Volume
#11: “The challenge of/for
BRIC Multinationals”
Publisher: Emerald
For Volume #11 of the PIBR book series,
we invite two types of contributions:
· Research papers on emerging market – particularly BRIC
– multinationals;
· Teaching cases that address managerial dilemmas
related to the internationalization of BRIC firms.
This
Call for Chapters is intended to provide prospective authors for a volume on
BRIC multinationals to come up with relevant ideas. The Call first describes
why the issue of BRIC multinationals defines a specific angle in international
business research. Secondly, the Call specifies the content of the special
issue that we plan for the Progress in International Business Research
(PIBR) book series (published by Emerald). Thirdly, this Call elaborates possible
themes and the way these could be tackled in the form of teaching-oriented case
studies. You are warmly invited and welcome to contribute!
General
Introduction: Why BRIC multinationals are special?
The
recent emergence of a number of high-profile multinational enterprises (MNEs)
from emerging markets has triggered considerable research and debate on how to
understand and appraise this phenomenon (Sauvant, 2011). The challenge for
empirical research includes the question of whether the strategies and motives
for the internationalization of these MNEs can be considered fundamentally
different from the strategies of firms from developed countries (Luo and Tung
2007), or whether their ownership advantages are fundamentally different from
those of developed country MNEs (Mathews 2002; Luo and Tung 2007; Buckley et
al. 2007; Li 2007). Increasingly described as “springboarding” (Luo and Tung
2007), the internationalization strategies of emerging market firms are
characterized by their high-risk, aggressive, and “boom-and-bust” or radical
nature, while targeting many customers in many foreign markets at once, in a
strategy of entrepreneurial venturing (Yiu et al. 2007). Comparing developed
country MNEs of the 1960s, with emerging market MNEs in the 2000s, Dunning,
Kim, and Park (2008) identified a number of additional differences. These
include forms of entry (alliances); motivation (asset augmentation); managerial
approach (regional and geocentric); role of home governments (more active than
in the past); regional destination; institutional triggers of
internationalization rather than traditional motives related to neoclassical
models; and the lack of firm-specific ownership advantages (177).
One
of the problems with these observations is that the category of ‘emerging
market multinationals’ does not distinguish between different types of emerging
markets. Although the empirical research is dominated by Chinese, Indian and –
to a lesser extent – Brazilian multinationals, the theoretical literature
nevertheless tends to adopt the more neutral term of emerging markets. But to
what extent can the multinationals from these very specific country backgrounds
be considered representative for a wider group of multinationals? Can China be
compared, for instance, to Malaysia or Thailand?
Taking
these questions into account asks for the extent to which countries-of-origin
matter in general for the study of MNEs. Moreover, with regard to the special
case of BRIC countries and BRIC multinationals, a further dimension should be
taken into account: the size of the home country as well as in particular the
political weight in the international arena that this brings with it. To what
extent can these domestic institutions be considered ‘normal” for explaining
the internationalization strategies of BRIC multinationals as compared to
emerging market multinationals in general? Another dimension related to these
questions is the circumstance that whereas the classical developed country
multinationals developed more or less parallel to their home countries economic
development and political power, the BRIC multinationals still develop in
relatively weakly developed countries, however with considerable political
power and aspirations. Do these circumstances, therefore, imply that perhaps
theoretical lines for ‘emerging market multinationals’ need not be redrawn, but
that new approaches to explain the new breed of multinationals from BRIC
countries need to be designed? If so what does that mean for the study of
international business. Most modern IB theorists have either denied that there
is need for new approaches, or have slightly modified their approach, not to
explain for emerging market multinational specifically, but rather to include
some of the characteristics of globalization in general. But to what extent
does this underestimates the ‘uniqueness’ of the BRIC multinationals? Because
the BRIC countries – in comparison to most other developing countries – have
occupied a stronger bargaining position vis-à-vis developed countries’
multinationals, does this change their entry conditions and ultimately the way
foreign multinationals (can) contribute to domestic development? And the
flip-side of this argument: most BRIC countries only started to ‘allow’ their
domestic companies to move abroad, thus creating substantial Outward Foreign
Direct Investment flows. Many of these moves were accompanied by institutional
arrangements, like Bilateral Investment Treaties (BITs). Depending on the
ownership of these companies, their international expansion was part of
national strategies and policy agendas. Compared to the outwards
internationalization strategies of ‘western’ multinationals, this also provides
a distinctive characteristic of BRIC multinationals: their links with the
foreign ambitions of their home governments.
PIBR
#11 – Research papers
This
volume searches for a number of idiosyncratic elements in internationalization
strategies of BRIC MNEs and, therefore, in particular in their relationship
with home country policies:
1
The
theoretical challenge: do we need different or more specific theories of EMNEs
to assess the phenomenon of BRIC multinationals?
2
The
empirical challenge: what marks the changing position of BRIC countries in the
world economy: including institutional differences and commonalities in outward
orientation and participation and shaping of international institutions (such
as the BRICs bank complementing Bretton Woods institutes).
3
The
managerial challenge: coming of age of a new breed of multinationals: what
distinguishes BRIC multinationals from other multinationals? To what extent is
the diplomatic agenda aligned with the corporate agenda?
4
The
policy making challenge: impact of outward Foreign Direct Investment on the
home market: What impact have MNEs from BRIC countries on their domestic
economy and the political constellations
PIBR
#11 – Teaching cases
Educational
ambitions
This volume emphasizes the unique characteristics of BRIC multinationals. We will actively solicit state-of-the art contributions, including systematic literature reviews – preferably by PhD students. Furthermore, the volume is intended to be used in an educational setting. For this, more extensive teaching cases as well as short cases (included as boxed in the book) are request that illustrate the above ambitions of the book:
- Examples of how the size of the home market influences the international strategies of companies
- Examples of how the international strategy of a company is linked to national political priorities
- Examples of companies that successfully combined a Bilateral Investment Treaty (or any other form of diplomatic support) with a foreign investment
- Examples of negative or positive responses by host governments to the entry of BRIC multinationals
- Examples of the risks and opportunities of ‘springboarding’ strategies of BRIC multinationals
- Examples of in particular the regional implementation of internationalization strategies by BRIC multinationals
The teaching case format
1. The special focus of BRIC cases
The BRIC countries are a ‘special breed’ in the internationalization strategies of firms, because of a number of reasons: (1) big home market, that is rapidly developing, (2) but that remains not very well developed yet with sizable institutional voids and great ‘ issues’ at home, (3) at the same time these countries have sizable political weight in the international arena (member of security council, in international treaties etc.) that makes them incomparable to most other developing countries, which (4) therefore creates a different ‘risk mitigation’ strategy for the companies originating in the BRIC countries (Outward Foreign Direct Investment), and (5) at the same time creates a better bargaining position of these companies vis-à-vis incoming companies in their home turf (Inward Foreign Direct Investment), and explains also why (6) some of these companies have internationalized so rapidly (springboarding) due to a mix of domestic and foreign influences that in the case of BRIC multinationals really make a difference (strategic tipping points; for instance the political support to take over competitors in the home market and/or to invest abroad as part of geo-political strategic motivations).
2. Theoretical discussion
This distinguishes them from traditional multinationals (general theory on multinationals) and from ‘emerging market multinationals’ (general theory on latecomer multinationals). The discussion whether we need ’new theory’ or can continue to base our studies on ‘old’ theories therefore seems a bit off-the-case. See, for example, van Tulder (2010), who argues that it is more important to re-address classical approaches to IB (the political economic) next to recent insights that look at the motivations to go abroad in a more holistic manner: such as the ‘resource bundling’ perspective and different ways of looking at stakeholder engagement and new angles to the ‘liability of foreignness’. VAN TULDER, Rob (2010). Toward a Renewed Stages Theory for BRIC Multinational Enterprises? A Home Country Bargaining Approach. In SAUVANT, Karl, McALLISTER, Geraldine, and MASCHEK, Wolfgang (eds.), Foreign Investments from Emerging Markets.
3.
The case format
Taking
the above considerations into account the teaching case should roughly follow the following characteristics:
•
[a]
discuss a BRIC multinational, with controlling ownership in the BRIC country
(can be anything)
•
[b] depart
from a managerial problem: what should the manager do?
•
[c]
take a bargaining and stakeholder perspective: how to deal with stakeholders at
home and abroad (or how is action induced by stakeholder action at home)?
•
[d]
look at risk mitigation factors (that are typical for BRIC countries; bilateral
treaties between the home and the host countries: BITs, DTTs, regional treaties
and the like)
•
[e]
consider the institutional distance that the company has to overcome and the
managerial problems it facing because of that
•
[f]
try to specify in which stage of internationalization this company is and what
that entails for the management problem
•
[g]
NOTE: the core of the case can be any management problem in specific (R&D,
take-over yes/no, marketing, license to operate, entry decision, independence
of the subsidiary) as long as you are able to define the role that is played by
the large home country basis (i.e. the BRIC nature)
NOTE:
At the EIBA 2015 conference in Rio de Janeiro (www.eiba2015.org), a special session around the
prospective teaching cases on BRIC multinationals will be organized.
Deadlines:
· April
30th 2015:
First submission of papers (to the EIBA 2015 Rio conference, www.eiba2015.org)
· December
2015: Pre-selection of papers/chapters
· March
15th 2016:
Second submission of improved papers
· May
15th 2016:
Final submission of papers
· November
2016: Publication of the book
Teaching
cases shall be submitted as competitive papers (as per the guidelines above) to
Track 14 of the EIBA 2015 conference and must not exceed 25 pages
(double-spaced), including tables, figures, references, and the respective
teaching notes. Manuscripts submitted must not have been published, accepted
for publication, or be currently under consideration elsewhere. Teaching cases
must contain (1) the text of the teaching case itself, where the managerial
dilemma is presented and information about the company and the context is
shown; (2) teaching notes, which must present the learning objectives, issues
for discussion, examples of appropriate analysis and of suggestions for
in-class dynamics; and, ideally, also (3) a discussion of experiences in using
the case in class.
ATTENTION
– Special Issue of ARLA: While PIBR Volume #11 is interested in cases about
BRIC multinationals, Academia Revista
Latinoamericana de Adminsitración (ARLA) (http://www.emeraldgrouppublishing.com/products/journals/journals.htm?id=arla) will be publishing
a special issue composed of the best teaching cases (submitted to the EIBA 2015
conference) that address internationalization challenges of Latin American
firms (excluding Brazilian firms, which are within the scope of PIBR Volume #11).
Further
information:
Rob
van Tulder
Professor
of International Business-Society Management
Department
of Business-Society Management
Rotterdam
School of Management (RSM)
Erasmus
University Rotterdam, Netherlands
http://www.edmgr.com/rsbe/
