We invite you to join a Q&A session for our Special Issue in the Journal of International Management (AGJ 3 / ABDC A) at 10am EST / 15pm GMT
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https://zoom.us/j/98701499963?pwd=VlJXQUJoU1dHa1lLNnNxTlhmQmNHUT09
Here is an article in AIB Insights that further explains the topic and the Call for papers is right below: Mature MNE Subsidiaries in Emerging Markets: An Old Phenomenon with a New Research Agenda | Published in AIB Insights
Call for papers - Journal of International Management | ScienceDirect.com by Elsevier
The Management of Longstanding MNE Subsidiaries in Host Countries
Submission Window:
Oct 1st – Oct 31st, 2023
Guest Editors:
Felix Arndt, University of Guelph, Canada
Christiaan Röell, University of Sheffield, UK
Peter Rodgers, University of Southampton, UK
Elisabeth Rose, Indian Institute of Management Udaipur, India
JIM Editor-in-chief:
Vikas Kumar, University of Sydney, Australia
BACKGROUND
After many decades of globalization, the interest of management scholars is starting to broaden from how multinational enterprises (MNEs) enter new markets to how established subsidiaries sustain their competitiveness and influence over time (Röell, Arndt & Kumar, 2022). A century ago, only (or mainly) large well-resourced firms had the capability to participate in international trade and investments. Foreign subsidiaries were established in foreign markets (often former colonies) because they offered favorable entry conditions and access to resources (Frynas et al., 2006). Nowadays, longstanding subsidiaries need to consider not only their economic but also social and environmental impact. Sustainable subsidiary management becomes particularly relevant in a world with changing attitudes towards globalization. Managing for the long run requires subsidiaries to employ and develop novel strategies to manage market and nonmarket aspects in host markets.
The bulk of MNE subsidiary research focuses on initial entry or exit from foreign locations (Meyer, Li & Schotter, 2020). The international business (IB) literature pays limited attention to theory development relating to longstanding subsidiaries in both developed and emerging markets, despite the opportunity to advance scholarship on the management of MNEs within a host country context (Pant & Ramachandran, 2017). This is remarkable because it was, in fact, the observation of the ubiquitous presence and visibility of these MNEs and the effects they had on the contexts in which they were operating that first captured the attention of scholars. To survive and thrive, longstanding subsidiaries have adapted to rapid technological change, regime change and institutional reforms, growing international and domestic competition, new demands from customers and regulators, waves of uncertainty, and thus studying longstanding subsidiaries can offer novel insights into these key players in IB.
Corporate managers and management scholars need to be aware that managing market entry is different from running longstanding subsidiaries as the role of local employees, the nature of government relations, and resource flow between the headquarters and subsidiaries are all strikingly different (Röell, Arndt & Kumar, 2022). For instance, in contrast to new MNE entrants and indigenous firms, established subsidiaries often contribute financial resources and talent to the headquarters' operations. Furthermore, compared to young subsidiaries, the workforce and ways of operating have become more localized, and their strategies and practices are more like those of indigenous firms, while also facing pressure from headquarters to maintain global standards. Over time, ethnocentric staffing policies are generally replaced by more progressive, polycentric, and geocentric attitudes. Mature subsidiaries employ mostly local employees who embody local cultural norms and practices. Interestingly, research suggests that older, larger subsidiaries are more likely to face publicity crises, as a result of their inability to understand social demands (Zhao, Park & Zhou, 2014). Despite the many differences between young and mature subsidiaries past studies have focused primarily on explaining the early stages of the internationalization. Yet, to date, we know little about the post-entry strategies and tactics in the later phase of mature subsidiaries in both developed and emerging markets.
AIMS AND SCOPE
The goal of this special issue is to bring longstanding subsidiaries to the forefront of IB research. We seek to better understand the unique challenges that longstanding MNE subsidiaries face and how to address them. The commitment of longstanding MNEs to their host countries is often fundamentally different from the commitment of younger subsidiaries. The IB literature lacks theories that would allow us to predict the behavior of longstanding subsidiaries as opposed to new entrants or indigenous firms and there is no sufficient empirical base to offer comprehensive answers to questions surrounding longstanding MNE subsidiaries and how they sustainably manage their operations in host countries.
This special issue seeks to spur research that addresses this underexplored area of research. We do not fully understand the consequence of the longstanding commitment of MNEs to host countries. Yet, we know that longstanding MNE subsidiaries are significantly different from younger ones as these subsidiaries are much more deeply embedded into the host countries, the MNE headquarter extracts resources from longstanding subsidiaries, and their responses to institutional challenges may differ from those of less experienced subsidiaries. Recent advances in this area of inquiry offer first insights that longstanding subsidiaries are deeply involved with the social and environmental challenges of the host country and are not mere exploitation consortia anymore (Röell, Arndt & Kumar, 2022) We hope that the special issue further strengthens this new research arena on an old phenomenon and helps to pioneer research on mature subsidiaries around the world.
TOPICS OF INTEREST
We welcome theoretical and empirical papers addressing any challenge unique to longstanding MNE subsidiaries and potentially powerful to deepen our understanding of the strategic issues that they face. The topics below provide an indicative, but non-exhaustive, list of questions that can be tackled through conceptual, quantitative, qualitative, or mixed method approaches, drawing on a variety of theoretical lenses and paradigms. We also welcome historical studies that, for instance, investigate how subsidiaries responded to institutional reforms or regime changes over time.
- Subsidiaries and sustainability
How do longstanding subsidiaries manage economic, social, and environmental issues in relation to the nature of their products, their operations in the host countries, or in relation to global policies of the MNE headquarter?
- Ownership
How does ownership (equity) change over time from market entry to subsidiary maturity? What is the role of markets / non-markets for facilitating decision on ownership structure?
- Risks / uncertainty
How do the responses of longstanding subsidiaries facing political uncertainty or risk differ to new subsidiaries or local firms? How do firms respond to institutional reforms?
- Institutional friction and embeddedness
How do longstanding subsidiaries deal with institutional friction between the headquarter and the host country subsidiary? How do longstanding subsidiaries deal with institutional friction with the host country?
- Identity
How does the identity of longstanding subsidiaries evolve between the demands of the headquarter and the host country as well as its interaction with local stakeholders?
- Strategic decision-making
How do strategic decision-making processes work in longstanding subsidiaries?
- Relationship between HQ and longstanding subsidiaries
What challenges do longstanding subsidiaries face when providing resources to headquarters? What resources do longstanding subsidiaries (possibly opposed to market entrants) draw on from the headquarters?
- Human resources
Mature subsidiaries employ mostly local employees who embody local cultural norms and practices, which is effective for bridging cultural and institutional differences. Over time, as emerging markets develop, the question may become more about the contribution of expatriates rather than vice versa. What is the right balance between home, host, and third-country nationals in longstanding subsidiaries?
- Local adaptation
One of the most important international strategic decisions that MNEs need to make is their degree of local adaptation in a host market. While local adaptation can increase their chance of survival, it may also come at a cost, and loss of the firm's distinctive strategy. How far should longstanding subsidiaries adapt to the local market?
- Regime change and institutional reforms
Longstanding subsidiaries frequently experience regime change and/or institutional reforms. How do firms respond to these changes in their environment?
- Ambiculturalism in subsidiary management
Ambiculturalism suggests that managers and firms may gain unique strengths from their experience in and with different cultures. How do subsidiaries or managers within subsidiaries draw on the unique strength of the home and host country cultures?
- Responding to crises
MNEs are often accused of social misdeeds and experience public crises in emerging markets. How do young and mature subsidiaries respond to crises?
- Colonial past
Western European MNEs often entered colonies because they offered favorable entry conditions. Independence from colonial rules has brought challenges for these firms. How do these firms manage the risks (and/or benefits) associated with their colonial past?
Q&A SESSION
If you are interested in submitting a manuscript to the special issue, you can attend the online Q&A session with the guest editors in February 2023. Details will be communicated via social media.
PAPER DEVELOPMENT WORKSHOP
Authors who are invited to resubmit their manuscripts after the first round of review will be invited to a paper development workshop. This workshop is meant to help all authors improve their papers, and build a community of like-minded scholars in IB. Please note that participation in the workshop does not guarantee acceptance of the paper in the Special Issue. Likewise, attendance is also not a prerequisite for paper acceptance.
REFERENCES
Arndt, F., Roell, C., & Kumar, V. (2023). Mature MNE subsidiaries in emerging markets: An old phenomenon with a new research agenda. AIB Insights. https://doi.org/10.46697/001c.72797.
Frynas, J. G., Mellahi, K. & Pigman, G. A. (2006). First mover advantages in international business and firm-specific political resources. Strategic Management Journal, 27, 321– 45.
Meyer, K., Li, C. & Schotter, A. (2020). Managing the MNE subsidiary: Advancing a multi-level and dynamic research agenda, Journal of International Business Studies, 51, 538–576.
Pant, A. and Ramachandran, J. (2017). 'Navigating identity duality in multinational subsidiaries: A paradox lens on identity claims at Hindustan Unilever 1959‒2015'. Journal of International Business Studies, 48, 664–692.
Röell, C., Arndt, F. & Kumar, V. (2022). A Blessing and a Curse: Institutional Embeddedness of Longstanding MNE Subsidiaries in Emerging Markets. Journal of Management Studies, https://doi.org/10.1111/joms.12817
Zhao, M., Park, S. H. & Zhou, N. (2014) MNC strategy and social adaptation in emerging markets. Journal of International Business Studies, 45(7), pp. 842–861.
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Felix Arndt
University of Guelph
Guelph ON
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