Please see attached a call for a special issue of the Journal of World Business that we hope will be of interest to many IB scholars.
National Corporate Governance and The Multinational Enterprise: Integrative and Disintegrative Trends In MNE Strategy, Structure and Cognition
Deadline for submission: April 30, 2017
Submissions open: April 1, 2017
Sumon Kumar Bhaumik, Sheffield University Management School, UK
Nigel Driffield, Warwick Business School, UK
Tomasz Mickiewicz, Aston Business School, UK
Paul Vaaler, Carlson School of Management, University of Minnesota, USA
Ajai Gaur, Rutgers Business School, USA
This special issue of the Journal of World Business (JWB) is devoted to research on national corporate governance factors and their impact on
the strategy, structure and cognition of the multinational enterprise (MNE). Decades of international business (IB) research assumed that MNE location was operationally defined by where MNE’s plants, property, people and products were located (e.g.,
Melin, 1992). But recent IB research (e.g., Bell et al., 2014) has investigated non-operational dimensions of “location”: where an MNE files articles of incorporation; where it initially lists and then cross-lists securities on financial markets;
where it patents new technologies; where it concludes licensing, franchising and alliance agreements; where it recruits members of the executive management team and board of directors. The location of such activities can also change how a MNE competes with
rivals, how it perceives the external environment, how it organizes itself, and how it is governed, that is how MNEs assure relevant stakeholders of an adequate return for what they contribute (Shleifer & Vishny, 1996). IB research on MNE management should
investigate these and other non-operational aspects of MNE location, analyse their impact on corporate governance, and develop theory and evidence to guide our understanding of how non-operational location affects MNE strategy, structure and cognition through
the channel of corporate governance. Our special issue seeks papers advancing such investigation, analysis and development.
MNEs operate in multiple countries with different, sometimes inconsistent or even contradictory formal rules, such as national laws, and informal norms tied perhaps to national culture. But MNEs may also confront inconsistent even contradictory rules and norms independent of where they operate. Concluding a strategic alliance agreement with a US firm to cooperate on sale and distribution of products there may commit a foreign firm to adhere to US corporate governance standards, even if it has no plant, property or equipment in the US (Siegel, 2009). For all practical purposes therefore, the firm may be located in the US. Non-operational dimensions of enterprise multinationality can change assurances MNEs make to different stakeholders, change stakeholder priority regarding such assurances, perhaps even compel the abandonment of certain stakeholders in an MNE’s home country. Research addressing such tensions also help us answer a critical question for the special issue: How do MNEs reconcile different, sometimes inconsistent, even contradictory aspects of national corporate governance?
Answers might be characterized as an integration-disintegration trade-off reminiscent of IB research reaching back to Perlmutter (1969) and running through Doz and Prahalad (1987), Bartlett and Ghoshal (1989) and others (e.g., Luo & Shenkar, 2006). For them, the crucial trade-off in MNE strategy, structure and cognition concerned the needs for global efficiency versus the national responsiveness in operations. For us, the no less important and often risk-fraught trade-off relates to which rules and norms will govern those operations as well as the corporate accounting, law, finance and public relations activities supporting them. A single corporate governance standard tied to one country may dominate. Or there may be different corporate governance standards, each tailored to national rules and norms linked to a specific non-operational MNE transaction.
Consider, for example, how MNE decisions about where to raise capital can affect MNE operations globally. IB research (e.g., Bell et al., 2014) and related law and finance research (e.g., Coffee, 2002) highlights differences in rules and norms assuring shareholder rights as significant factors influencing where firms chose to locate initial public offerings (IPOs) of shares. For instance, firms that may never sell products in the UK, never build a plant to produce them in the UK, never establish any other substantial operational presence in the UK may yet govern themselves under UK corporate regulations, charters and by-laws just by listing shares on the London Exchange. Even if they already have a primary share listing in their country of domicile and operation, those same firms can establish new cross-listings compelling them to “bond” with UK corporate governance standards. For MNEs, financial “re-location” to the UK changes relevant corporate governance standards across all operations, whether they be in the home country or in some third country. That re-location can lead to one integrated standard replacing the other. But what if MNEs later delist from a foreign exchange as many did from US exchanges in the 2000s after passage of the Sarbanes-Oxley reforms (Leuz et al., 2009)? Then a single integrated corporate governance standard could quickly devolve into different local standards, a result outside observers might characterize as disintegrative rather than, say, locally responsive. Indeed, we think MNE strategy, structure and cognition follows from the relative importance of integrative versus disintegrative trends in MNE corporate governance.
Our special issue theme encourages a broad range of research involving MNEs domiciled in both developed and emerging-market country contexts. Consider, for example, how MNEs from developing countries reconcile national corporate governance system differences as they expand internationally (Gaur & Delios, 2015; Singh & Gaur, 2013). Traditions of concentrated, often family-based ownership persist in such MNEs, even as corporate governance reforms in many countries since the 1990s have improved investor protections and raised expectations of broader public ownership (Aguilera & Crespi-Cladera, 2016). MNEs organized in business groups also persist, despite deepening local credit and equity markets (Yu et al., 2005), and despite significant weakening of other factor market advantages business groups once enjoyed (Bhaumik et al., 2012; 2016). As these MNEs expand into developed countries of Europe and North America operationally and otherwise, they encounter new institutions demanding outside non-family directors and shareholders, and corporate structures with more transparent financing arrangements. Evolving strategy, structure and cognition in developing country MNEs encountering these new institutional demands provide prospective contributors to our special issue with a rich opportunity to analyse integrative and disintegrative trends in MNE corporate governance.
Other research questions related to our special issue theme include the following:
· What processes prompt MNEs to integrate national corporate governance standards? What processes prompt disintegration?
· How do MNEs sequence processes of non-operational re-location through means such as international alliance and licensing agreements, cross-listing, and re-incorporation? How does such sequencing affect MNE management of different national corporate governance system requirements they encounter?
· Is it more difficult for MNEs to reconcile different national rules (e.g., securities regulations) compared with norms (e.g., corporate social responsibility) in MNE corporate governance?
· How and why do MNEs shift activities in response to differences in national corporate governance systems? How and why do MNEs shift activities in response to (expected?) national corporate governance system convergence?
· How do both alliance-based and franchise- or license-based MNEs position themselves on the integration-disintegration continuum?
· How does a host-country’s national corporate governance system affect MNE FDI mode?
· How does state ownership affect integrative and disintegrative trends in MNE corporate governance?
· How do MNEs with disintegrated corporate governance standards coordinate strategy and structure internationally? How do MNEs with integrated corporate governance standards encourage flexibility in strategy and structure internationally?
· When does either integrated or disintegrated MNE corporate governance enhance operating performance?
· How do IB concepts like the liability of foreignness apply when MNE location is determined legally or financially rather than by where the MNE is headquartered operationally?
· How do small and medium-sized MNEs manage differences in national corporate governance systems compared with the large ones? What role does entrepreneurship play in that management? Are new firms different in this respect, being able to adjust their logic of operations from the start?
· How do MNEs work with national politicians to change in rules affecting national corporate governance? How do MNEs work with national business leaders and the general public to change norms affecting national corporate governance?
· What are the implications of this for the organisation of global value chains, particularly for the much commented upon, but little researched issue of “reshoring”?
The questions are not meant to be exhaustive but merely illustrative of special issue topics prospective contributors might consider.
Types of Submissions for the Special Issue
We seek manuscripts offering either theoretical or empirical contributions, but prefer papers offering both. We seek manuscripts drawing on IB, corporate governance and strategy literatures as well as related literatures in institutional economics, law and public policy. Methodologically, we seek manuscripts using qualitative, quantitative, and mixed-method research approaches, and offering international perspectives. We are especially interested in manuscripts that deepen our understanding of multi-dimensionality in MNE location, of managing multiple national corporate governance imperatives such location often mandates, and of choices in organizational strategy, structure and cognitive mind set illustrating the integrative-disintegrative tensions MNEs must manage.
Submission Processes for the Special Issue
Authors should submit complete manuscripts by the submission deadline date via the JWB Evise online submission system at https://www.evise.com/profile/#/JWB/login. To ensure that all manuscripts are correctly identified for consideration for this special issue, it is important that authors select ‘SI: Corporate Governance’ when they reach the “Article Type” step in the online submission process. Manuscripts should be prepared in accordance with the JWB Guide for Authors available on the journal web page. All submitted manuscripts will be subject to the JWB’s blind review process.
Questions about the special issue may be directed to the guest editors or supervising editor:
Nigel Driffield Phd, FAcSS.
Professor of International Business,
Deputy Pro Vice Chancellor for Regional Engagement,