The Dynamics of International Market Withdrawal

This study focuses on the decision-making process of international market withdrawal within the scope of international market portfolio management. A comparative study of eight withdrawal cases in four multinational firms results in a six-phased decision-making model that is driven by threat-rigidity behavior, failure-induced learning and political dynamics. Two types of international market withdrawal are identified. On the one hand, a tactical withdrawal is the outcome of threat-rigidity and exploitative learning at the level of executive management. A strategic withdrawal, on the other hand, is characterized by a process of failure-induced exploratory learning initiated by middle level challengers. In contrast to a tactical withdrawal, which remains an isolated decision and does not interfere with other international ventures of the business unit, a strategic withdrawal turns out to be a germ of strategic (re)orientation of the business unit’s entire international market portfolio. Whether a market withdrawal turns out to be tactical or strategic ultimately depends on the autonomy, the amount and the relevance of challengers’ market and business knowledge.Economics ;

Social norms, social cohesion, and corporate governance

Research Question/Issue: We study the relationship between informal rules (represented by social norms and social cohesion in a community) and corporate governance. A community is a large social unit characterized by a distinct set of informal rules. Specifically, three hypotheses are tested: (1) Communities with stronger social norms will have more open firm-level corporate governance, (2) More socially cohesive communities will have more open firm-level corporate governance, and (3) The relationship between social norms and corporate governance will be mediated by social cohesion. Research Findings/Insights: Unlike previous studies, we use data from a single, culturally diverse country, Ukraine, in order to isolate the effect of informal rules. The country’s provinces are used as proxies for communities. We develop our measures of social norms and social cohesion by performing a factor analysis on the measures commonly used in previous research (social capital, religiosity, total fertility, ethnic homogeneity, linguistic homogeneity, and homicide rate). All three hypotheses are supported, whether using composite or individual measures of social norms and cohesion. The mediation is partial, suggesting that the hypothesized effect of social norms on corporate governance may (i) partly come through cohesion and (ii) partly be direct. The results are highly significant and robust, and they hold very well when controlled for economic development, firm characteristics, and industry. Theoretical/Academic Implications: We contribute to the large literature on institutional determinants of corporate governance by proposing that informal rules may have a substantial impact on firm-level corporate governance. We also identify specific sources of informal rules: social norms and cohesion. Testing our insights in other countries and in cross-country settings would help to further understand what rules matter for corporate governance and whether informal rules may substitute for formal rules. Another research opportunity, perhaps best exploited through case-based research, is the deeper enquiry into the very mechanism by which informal rules may affect firm-level corporate governance. Practitioner/Policy Implications: Manipulating informal rules, such as norms and cohesion, is an unlikely option for corporate governance reform. If that is the case, the policy should consist in adjusting the governance system to fit them. As this fit will differ across communities and countries, international convergence of corporate governance appears unlikely

Toward a multilevel perspective on digital servitization

Purpose – The purpose of this paper is to provide a theoretical lens on digital servitization (DS) for future research purposes. By developing a multilevel framework that helps structure and untangle its complexity, the authors aim to increase understanding into the persistent challenge of DS. Design/methodology/approach – Building on a problematization approach, critical incident technique was applied to a comparative, longitudinal, multiple-case study in which DS journeys from one Italian and one Belgian manufacturing firm were analyzed. Findings – Analysis revealed that different levels and elements of the multilevel framework were simultaneously involved in the identified critical incidents. This huge interconnectedness severely challenged the DS journeys. Managerial (un)responsiveness played a central role in the organizational outcome for both firms. Originality/value – The authors answer the call for a more holistic approach toward DS. A multilevel framework is provided to be employed by future researchers and practitioners alike. A mid-range theory for DS and propositions for future research are developed