Locational boundness of resource, compatibility of production, and downside risks of multinationality

IF 5.7 2区 管理学 Q1 BUSINESS Global Strategy Journal Pub Date : 2022-01-13 DOI:10.1002/gsj.1426
Sangcheol Song
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Abstract

Research Summary

We extend the multinational operational flexibility literature by examining how the characteristics of resources and capabilities within a portfolio of international investments affect its downside risks. We postulate that non-location bound resources and capabilities within an international investment portfolio are crucial to reducing switching costs and enhancing cross-country switchability, thus curbing downside risks. Our large sample of Korean multinational corporations reveals that globally sourced production inputs or more technological capabilities help curb downside risks, while locally sourced inputs or more marketing capabilities do not. We additionally find that the positive effect of less locational boundness is more salient when the portfolio has a high product relatedness or standardization.

Managerial Summary

This study provides some managerial implications for international business managers. The findings suggest that the downside risk reduction effect of multinationality varies by heterogeneous resource and production conditions. They indicate that the locational boundness embedded in marketing capability, technological capability, and product type affects cross-border switchability. IB managers make strategic decisions on resource and product types for their overseas manufacturing subsidiaries in the configuration and coordination processes of their internationalization to maximize multinational operational flexibility. A more effective alignment of resources and capabilities with the strategic intent of boosting geographic fungibility facilitates effective production shifts within the same production network.

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资源的区位有限性、生产的兼容性以及多国性的下行风险
我们通过研究国际投资组合中的资源和能力特征如何影响其下行风险来扩展跨国经营灵活性文献。我们假设国际投资组合中的非区位约束资源和能力对于降低转换成本和提高跨国转换能力至关重要,从而抑制下行风险。我们对韩国跨国公司的大量样本显示,全球采购的生产投入或更多的技术能力有助于遏制下行风险,而本地采购的投入或更多的营销能力则没有作用。我们还发现,当投资组合具有较高的产品相关性或标准化时,较少的区位边界的积极作用更为显著。本研究为国际商务管理者提供了一些管理启示。研究结果表明,多国性降低下行风险的效果因资源和生产条件的异质性而异。研究表明,市场营销能力、技术能力和产品类型的区位局限性影响了跨境可转换性。跨国企业管理者在其海外制造子公司国际化的配置和协调过程中对其资源和产品类型进行战略决策,以最大限度地提高跨国经营的灵活性。通过提高地理可替代性的战略意图,更有效地整合资源和能力,有助于在同一生产网络内实现有效的生产转移。
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来源期刊
CiteScore
14.20
自引率
11.80%
发文量
46
期刊介绍: The Global Strategy Journal is a premier platform dedicated to publishing highly influential managerially-oriented global strategy research worldwide. Covering themes such as international and global strategy, assembling the global enterprise, and strategic management, GSJ plays a vital role in advancing our understanding of global business dynamics.
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