variable, but, like the market, as an organizational entity is, in its own right, bound to be deficient” (1993: 49). Failure to understand this political angle might lead to over-simplistic models of MNEs. Therefore, there is a need to conduct research on the factors that determine the choice of political strategies by MNEs operating in an emerging economy context. Note that these political strategies are not an end in themselves, but rather a means for an MNE to achieve public policy outcomes that are favorable for its economic success. This theoretical study aims to fill this gap in the literature by first discussing the existing work on the political strategies of MNEs and then presenting a theoretical framework with specific propositions that predict the effect of different variables on the choice of these political strategies. Institutional theory is the focused theoretical framework in constructing the propositions because it emphasizes the relationship between the MNE and its “institutional environment,” including government actions and the way through which this relationship shapes the MNE’s internal structures and processes (Westney, 1993). Institutional theory is also appropriate for the emerging economies’ contexts since it emphasizes contextual factors influencing both market and non-market forces (Peng et al., 2008; Oliver, 1991). Since the environment faced by an MNE is characterized by high uncertainty and multiple demands, institutional theory provides a suitable theoretical framework with which to study MNEs’ strategies, especially when one seeks to understand how MNEs attempt to reshape institutional environments (Xu and Shenkar, 2002). Given that the government is a major source of uncertainty for MNEs (Brewer, 1992), and political strategies by definition (Baysinger, 1984) are attempts to reshape a firm’s opportunity set, or that of its rivals, institutional theory is particularly considered as relevant to the study of MNEs’ political strategies. Moreover, in line with calls for research using multiple levels of theoretical explanation (Klein et al., 1994), factors at firm, industry and institutional level are considered in the theoretical framework. This has enabled us to develop a holistic model for political strategy formulation. Some of the practical implications of this model, along with suggestions for future research, are explored in the concluding remarks.

journal of International Business Studies (2011) 42, 573-581. doi: 10.1057/jibs.2011.19 It is exhilarating to write the introduction to this Special Issue as it presents an important opportunity for qualitative research to reclaim its position as an integral part of international business (IB) research. The field of IB was founded on a rich qualitative research legacy (e.g., Bartlett, 1979; Crozier, 1965; Fayerweather, 1969; Johanson & Vahlne, 1977; Kindleberger, 1956; Prahalad, 1975; Wilkins, 1970, 1974). Over time, however, such methods have been progressively marginalized in our field as quantitative methods have become the norm. This shift in emphasis has mirrored the broader trend toward more positivistic empirical methods in the social sciences. The field of IB is multidisciplinary in scope, and interdisciplinary in content and methodology (statement of JIBS editorial policy). However, as our respective home disciplines came under growing pressure to solidify their legitimacy as scientific endeavors that merit scholarly attention, it is not surprising that we began to take on the norms propagated within our own academic communities that typically equated quantitative data with hard science. While there are clear merits associated with quantitative methods, the multi-cultural, multi-dimensional and dynamic nature of the field of IB lends itself to a broad range of research methodologies, qualitative methods being one of them. In order to understand the complexities of emergent and evolving phenomena scattered over distance, and the differentiated contexts typical to many topics under investigation in IB, it is often inappropriate to engage in large-scale, cross-sectional studies or reductionist methods in the absence of well-developed theory. Rather, thick description, exploratory research and comparative case analysis that focus on inductive theory building and hypotheses generation may be more suitable.

In the managerial and organizational cognition (MOC) literature, cognition is often studied by considering the observable characteristics of decision-makers. However, these studies have largely neglected cognitive differences stemming from the cultural, national, ethnical, and geographical (CNEG) characteristics of decision-makers – ones that are commonly studied in the field of international business (IB) research. Despite the contributions of IB research within the domain, the advancements have not found their way to the broader literature on MOC. In order to remedy this deficiency, this chapter seeks to introduce the work conducted within the IB field on the cognitive differences and the resultant cognitive distance stemming from decision-makers’ CNEG characteristics. This work has generated original insights on: (1) cognitive distances; (2) cognitive structures; (3) the legacy of the home country; and (4) tolerance to cognitive differences. As a result, this chapter strengthens the foundations for cumulative knowledge building by providing an integrative understanding of cognitive research based on the characteristics of managers.