Abstract

Partnering with startups is an important way by which large multinational corporations (MNCs) pursue open innovation. This article sheds light on distinctive startup partnering strategies across multiple locations. These vary in terms of institutional strength (advanced vs. emerging markets) and local reputation in a given sector (cluster vs. non-cluster). Different partnering strategies are appropriate for each location type: a template-based or purpose-built approach (in clusters vs. non-clusters, respectively), and a facilitative or directive approach (in advanced vs. emerging markets, respectively).

Keyword

partnerships ;  startup ;  global collaboration ;  multinational corporations ;  innovation ;  open innovation ;  emerging markets

Abstract

This paper offers preliminary ideas on egocentric network dynamics associated with a new venture partnering with a large ecosystem hub firm. Such a perspective is appropriate since achieving value creation through active partnering requires building and strengthening ties over time across the hub firm's ecosystem.

Keyword

Co-creation ;  Ecosystem ;  Innovation ;  Network oscillation ;  New venture

Abstract

We provide an integrative account of how springboarding emerging market multinational enterprises (EMNEs) traverse the distinct contexts of their home and host markets by synthesizing the composition-based view with the Springboard Perspective to offer a novel, holistic, and dynamic Compositional Springboarding Perspective of EMNE evolution. We argue that EMNE internationalization entails a meta-duality between a compositional logic (home market) and springboarding logic (host market), and that the capabilities associated with springboarding - amalgamation, ambidexterity, and adaptability - help balance these two logics' interplay and integration. We elaborate on the differential roles that these capabilities play across the upward spiral's five stages (the process of EMNE evolution), which have differing emphases in terms of these logics.

Keyword

ambidexterity; composition-based view ;  emerging economies ;  emerging market multi-nationals ;  emerging markets ;  internationalization ;  organization learning ;  springboard perspective ;  unlearning

Abstract

Keyword

Abstract

This case describes the process of entering the Chinese market by Capillary Technologies, an Indian software company that provides cloud-based omnichannel customer engagement and related services for retailers and brands. Capillary represents a high level of ambition: in a country that was well known for software service companies (based primarily on labor cost advantages), it was founded as a business-to-business (B2B) software product company (thus one developing intellectual property). After entering several Western markets, which was consistent with the venture's lofty aspirations, the venture's leadership came to the view that the firm was better placed to pursue Asian markets. The new venture relocated its headquarters from India to Singapore, and made strong efforts to gain revenue in the Asia region — including the large but intensely competitive Chinese market. The case describes how, under the leadership of its China General Manager based in Shanghai, Capillary Technologies started off by working with Western multinationals that were its customers in other markets, then began attracting local customers as it established a Chinese technology team to cater to the unique technological ecosystems prevalent in China. Over a three-year period, Capillary achieved 200% growth per annum. The case concludes by noting the opening of a new office in Guangzhou as Capillary seeks to further deepen its presence in the Chinese market.

Keyword

Chinese market ;  Customer Relationship Management System ;  indian startup ;  learning orientation ;  Localization

Abstract

Should innovation come from within the company or from without? The answer is both.

Keyword

Collaboration ;  Employees ;  Empowerment ;  Entrepreneurs ;  Innovations ;  Intrapreneurs ;  Partnering ;  Startups

Abstract

Despite their prevalence and significance, competitive wars have received limited attention from the strategy literature. Our knowledge of how inter-organizational linkages influence competitive wars is particularly lacking. Drawing on the social embeddedness perspective, we argue that both direct linkages (i.e., strategic alliances) and indirect linkages (i.e., common ownership ties and common analyst ties) reduce the likelihood of war, thereby functioning as the glue that binds firms together. Yet once competitive wars are launched in related markets, indirect linkages through common third parties may continuously function as glue, reducing the likelihood of war spillover, whereas direct linkages, such as strategic alliances, may facilitate the spillover of competitive wars, akin to adding gasoline to a fire. Using data from the U.S. domestic airline industry between 1991 and 2010, our empirical evidence offers strong support for our predictions.

Keyword

Competitive Strategy ;  Competitive dynamics ;  Topic Areas ;  Strategic Management

Abstract

We investigate the role of high distance in trust erosion between small partners. High distance is known to hinder the formation of trust between potential partners, but its role in trust erosion in established partnerships is less understood by international business scholars. Through a qualitative longitudinal study, we extend current theory of how high distance affects the trust dynamics between cross-border partners. Specifically, we unearth three interrelated mechanisms that together explain how and why trust can erode due to high distance. We show that, before a partnership is formed, high distance can lead partners to erroneously attribute cues to a potential partner's high quality, leading to over-expectations of partner performance. Once the partnership is operational, high distance hinders actors' ability to understand situational factors associated with disappointing outcomes, and so they are attributed to failings of the partner. At the same time, distance-related challenges of bounded reliability render partners reluctant to discuss partnership outcomes. This can result in a vicious cycle of inertia as partners strive to protect goodwill while abandoning efforts to produce partnership outcomes because of doubts of the other's quality. Thus, our theoretical model illustrates the limitations of trust and explains how, paradoxically, high distance can facilitate both trust formation and trust erosion.

Keyword

Case theoretic approaches ;  China ;  Longitudinal ;  Process model ;  Small and medium-sized enterprises ;  Trust ;  Trust erosion

Abstract

Although international business scholars have begun to recognize the division of entrepreneurial labor between MNEs and SMEs, there is a fragmented understanding of the different forms MNE–SME cooperation can take. We develop a typology that takes into account not only complementarity of capabilities but also, crucially, the compatibility of intent between MNEs (exploration vs. exploitation) and SMEs (international vs. domestic orientation). The framework offers a novel way to understand the forms and dynamics of MNE–SME cooperation. We also show how it can be applied more broadly, by considering its application to societal challenges, such as achieving the United Nations’ Sustainable Development Goals.

Keyword

global innovation ;  global value chain ;  interorganizational relationships ;  MNE-SME cooperation ;  SME internationalization ;  Sustainable Development Goals

Abstract

Research Summary Activist hedge funds are the new breed of corporate raiders, yet we know little about how the management and board of target firms respond to activist investors. Using a behavioral perspective, we propose that an activist's reputation for being confrontational conveys information to the target company as to what they are likely to encounter in an activist campaign. To avoid the potential adverse consequences of engaging in such a contest, we propose and find that target companies are more likely to settle with an activist known for being confrontational. Our study contributes to corporate governance research by providing insight into the importance of the social context surrounding activist campaigns and the role of reputation in influencing how companies respond to activist investors. Managerial Summary Given that hedge fund activism is having a major impact on firm's strategic and financial decision-making, it is important to understand how these activist investors influence companies. An activist campaign is a highly disruptive event leading to considerable ambiguity and uncertainty as to what is likely to transpire. Given this information void, our study finds that the board and management respond based on the reputation of the activist investor that has taken a stake in the company. That activist investors with a reputation for being hostile are more successful may be a defensive response on the part of management in order to avoid the potential adverse consequences of a hostile campaign. This has implications for corporate governance and the fiduciary duty of the board. Keywords

Keyword

activist hedge funds ;  corporate governance ;  executive decision-making ;  market signaling ;  reputation