Introduction to International Business

An introduction to the global business environment, this course examines the discrete and interactive effects of the geographic, historical, sociocultural, political/legal, economic and technological forces that shape business activities across borders and their consequences

How Emerging Market Firms Compete in Global Markets

We posit that contexts in emerging markets are different from developed country contexts. These contextual differences necessitate the development and deployment of unique capabilities and strategies on the parts of companies operating there. While all emerging market countries are not uniform across all of the characteristics described below, there is a great deal of commonality on these conditions within the group of emerging market countries, by virtue of their similar stages of development. Thus, companies that develop their skill sets and products/services in one emerging market are likely to more easily be able to extend them to others. Conversely, there are great differences in these characteristics in the developed group of countries

Globalization and International R&D Flows into Emerging Markets: Nomothetic Evidence

In this paper we analyze the impact of some determinants of international R&D expenditures made by overseas affiliates of MNCs. We also examine whether globalization has expedited international R&D investment flows since 1995, the year that internet access was opened up to mass usage and trade barriers began to concertedly decrease worldwide, following the emergence of the World Trade Organization (WTO). We find evidence that ethnic diversity, political stability, and patent rights enforcement promotes international flows of R&D investments. Increased workers’ educational levels appear to have contradicting effects on international R&D investment flows. When we isolated the effects of globalization into its component forces of technological advancement and trade liberalization, we found some notable interaction effects, especially involving trade barriers. Increased globalization since 1995 has increased international R&D flows in the face of diminishing tariff barriers. A dataset containing more countries and more recent time horizons should help to unravel some of the counter-intuitive and confounding results that our study has unearthed

Organizational Control Systems: Matching Controls with Organizational Levels

Companies today face a number of risks, such as environmental liabilities, losses from misuse of derivatives or harassment suits, which underscore the need for better control systems. Clearly, there is a tradeoff between having too much versus too little control. However, in addition to the amount of control, the mix of controls is important in maintaining the right balance within an organization. A framework is proposed that should help managers determine the appropriate matching of control types and control levels in their organizations. The matching is discussed for both traditional companies and modern, information-age companies

Developing Business Acumen in Chinese Business School Graduates

This study assessed the importance of knowledge, skills, abilities (i.e., KSAs) and competencies for managerial success in China’s market economy. Business students at a major Chinese university were surveyed over a five year period, initially in 2001 and later in 2006, five years after China’s entry into the World Trade Organization (WTO). Using Partial Least Squares (PLS), the explained variances in business acumen and social motivation skills were higher after China’s WTO entry. The results were reversed for communication skills. The results confirmed the predictive relevance of entrepreneurial behavior and adaptability in the model. Overall, the results suggest an enhanced appreciation for these KSAs after China’s WTO entry

Developing Business Acumen in Chinese Business School Graduates

This study assessed the importance of knowledge, skills, abilities (i.e., KSAs) and competencies for managerial success in China’s market economy. Business students at a major Chinese university were surveyed over a five year period, initially in 2001 and later in 2006, five years after China’s entry into the World Trade Organization (WTO). Using Partial Least Squares (PLS), the explained variances in business acumen and social motivation skills were higher after China’s WTO entry. The results were reversed for communication skills. The results confirmed the predictive relevance of entrepreneurial behavior and adaptability in the model. Overall, the results suggest an enhanced appreciation for these KSAs after China’s WTO entry

Business Risk And Performance: An Examination Of Industry Effects

Both business risk and industry sales volatility decreased across the computing equipment manufacturing, airline and pharmaceutical industries. Earnings performance and industry environmental munificence were both the highest among airlines. High volatility, while posing greater business risks, also offered the opportunity for improved risk-performance payoffs in the computer industry. Individual firms in the computer and pharmaceutical industries successfully reduced business risk while simultaneously increasing earnings performance (i.e., negative within-firm correlations), indicating idiosyncratic firm-specific effects

Top Management Compensation and Shareholder Returns: Unravelling Different Models of the Relationship

In order to further examine the relationship between executive pay and company performance, this paper investigates the linkage between two separate components of executive compensation (i.e. cash compensation and stock options) and market return performance, among a selected sample of US pharmaceutical company CEOs and COOs. In the surveyed sample, changes in cash compensation were found to exhibit a between-firm relationship with lagged market returns, while Δ stock option grants displayed a within-firm relationship. The former result suggests a commonality in practices across all firms, while the latter denotes idiosyncratic firm-specific practices. These contrasts represent different degrees of the agency problem in the contracts for cash compensation as compared to the stock option components. Levels of cash compensation were affected primarily by firm size. Market returns were not instrumental influences on the levels of both compensation components

R&D Investments of Multinational Corporations

This paper investigated the influence of country-level factors that have led to shifts in the patterns of international R&D investments made by Multinational Corporations (MNCs), from an exclusive focus on developed countries to a broader scope that also includes developing countries. Differences in a country\u27s national technological innovation capability, that comprised the country\u27s capacity for the creation of technology, technology infrastructure and the development of human skills, were the most important factors in attracting R&D investments. Different strategic motivations like home-base exploiting versus home-base augmenting foreign R&D investments are attracted to countries with differing national innovation capabilities. The country\u27s Intellectual Property Rights (IPR) score was also an important influence on R&D investments. International investor\u27s experience with the country, as measured by prior FDI inflows, was a critical element in attracting R&D investment inflows

Social Embeddedness, Overt and Covert Power, and Their Effects on CEO Pay: An Empirical Examination Among Family Businesses in India

The literature on CEO compensation reflects two common biases: (a) the dominant use of the agency theory perspective and (b) the almost exclusive use of U.S. and U.K samples. Agency theory views compensation as a consequence of the incentive contracts and the processes of corporate governance. However, little is known about the determinants of CEO compensation in developing countries. Considering that foreign direct investment of U.S. multinational enterprises increased 10-fold over the past decade, mostly in developing economies, there is a great need to understand the dynamics of pay setting in these foreign contexts. Overall, there is an imperative need to explore alternative theoretical perspectives as well as investigate nontraditional contexts to broaden existing theoretical premises. In an attempt to address this need, this study investigates the CEO\u27s social embeddedness and overt and covert power as determinants of CEO pay in a sample of Indian family-controlled firms. Using a time-series, cross-sectional regression analysis, we find family shareholding and the percentage of inside directors on the board (identified as bases of overt power for the CEO) to be the predominant influences on CEO pay. By contrast, some of the identified bases of covert power, such as the CEO\u27s tenure, age, education, and firm diversification, are not significant. Surprisingly, controls for firm size and performance also exhibit no influence on CEO pay. These findings offer a useful point of reference against which results from western studies can be compared to formulate more holistic theories of CEO pay