New Anthology by CIBS
A new anthology on Asian inward and outward FDI, edited by Claes G. Alvstam, Harald Dolles and Patrik Ström will be published by Palgrave MacMillon, NOV-DEC 2013.
Asian inward and outward FDI: New challenges in the global economy
Editors: Claes G. Alvstam, Harald Dolles and Patrik Ström
Planned publication by PalgraveMacmillan Spring 2014.
Foreword by Harukiyo Hasegawa, Honorary Fellow White Rose East Asia Centre, Sheffield, UK.
Preface by Claes G. Alvstam, Harald Dolles and Patrik Ström
Chapter 1. Asian inward and outward FDI: new challenges in the global economy – An introduction. By Claes Alvstam, Harald Dolles and Patrik Ström
In this introduction to the anthology of Asian inward and outward FDI, the authors offer a broad picture of contemporary challenges in the world economy, with special focus on how FDIs are intrinsically embedded in the general economic integration process in Asia. There is a dialectic relation between outward and inward FDI, as well as between trade and investment flows in the sense that an actor-based, firm-level approach reveals that the same actors are in parallel engaged both as importers and as exporters of their goods, services and capital. Accordingly, the analysis at the level of the single enterprise has been adopted as the main research perspective throughout the volume.
II STRATEGIC AND MANAGERIAL IMPLICATIONS OF EURO-ASIA FOREIGN DIRECT INVESTMENT
Chapter 2. Yu Zheng: Changing faces of MNCs in China: subsidiary strategy in corporate strategic reorientation
This study reveals the subsidiary’s perspective on the implication of transition within MNCs in China. Initially drawn into China to reduce production costs, many MNCs now face new challenges as the internal market expands, and companies are pressed to move up the value chain. Drawing upon the literature in subsidiary strategy, MNCs as federal networks and commodity chain analysis, the study explores the emergent subsidiary strategy under corporate level strategic reorientation in China. By locating the study in the scenario of corporate strategic changes, the chapter depicts a portfolio of strategies undertaken by the Chinese subsidiaries to move away from a low-cost production base. The empirical evidence has been collected through four intensive case studies of Japanese MNCs in China.
Chapter 3. Harald Dolles and Sten Söderman: Sponsoring as a strategy to enter, develop and defend markets: Advertising patterns of the Beijing Olympic Games’ sponsoring partners
Multinational enterprises use mega-events as an international marketing platform. But sponsoring mega- events has also developed as a strategic way for local companies to enter new markets or to prove themselves as being ready for the world market, especially when the event takes place in an emerging market. This research describes and analyses the advertising behaviour of the sponsoring partners to the Beijing Olympic Games in 2008. A means-objective framework of sponsoring focussing on six factors was applied to analyse 739 advertisements and press releases between 2001 and 2008. By applying a qualitative content analysis, we discovered eight dominant means-objectives combinations leading to different sponsor advertising strategies in an effor to enter, develop or defend markets.
Chapter 4. Chie Iguchi; Takabumi Hayashi and Atsuho Nakayama: Global Innovation and R&D for Knowledge Creation: The Case of P&G, Unilever and Kao
Many multinational enterprises have typically launched new products in overseas markets while conducting R&D mainly at home. However, in the last 10-20 years, the geographical dispersion of scientific and technological knowledge-creation in emerging markets means that many companies are now collaborating in R&D at home and abroad. Traditional knowledge-creation theories, including strategic-management theories, have hardly addressed these issues from the perspective of sources of global competitiveness and dynamic capabilities. This study analyzes the cases of Kao, P&G and Unilever through papers published in the US, UK and Netherlands to examine how these MNEs leverage overseas R&D resources, which can be regarded as knowledge-creation processes.
Chapter 5. Christian Schmidt; Sebastian Mansson and Harald Dolles: The new face of talent management in multinational corporations: responding to the challenges of searching and developing talent in emerging economies
This study shows how multinational corporations structure their global approach to identification and development of internal high-potential employees towards global leadership positions, and to what extent it is adapted to China. The research is based on more than 20 interviews with 14 multinational corporations across different industries. The main finding is that in most corporations, adaptations of talent management processes in China are limited, but do exist. However, at the higher leadership levels, there are virtually no adaptations of global leadership standards as of today, and most multinational corporations are striving to implement a global and universal talent management approach.
Chapter 6. Rolf D. Schlunze, Weiwei Ji and Will Baber: Preferences and intercultural networking for globalizing practices of successful leaders in the intercultural workplace
Corporate leaders must survive recessions, financial crises, and other setbacks. This action research of two managers in Japan uses relationship mapping and semi-structured interviews to clarify how preferences and networking in the corporate, market and living environments contribute to mutual intercultural synergy for corporate success. One leader is more locally embedded; the other is more global networked. Both leaders integrate globally while succeeding through visionary practices locally. A strongly communicated vision of corporate governance drives their success. Combining preferences and networking in a team unified by business practice to rethink traditional approaches is an important learning from these co-leaders.
III LOCATIONAL IMPLICATIONS OF EURO-ASIA FOREIGN DIRECT INVESTMENT
Chapter 7. Andrew Staples: Foreign direct investment and economic revitalization in Japan: The role of the foreign firm in Niseko
This paper considers the role of inward foreign direct investment (FDI) in the economic revitalization of Japan’s domestic economy and locates firm-level analysis within the broader context of Japan’s contemporary political economy. More specifically, this paper examines the phenomenon of inward FDI in Niseko, a ski-resort on Hokkaido, northern Japan, through case study analysis of three foreign owned or financed firms. Niseko has received an unprecedented level of investment and interest from overseas in the past decade leading to the so-called ‘Niseko Boom’ which has been driven primarily by foreign players. The key aim of the paper is to critically assess the impact of this phenomenon with reference to the ‘FDI/economic revitalization’ debate in Japan.
Chapter 8. Flora Bendt; Joakim Sanne and Harald Dolles: Exploring thick description in business system analysis: The Korean business system from a European corporate perception
The South Korean business system and its foundations still need to be taken into account by European economic actors, when entering and exploring the market. Business system theories might provide a suitable framework for analysis. Ten qualitative interviews have been conducted with European companies doing business in South Korea across different industries. Empirical findings resulted in a comprehensive image of the South Korean business system enriched by a European corporate assessment. It can be concluded that for a successful existence in the South Korean market European companies have to consider governmental dominance in business structures, the importance of business network relations as well as implications of strong cultural characteristics.
Chapter 9. Sang-Chul Park; Claes G. Alvstam; Harald Dolles and Patrik Ström: Samsung Electronics: From ‘national champion’ to ‘global leader’
This study focuses on how a company can succeed in becoming a ‘global leader’ in the industry, using the example of the corporate strategies of Samsung Electronics. It shows what kind of company structure has been built and provides insights into management style and leadership. The chapter is structured in four parts: first, an introduction into the theoretical approaches to be applied for this kind of study; second, how Samsung Electronics became a ‘national champion’, before moving on explaining how it emerged as a ‘global leader’; and, finally, its strategy for sustainable globalization. Finally, the challenges associated with being a ‘global leader’ are summarized.
Chapter 10. Katarina Lagerström and Roger Schweizer: A business tale on marriage, divorce and remarriage in the corporate world: a conceptual framework of firms’ disintegration process
Multinational companies from emerging markets increasingly internationalize their activities, not at least through cross-border acquisitions. Since many of these firms are latecomers on the international arena, the acquired firms are in many instances firms that have been acquired previously and that first have to be demerged from the previous owner. The prevailing merger and acquisition literature has hitherto neglected the disintegration process following a demerger. In order to close this gap and drawing on empirical evidence from the disintegration process of Volvo Car Corporation from Ford Motor Corporation – a necessity for the subsequent acquisition of Volvo Car Corporation by Zhejiang Geely Holding Group, the chapter offers a process perspective of a demerger process. We distinguish between three interrelated phases; i.e. (1) the pre-demerger phase; (2) the negotiation phase; and (3) the disintegration phase and give examples of experienced challenges and chosen solutions. The chapter further discusses the potential additional challenges when integrating an acquired firm that simultaneously is going through a disintegration process.
Chapter 11. Claes G. Alvstam and Inge Ivarsson: The ‘Hybrid’ emerging market multinational enterprise – The ownership transfer of Volvo Cars to China
This study deals with strategic asset-seeking FDI by emerging market multinational enterprises through acquisitions of well-established developed market companies, with the ambition to strengthen their position at the domestic market – the ‘springboard’ approach. But, while the majority of EMNEs have been either state-owned companies or privately owned, there are fewer examples of private firms with domestic roots, but legally registered and incorporated abroad, who acquire a foreign multinational in order to improve its domestic competitive advantage. The acquired company becomes neither entirely foreign nor entirely domestic in its new home country, but a ‘hybrid’. The empirical example is taken from the acquisition of formerly Swedish Volvo Car Corp. by Chinese Zhejiang Geely Holding Group.
Chapter 12. Claes Alvstam, Harald Dolles and Patrik Ström: Concluding Remarks on Asian Inward and Ooutward FDI: New Challenges in the Global Eeconomy
This anthology has dealt with the dynamic aspects of inward and outward foreign direct investment in Asia, with particular attention to how we can learn from the past experiences in Japan and Korea, and what the recent rapid internationalization of China’s economy might imply for the Asian region as a whole. There has been a special focus in the different contributions on less observed features in the FDI research, particularly within the intangible production sectors, on longitudinal studies at the firm-specific level, as well as on the relationship between investment and marketing aspects. It is suggested that the global value-chain approach should be more often adopted in future research, in order to obtain a better picture of the context in which Asian foreign direct investment take place.
Notes on Contributors:
Claes G. Alvstam holds the Ragnar and Torsten Söderberg rotating chair in economic sciences and is a professor in international economic geography at the School of Business, Economics and Law at the University of Gothenburg, Sweden. He is at present acting director for the Centre of International Business Studies at the School. Claes’ research has concerned foreign trade, foreign direct investment, regional economic integration in Europe and Asia, external trade policy, the internationalization process of the firm, technology and knowledge transfers between transnational enterprises and local host-market suppliers, and has published numerous books and articles in international journals, most recently ‘The Changing Competitive Landscape in Euro-Asia Business’ (Focussed Issue Asian Business and Management, 2014, with Dolles and Ström)
William Baber is Associate Professor at Kyoto University and a leading member of the research group Spaces of International Economy and Management (SIEM). His educational and research interest is in the field of intercultural business communications. William’s work focuses on synergistic effects of communications, corporate governance and impact of expatriates on the Japanese workplace.
Flora Bendt completed her MSc in International Business and Trade at the School of Business, Economics and Law at the University of Gothenburg, Sweden and a BSc in business economics at Luleå University of Technology. Her research focused on foreign market entry strategies of SMEs and the impact of Free Trade Agreements. Flora currently works as fashion demand planner Europe for The Nuance Group, a company in the travel retail industry.
Harald Dolles is Professor in Sport Management at Molde University College, Specialized University in Logistics, Molde (Norway) and Professor in International Business at the University of Gothenburg, School of Business, Economics and Law (Sweden). From 2001 to 2006 he was assigned by the German Ministry of Education and Science to serve in official mission as expert on Japan and China at the economic section of the German Institute for Japanese Studies in Tokyo and taught as Visiting Professor at Chuo University (Tokyo, Japan). Harald serves on the Board of the Euro-Asia Management Studies Association since more than 10 years and frequently contributes to scientific development in the fields of international business, innovation and entrepreneurship, Asian studies and sports management. In this regard, he has a publication stream of articles and books, most recently The Changing Competitive Landscape in Euro-Asia Business (Focussed Issue Asian Business and Management, 2014, with Alvstam and Ström); Handbook of Research on Sport and Business (Edward Elgar, 2013, with Söderman), Sports Management and Mega Events: J-League Soccer and Mega-Sports Events in Asia (in Japanese; Bunshindo, 2012, with Takahashi, Hayakawa and Söderman)
Katarina Hamberg Lagerström, Ph.D. is Associate Professor in International Business at the Department of Business Studies, Uppsala University, Sweden and Associated Researcher at the School of Business, Economics and Law, Gothenburg University, Sweden. Katarina’s research interests include firm’s internationalization process, business strategies, and knowledge management in MNCS. She has published papers in academic journals such as International Business Review, Journal of World Business and International Journal of Project Management.
Takabumi Hayashi is Professor of International Business at Kokushikan University, Business School in Tokyo. His research interests include intercultural management and innovation, competitive advantage and knowledge management strategy, BOP and multinational companies, theory of internationalization of R & D activities in multinational companies.
Chie Iguchi is Associate Professor of International Business at the Faculty of Business and Commerce at Keio University in Tokyo. She was awarded a MSc from SOAS in London and a MSc and PhD in International Business from University of Reading, Business School. Her research interests include roles of R&D in host Asian countries, technological upgrading, innovation activities and knowledge creation activities in host Asian countries, particularly Japanese TNC's behaviors in Thailand, Malaysia, Philippines, Taiwan, Singapore, India and Indonesia, as well as issues on headquarter and subsidiaries relationships.
Inge Ivarsson is Professor of Economic Geography at the School of Business, Economics and Law at the University of Gothenburg, Sweden, and is affiliated to its Centre of International Business Studies. He has published extensively in international journals within the fields of globalisation and the role of transnational corporations, foreign direct investment in Europe and Asia, location strategies of research & development activities in TNCs, international technology and knowledge transfer between transnational corporations and host-market suppliers in emerging markets. In 2012 he received, together with a co-author, the ‘Best Paper Award’ in International Business Review by the European International Business Academy.
Weiwei Ji received his PhD from Ritsumeikan University in Japan and currently works as a research fellow at the School of International Studies/Academy of Overseas Chinese Studies of Jinan University, Guangzhou, China. Weiwei takes leadership in a government sponsored joint research project on Chinese managers’ success practices in Japan focusing cross-cultural leadership capacities, networking activities and preference behaviors.
Sebastian Mansson holds a Masters Degree in International Business and Trade from the from the School of Business, Economics and Law, University of Gothenburg, Sweden. His Masters Thesis (co-written with Christian Schmidt) titled “Talent Management and Leadership Development at Western multinational companies and the transfer of practices to China” was awarded with the Malmsten Award for Best Thesis in international business in 2011. The research was later presented in the 28th EAMSA conference in Gothenburg. Sebastian is currently working on commercial projects in the renewable energy industry.
Atsuho Nakayama is Associate professor of marketing at Tokyo Metropolitan University, School of Business Administration.
Sang-Chul Park has received PhD degrees in political science in 1993 in Germany and economics in 1997 in Sweden. He is currently Full Professor at Graduate School of Knowledge based Technology and Energy, Korea Polytechnic University and Adjunct Professor at Center for Science-based Entrepreneurship, Korea Advanced Institute of Science and Technology (KAIST), South Korea. Sang-Chul is also a Private Dozent at Justus Liebig University in Giessen, Germany and Visiting Professor at Gothenburg University, Sweden. His research interests concern industrial policy and regional development and studies on innovation systems and on science parks and innovative clusters in particular. Currently his research areas are expanded toward energy policy, sustainable development strategy, high technology ventures and international business and trade.
Joakim Sanne has a bachelor degree in Industrial Economics with majors in Industrial Organization, Quality Management and Logistics from the University of Gavle. After several years of working within the automotive industry, he started studying again at the University of Gothenburg. He graduated from the University of Gothenburg with a MSc in International Business and Trade. Joakim also studied Korean language and culture at Korea University in Seoul.
Rolf D. Schlunze is Professor of Intercultural Management in the Department of International Business Administration at Ritsumeikan University. He focuses his research on the adjustment process of managerial systems and expatriate managers. Co-leading the international research group Spaces of International Economy and Management (SIEM) his academic endeavor is to introduce contextual management appraisals to scholars and international business people.
Christian Schmidt holds a Masters Degree in International Business and Trade from the School of Business, Economics and Law, University of Gothenburg, Sweden. His Masters Thesis (co-written with Sebastian Mansson) titled “Talent Management and Leadership Development at Western multinational companies and the transfer of practices to China” was awarded with the Malmsten Award for Best Thesis in international business in 2011. The research was later presented at the 28th EAMSA conference in Gothenburg. Christian is currently working with talent management and leadership development, specifically focussing on change management in the automotive industry.
Andrew Staples is currently Director of the Economist Corporate Network in Japan and formerly Associate Professor of International Business at Doshisha Business School, Kyoto, Japan. He was awarded a Daiwa Anglo-Japanese Foundation/Japanese Foundation Endowment Committee PhD Scholarship (2000-2003) and a Japanese Ministry of Education, Culture, Sports, Science and Technology (MEXT) Research Scholarship (Hitotsubashi University, Tokyo. 2001–2003). Andrew’s publications include ‘Responses to Regionalism in East Asia: Japanese Production Networks in the Automotive Sector’ published as part of the Palgrave Macmillan Asian Business Series and chapters in edited volumes and textbooks. He is also a Senior Editor for the internationally peer reviewed journal Asian Business and Management.
Patrik Ström is Associate Professor of Economic Geography at the School of Business, Economics and Law, the University of Gothenburg, and holds Ph.D. degrees in Business administration at Roskilde University, Denmark, and in economic geography at the University of Gothenburg. Patrik’s main research has centered around the service industry within the field of internationalization. He is currently President of RESER, The European Network on Research in Services, and chairs a working group within the European Commission on the future of service industry. Most recently he published ‘The Changing Competitive Landscape in Euro-Asia Business’ (Focussed Issue Asian Business and Management, 2014, with Alvstam and Dolles).
Sten Söderman is Professor of International Business at Stockholm University, School of Business (Stockhom, Sweden). Previously he was a professor at Luleå University of Technology and a business consultant specialising in startups (in Manila, Geneva and Brussels). His research has focused on market strategy development and implementation and more currently on the international expansion of European firms in Asia and the global entertainment economy. He is the author and editor of many books, case studies and articles, most recently: Handbook of Research on Sport and Business (Edward Elgar, 2013, with Dolles), Emerging Multiplicity: Integration and Responsiveness in Asian Business Development (2006, Palgrave Macmillan)
Roger Schweizer is an assistant professor with the Centre for International Business Studies, Department of Business Administration, School of Business, Economics and Law at the University of Gothenburg. His current research interests are international strategy issues in general and, in particular, firm’s internationalization processes, international entrepreneurship, the relationship between headquarters and subsidiaries, and mergers and acquisitions.
Dr Yu Zheng a Lecturer in Asian Business and International Human Resource Management at the School of Management, Royal Holloway University of London. Yu’s research interests are in international human resource management, cross-country transfer of management practices and comparative employment relations. Her research monograph ‘Managing Human Resources in China: The view from inside multinationals’ is published by Cambridge University Press (2012).