Organizational Capabilities for Mass Market Innovations in the Emerging Economies: Insights from an Automobile Firm in India

Of late, there has been a dramatic shift of world economic power towards less-developed countries, in particular, emerging economies (EEs). The growing influence of EEs is shifting the global competitive landscape, as these new economies are a great source of opportunity, inspiration and innovation. However, companies face the challenge to identify what organizational capabilities are required to serve mass market customers to meet their unique demand and price-performance conditions. In depth empirical studies in this context are largely unexplored in the academic literature. Focusing on the product innovation for India and other EEs with the creation of passenger vehicles from the Indian multinational automaker- Mahindra & Mahindra, our analysis highlights that capabilities to recombine are required to achieve an altered price-performance package. Furthermore, linkage capabilities are required to economize on resources. Also, capability to modularize is required for product performance improvements to serve multiple tiered customers. Using case study design, our study aspires to contribute to the innovation literature on mass markets formulating a set of testable propositions to advance research in this subject

Transnational Corporations, Local Adaptation and Inter- Firm Linkages in Developing Countries: Some Contrasts with Local Enterprises in India.

The issue how transnational corporations (TNC) affiliates adapt locally within emerging markets while sustaining their global competitive advantage has been debated and discussed in international business literature. Even so, the actual response of TNC-affiliates to this contradiction has not been systematically explored. Using a rich dataset of over 300 companies in India, we examine if the ability of TNC-affiliates to adapt and strike linkages in host countries is in any way different to those of their local counterparts. Our results show that TNC-affiliates and local enterprises (LE) behave differently across a majority of dimensions predicted. But whereas this difference is robust for mature industries like chemicals, the same cannot be claimed for high technology global industries like electronics and transport equipment. This suggests that the behavioural differences between the two groups of firms may be strongly influenced by market structural variables impinging upon the industries in which they compete. The results have implications for TNCaffiliates striving to streamline their strategy with pressures in their task environment and also for nation-states as to how to best devise policy mechanisms to assist the same

Industrial modernisation through institutional upheaval in a transition economy

Purpose The purpose of this paper is to examine the effects of Russian institutional upheavals on industrial development. Design/methodology/approach The paper uses a longitudinal case study analysis of three Russian pharmaceutical firms exploring the role of state support in developing a self-sustained competitive innovation-dependent industry. Findings Russia’s shock therapy transition to a newly liberalised economy the 1990s without a supportive institutional framework led to severe setbacks in its modernisation process. A weak institutional context was not conducive to development of its fledgling organisations. In late 2000s, Russian Government initiated large-ranging institutional support in favour of strategic industries. This resulted in a shift from short-term profit-seeking arbitrage strategies to long-term investment strategies towards vertical integration, R&D and human resource development. Findings indicate countries that wish to forge competitive industries need to develop a strong supportive institutional mechanism that allows targeted industries to modernise and compete on a global scale. To ensure the effectiveness of execution of strategic policies, coherent communication channels and collaboration between the industry and the state is necessary. Originality/value While research on large emerging economies, such as China and India, is extensive, research on Russia and surrounding states is sparse. Most of the research on Russia is based around large resource-sector organisations. This study is novel in its uncovering various phases of development of an innovation-dependent industry

The use of third party logistics services by large Australian manufacturers: current status and trends

Based on a revised questionnaire developed originally by Lieb (1992), an empirical research was conducted to investigate the use of third-party logistics (TPL) services by large manufacturing companies in Australia. Using a sample drawn from Australia’s Top 500 companies, the study examined the extent to which TPL services used, the type of logistics services used, the impact of the use of TPL services on customer satisfaction, costs and employee morale of the user companies. The results revealed that about two-third of the companies who have responded use TPL services from one or more TPL providers, and over 85% of the companies were satisfied with the services provided by the TPL service providers. The results also indicated that the most frequently used logistics functions were warehouse management, order fulfilment and fleet management

Political connections and strategic choices of emerging market firms: Case study of Russia’s pharmaceutical industry

Purpose: The purpose of this paper is to investigate the importance of political connections in the emerging market context. Design/methodology/approach: A case study analysis of three Russian pharmaceutical firms is conducted to uncover how they performed through the Russian transition – the institutional upheaval of the 1990s – and the ongoing state-led industrialization. Findings: In the early years of transition, firms heavily rely on political networking to gain legitimacy and fill institutional voids. As institutions strengthen, the need for political networking is being substituted by arm’s length networking. Strengthening of institutions also results in a more stable business environment, evolving firms’ strategies from short-term core competency concentration to long-term innovative visions. Research limitations/implications: Firms operating in the Russian, Commonwealth of Independent States and some other Eastern European state domains must be wary of complex ties that are prevalent in these countries and often can assist or hinder firm performance. Although formal institutions strengthen arm’s length networks, a close cooperation between strategic firms and the state remains. Originality/value: The paper proposes two phases of the Russian transition and provides a taxonomy of strategic choices of Russian firms during the transition. Further, the paper describes the key institutional developments in the two phases of the Russian transition. Finally, a framework of political connections and their role in business operations in the two phases of the transition is provided

Industrial modernisation through institutional upheaval in a transition economy

Purpose: The purpose of this paper is to examine the effects of Russian institutional upheavals on industrial development. Design/methodology/approach: The paper uses a longitudinal case study analysis of three Russian pharmaceutical firms exploring the role of state support in developing a self-sustained competitive innovation-dependent industry. Findings: Russia’s shock therapy transition to a newly liberalised economy the 1990s without a supportive institutional framework led to severe setbacks in its modernisation process. A weak institutional context was not conducive to development of its fledgling organisations. In late 2000s, Russian Government initiated large-ranging institutional support in favour of strategic industries. This resulted in a shift from short-term profit-seeking arbitrage strategies to long-term investment strategies towards vertical integration, R&D and human resource development. Findings indicate countries that wish to forge competitive industries need to develop a strong supportive institutional mechanism that allows targeted industries to modernise and compete on a global scale. To ensure the effectiveness of execution of strategic policies, coherent communication channels and collaboration between the industry and the state is necessary. Originality/value: While research on large emerging economies, such as China and India, is extensive, research on Russia and surrounding states is sparse. Most of the research on Russia is based around large resource-sector organisations. This study is novel in its uncovering various phases of development of an innovation-dependent industry

Foreign Firms and Local Linkages: Multinational affiliates and local enterprises in India - a comparative study

Few attempts have been made at addressing the question of how the degree of foreign ownership influences the propensity of firms in developing local linkages. This empirical work shows that contrary to popular belief and host-government intentions, multinational enterprise (MNE) affiliates have fewer linkages with the host-country enterprises vis-a-vis the local enterprises. Host governments need to design creative mechanisms to ensure effective alignment and achievement of both the MNE and host-country objective

The impact of institutional formation on firms’ strategic choices in knowledge development, absorptive capacity and vertical integration

This study examines the impact of institutional shifts on the strategic choices of Russian firms. It proposes and tests hypotheses of how a shift from a weak to a strong institutional context is likely to affect firms’ knowledge accumulation, absorptive capacities and internalisation of operations. Using discriminant analysis, the econometric investigation demonstrates that firms tend to allocate greater resources towards improving their knowledge and absorptive capacity and make more efforts to vertically integrate—in line with improvements in the institutional environment. These investments ensure the survivability and competitiveness of firms in the long term. Furthermore, the study demonstrates that the long-term strategic orientation of firms goes hand in hand with rising resource allocations by the nation-state towards economic development. The findings align with the institutionalist political economy views that institutions are the ultimate overseers that allow the market to operate efficiently, especially in emerging market environments. The paper is also instructive to other developing economies about the need to strengthen their institutional environments, which supports the long-term orientation of firms and has a positive impact on economic development. The analysis does not take into account the impact of sanctions on Russian business and economy, post the annexation of Crimea and the armed conflict with Ukraine. Nor does it consider the impact of COVID-19 on the economy. As such, the study attempts to constitute an untainted comparison of two paths of transition on Russian firms—shock therapy, vis-à-vis, an institutional political economy approach

Patterns of Multinationals’ Technological Strategies in Emerging Economies: Evidences from Brazil and India.

A key factor behind a country’s ability to attract knowledge-based foreign Investment is an institutional context oriented towards innovation. The development of such a context is not an easy task though: it requires not only an advanced domestic knowledge base, but also a policy and a management framework that can integrate local and foreign assets in the host-country innovation system. This is a challenging task for emerging economies, especially given that they have increasingly experienced erosion of their locale-specific technological advantages after liberalization of their economies. Hence there is a strong need to re-design strategies for catch-up, oriented towards combining interests of local and foreign business. This paper aims to contribute to the design of such new strategies by identifying Innovation Practices (IPs) of Multinational Enterprises (MNEs) affiliates in Brazil and India. Multivariate analysis techniques applied in more than 1000 manufacturing foreign-owned firms in Brazil and India shows significant differences in knowledge-based assetsseeking strategies by MNE affiliates, which reflect a heterogeneity of IPs in MNE affiliates acrosscountries. The results suggest MNEs have different levels of involvement with local innovation systems in Brazil and India. Such heterogeneity in assets-seeking MNEs behaviour combined with different country-specific competencies in attracting more-knowledge intensive foreign investments have created different opportunities for these countries to be inserted in the global value-chain