This research was motivated by the desire to understand how regulatory reforms affect the task environment in an emerging market. Regulatory reforms in emerging markets have been used amongst others to correct market failures, increase competition or grow economic sectors. However, on occasion unintended consequences arise from these interventions leading to “liabilities of foreignness” for some of the entities operating in the institutional environment. To this end, this study aimed to establish if these effects were prevalent in the South African mining environment by studying two cases of companies operating in the sector, represented by a foreign and a domestic entity.An exploratory qualitative research design was followed since the researcher was unsure whether the phenomena being observed constituted LOFs or not. A literature study was conducted in order to define the construct of liabilities of foreignness and its impact on the task environment. Therefore the objective of the study was to;Establish the effect of institutional reforms in facilitating the development of LOFs in emerging markets.The research did show the regulatory reforms to alter the business environment somewhat, therefore leading to LOFs in the task environment. However, no entities appeared to be benefiting from the current regulatory reforms, as suggested by the literature. This is possibly due to organisational learning or the efficacy of the individual entities in applying coping strategies to mitigate against LOFs in the institutional context. / Dissertation (MBA)--University of Pretoria, 2012. / Gordon Institute of Business Science (GIBS) / unrestricted

Distance is a central concept in international business research, yet there is debate about the construct as well as its operationalization. In this editorial, we address three of the most important recurring questions posed by authors, editors, and reviewers by examining the theory, methods, and data of distance research. We discuss (1) how to theorize on distance, and (2) what method and (3) what data to use when constructing a distance index. We develop practical recommendations grounded in theory, illustrating and supporting them by calculating cross-country distance indices for all available country pairs and two of the most used distance indices: cultural and institutional distance. We show that whereas a specific method to calculate distance may matter to some extent, the choice for a specific cultural or institutional framework to measure cultural or institutional distance has a major impact on country pair distances. Overall, this editorial highlights the importance of matching data and method to the theoretical argument.

Internationalization of firms has been an on-going process for many years, however, over the recent years, there has been radical changes in the business world, which has created a more competitive business environment for firms. This change in the business environment has not been an easy process nor is it anticipated to get any easier. International firms entering new markets are faced with different challenges, which could be embedded in the behaviour specific to the people living in these countries. Cultural distance is defined as complex and intangible and measured only at a single point in time. Cultural distance easy creates an “illusion” of symmetry where measures at the time of market entry might have changed by the time the performance is measured. Measuring only the cultural distance is not enough to fully understand the international behaviour and how business practices have adapted to the foreign market, to do so one need to understand the institutional distance in order to understand the behavioural patterns existing within the foreign market and adapt its business practices accordingly. There is no support for the perception of cultural and institutional distance between two institutional contexts to be symmetric; it is an illusion of symmetry. Therefore the purpose of this study is to describe and analyze how asymmetry in firms’ perception on cultural and institutional distance affect the extent of firms’ adaptation. This is by increase understanding on how firms from different institutional contexts perceive the distance between them and to what extent they adapt their business practices to the foreign market. In order to answer this purpose a qualitative research has been conducted where managers in three firms from Sweden and three firms from China has been interviewed on their perception of distance on the opposite market. The theoretical framework has included a presentation of the cultural distance, the institutional distance and adaptation of business practices.  This has been followed by a theoretical synthesis, which has been conducted based on the theoretical concepts. Furthermore, the empirical chapter presents the findings of each case company. In the analysis chapter, the theoretical framework has been analyzed together with the empirical data. Based on the analysis the authors have been able to conclude that asymmetry in firms’ perception on distance affects the extent of firm’s adaptation of business practices to the institutional context. It can be concluded that Swedish firms adapt business practices to less extent than Chinese firms and the reason behind it is the asymmetry in firms’ perception of distance. Swedish firms investing in the Chinese market is not faced with the same distance as a Chinese firm investing in the Swedish market, and thus they do not adapt to the same degree.

We investigate a multinational corporation's (MNC) decision to appoint host-country national (HCN) managers to foreign subsidiaries based on the institutional context of and familiarity with the host country. HCN managers are commonly associated with specialized knowledge, superior responsiveness, and higher legitimacy. Yet, we argue that local familiarity of HCNs can also be perceived as risky or harmful by MNC parents. We analyze how formal and informal institutions affect the trade-off between positive effects and potential costs associated with HCN managers ("Local allies" vs. "Trojan horses"). We find that legal institutions protect foreign MNCs from potential costs, encourage the use of HCNs and reinforce their benefits. Corruption and corruption distance, however, increase perceived costs associated with HCN managers up to a point at which they outweigh their perceived benefits.

This thesis aims to understand the relative influence of institutional, cultural and organizational factors on the adjustment of the United Nations’ (UN) and multinational companies’ expatriates in Egypt. The research makes a contribution to the field of expatriate research through its application of the institutional lens in examining the factors impacting on adjustment; and through testing a traditional adjustment model in an under-researched host context. As a result of the research this thesis proposes a new framework for understanding the factors impacting on adjustment which adopts a contingency perspective and incorporates a stronger focus on institutional determinants and the organisational infrastructure supporting the management of expatriates. The study relies, for its theoretical basis, on certain cultural and organizational factors borrowed from the expatriate literature, in addition to introducing other factors (mainly institutional factors) which have not been previously examined in the literature as predictors of adjustment. The research questions the utility of these organizational, cultural and institutional factors, especially those from traditional models, when applied to relatively new national and organizational contexts, the Egyptian national context and the United Nations organizational context. Both contexts are under-researched areas in the expatriate adjustment literature and in the international human resources management literature in general. The Arab cultural context introduces many differences to the Anglo-Saxon and European context, more traditionally the subject of research studies and thus it provides an opportunity for testing the wider application of expatriate models. Equally the UN is a highly multicultural organisational context with a socio-political mission which is highly distinct from the ‘for profit’ based multinational. Thus both these contextual factors offer fertile ground for the further development of a framework for understanding expatriate adjustment during contemporary times. In addition, the novelty of the context brings to the fore the opportunity for examining the utility of institutional theory as an alternative or complement to cultural theory as a way of understanding the factors influencing expatriate adjustment. In terms of the method, the research relies mainly on quantitative data obtained by surveying expatriates in multinational and United Nations organizations working in Egypt. In addition a qualitative technique (interviews) was used to aid questionnaire development and data contextualization. The results highlight the role of institutional measures in explaining expatriate adjustment. The evidence suggests that the institutional variables provide additional explanatory power beyond that provided by traditional factors studies. However, the research also demonstrates that the institutional measures do not replace the cultural measures and therefore there is not a substitution factor at work. Rather, we would argue that the institutional lens provides additional understanding and is tapping into other factors not already captured through measures of culture. The research puts forward a contingency model incorporating additional organisational and institutional variables which are often overlooked or underemphasised in some of the traditional organisational focused models.

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Foreign direct investments that come with globalization bring benefits with them if opportunities are handled in the best manner. One opportunity rises with the institutional difference issue. Different countries have different institutional profiles. Institutional profiles briefly include culture, social norms or governmental regulations. When investing abroad, the bigger the institutional difference gets between the home country and the host country, the harder it gets to acquire the local institutional knowledge. This may result in a negative effect in the firm performance. To make the right decisions managers, being an important part of the decision making process, are required to have a profound understanding and knowledge of the local institutional environment. In here the investing companies have two options; either to use local managers or to acquire knowledge through the accumulation of experience. Building on the institutional theory, sixteen multinational companies operating in the manufacturing industry in Turkey are analyzed with the aim to contribute to the understanding of whether native managers or company experience is creating a better firm performance in consideration with handling the institutional differences. The results of this study point out that, the manager origin indeed influence the firm performance and native managers have a positive effect on the firm performance.

We investigate the effect of changing national institutions on relocations of intermediary HQs. Using a dataset of 154 cross-border relocations between the period from 2000 to 2015, we draw on the intermediary HQ's middle position within the MNC and investigate how a decrease in institutional quality in the HQ's host country and a change in institutional distance between different MNC units affect the relocation decision. Our findings advance the emergent literature on HQ relocations as well as our knowledge of intermediary HQs and the effect of changing institutions on organizational location choices. Beyond our theoretical contributions, we offer policy and managerial implications.

No description available.

Due to the moderately small market of Sweden, firms expand and conducts business on an international level in order to find new opportunities and increase the profits. Many Swedish multinationals expand to the Russian market, due to its size regarding customer base and landmass. Thus, the aim of this study is to provide a greater understanding of how informal institutions in Russia are influencing Swedish multinationals’ establishment and development in the Russian market. Appropriate aspects of informal institutions have been acknowledged and identified with a further analysis in relation to internationalization, culture, and network. A qualitative research method was implemented in this study with the aim to obtain a greater understanding of informal institutions and the way it affects the Swedish firms in Russia. Furthermore, this study used abduction as a research approach, since the authors of this thesis switched between theory and empirical data to make adjustments during the process that enabled the authors to be flexible while gathering the data. The literature review that is presented in this study has a link to internationalization, culture, network and lastly informal institutions. Through combining the presented literature review, the authors developed a conceptual framework that further was used when analyzing the empirical data, collected from multi-case studies of Swedish multinationals. The analysis section discusses both similarities and dissimilarities between the theory and the empirical findings. These analyses are designed in relation to the conceptual framework. The final chapter of this thesis will contain conclusions that were derived from the material in the analysis chapter. Furthermore, the theoretical implications and a revised theoretical model will be presented. Additionally, the managerial implications will be presented along with limitations of the study and the study will be concluded with suggestions for further research. The main theoretical implications that have been developed during this thesis, contains reducing the research gap and continuing with a demonstration of how Russian informal institutions influence Swedish multinational’s establishment and development in the Russian market. The main practical implication of this study is to aid the business procedures of Swedish companies in the Russian market. Moreover, this study can be of practical use to Swedish firms that are in the process of or planning to internationalize to the Russian market.