Integration-responsiveness, local hires and subsidiary performance amidst turbulence: Insights from a survey of Chinese subsidiaries

Abstract

We study MNE subsidiary performance in a turbulent, emerging economy, focusing on how locally hired managers and integrationresponsiveness (I-R) influence performance outcomes. We augment I-R by considering how locally hired managers support or hinder global integration (GI) and local responsiveness (LR) in China. Analysis of data from 104 Chinese subsidiaries suggests higher proportions of locally hired managers do not support GI; GI is sufficient in its own right in dealing with turbulence, positively moderating the relationship between turbulence and performance. However, a higher proportion of locally hired managers does improve subsidiary performance amidst turbulence when accompanied by LR.

Measuring the performance of poultry business through effective supply chain management skills

“…With regard to contracts, the economic linkages between companies and those in the poultry farming industry have also increased exceptionally in the last twenty years. Research studies on poultry farming in Asia and Africa (Williams et al, 2017) illustrate the growth of poultry in the last two decades, McKenzie et al (2018) examine the contract relationships between the poultry growers and suppliers which has resulted in an incredible growth of poultry production and increase in the performance of poultry business. With the growth in livestock, a need is also felt to create effective product supply chains in order to sustain, modulate and promote livestock in particular and agriculture and globalization also in general.…”

Local responsiveness strategy of foreign subsidiaries of Chinese multinationals: The impacts of relational-assets, market-seeking FDI, and host country institutional environments

“…In contrast, local responsiveness (R) emphasizes variations of local market conditions and thus requires the subsidiary of the multinational enterprise (MNE) to adapt its operation to local circumstances (Bartlett & Ghosbal, 1989;Prahalad & Doz, 1987). MNEs can choose to pay more attention to one dimension than the other or to achieve both dimensions (Luo, 2001;Prahalad & Doz, 1987;Williams, Colovic, & Zhu, 2017).…”

“…However, a number of scholars argue that the degree of global integration and local responsiveness is constrained by organizational resources and capabilities (Bartlett & Ghosbal, 1989;Luo, 2001Luo, , 2002Rugman & Verbeke, 1992Tallman & Yip, 2009). Both dimensions of I/R strategy are found to have a positive impact on firm performance (Hult, Ketchen, & Slater, 2005;Johansson & Yip, 1994;Meyer & Su, 2015;Morrison & Roth, 1992;Roth & Morrison, 1990;Roth, David, & Morrisson, 1991;Williams et al, 2017). Verbeke (1992, 2001) provide an interpretation of I/R framework from the perspectives of internalization theory, especially firm-specific advantages (FSAs) and country specific advantages (CSAs) (Rugman, 1981).…”

“…Yet, the achievement of the 'transnational strategy' is rather idealistic. Even the largest MNEs need to make a choice between global integration and local responsiveness (Brock & Hydle, 2018;Meyer & Su, 2015;Peng, 2014;Verbeke, 2013;Williams et al, 2017).…”

“…Second, we contribute to the growing literature on the internationalization strategy of Chinese MNEs and their subsidiaries. This is a novel contribution in this research stream given that the extant knowledge on I/R framework has been developed mainly in the context of Western MNEs operating in other advanced economies or emerging economies (e.g., Hult et al, 2005;Johansson & Yip, 1994;Luo, 2001Luo, , 2002Meyer & Su, 2015;Roth et al, 1991;Williams et al, 2017). Specifically, subsidiaries of advanced economy MNEs investing abroad are able to internalize strong NLB FSAs developed in home countries (top-down knowledge transfer) (Birkinshaw et al, 2005;Birkinshaw, 2014;Rugman et al, 2011a).…”