Paul W. Beamish

International Diversification and Firm Performance: The S-curve Hypothesis

A proposed theoretical framework for the study of multinationality and performance includes both benefits and costs of geographic expansion over different phases of internationalization. Data on 1,489 Japanese firms over 12 years show a consistent horizontal X S-shaped X relationship between multinationality and performance. Further, firms investing more heavily in intangible assets, such as technology and advertising, achieved greater profitability gains from growth in foreign direct investment. Our framework and findings highlight complexity and temporal dynamics.

Adapting to foreign markets: Explaining internationalization

While much is known about the factors associated with the choice of an individual mode of distribution (e.g. export, sales branch, wholly owned production), we know little about why firms change modes and what explains the pattern of mode change. After interviewing 76 executives from 38 firms regarding 139 mode changes, that which best explained mode change was a modified stages model. Mode change tended to arise following changes in (A) constraints (resources or regulation) or (B) perceptions of market and mode costs and benefits. The ensuing pattern of internalization -- whether de-investment, single step stages type investment or multi step incremental investment -- depended on the nature of the stimuli, the firms level of resources, experience and international skills, and the extent to which attitudes changed.

Survival and Profitability: The Roles of Experience and Intangible Assets in Foreign Subsidiary Performance

This study integrates research on the financial performance of multinational firms with research on foreign subsidiary survival. We examined the influences a firms intangible assets and its experience have on foreign subsidiary survival and profitability using a sample of 3,080 subsidiaries of 641 Japanese firms. The results show survival and profitability have different antecedents. Host country experience has a direct effect on survival but a contingent relationship with profitability. The entry mode moderated the nature of these relationships.

A Resource-Based Approach to the Study of Export Performance

This paper presents a comparative study of the export performance of U.S. and Canadian small and medium‐sized exporters. A parsimonious model is developed drawing on the resource‐based theory of the firm, with three sets of resources, namely firm size, enterprise, and technological intensity. These key resources are good predictors of the export strategy of a firm. Export strategy is modeled as degree of internationalization, and its effect on the overall firm performance is studied using firm‐level performance measures. LISRELs multiple group analysis feature is used in the analysis to test the model. The results confirm the validity of the model across the two data sets.

Geographic Scope, Product Diversification and the Corporate Performance of Japanese Firms

The study extends research on the geographic scope, product diversification and performance relationship by exploring both the antecedents and consequences of geographic scope. In so doing, it addresses a fundamental criticism of the geographic scope-performance relationship; namely, that the observed positive relationship between geographic scope and performance is spurious because it is the possession of proprietary assets that are the foundation of superior performance, not expansion into international markets per se. We tested the research model with data on the corporate performance of 399 Japanese manufacturing firms. In the Partial Least Squares analyses used to examine the study’s six main hypotheses, we demonstrate that geographic scope was positively associated with firm profitability, even when the competing effect of proprietary assets on firm performance was considered. Further, we find that performance was not related to the extent of product diversification; although investment levels in rent-generating, proprietary assets were related to the extent of product diversification.

Financial and strategic motivations behind IS outsourcing

Information Systems (IS) functions and whole IS departments are being outsourced in industries where the IS functions have been considered ‘core’ to the success of that business. Why and how senior management came to make these decisions is the focus of this article. It explains the motivations behind Information Technology (IT) outsourcing when popular alliance theories, such as transaction cost theories, game theory and joint-venture alliance theory suggested firms would not outsource an entity if core competency would be lost. Seven case studies were used to investigate the IT outsourcing phenomenon in the observed ‘alliance-like’ relationships emerging in the banking industry in the early 1990s. Inductive theory generating research was undertaken in this work following Yins (1984, 1989) guidelines of multiple case replications to ensure rigorous and systematic data collection procedures. Before the case studies were conducted, 40 preliminary interviews were undertaken with managers of companies that were and were not involved in IT outsourcing contracts to explore the theorized factors of interest drawn from the literature, to develop the propositions, and to refine a structured interview guide. These preparatory steps led into the initial case study, and the literal replications of the proposed factors to confirm the patterns found. A theoretical replication based on conflict resolution was then undertaken to expose greater variation in conflict with the outsourcing relationships to contrast the initial patterns found. The results suggest that financial motivations underlie many IT outsourcing decisions, and unresponsive IS departments are accelerating the pace of the outsourcing process. Within this research, IT outsourcing was found to have profound effects on the expenses for the banks. However, contrary to conventional wisdom, IT outsourcing is taking place within firms and industries which utilize IS activities that are considered core competencies. Several strategic motivations were presented that may explain this management decision. Firms were undertaking IT outsourcing to change the organizational boundaries, to restructure, to mitigate technological risk and uncertainty, to access emerging technology, to manage the IS department better, and to link business and IT strategy.

Japanese firms and the decline of the Japanese expatriate

Conventional wisdom holds that Japanese firms use large numbers of expatriates and are reluctant to allow local nationals a significant role in subsidiary management. Japanese firms have been criticized for their unwillingness to capitalize on the internal diversity in their international managerial ranks. It has been suggested that a rice paper ceiling in Japanese firms restricts local managers from advancement opportunities and involvement in corporate-level decision making. The research reported in this paper directly challenges the notion that Japanese firms are unwilling to reduce their use of expatriates. Using a comprehensive database of Japanese subsidiaries, this paper shows that the number of Japanese expatriates is declining and has been for some time. One explanation for this decline is that Japanese firms have had no choice because of a limited supply of managers for expatriate positions. A second explanation is that Japanese firms are beginning to recognize the importance of empowering local management and are becoming more truly global in how they compete.

Expatriation as a Bridge Over Troubled Water: A Knowledge-Based Perspective Applied to Cross-Border Acquisitions

Do expatriate managers fulfil the role of ‘value-seeking connectors’ in cross-border acquisitions? Building from the organizational knowledge and the MNC literature, this paper focuses on the use of expatriate managers for transferring experience-based knowledge within the MNC and its impact on the survival of acquired subsidiaries. Using a sample of cross-border acquisitions by Japanese MNCs, we analysed the impact of expatriate managers on the relationship between the acquirer’s industry, host country and acquisition experience and the survival of the acquired subsidiary. Results show that the contribution of expatriation to the acquired firm’s survival varies considerably depending on the type of experience considered. In fact, connectivity through expatriation is costly and only when appropriately sent abroad do expatriate managers build an effective bridge over the troubled water that characterizes the challenging post-acquisition integration.

Organizational Climate Similarity and Performance: International Joint Ventures in Russia

This study examines how organizational climate dissimilarity between parent firms and the joint venture organization (JVO) affects joint venture performance. Data were obtained from interviews with the general manager of 40 IJVs and questionnaires were completed by top-level managers from both parents and the JVO (6 people / IJV). Results indicate that to have the best chance of success, it is important for a firm starting a joint venture to select a partner with an organizational climate similar to its own. Results also indicate that it is important to create an organizational climate at the JVO that is similar to the foreign parents organizational climate.

The Interplay of Form, Structure, and Embeddedness in Social Intrapreneurship

While the influence of form and structure on social entrepreneurship has received some attention within academe, the perception of form as discrete rather than embedded in organizational history, and structure as an individual, dichotomous choice between simple for–profit and nonprofit alternatives, has painted an incomplete picture. Through a rigorous analysis of 10 case studies located within Africa and Latin America involving social intrapreneurship, our findings suggest that cognitive, network, and cultural embeddedness each play an important constraining role that is even more pronounced in organizations that were historically nonprofit in form. However, our results also suggest a variety of decoupled structural approaches that may help mitigate such constraints.