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In this paper, we bring to the fore the role of relationships in serial acquirers. Through an in-depth, qualitative, longitudinal study, we explore how engaging in sequential and overlapping processes of postacquisition integration... more
In this paper, we bring to the fore the role of relationships in serial acquirers. Through an in-depth, qualitative, longitudinal study, we explore how engaging in sequential and overlapping processes of postacquisition integration impairs the integration capabilities of serial acquirers. We identify how the relational dynamics that follow each individual integration initiative impede the ability of acquiring firms to operate business as usual, as well as to integrate new targets. Our study offers deep insight into the complexities of serial acquisitions, by conceptualizing the nature and composition of integration capabilities, and the role of relationships in organizations undergoing frequent changes. Based on our findings, we assert that relationships deserve more attention in serial acquisitions; they serve as mechanisms that provide the social fabric of coordination and capability development.
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FDI and the transformation from industry to service society in emerging economies:
Previous studies of organizing costsin multinational corporations have taken the view of the parent corporation. In this study, we turn the table around and examine how subsidiaries experience orga ...
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Previous studies of organizing-costs in multinational corporations have taken the view of the parent corporation. In this study, we turn the table around and examine how subsidiaries experience org ...
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Can we predict which alliances that will terminate, and which alliances that will be successful over time? This is the core research question raised in this paper. By reviewing transaction cost economics, the resource-based view of... more
Can we predict which alliances that will terminate, and which alliances that will be successful over time? This is the core research question raised in this paper. By reviewing transaction cost economics, the resource-based view of strategy, and the relational contracting perspective, we derive at important alliance characteristics that these perspectives suggest as important for understanding alliance success and failure. Our hypotheses were tested on one hundred strategic alliances from the Norwegian manufacturing sector covering a five-year period. The results show that strategic alliances based on access to strategic important resources were less likely to terminate abruptly. We also found that newly established alliances had a higher termination rate than older alliances, indicating that alliances go through different phases of termination risk. Short-term performance was primarily affected by factors such as getting access to complementary and strategic important resources, wh...
How does an acquisition initiated by a firm’s alliance partner affect the value that the firm can create and capture from its alliance with that partner? We study this question by drawing from the ...
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Abstract The chapter examines how distance, integration mechanisms, and atmosphere influence the level of organizing costs and subsidiary initiatives in headquarter–subsidiary relationships. Survey data were collected at the subsidiary... more
Abstract The chapter examines how distance, integration mechanisms, and atmosphere influence the level of organizing costs and subsidiary initiatives in headquarter–subsidiary relationships. Survey data were collected at the subsidiary level in one major Norwegian multinational company. Empirical analyses were based on regression and partial correlation analyses. Organizing costs are driven by distance to headquarters as well as the integration mechanisms and the atmosphere that exists in subsidiary–headquarter relationships. Another important insight gained by this study is that integration mechanisms influence subsidiary initiatives.
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We investigate how a brand-owning MNE can coordinate and safeguard exchanges in its international production network following a decline in formal authority and a shift in ‘hub firm’ status to another member of the network. Our empirical... more
We investigate how a brand-owning MNE can coordinate and safeguard exchanges in its international production network following a decline in formal authority and a shift in ‘hub firm’ status to another member of the network. Our empirical material is drawn from a case study of a Norwegian shipbuilder. We illuminate what mechanisms are used by a network orchestrator in a peripheral position with limited formal authority, when they are used, and by whom they are developed and deployed. Our findings question and extend theorizations that assume a single, stable orchestrator, and that typically give primacy to the ‘executive suite’.
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Organizational identity, “who we are”, is closely linked to “what we do” and “how we do it”, and thus to action. We apply a strategy-as-practice perspective to examine the link between identity wor...
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The first study of fast internationalizing small to medium-sized enterprises (SMEs) was conducted by Rennie (1993). He identified a ‘new breed’ of Australian firms which were ‘born-global’. According to this study, born-global firms... more
The first study of fast internationalizing small to medium-sized enterprises (SMEs) was conducted by Rennie (1993). He identified a ‘new breed’ of Australian firms which were ‘born-global’. According to this study, born-global firms tended to be small with, for example, average sales of less than US$16 million and to be relatively young in age (for instance with an average age of 14 years). They should have begun exporting, on average, two years after their establishment and have generated three-quarters of their total sales via exporting. Such companies were found in all industries, but they all applied new technologies to developing unique products or a new way of doing business and, according to Junkkari (2000), as a result were strikingly competitive against established large players. Born-global firms or international new ventures (INVs) are firms that are international and entrepreneurial in their business dealings. Wright and Ricks (1994) highlighted international entrepreneurship (IE) as a newly emerging research arena and they defined internationalization speed as: time between discovery of an opportunity and first foreign entry, speed with which country scope is increased (market selection and spreading), and speed of international commitment (mode of entry versus export share). Oviatt and McDougall (1994) found that many of the firms they studied were not truly global and thus decided to call INVs these new fast internationalizing SMEs instead of born globals or global start-ups.
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Abstract Purpose With the disaggregation and fine-slicing of global value chains, offshoring and outsourcing has become increasingly relevant for many MNEs. The purpose of this chapter is to understand the value creation of the receiving... more
Abstract Purpose With the disaggregation and fine-slicing of global value chains, offshoring and outsourcing has become increasingly relevant for many MNEs. The purpose of this chapter is to understand the value creation of the receiving partner of outsourcing activities. This is a firm that will have many outsourcing alliances with partners, and one perspective to frame these alliances is the alliance portfolio perspective. We ask – how can a firm on the receiving end of outsourcing create value through the management of its alliance portfolio? Methodology/approach Through a case study of a company supplying products to manufacturing industries, we investigate ways in which the company adds value for customers through different models of customer integration. Applying an alliance portfolio perspective, we study benefits of grouping alliances with customers and suppliers. Findings Whereas most studies of alliance portfolios have focused on value creation within a portfolio, we find that the mediating capability of coordinating between groups or portfolios of alliances is critical. We also see that the risk aspect is important for firms receiving outsourcing activities. Research limitations/implications Our findings have implications for the strategy and organization of the mediating firm on the receiving end of outsourcing. We have only data from one firm, and therefore our findings need to be tested further. Practical implications Our findings have implications for managers organizing large alliance portfolios to include risk and mediation capabilities. Originality/value The chapter uses original in-depth data.
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This paper focuses on HQ intervention and the costs associated with it. Extant literature specifies HQ interventions inareas such as organizing lateral knowledge transfers, strategic planning,suppo ...
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Can we predict which alliances that will terminate, and which alliances that will be successful over time? This is the core research question raised in this paper. By reviewing transaction cost economics, the resource-based view of... more
Can we predict which alliances that will terminate, and which alliances that will be successful over time? This is the core research question raised in this paper. By reviewing transaction cost economics, the resource-based view of strategy, and the relational contracting perspective, we derive at important alliance characteristics that these perspectives suggest as important for understanding alliance success and failure. Our hypotheses were tested on one hundred strategic alliances from the Norwegian manufacturing sector covering a five-year period. The results show that strategic alliances based on access to strategic important resources were less likely to terminate abruptly. We also found that newly established alliances had a higher termination rate than older alliances, indicating that alliances go through different phases of termination risk. Short-term performance was primarily affected by factors such as getting access to complementary and strategic important resources, whereas long-term performance was be related to the partners’ ability to extend and develop the alliance. SNF Working Paper No. 67/02
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This paper focuses on identity and identification on a network level of analysis. Perceptions of competition and cooperation in relationships arising from such an approach are explored, and the concept of network identification is... more
This paper focuses on identity and identification on a network level of analysis. Perceptions of competition and cooperation in relationships arising from such an approach are explored, and the concept of network identification is introduced, with an explicit focus on boundaries ...
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This study tells the story of two acquisitions made by a company the authors call Multifirm. Multifirm acquired two targets, Datagon and Teknico. The Datagon employees immediately identified with Multifirm, and the integration process was... more
This study tells the story of two acquisitions made by a company the authors call Multifirm. Multifirm acquired two targets, Datagon and Teknico. The Datagon employees immediately identified with Multifirm, and the integration process was characterized by few conflicts and satisfied employees. The Teknico employees, on the other hand, failed to identify with Multifirm, and the integration process was fraught with disruptions and conflicts. Contrary to the conventional wisdom of identity threats, Multifirm reported that more value was created from the acquisition of Teknico than from Datagon. In this article, we try to understand why this was the case.
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The objective of this paper is to discuss the notion of identity and identification on a network level of analysis. The paper distinguishes between organisational and network levels of identity and suggests that managers face different... more
The objective of this paper is to discuss the notion of identity and identification on a network level of analysis. The paper distinguishes between organisational and network levels of identity and suggests that managers face different challenges depending on how they perceive their networks. Managers in networks with an identifiable hub or center may find it feasible to create an explicit network identity. Contrary to networks where neither pre-existing firms act as network hubs, nor where new administrative entities are established, the industrial network approach portrays networks without clear boundaries and commonly without hubs. Under such circumstances, the task is to increase one’s own and others network awareness by considering boundaries and thereby facilitating network identification. We describe this task as one of creating and perceiving ‘imaginary network boundaries’.
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This study examines how subsidiaries in multinational corporations (MNCs) experience interactions with corporate headquarters. We conceptualize such interactions in terms of organizing costs, focusing on two key types of costs: bargaining... more
This study examines how subsidiaries in multinational corporations (MNCs) experience interactions with corporate headquarters. We conceptualize such interactions in terms of organizing costs, focusing on two key types of costs: bargaining costs and information costs. Specifically, we examine how distance, coordination mechanisms, and atmosphere influence the level of organizing costs in the headquarter-subsidiary relationship. Using survey data collected among 104 subsidiary managers in two MNCs, we show that relationship atmosphere significantly reduces both types of organizing costs, whereas distance increases bargaining costs. We also find that centralization and formalization reduce information costs, whereas social integration, contrary to our hypothesis, increases bargaining costs.
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... Randi Lunnan, Norwegian School of Management BI, Sandvika, Norway. ... Globalisation is often characterised by reduction of trade barriers, falling telecommunication costs and speed of technological changes (Astley and Brahm, 1989;... more
... Randi Lunnan, Norwegian School of Management BI, Sandvika, Norway. ... Globalisation is often characterised by reduction of trade barriers, falling telecommunication costs and speed of technological changes (Astley and Brahm, 1989; Friedman, 2000; Harrison, 1994). ...
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Globally, the period from the 1980s to 2006 wascharacterised by growth in FDIs. Except for 1991, FDIflows increased every year between 1986 and 2000. Theperiod was also characterized by high economic growthin the so-called emerging... more
Globally, the period from the 1980s to 2006 wascharacterised by growth in FDIs. Except for 1991, FDIflows increased every year between 1986 and 2000. Theperiod was also characterized by high economic growthin the so-called emerging economies. These economiesbecame strongly involved in the global economy in thisperiod through an increase in inward FDIs. In someemerging economies, like China and the Baltic statesinward FDIs increased even after the general setback in2001. For example, while FDI inflows globally fell by 41percent in 2001, and another 21 percent in 2002, it increasedwith 18 percent in 2001 and another 64 percentin 2002 in Lithuania (UNCTAD, 2003). These tendenciesask for a closer examination of the role of FDIs in therecent development of emerging economies.The paper deals with the role of MNEs and FDI inemerging economies from about 1990 by especially focusingon Norwegian FDIs in Lithuania.1 This case isspecial because of two reasons. First, not only is Lithuaniaan exa...
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In this paper, we offer insights that combine a network perspective of the multinational company (MNC) with an analysis of different types of interdependencies. We develop and illustrate our arguments with a company case (LIMO) and argue... more
In this paper, we offer insights that combine a network perspective of the multinational company (MNC) with an analysis of different types of interdependencies. We develop and illustrate our arguments with a company case (LIMO) and argue that types of interdependencies have consequences for the orchestration of MNC activities. The experience from LIMO suggests that extreme organizational designs, where orchestration is either purely local or mostly global, fail to capture the nuances necessary to ensure efficiency and profitability. The main theoretical contribution in this paper is to show that the search for orchestration through an organizational design must involve the combination of several perspectives of activity combinations and their interdependencies. Simply optimizing through a tight network or looking at the firm as a loose federation is too simple to understand the complex trade-off facing modern MNCs.
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To what extent, why and where do multinational companies locate divisional headquarters (DHQs) abroad? This study of 30 of the largest listed companies in Norway over the 2000–2006 period shows that foreign-located DHQs have become... more
To what extent, why and where do multinational companies locate divisional headquarters (DHQs) abroad? This study of 30 of the largest listed companies in Norway over the 2000–2006 period shows that foreign-located DHQs have become relatively commonplace. A majority of DHQs located abroad are outcomes of foreign acquisitions, which suggests that obtaining legitimacy from local stakeholders such as customers, employees and investors is an important motivation. We also find that Norwegian companies emphasize efficiency and value creation in their location choices, as they tend to prefer other advanced and competitive countries as hosts for their DHQs. Distance from Norway is not significant. The off-shoring of strategic units such as DHQs is a phenomenon that occurs in advanced phases of companies' internationalization, beyond the point when familiarity and proximity still are key decision-making factors.