A perspective on regional and global strategies of multinational enterprises

Abstract

Multinational enterprises (MNEs) are the key drivers of globalization, as they foster increased economic interdependence among national markets. The ultimate test to assess whether these MNEs are global themselves is their actual penetration level of markets across the globe, especially in the broad 'triad' markets of NAFTA, the European Union and Asia. Yet, data on the activities of the 500 largest MNEs reveal that very few are successful globally. For 320 of the 380 firms for which geographic sales data are available, an average of 80.3% of total sales are in their home region of the triad. This means that many of the world's largest firms are not global but regionally based, in terms of breadth and depth of market coverage. Globalization, in terms of a balanced geographic distribution of sales across the triad, thus reflects a special, and rather unusual, outcome of doing international business (IB). The regional concentration of sales has important implications for various strands of mainstream IB research, as well as for the broader managerial debate on the design of optimal strategies and governance structures for MNEs.

Crossing the streams: HRM in multinational enterprises and comparative HRM

“…This is reflected in the CHRM literature, where 'dominance effects' have been identified (Smith & Meiksins, 1995) whereby what are seen as the most successful models have exemplary power on other communities, setting standards for the rest of the world. Another strand of the convergence debate reflects the international business literature (Rugman & Verbeke, 2004) and argues that regions are more important. The influence of the European Union on HRM has been profound, spreading legislation on a range of employment contract issue.…”

“…regional HQ). This is particularly surprising given the regional nature of international business (Rugman & Oh, 2013;Rugman & Verbeke, 2004) and the tendency for larger MNEs to establish regional headquarters and to regionalise their operations (Nguyen, 2014;Sparrow, Brewster, & Harris, 2004). Neither does it tend to acknowledge within-country differences that might explain differences in HRM between subsidiaries located in the same country (e.g.…”

Internationalization trajectories--a cross-country comparison: Are large Chinese and Indian companies different?

“…This means that although the sector of activity influences a firm' s internationalization strategy and trajectory, there is still important firm-specific variation, which re-iterates the observations of Rugman on the relevance of firm-specific advantages in internationalization strategies (Cf. Rugman and Verbeke, 2004).…”

“…Especially, the lack of systematic, integrated and time-related empirical information on MNE strategies is an important omission, as there are indications that dynamic differences in the internationalization process and the resulting balance in sales and assets over time affect the extent to which firms are able to reap the benefits from or handle the risks of international expansion (Vermeulen and Barkema, 2002;Ruigrok and Wagner, 2003). In addition, a longitudinal analysis of growth across borders can shed light on the growth of the firm in general (Jones and Khanna, 2004;Penrose, 1959), and allows for a study of the various strategies that firms have used in driving economic globalization, hereby furthering our understanding of this prominent process (Rugman and Verbeke, 2004).…”

Market convergence and advertising standardization in the European Union

“…Some scholars and analysts have argued that MNCs should focus on regional strategies before seeking to integrate their global operations (Rugman & Verbeke, 2004). To what extent are firms integrating global as well as regional marketing strategies?…”