Rakesh B. Sambharya

FOREIGN EXPERIENCE OF TOP MANAGEMENT TEAMS AND INTERNATIONAL DIVERSIFICATION STRATEGIES OF U.S. MULTINATIONAL CORPORATIONS

This paper extends upper echelon theory to the international business arena and tests the hypothesis that the foreign experience of top management team (TMT) members is associated with international diversification strategies. Regression analyses indicate that TMTs with a higher mean, greater heterogeneity, and a higher proportion of managers with foreign experience in 54 U.S. multinational corporations were significantly associated with the firms international involvement.

Corporate Ideology, Diversification and Firm Performance

The literature suggests that the fit between corporate culture and strategy influences firm performance. The present study examines the moderating effect of diversification strategy on the link between corporate ideology, a component of culture, and firm performance. A cross-sectional survey of the largest manu facturing firms in the United States was conducted measuring corporate ideo logy and diversification strategy. A moderated regression analysis was con ducted and it was found that the interaction between ideology and diversification exerts a significant effect on firm performance thus supporting the importance of strategic fit.

Effect of network organization on alliance formation: A study of the Japanese automobile ancillary industry

Competition in global industries is shifting increasingly from interfirm rivalry to rivalry between networks of firms. Strategies of individual firms are thus contingent on the degree of interdependence that exists between them and the core firm in the network. The present study examines the effect of network affiliation on a member firms decision to enter a foreign market and international strategic alliance formation. Affiliate firms have two options available to them: (1) enter into competitive strategic alliance with a competitor or (2) enter into a symbiotic strategic alliance with the core firm of the network organization. We tested this assertion using archival sources data on sixty-five Japanese automobile suppliers that had set up strategic alliances in the United States and that belonged to various interorganizational networks known throughout the Japanese automobile industry as keiretsu. Results indicate that when affiliate firms are dependent on the core firm, they prefer to form symbiotic strategic alliances. Conversely, affiliate firms prefer competitive strategic alliances with competitors when they are dependent on the core firm.

The impact of global integration on MNC performance: evidence from global industries

Using a sample of 91 firms in four global industries, this study finds evidence of an inverted U-shaped curve between global integration and return on sales. The multiple regression results highlight the benefits of global integration in developing competitive advantage, but also indicate tradeoffs associated with configuring and coordinating international activities by the global firm.

The Performance Implications of a Global Integration Strategy in Global Industries: An Empirical Investigation Using Inter-area Product Flows

Several authors in international management have stressed the importance of global integration for firms competing internationally. Surprisingly, little empirical research has been conducted on the relationship between global integration and performance.

Does economic freedom in host countries lead to increased foreign direct investment

Purpose – This study aims to examine the effect of the various dimensions of economic freedom and political freedom in host countries on the foreign direct investment (FDI) inflows over a six-year period from 1995 to 2000 in 95 countries. Design/methodology/approach – The sample consists of 95 countries and relates to the time period from 1995 to 2000. The sample is of a longitudinal or panel nature. Findings – Results indicate that better economic management (monetary policy, fiscal burden and banking and finance), less government participation in the economy, less state intervention (strong property rights, less regulation, low prevalence of informal markets and less corruption), absence of wage and price controls and higher levels of political freedom lead to higher FDI inflows after controlling for FDI stock. Research limitations/implications – Most empirical studies using indices such as the Index of Economic freedom are subject to certain methodological limitations such as model selection, parameter...

RATIONAL MODEL OF DECISION MAKING, STRATEGY, AND FIRM PERFORMANCE

The present study tests the proposition that the normative rational model of decision making influences diversification strategy which, in turn, influences the firms performance. Questionnaires measuring rational decision making were mailed to 441 large U.S. manufacturing firms with a response rate of 23%. Compustat was used to measure Palepus entropy measures of diversification: total, related, and unrelated diversification. The results show a significant positive relationship between top managements emphasis on rational decision making and diversification as well as a significant negative relationship between diversification and firm performance. Thus, the study shows strong support for the role of diversification strategy as a mediator between rational decision making and firm performance.