Emerald | Management Research Review | Table of Contents

Determinants of foreign subsidiary staffing by service firms

literatinetwork@emeraldinsight.com (Naoki Ando, Nobuaki Endo) — Fri, 17 May 2013 00:00:00 +0100

Abstract

Purpose – The purpose of this paper is to examine how service firms determine foreign subsidiary staffing, emphasizing the joint effect of an attribute specific to the service sector and the institutional environment of the host countries. Design/methodology/approach – This study develops hypotheses regarding the joint effect of human capital intensity and institutional distance on the ratio of parent country nationals to foreign subsidiary employees. A Tobit regression is conducted to test the hypotheses, using a sample that consists of 1,067 foreign subsidiaries of Japanese service firms. Findings – This study finds that the human capital intensity of a service firm has a positive impact on the ratio of parent country nationals to foreign subsidiary employees. The study also finds that the institutional distance between the host country and the home country is negatively associated with the ratio of parent country nationals. In addition, this study finds that the positive impact of human capital intensity on the ratio of parent country nationals becomes weaker as the institutional distance becomes greater. Originality/value – This study explores the factors that affect the decisions regarding foreign subsidiary staffing in the service sector. It advances the understanding of the foreign subsidiary staffing of service firms by examining the joint effect of an attribute specific to the service sector and the institutional environment of the host countries. This study shows evidence that the effect of an attribute specific to the service sector is more complex than a linear relationship.

“It's (not) the economy, stupid”: wasted opportunities (apologies to James Carville)

literatinetwork@emeraldinsight.com (Michaeline Skiba, Patrick O'Halloran) — Fri, 17 May 2013 00:00:00 +0100

Abstract

Purpose – Taking a broad review of the management and economics literature, the purpose of this paper is to examine how the recent “Great Recession” has had a disproportionate adverse impact on US labor markets and created social disruptions to professional workers experiencing persistent unemployment or underemployment. Design/methodology/approach – Secondary data analysis shows how the recent recession has had a disproportionate impact on employment. Recognizing underemployment as a potentially persistent state, the authors delineate the extent and consequences of underemployment. Findings – Analyses of unemployment and underemployment resulting from the recent recession suggest it has had a particularly severe detrimental impact on worker benefits, incomes and employment prospects for most US workers. Research limitations/implications – Secondary data analysis is a major limitation but results justify a call for further research into the potential increase in the long-term economic displacement of professional workers. Originality/value – This paper is unique in applying economic and management constructs in an analysis of the origins, consequences and recommendations for decreasing the rising level of underemployment among professional US workers.

Dynamics of entering politically risky foreign markets

Fri, 17 May 2013 00:00:00 +0100

Abstract

Purpose – The purpose of this paper is to examine the effects of political risk on firms' likelihood of foreign market entry and performance by adopting a strategic view of political risk and drawing upon the arguments of multimarket contact theory. Design/methodology/approach – This study estimates the location choice and performance of Japanese auto parts-makers using panel regression models. Findings – The study finds that firms with low multimarket contact in the home country and high multimarket contact in the host country are less likely to avoid politically risky host countries and that firms which entered politically risky host countries exhibit greater performance when the degree of multimarket contact with prior entrants is high. Research limitations/implications – Although the research design raises a concern about the generalizability of the findings, this study highlights the strategic importance of politically risky markets and suggests the importance of considering competitive interactions with rivals in examining interdependent behavior in foreign direct investments. Practical implications – Instead of consistently avoiding politically risky markets, managers should actively consider the potential strategic importance of these markets. A post-entry strategy suggested by the findings is taking positive steps to leverage the benefits of multimarket contacts for managing subsidiaries in politically risky host countries. Originality/value – Unlike previous studies, this study emphasizes the strategic potential of politically risky markets and takes a view that firms have variable political risk tolerance. Furthermore, the authors' adoption of multimarket contact theory allows a novel approach to benchmarking against rivals for foreign entry decisions.

Language, cultural intelligence and expatriate success

literatinetwork@emeraldinsight.com (Kyle C. Huff) — Fri, 17 May 2013 00:00:00 +0100

Abstract

Purpose – The purpose of this paper is to examine how cultural intelligence (CQ) and language proficiency are related to cross-cultural adjustment, expatriate satisfaction, and expatriate desires towards the future, to further what is known about CQ. Design/methodology/approach – A quantitative survey was developed and administered to 140 native English-speaking expatriates living in Japan who were participating in the Japan Exchange and Teaching program. The survey was designed to measure CQ, language proficiency, cross-cultural adjustment, satisfaction with their work and life in Japan, and their attitudes towards future expatriate assignments. Findings – In total, there were eight criterion variables used in the study. Results from a series of hierarchical regression analyses revealed that the four CQ factors and language proficiency to various degrees were able to predict the various criterion variables. Motivational CQ was the only predictor variable that was able to predict all criterion variables. Research limitations/implications – This paper provides solid quantitative research into CQ. However, since the data come from self-report surveys, its limitations in terms of common method bias are recognized. Practical implications – This study identifies both language ability and CQ as predictive of expatriate adjustment. This information enables organizations to better prepare their members for expatriate assignments. Originality/value – Although prior research has investigated a number of these issues separately on various types of samples, this paper is the first to combine all the variables into one study using expatriates.

Evaluating cloud computing services from a total cost of ownership perspective

Fri, 17 May 2013 00:00:00 +0100

Abstract

Purpose – Start-up companies in particular can benefit from cloud computing services, since frequently they do not operate an internal IT infrastructure. The purpose of this paper is to present a total cost of ownership (TCO) approach for cloud computing services. Design/methodology/approach – The authors applied a multi-method approach (systematic literature review, analysis of real cloud computing services, expert interviews, case study) for the development and evaluation of a formal mathematical TCO model. Findings – It was found that decision processes in cloud computing are conducted ad hoc and lack systematic methods. The presented method raises the awareness of indirect and hidden costs in cloud computing. Research limitations/implications – Some restrictive assumptions were made. For instance, cost types that focus on an existing internal IT infrastructure were hidden. Future research can combine risk and security aspects by means of a TCO approach. Additionally, benefits management in cloud computing is another new research field that can, for instance, be explored by means of cost-benefit analyses. Practical implications – The analysis of relevant cost types and factors of cloud computing services is an important pillar of decision making in cloud computing. The software tool allows for an easy application of the TCO model with reasonable effort. Originality/value – The paper provides an evaluated mathematical model for the calculation of the TCO of cloud computing services. With this tool, decision makers are able to decide whether outsourcing into the cloud is monetarily attractive; to be more specific, whether the costs associated with cloud computing services are lower than with a pre-existing infrastructure.