Customer involvement and service firm internationalization performance: An integrative framework

Abstract

To overcome the costs of doing business abroad, researchers have suggested either legitimacy-or efficiency-based solutions. However, both types of solutions still treat host-country customers as external to the theory. We highlight the role of customers in the international professional business service setting and argue that customer involvement is positively related to the perceived internationalization performance of multinational corporations (MNCs). MNCs with managers who perceive higher legitimacy pressures and greater needs for local knowledge tend to undertake greater efforts to build customer involvement. Furthermore, we develop a configuration framework between perceived strategic needs and MNCs' capabilities. Specifically, MNCs that match relational capability with legitimacy needs and absorptive capacity with knowledge needs are more likely to engage in customer involvement. Our survey of 175 Chinese MNCs provides evidence that customer involvement is positively related to perceived internationalization performance. When MNCs' relational capabilities are stronger, the positive relationship between legitimacy pressure and customer involvement increases. By contrast, MNCs with greater perceived market ambiguity improve customer involvement only when they have stronger absorptive capacity. We conclude that MNCs may simultaneously reduce legitimacy and efficiency costs through customer involvement after considering the fit between perceived environmental pressures and firm capabilities.

Strategic customer analysis based on Balanced Scorecard

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Research performance as a quality signal in international labor markets: Visibility of business schools worldwide through a global research performance system

“…Research on the internationalization of knowledge-intensive service-industry firms highlights the importance of talent mobility in developing firm-level IB capabilities (Brock, 2012). Yet, when the legitimacy of new entrants to international markets is discussed, the focus is on the reputational signals sent to potential customers (Bello, Radulovich, Javalgi, Scherer, & Taylor, 2016;Guillotin & Mangematin, 2015;Zhang et al, 2015). Our paper emphasizes the equal importance of legitimacy signaling in global labor markets, where knowledge-intensive service-industry firms seek to attract new organizational members with necessary international capabilities.…”

Strategic resource decisions to enhance the performance of global engineering services

“…We in our investigations focus on a particular type of service operations -global engineering services, which are typically knowledge-intensive, project-based, and people-centric, representing a distinctive business model of professional service firms in general (Løwendahl 2005;Malhotra and Morris 2009;Von Nordenflycht 2010;Zhang et al 2016). In doing so, we are able to generate theoretical insights potentially useful for a wider range of service firms which have attracted a growing research interest among IB scholars (Zhang et al 2015;Bello et al 2016;Shin et al 2017). At the same time, the research focus itself has significant industrial implications.…”