Entry and exit decisions in flexible teams

The present study identifies a major limitation of current research on multinational enterprises (MNEs). Joint decision-making in a distributed setting is of critical importance in practice, but has received little attention in our theories. To address this gap in knowledge, we examine the effects of flexible decision teams when MNEs assess turbulent markets. Remarkably, flexible teams composed of fallible evaluators can outperform what is usually thought of as an “optimal” decision. Our main result supports the claims advanced in recent empirical studies. Structural flexibility can help MNEs achieve high levels of performance, even in conditions of turbulence. Journal of International Business Studies (2008) 39, 1278–1292. doi:10.1057/palgrave.jibs.8400413

The performance of cross-border units in China: a test of natural selection, strategic choice and contingency theories

This study tests the explanatory power of three theoretical frameworks for the performance of cross-border affiliates, by examining the experience of 615 Hong Kong firms managing operations in mainland China. The frameworks tested are: the natural selection approach, focused on the influence of the environment; the strategic choice approach, focused on managerial action; and the contingency approach, which emphasises the ‘fit’ between environmental contingencies and internal organisation. The results show that natural selection and strategic choice have a role to play, even when controlling for each other. They also support a simple approach to contingency, but not a more complex version involving interactions. Although the business and institutional environments do have a significant influence on the performance of cross-border affiliates in a transition economy, performance can be improved through strategic managerial action. In particular, leveraging local resources by developing trust between parent and affiliate, and maintaining close control and integration with the parent, are associated with enhanced performance. Journal of International Business Studies (2003) 34, 242–254. doi:10.1057/palgrave.jibs.8400033