Masaaki Kotabe

Global sourcing strategy and sustainable competitive advantage

Abstract Global sourcing strategy has been one of the most hotly debated management trends in the last 20 years. In its early years, global sourcing was examined mostly from “in-house” development and procurement perspectives; and in the last several years, research focus has shifted to “outsourcing” activities. Along with this shift from internal to external focus on global sourcing, many researchers and business practitioners have applied a core competency argument to justify increased levels of outsourcing activities on a global basis. Although the beneficial aspects of outsourcing are assumed in most cases, no consensus exists in reality as to the effect of outsourcing. Furthermore, the increased instability of the exchange rate environment in the last several years has also led to increased difficulties in managing globally scattered operations that were once fashionable in the 1980s-90s under the rubric of global strategy. In this article, the authors explore potential limitations and negative consequences of outsourcing strategy on a global scale.

The Effect of Export Assistance Program Usage on Export Performance: A Contingency Explanation

On the basis of a synthesis of prior research, the authors develop a model, which integrates export marketing involvement and the use of government export promotion assistance programs as critical variables affecting export performance, and subject it to empirical evaluation. In this context, the authors also investigate organizational and managerial differences among the firms involved in export marketing to ascertain the robustness of and replicate the observed differences in firms’ export marketing involvement behavior. The results indicate that export marketing involvement of firms and firms’ usage of government export assistance programs are important export success factors. However, the relevance of export assistance programs and the role they play vary depending on the dimension of export performance being considered.

Dynamic Capabilities, Government Policies, and Performance in Firms from Emerging Economies: Evidence from India and Pakistan

In this study we developed a model of the dynamic capability development mechanisms in Emerging Market manufacturing Firms (EMF). We identified three dynamic capability development mechanisms: organizational learning, reverse engineering, and manufacturing flexibility. We generated hypotheses based on this framework, linking these mechanisms with firm performance. We also modelled the roles played by managerial use of two types of government policies: input supporting policies and marketing supporting policies. We tested our hypotheses on a sample of Indian and Pakistani manufacturing firms. Results showed that organizational learning, reverse engineering and manufacturing flexibility had significant impacts on EMF performance. Additionally, organizational learning combined with input supporting government policies enhanced performance, and the combination of manufacturing flexibility and marketing supporting government policies had an insignificant influence on performance.

Assessing Measurement Invariance of Export Market Orientation: A Study of Chinese and Non-Chinese Firms in China

In response to numerous calls for the cross-cultural validation of measures used in international research, the authors assess measurement invariance of the export market orientation (EMO) and export performance (EP) constructs using 491 Chinese and non-Chinese export ventures in China. The results show that both the EMO and the EP scales are invariant between Chinese and non-Chinese export ventures. In addition, different EMO components have differential effects on EP for Chinese versus non-Chinese firms. To achieve higher EP, Chinese firms should focus on export intelligence responsiveness, and non-Chinese firms should concentrate their efforts on export intelligence generation. The authors discuss implications and suggest directions for further research.

A Story of Breakthrough vs. Incremental Innovation: Corporate Entrepreneurship in the Global Pharmaceutical Industry

Breakthrough innovations are difficult to create; yet they are critical to long term competitive advantage. This highlights the considerable opportunities and risks that face corporate entrepreneurs. We study the complex explorative and exploitative entrepreneurial processes of multinational firms operating in the global pharmaceutical industry. We analyze over 1,500 new drug approvals by the U.S. Food and Drug Administration (FDA). We find that a successful track record in breakthrough innovation significantly increases the likelihood of a current breakthrough, while achievements in non-generic incremental innovation do not have a significant effect. A strong foundation in generic incremental innovation hinders breakthrough performance. Thus, incremental innovation processes appear to be heterogeneous. Products that emerge from joint ventures and alliances are more likely to be breakthroughs. Foreign subsidiary participation in innovation processes did not significantly inhibit breakthroughs. These suggestive findings support the decentralization literature that highlights the benefits associated with exploiting knowledge from foreign centers of excellence. Contrary to the literature arguing that younger firms tend to have greater advantages in “exploration”, we do not find firm age to be a significant predictor of the likelihood of breakthrough innovation.

Global Sourcing Strategy and Performance of Knowledge-Intensive Business Services: A Two-Stage Strategic Fit Model

This research contributes to the understanding of global sourcing strategy of knowledge-intensive business services (KIBSs) by offering an explanation for the differential performance among firms, even when they use similar global sourcing strategies. Using a systems integrator as the sourcing firms perspective, the authors argue that complex KIBSs involve a complicated mixture of interfaces in that the performance of an individual KIBS is insufficient in defining the overall performance of the integrated KIBS system. The theoretical framework uses a two-stage strategic fit model that emphasizes the conditions under which global sourcing of KIBSs influences performance. Firms that strategically coalign sourcing strategy with KIBS attributes for each KIBS activity should perform more effectively than firms that lack such a coalignment. After selecting an appropriate sourcing strategy, the firms dynamic capabilities (i.e., absorptive capacity and integration capability) may accentuate or attenuate the performance of the strategy at the integrated KIBS system level. Thus, although managers may be tempted to source KIBSs globally to reduce labor costs, they must examine both the KIBS attributes and the firms dynamic capabilities.

Hollowing-out of U.S. multinationals and their global competitiveness: An intrafirm perspective

Abstract This article examines a widely debated issue: the “hollowing-out” of U.S. multinationals. Using path analysis applied to the benchmark survey of U.S. direct investment abroad for 1977 and 1982, the study shows that the “hollowness” of U.S. multinationals is indicative of their global competitiveness, although causal relationships are not obvious. “Hollowing-out” may be an offshoot of the deindustrialization of the U.S. economy; it may alternatively signify “reindustrialization” of U.S. firms on a global basis.

A Taxonomy of Sourcing Strategic Types for MNCs Operating in China

This paper presents a taxonomic study of sourcing strategy types and their relationships to subsidiary profitability. Using the taxonomic approach, this study identifies five sourcing strategy types based on the decision rules of direction and volume of sourcing activities, namely market access, offshore platform, offshore manufacturing, local sourcing, and complex sourcing. We validated these sourcing types by linking them to a set of business and investment strategic factors. Based on a sample of 319 foreign subsidiaries in China, the results confirm the taxonomy of sourcing types indicating that sourcing strategy types indeed vary along the strategic factors including wage rates, R&D intensity, subsidiary size, capital commitment, ownership control and partner type.

Perceptions of Motivational Components: Salesmen and Saleswomen Revisited

Although empirical work has examined differences between salesmen and saleswomen on various aspects, no comprehensive study has examined gender-based distinctions in salespeoples work motivation. The paucity of research attention on this topic is surprising given the plethora of literature in organizational behavior. This paper reports the results of an investigation that explored male and female salespeoples perceptions of expectancies, instrumentalities, and valence for rewards. Findings reveal minimal contrast between the two groups. Implications for practitioners and researchers are provided.

Strategic alliances in emerging Latin America: a view from Brazilian, Chilean, and Mexican companies

Brazil, Chile, and Mexico constitute the leading newly industrialized countries (NICs) of Latin America. It is within these markets that the world expects significant economic gains over the next decade. Local companies in these countries are allying with foreign companies to enhance their competitive positions, yet little is understood about such interfirm collaboration with partners from these Latin American countries. Our study examines the strategic objectives of these Latin American companies, partnership structures, and their satisfaction in collaborating with companies from developed countries. Although existing studies have historically examined the dyad of strategic alliances from a perspective of developed countries (e.g., the U.S.), our study explores the issue from a perspective of companies in emerging Latin American economies.