Portfolio configuration and foreign entry decisions: A juxtaposition of real options and risk diversification theories

Research Summary Research on foreign market entry has rarely considered that multinational firms' new entries may be affected by the configuration of their existing affiliates. We argue that in making entry decisions, firms take into account how an entry into a new location helps increase the operational flexibility of their affiliate portfolios due to options to switch operations across affiliates in case of diverging labor cost developments across host countries. We juxtapose this real options‐based explanation with a risk diversification explanation. Analysis of Japanese multinational firms' foreign entry decisions suggests that the two explanations are complementary. We also establish portfolio‐level boundary conditions to the influence of operational flexibility considerations on entry, in the form of product diversification and the nature of dispersion of labor cost levels. Managerial Summary When deciding on whether to enter a foreign market, managers of a multinational firm are intuitively aware that they need to consider how the economic environment of the target host country is related to the environments of the existing countries in which the firm operates. The less the environments are correlated with each other, whether in terms of input cost or market demand conditions, the greater the chance that the firm may capture cost savings and reduce sales volatility globally. These benefits arise from a switching option to shift operations flexibly across countries and from an ability to reduce risk by holding a portfolio of diversified global investments. Our findings support both sets of considerations, suggesting that companies do give due attention to correlations in labor cost and market demand between the target host country to enter and the existing host countries

Voices of the hungry: a qualitative measure of household food access and food insecurity in South Africa

South Africa is rated a food secure nation, but large numbers of households within the country have inadequate access to nutrient-rich diverse foods. The study sought to investigate households’ physical and economic access and availability of food, in relation to local context which influences households’ access to and ability to grow food which may affect the dietary quality. We sought to understand self-reported healthy diets, food insecurity from the perspective of people who experienced it, barriers to household food security and perceptions and feelings on food access as well as strategies households use to cope with food shortages and their perceptions on improving household food security

Chronic and structural poverty in South Africa: Challenges for action and research

Ten years after liberation, the persistence of poverty is one of the most important and urgent problems facing South Africa. This paper reflects on some of the findings based on research undertaken as part of the participation of the Programme for Land and Agrarian Studies (PLAAS) at the University of the Western Cape in the work of the Chronic Poverty Research Centre (CPRC), situates it within the broader literature on poverty in South Africa, and considers some emergent challenges. Although PLAAS’s survey, being only the first wave of a panel study, does not yet cast light on short term poverty dynamics, it illuminates key aspects of the structural conditions that underpin long-term poverty: the close interactions between asset poverty, employment-vulnerability and subjection to unequal social power relations. Coming to grips with these dynamics requires going beyond the limitations of conventional ‘sustainable livelihoods’ analyses; and functionalist analyses of South African labour markets. The paper argues for a re-engagement with the traditions of critical sociology, anthropology and the theoretical conventions that allow a closer exploration of the political economy of chronic poverty at micro and macro level