Cultural dynamics and the evolution of innovation capability of emerging market firms: “Why and how” is history, and the new era is “what, who, and when”

 

Closes: 27 Aug 2023

Journal

Cross Cultural & Strategic Management

Guest editor(s)

Byung Il Park, Shufeng (Simon) Xiao, Peter Shi, Zaheer Khan

Opening date: 1st May 2023

Introduction: 

The business landscape of innovation has been drastically changed by emerging market firms (EMFs) (cf. Anand, McDermott, Mudambi, and Narula, 2021). Over the last two decades, various high-technology and knowledge-intensive sectors have grown, particularly in emerging markets, and are now playing a leading role in the global innovation networks (Awate, Larsen, and Mudambi, 2012; He, Khan, Lew, and Fallon, 2019; Narula, 2015; Nguyen, Verreynne, Steen, and Torres de Oliveira, 2023), and EMFs have increasingly begun to play active roles as a new knowledge reservoir across industries in the global arena (e.g., Anand et al., 2021; Buckley and Hashai, 2014; Govindarajan and Ranmamurti, 2011; He et al., 2019; Hertenstein, and Alon, 2022; Luo and Tung, 2018). Due to recent trends, the evolutionary path of innovation capability of EMFs has received increasing scholarly attention (Anand et al., 2021; Luo, 2016; Peng, Fang, and Lockett, 2021; Tseng, 2009). Thus, we believe that now is the time to conduct a comprehensive survey and examination of their past paths and future innovation trajectories.

We argue that an increase in innovation capability of EMFs can influence their strategic position in the existing value chain in two ways. At the micro-level, accumulation of valuable and novel knowledge embedded in human resources enhances the competitiveness of firms and organizations (Beechler and Woodward, 2009; Bowman and Swart, 2006; Choi, Ravichandran and O’Connor, 2018), and this superiority often helps to win other competitors (including rivals from advanced economies) in the performance race. In this sense, behind a “why” is always the “who,” which is represented by the human resources within organizations. This “who” is much more influential than the “why” because the “who” functions as a fuse to start a movement.

From the macro-level perspective, increasing innovation capabilities in an appropriate time enables firms in emerging markets (e.g., China and India), which try to aggressively leap into advanced economies by acquiring firms, to move along or climb the value chain (Fu, Sun, and Ghauri, 2018; He, Khan, and Shenkar, 2018; Plechero and Chaminade, 2013; Yu, Malerba, Adams, and Zhang, 2017). Despite this, another component associated with innovation management and missed by previous studies exploring innovation capabilities of EMFs is “when”. This component includes an understanding of the right time for innovation of EMFs. In other words, many EMFs are characterized by two sides of the same coin. That is, they are not only sometimes referred to as entities that successfully achieve technological innovation but also often suffer from organizational weaknesses in various aspects, such as marketing and global strategy (Douthwaite, Keatinge, and Park, 2001; Greve and Seidel, 2015; Krammer and Jimenez 2020; Schanz, Hüsig, Dowling, and Gerybadze, 2011). Thus, they must be able to determine whether they need direction and stability or acceleration and new innovation. EMFs that can link to the sentiment of the era have greater chances of growing increasingly (Guan, Jichard, Tang, and Lau, 2009; He et al., 2018; Munjal, Bhasin, Nandrajog, and Kundu, 2022).

Therefore, an important research agenda needing to be considered is “what innovation” in that it is closely associated with organizational performance. In addition, what has changed over recent years is the “who” and the “when”. A “why” alone does not create innovation, but the “who” at the right time (i.e., when) does. Moreover, timing is particularly important in the emerging market contexts, which always experience dynamic economic and institutional changes. However, previous studies have generally focused on examining why firms attempt to accomplish innovation and how they achieve it. This represents an important research gap in the literature concerning the evolutionary process of innovative capability building in EMFs.

In addition, the effects of cultural differences for innovation undertaken by EMFs are an interesting and extremely multifaceted topic. It cannot be denied that a cross-cultural capability is crucial in globalized and hyper-connected world, and its effects for innovation are no exception. These capabilities are particularly meaningful in EMFs, in that they need to catch up with firms in advanced economies. In this vein, the former firms (i.e., EMFs) should obviously consider what, who, and when to adapt innovation to the cultures and unique attributes of different countries and regions, but less attention has been paid to exploring the cultural dynamics for innovation, as well as the primary cultural mechanisms that EMFs employ to build their innovation in the global context.

For instance, a group of researchers, such as Stahl and Tung (2015) suggest that cross-cultural diversity tends to have a negative effect on capability exploiting overseas R&D units but may be beneficial for capability exploring R&D units aiming to enhance their competitive advantage by seeking new knowledge. The studies above, experimenting an association between culture and innovation, are only a few, and thus those studies are works of another kind, but such exceptional empirics, scrutinizing the cultural dynamics and its influences on innovation, seem to merely presume that some cultures tend to be more favorable for high innovation performance than others (Espig et al., 2021). We believe that well performing firms and EMFs winning in the learning race should take adequate account of these cultural differences, and purposefully shape a culture that is designed to drive more innovation, indicating cross-cultural competency is more important than ever. These discussions argue that understanding the unique process of innovation building in EMFs by unpacking the value of cultural dynamics within these firms can assist us in developing new and more systematic models and frameworks to explain innovation capabilities of EMFs.

 By recognizing these current gaps, this special issue aims to investigate the value of cultural dynamics within EMFs and their evolutionary path in the development of innovation capabilities, and explores several key questions to stimulate unexplored issues in this important knowledge domain. We seek quantitative and qualitative papers that advance our knowledge on international business, with a special focus on innovation at the intersection of culture. In particular, we seek papers guiding the evolution of theoretical perspectives and developing extant theoretical lens into the phenomenon suggested by the special issue theme. Papers may address, but are not limited to, the following potential research questions.

·         Are there EMFs, which successfully achieve innovation by identifying some cultures as intrinsically better at innovation than others? What facilitates these to obtain the innovation?

·         What are critical mechanisms boosting strong correlations between certain cultural characteristics and innovation performance in EMFs?

·         What really makes a culture innovative, and how can a culture be actually shaped towards EMFs’ innovation when we consider that every culture has its own strengths and weaknesses for innovation?

·         How can EMFs use persistent cross-cultural differences for innovation?

·         Does national cultural diversity experienced by EMFs increase the match between expectations and products delivered to customers of global markets? Who particularly enhances the effects of the cross-cultural diversity on such marketing innovations?

·         When cultural diversity drives EMFs’ innovation?

·         What cultural challenges are faced by EMFs in developing their innovation capabilities?

·         What is the potential role of cultural diversity of top management team (TMT), employees or institutional investors within EMFs in shaping their innovation capabilities?

·         What is the role of the process of recombination of various cultures within EMFs and the dynamics of such process in explaining the heterogeneity of innovation capabilities in EMFs?

·         How do multiple levels of cultural differences or diversity within EMFs affect driving or hindering in the building and development of innovation capabilities?

·         Do different forms of innovation capabilities shape the performance of EMFs in the same way? What is the role of cultural dynamics in explaining such potentially heterogeneous performance implications of different innovation capabilities in EMFs? 

Special Issue Editors:

Byung Il Park (Hankuk University of Foreign Studies, South Korea, [log in to unmask])

Shufeng (Simon) Xiao (Sookmyung Women’s University, South Korea, [log in to unmask])

Peter Shi (Macquarie University, Australia, [log in to unmask])

Zaheer Khan (University of Aberdeen, UK, [log in to unmask])

 

Submission Process and Deadlines

Papers for the special issue should be prepared according to CCSM guidelines for authors: here.

Publication of the special issue is planned for 2025. Please submit your paper via the journal Submission System: here.

Authors should indicate that they would like their submission to be considered for the special issue “Cultural Dynamics and Innovation in Emerging Market Firms”. All submissions will go through the CCSM regular double-blind review process and follow the standard norms and processes.

For informal inquires related to the special issue, proposed topics, and potential fit with the special issue objectives, please contact the following guest editors:

Byung Il Park (Hankuk University of Foreign Studies, South Korea, [log in to unmask])

Shufeng (Simon) Xiao (Sookmyung Women’s University, South Korea, [log in to unmask])

Peter Shi (Macquarie University, Australia, [log in to unmask])

Zaheer Khan (University of Aberdeen, UK, [log in to unmask])

Key Dates: 

Opening date: 1st of May, 2023
Closing date: 27th August, 2023

 

References

Anand, J., McDermott, G., Mudambi, R., and Narula, R. (2021), “Innovation in and from emerging economies: New insights and lessons for international business research”. Journal of International Business Studies, Vol. 52, pp. 545–559.

Awate, S., Larsen, M. M., and Mudambi, R. (2012), “EMNE catch‐up strategies in the wind turbine industry: Is there a trade‐off between output and innovation capabilities?” Global Strategy Journal, Vol. 2 No. 3, pp. 205–223.

Beechler, S., and Woodward, I. C. (2009), “The global “war for talent””. Journal of International Management, Vol. 15 No. 3, pp. 273–285.

Bowman, C., and Swart, J. (2006), “Whose human capital? The challenges of value capture when capital is embedded”. Journal of Management Studies, Vol. 44 No. 4, pp. 488–505.

Buckley, P. J., and Hashai, N. (2014), “The role of technological catch up and domestic market growth in the genesis of emerging country-based multinationals”. Research Policy, Vol. 43 No. 2, pp. 423–437.

Choi, B., Ravichandran, T., and O'Connor, G. C. (2018), “Organizational conservatism, strategic human resource management, and breakthrough innovation”. IEEE Transactions on Engineering Management, Vol. 66 No. 4, pp. 529–541.

Douthwaite, B., Keatinge, J. D. H., and Park, J. R. (2001), “Why promising technologies fail: The neglected role of user innovation during adoption”. Research Policy, Vol. 30 No. 5, pp. 819–836.

Espig, A., Mazzini, I. T., Zimmermann, C., and de Carvalho, L., C. (2021), “National culture and innovation: A multidimensional analysis”. Innovation and Management Review, ahead-of-print. https://doi.org/10.1108/INMR-09-2020-0121

Fu, X., Sun, Z., and Ghauri, P. (2018), « Reverse knowledge acquisition in emerging market MNEs: The experience of Huawei and ZTE”. Journal of Business Research, Vol. 93, pp. 202–215.

Govindarajan, V., and Ramamurti, R. (2011), “Reverse innovation, emerging markets, and global strategy”. Global Strategy Journal, Vol. 1 No. 3‐4, pp. 191–205.

Greve, H. R., and Seidel, M. D. L. (2015), “The thin red line between success and failure: Path dependence in the diffusion of innovative production technologies”. Strategic Management Journal, Vol. 36 No. 4, pp. 475–496.

Guan, J. C., Richard, C. M., Tang, E. P., and Lau, A. K. (2009), “Innovation strategy and performance during economic transition: Evidences in Beijing, China”. Research Policy, Vol. 38 No. 5, pp. 802–812.

He, S., Khan, Z., Lew, Y.K., and Fallon, G. (2019), “Technological innovation as a source of Chinese multinationals’ firm-specific advantages and internationalization”. International Journal of Emerging Markets, Vol. 14 No.1, pp.115-133.

He, S., Khan, Z., and Shenkar, O. (2018), “Subsidiary capability upgrading under emerging market acquirers”. Journal of World Business, Vol. 53 No. 2, pp.248-262.

Hertenstein, P., and Alon, I. (2022), “A learning portal model of emerging markets multinationals”. Global Strategy Journal, Vol. 12 No. 1, pp. 1–29.

Krammer, S M. S., and Jiménez, A. (2020), “Do political connections matter for firm innovation? Evidence from emerging markets in Central Asia and Eastern Europe”. Technological Forecasting and Social Change, Vol. 151, 119669.

Luo, Y. (2016), “Toward a reverse adaptation view in cross-cultural management”. Cross Cultural & Strategic Management, Vol. 23 No. 1, pp. 29–41.

Luo, Y., and Tung, R. L. (2018), “A general theory of springboard MNEs”. Journal of International Business Studies, Vol. 49 No. 2, pp. 129–152.

Munjal, S., Bhasin, N., Nandrajog, D., and Kundu, S. (2022), “Examining the evolution of emerging market multinational enterprises’ competitive advantages: Evidence from India”. Journal of Business Research, Vol. 145, pp. 732–744.

Narula, R. (2015), “The viability of sustained growth by India’s MNEs: India’s dual economy and constraints from location assets”. Management International Review, Vol. 55, pp. 191–205.

Nguyen, T., Verreynne, M. L., Seen, J., and Torres de Oliveira, R. (2023), “Government support versus international knowledge: Investigating innovations from emerging-market small and medium enterprises”. Journal of Business Research, Vol. 154, 113305.

Peng, X., Fang, K., and Lockett, M. (2021), “From focus to ambidexterity: The choice of catch-up strategy for EMNEs”. Cross Cultural & Strategic Management, Vol. 28 No. 2, pp. 265–285.

Plechero, M., and Chaminade, C. (2013), “The influence of micro-characteristics in different modes of globalization of innovation: A comparative study of Indian (Pune) and Chinese (Beijing) firms”. Industry and Innovation, Vol. 20 No. 7, pp. 661–682.

Schanz, C., Hüsig, S., Dowling, M., and Gerybadze, A. (2011), “Low cost–high tech innovations for China: Why setting up a separate R&D unit is not always the best approach”. R&D Management, Vol. 41 No. 3, pp. 307–317.

Stahl, G., and Tung, R. (2015), “Towards a more balanced treatment of culture in international business studies: The need for positive cross-cultural scholarship”. Journal of International Business Studies, Vol. 46 No. 4, 391–414.

Tseng, C. Y. (2009), “Technological innovation and knowledge network in Asia: Evidence from comparison of information and communication technologies among six countries”. Technological Forecasting and Social Change, Vol. 76 No. 5, pp. 654–663.

Yu, J., Malerba, F., Adams, P., and Zhang, Y. (2017), “Related yet diverging sectoral systems: Telecommunications equipment and semiconductors in China”. Industry and Innovation, Vol. 24 No. 2, pp. 190–212.

 

Special Issue Editors

Byung Il Park is a Professor in International Business at the College of Business, Hankuk University of Foreign Studies (South Korea). His research focuses on emerging-market MNEs, MNE strategy, and the corporate social responsibility of MNEs and MNE corruptions. He has published more than 50 papers in academic journals, such as the Journal of World Business, Journal of International Management, Management International Review, International Business Review, International Marketing Review, Corporate Governance: An International Review, International Small Business Journal, Journal of Business Research and Asia Pacific Journal of Management. He is Consulting Editor of Entrepreneurial Business and Economics Review and serves as an Editorial Advisory Board Member for International Business Review. In addition, he has dealt with or has been handling special issues, for example, for Journal of World Business, Journal of Business Research, International Marketing Review, Management Decision, Thunderbird International Business Review, and Management and Organization Review.

 

Shufeng (Simon) Xiao is currently an Associate Professor of International Business at the Division of Business Administration, Sookmyung Women's University, Seoul, Korea. He is currently serving as Editor-in-Chief for International Journal of Multinational Corporation Strategy. His primary teaching and research interests lie in the rise of emerging multinational enterprises, institutional theory in strategic management, entrepreneurship and innovation, and foreign subsidiary management in emerging markets, with a particular focus on China and India. His recent research interests center on international business in the digital economy, with a focus on technology innovation within and between platform ecosystems. His research has appeared in the Journal of Business Research, Journal of International Management, International Business Review, Management International Review, International Journal of Human Resource Management, Asian Business & Management, Business Research Quarterly, Thunderbird International Business Review, and other major journals.

 

Yangyan (Peter) Shi is a faculty member of Macquarie Business School in Macquarie University. His research focuses on operations and supply chain management. He has published in such journals as the International Journal of Operations and Production Management, International Journal of Production Economics, Supply Chain Management: An International Journal, Production, Planning & Control, International Journal of Production Research, Annals of Operations Research, International Journal of Physical Distribution and Logistics Management, International Journal of Logistics Management, etc.

 

Zaheer Khan is a Professor in Strategy and International Business at the University of Aberdeen, UK. His research focuses on global technology management, international alliances and internationalization of firms from emerging markets. He is a Fellow of the Academy of Social Sciences. His work has appeared in leading journals such as the Journal of International Business, Journal of World Business, Global Strategy Journal, Management International Review, International Business Review, Journal of Organizational Behavior, Human Resource Management, British Journal of Management, and Human Relations, among others. He is an Associate Editor of Critical Perspectives on International Business, and sits on the editorial board of British Journal of Management, Journal of World Business, Management International Review, Multinational Business Review, Journal of Knowledge Management, and International Studies of Management and Organization. He has co-edited special issues of International Business Review, Management International Review, Applied Psychology: An international Review, Critical Perspectives on International Business, Journal of International Management, and International Studies of Management and Organization.