Many potential benefits of foreign expansion have been identified in the literature, yet empirical support that multinational firms perform better than domestic firms is mixed. This paper takes a longitudinal perspective and argues that how much a firm benefits from having foreign subsidiaries depends on its process of internationalization. We argue that a firm's capacity to absorb expansion is subject to constraints: some expansion patterns increase profitability less than others, owing to diseconomies of time compression. We hypothesize that the speed of internationalization, the spread of the geographical and product markets entered, and the irregularity of the expansion pattern negatively moderate a firm's increase in profitability resulting from international expansion. Model estimations based on panel data raised strong support for these predictions.
Despite the clear importance of team creativity for organizations, the conditions that foster it are not very well understood. Even though diversity, especially diversity of perspectives and knowledge, is frequently argued to stimulate higher creativity in teams, empirical findings on this relationship remain inconsistent. We have developed a theoretical model in which the effect of a team's diversity on its creativity is moderated by the degree to which team members engage in perspective taking. We propose that perspective taking helps realize the creative benefits of diversity of perspectives by fostering information elaboration. Results of a laboratory experiment support the hypothesized interaction between diversity and perspective taking on team creativity. Diverse teams performed more creatively than homogeneous teams when they engaged in perspective taking, but not when they were not instructed to take their team members' perspectives. Team information elaboration was found to mediate this moderated effect and was associated with a stronger indirect effect than mere information sharing or task conflict. Our results point to perspective taking as an important mechanism to unlock diversity's potential for team creativity.
How do firms learn to successfully acquire other firms? The authors first review early work, mostly from the 1980s to the mid-1990s, testing the learning curve perspective on acquisitions and exploring some contingencies. They then discuss three more recent streams of research on negative experience transfer, deliberate learning mechanisms, and learning from others, which provide deeper insight into the contingencies and mechanisms of organizational learning in strategic settings such as acquisitions. The article concludes with an agenda for future research.
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