IDEAS home Printed from https://ideas.repec.org/a/spr/manint/v54y2014i5d10.1007_s11575-014-0218-3.html
   My bibliography  Save this article

Practice Standardization in Cross-Border Activities of Multinational Corporations: A Resource Dependence Perspective

Author

Listed:
  • Xia Jun

    (University of Texas at Dallas)

  • Marshall S. Jiang

    (Brock University)

  • Sali Li

    (University of South Carolina)

  • Preet S. Aulakh

    (York University)

Abstract

This study examines the relationship between power dependence and practice standardization in the context of cross-border alliances. Existing studies have typically assumed that standardization or adaptation is a unilateral decision made by multinational corporations (MNCs) but ignored the influence of the relative power of multinational and local partners under conditions of government influence. Drawing on resource dependence theory (RDT), we argue that the power imbalance between multinational and local firms may shape the standardization of practices in their established alliances. The results, based on a sample of 243 Fortune 500 US companies, indicate that when the level of government influence is high, the positive effect of MNCs’ resource importance on practice standardization diminishes and the negative effect of local firms’ alternative resources becomes stronger. These findings suggest that RDT has important implications for understanding standardization versus adaptation in cross-border alliances.

Suggested Citation

  • Xia Jun & Marshall S. Jiang & Sali Li & Preet S. Aulakh, 2014. "Practice Standardization in Cross-Border Activities of Multinational Corporations: A Resource Dependence Perspective," Management International Review, Springer, vol. 54(5), pages 707-734, October.
    • Handle: RePEc:spr:manint:v:54:y:2014:i:5:d:10.1007_s11575-014-0218-3
    DOI: 10.1007/s11575-014-0218-3
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11575-014-0218-3
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s11575-014-0218-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. David Krueger & Bocheng Ding, 2009. "Ethical Analysis and Challenges of Two International Firms in China," Journal of Business Ethics, Springer, vol. 89(2), pages 167-182, November.
    2. Charles W. L. Hill & Peter Hwang & W. Chan Kim, 1990. "An eclectic theory of the choice of international entry mode," Strategic Management Journal, Wiley Blackwell, vol. 11(2), pages 117-128, February.
    3. Sushil Vachani, 1995. "Enhancing the Obsolescing Bargain Theory: A Longitudinal Study of Foreign Ownership of U.S. and European Multinationals," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 26(1), pages 159-180, March.
    4. Robert Jensen & Gabriel Szulanski, 2004. "Stickiness and the adaptation of organizational practices in cross-border knowledge transfers," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(6), pages 508-523, November.
    5. David K Tse & Yigang Pan & Kevin Y Au, 1997. "How MNCs Choose Entry Modes and Form Alliances: The China Experience," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 28(4), pages 779-805, December.
    6. Jean-Paul Roy & Christine Oliver, 2009. "International joint venture partner selection: The role of the host-country legal environment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(5), pages 779-801, June.
    7. Bruce Kogut & Udo Zander, 1993. "Knowledge of the Firm and the Evolutionary Theory of the Multinational Corporation," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 24(4), pages 625-645, December.
    8. Ulf Elg, 2000. "Firms' Home-Market Relationship: Their Role when Selecting International Alliance Partners," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 31(1), pages 169-177, March.
    9. Karabay, Bilgehan, 2010. "Foreign direct investment and host country policies: A rationale for using ownership restrictions," Journal of Development Economics, Elsevier, vol. 93(2), pages 218-225, November.
    10. Mitchell P. Koza & Arie Y. Lewin, 1998. "The Co-Evolution of Strategic Alliances," Organization Science, INFORMS, vol. 9(3), pages 255-264, June.
    11. S Tamer Cavusgil & Shaoming Zou & G M Naidu, 1993. "Product and Promoting Adaptation in Export Ventures: An Empirical Investigation," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 24(3), pages 479-506, September.
    12. Armstrong, J. Scott & Overton, Terry S., 1977. "Estimating Nonresponse Bias in Mail Surveys," MPRA Paper 81694, University Library of Munich, Germany.
    13. Anne Tempel & Peter Walgenbach, 2007. "Global Standardization of Organizational Forms and Management Practices? What New Institutionalism and the Business‐Systems Approach Can Learn from Each Other," Journal of Management Studies, Wiley Blackwell, vol. 44(1), pages 1-24, January.
    14. Douglas Dow, 2006. "Adaptation and performance in foreign markets: evidence of systematic under-adaptation," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 37(2), pages 212-226, March.
    15. Dong Chen & Yongsun Paik & Seung Ho Park, 2010. "Host-country policies and MNE management control in IJVs: Evidence from China," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(3), pages 526-537, April.
    16. Magali A. Delmas & Michael W. Toffel, 2008. "Organizational responses to environmental demands: opening the black box," Strategic Management Journal, Wiley Blackwell, vol. 29(10), pages 1027-1055, October.
    17. Keith G. Provan & Jule B. Gassenheimer, 1994. "Supplier Commitment In Relational Contract Exchanges With Buyers: A Study Of Interorganizational Dependence And Exercised Power," Journal of Management Studies, Wiley Blackwell, vol. 31(1), pages 55-68, January.
    18. Sea-Jin Chang & Arjen van Witteloostuijn & Lorraine Eden, 2010. "From the Editors: Common method variance in international business research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(2), pages 178-184, February.
    19. T. K. Das & Bing‐Sheng Teng, 2002. "The Dynamics of Alliance Conditions in the Alliance Development Process," Journal of Management Studies, Wiley Blackwell, vol. 39(5), pages 725-746, July.
    20. Theodosiou, Marios & Leonidou, Leonidas C., 2003. "Standardization versus adaptation of international marketing strategy: an integrative assessment of the empirical research," International Business Review, Elsevier, vol. 12(2), pages 141-171, April.
    21. Philip H. Birnbaum, 1985. "Political strategies of regulated organizations as functions of context and fear," Strategic Management Journal, Wiley Blackwell, vol. 6(2), pages 135-150, April.
    22. Timothy P Blumentritt & Douglas Nigh, 2002. "The Integration of Subsidiary Political Activities in Multinational Corporations," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 33(1), pages 57-77, March.
    23. James G. March, 1991. "Exploration and Exploitation in Organizational Learning," Organization Science, INFORMS, vol. 2(1), pages 71-87, February.
    24. Nathan Fagre & Louis T Wells, 1982. "Bargaining Power of Multinationals and Host Governments," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 13(2), pages 9-24, June.
    25. Anthony Goerzen & Paul W. Beamish, 2003. "Geographic scope and multinational enterprise performance," Strategic Management Journal, Wiley Blackwell, vol. 24(13), pages 1289-1306, December.
    26. Oded Shenkar, 2012. "Cultural distance revisited: Towards a more rigorous conceptualization and measurement of cultural differences," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 43(1), pages 1-11, January.
    27. Sinha, Uday Bhanu, 2001. "International joint venture, licensing and buy-out under asymmetric information," Journal of Development Economics, Elsevier, vol. 66(1), pages 127-151, October.
    28. T C Melewar & John Saunders, 1999. "International Corporate Visual Identity: Standardization or Localization?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 30(3), pages 583-598, September.
    29. Schmid, Stefan & Kotulla, Thomas, 2011. "50 years of research on international standardization and adaptation--From a systematic literature analysis to a theoretical framework," International Business Review, Elsevier, vol. 20(5), pages 491-507, October.
    30. Benjamin Gomes-Casseres, 1990. "Firm Ownership Preferences and Host Government Restrictions: An Integrated Approach," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 21(1), pages 1-22, March.
    31. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2010. "The worldwide governance indicators : methodology and analytical issues," Policy Research Working Paper Series 5430, The World Bank.
    32. Gary Hamel, 1991. "Competition for competence and interpartner learning within international strategic alliances," Strategic Management Journal, Wiley Blackwell, vol. 12(S1), pages 83-103, June.
    33. Andrew Delios & Paul W. Beamish, 1999. "Ownership strategy of Japanese firms: transactional, institutional, and experience influences," Strategic Management Journal, Wiley Blackwell, vol. 20(10), pages 915-933, October.
    34. Williamson, Oliver E, 1983. "Credible Commitments: Using Hostages to Support Exchange," American Economic Review, American Economic Association, vol. 73(4), pages 519-540, September.
    35. Keith D Brouthers & Gary J Bamossy, 1997. "The Role of Key Stakeholders in the International Joint Venture Negotiations: Case Studies from Eastern Europe," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 28(2), pages 285-308, June.
    36. H. Kevin Steensma & Marjorie A. Lyles, 2000. "Explaining IJV survival in a transitional economy through social exchange and knowledge‐based perspectives," Strategic Management Journal, Wiley Blackwell, vol. 21(8), pages 831-851, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wang, Yonggui & Wang, Na & Jiang, Ling & Yang, Zhilin & Cui, Victor, 2016. "Managing relationships with power advantage buyers: The role of supplier initiated bonding tactics in long-term buyer–supplier collaborations," Journal of Business Research, Elsevier, vol. 69(12), pages 5587-5596.
    2. Ghantous, Nabil & Das, Shobha S. & Chameroy, Fabienne, 2018. "Governance capabilities and relationship performance in international franchising," Journal of Retailing and Consumer Services, Elsevier, vol. 40(C), pages 19-30.
    3. Xiaowei Rose Luo & Ling Yang & Xiaobin He, 2020. "Can One Stone Kill Two Birds? Political Relationship Building and Partner Acquisition in New Ventures," Entrepreneurship Theory and Practice, , vol. 44(4), pages 817-841, July.
    4. Arup Barua & Alexandra Ioanid, 2020. "Country Brand Equity: The Decision Making of Corporate Brand Architecture in Cross-Border Mergers and Acquisitions," Sustainability, MDPI, vol. 12(18), pages 1-24, September.
    5. Yang Zhang & Su Zhang & Fu-Chieh Hsu, 2023. "Crisis Management Performance of Upscale Hotels in the Greater Bay Area, China: A Comparative Study in a Complex Institutional Situation," Sustainability, MDPI, vol. 15(6), pages 1-24, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. George Peng & Paul Beamish, 2014. "The effect of host country long term orientation on subsidiary ownership and survival," Asia Pacific Journal of Management, Springer, vol. 31(2), pages 423-453, June.
    2. Cuypers, I.R.P., 2009. "Essays on equity joint ventures, uncertainty and experience," Other publications TiSEM 8dc79e86-c625-467f-a450-8, Tilburg University, School of Economics and Management.
    3. Peng, George Z., 2012. "FDI legitimacy and MNC subsidiary control: From legitimation to competition," Journal of International Management, Elsevier, vol. 18(2), pages 115-131.
    4. Christian Schwens & Florian B Zapkau & Keith D Brouthers & Lina Hollender, 2018. "Limits to international entry mode learning in SMEs," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(7), pages 809-831, September.
    5. Lee, Jeoung Yul & Xiao, Shufeng(Simon) & Choi, Byungchul, 2021. "Unpacking the drivers of emerging market firms’ international joint venture formation: The interplay between technological innovation strategies and home- and host-institutional pressures," Journal of Business Research, Elsevier, vol. 134(C), pages 378-392.
    6. Yan, Ji & Tsinopoulos, Christos & Xiong, Yu, 2021. "Unpacking the impact of innovation ambidexterity on export performance: Microfoundations and infrastructure investment," International Business Review, Elsevier, vol. 30(1).
    7. Khan, Zaheer & Lew, Yong Kyu & Marinova, Svetla, 2019. "Exploitative and exploratory innovations in emerging economies: The role of realized absorptive capacity and learning intent," International Business Review, Elsevier, vol. 28(3), pages 499-512.
    8. Sadeghi, Arash & Aliasghar, Omid & Bouguerra, Abderaouf, 2023. "Unpacking the relationship between post-entry speed of internationalization and export performance of SMEs: A capability-building perspective," Journal of International Management, Elsevier, vol. 29(1).
    9. Hitt, Michael A. & Li, Dan & Xu, Kai, 2016. "International strategy: From local to global and beyond," Journal of World Business, Elsevier, vol. 51(1), pages 58-73.
    10. Erdener Kaynak & Mehmet Demirbag & Ekrem Tatoglu, 2007. "Determinants of ownership-based entry mode choice of MNEs: Evidence from Mongolia," Management International Review, Springer, vol. 47(4), pages 505-530, October.
    11. Bell, J.H.J., 1996. "Joint or Single Venturing? : An Electric Approach to Foreign Entry Mode Choice," Other publications TiSEM 06f84735-3cf5-432f-8bc8-c, Tilburg University, School of Economics and Management.
    12. Yadong Luo & Huan Zhang & Juan Bu, 2019. "Developed country MNEs investing in developing economies: Progress and prospect," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(4), pages 633-667, June.
    13. Reuer, Jeffrey J. & Zollo, Maurizio, 2005. "Termination outcomes of research alliances," Research Policy, Elsevier, vol. 34(1), pages 101-115, February.
    14. Pei Sun & Jonathan P. Doh & Tazeeb Rajwani & Donald Siegel, 2021. "Navigating cross-border institutional complexity: A review and assessment of multinational nonmarket strategy research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(9), pages 1818-1853, December.
    15. Li, Jizhong & Jiang, Fuming & Shen, Jie, 2016. "Institutional distance and the quality of the headquarters–subsidiary relationship: The moderating role of the institutionalization of headquarters’ practices in subsidiaries," International Business Review, Elsevier, vol. 25(2), pages 589-603.
    16. Mandler, Timo & Sezen, Burcu & Chen, Jieke & Özsomer, Ayşegül, 2021. "Performance consequences of marketing standardization/adaptation: A systematic literature review and future research agenda," Journal of Business Research, Elsevier, vol. 125(C), pages 416-435.
    17. Oetzel, Jennifer, 2005. "Smaller may be beautiful but is it more risky? Assessing and managing political and economic risk in Costa Rica," International Business Review, Elsevier, vol. 14(6), pages 765-790, December.
    18. Alex Eapen & Rekha Krishnan, 2019. "Transferring Tacit Know-How: Do Opportunism Safeguards Matter for Firm Boundary Decisions?," Organization Science, INFORMS, vol. 30(4), pages 715-734, July.
    19. Madhok, Anoop, 1996. "Know-how-, experience- and competition-related considerations in foreign market entry: An exploratory investigation," International Business Review, Elsevier, vol. 5(4), pages 339-366, August.
    20. Reuer, Jeffrey J. & Ariño, Africa, 2002. "Contractual heterogeneity in strategic alliances," IESE Research Papers D/482, IESE Business School.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:manint:v:54:y:2014:i:5:d:10.1007_s11575-014-0218-3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.