Critical Perspectives on International Business

Forsgren, Mats; Yamin, Mo

2023 Critical Perspectives on International Business

doi: 10.1108/cpoib-05-2022-0048

The purpose of this paper is twofold: to analyse what theories assume about multinational enterprises (MNEs) when they claim these are superior and to discuss possible explanations for why MNE superiority seems to be dominant in the international business (IB) research field.Design/methodology/approachA common theme in mainstream IB theories is that multinational enterprises (MNEs) are superior in terms of cost efficiency and innovativeness compared with other types of organizations. A closer look at transaction cost economics (TCE)/internalization theory, evolutionary theory and dynamic capability theory reveal a bias toward MNE supremacy because of how MNEs are conceptualized as firms and therefore fail to explain the essence of “multinational advantage”. These revelations and the strong dependence on the benevolence to provide unbiased data means that MNE supremacy posited by mainstream IB theories is as much a rationalized myth as an empirical fact.FindingsAlthough mainstream theories differ when it comes to the building blocks that constitute MNE supremacy, they have one attribute in common: they are silent as to why MNEs are superior compared with, for example, domestic firms or other types of economic agents. Irrespective of whether the focus is the strength of the hierarchy, the skill of managers or a common identity, nothing in the theories tells us that these factors are more pronounced in MNEs than in other types of economic actors.Originality/valueThe paper deals with the issue of multinational advantage. It claims that mainstream theories of MNEs tend to assume, explicitly or implicitly, that MNEs are superior in terms of cost efficiency and innovativeness compared with other types of economic agents. The analysis demonstrates that this tendency is a consequence of how MNEs are conceptualized as firms in the different theories as well as of the strong dependence in IB research on the benevolence of MNEs to provide unbiased data. It is concluded that MNE supremacy posited by mainstream IB theories is as much a rationalized myth as an empirical fact.

Ietto-Gillies, Grazia

2023 Critical Perspectives on International Business

doi: 10.1108/cpoib-02-2023-0013

The paper takes the lead from Forsgren and Yamin (2022), “The MNE as the ‘crown of creation’?: A commentary on mainstream theories of multi-national enterprises”, and accepts that the MNE can, indeed, be seen as the “crown of creation” in the world of business. The purpose of the paper is to show that this is due to advantages of multi/transnationality that must be sought outside rather than within the firm itself.Design/methodology/approachThe paper argues that the advantages of multi-nationality derive from the differences in regulatory regimes between nation-states and, specifically, from laws and regulations regarding the following: labour and social security, industrial policy, taxation and environmental regulations. Some examples are given.FindingsIt is claimed that the transnational company (TNC) has the ability to operate as a unified centre of strategic decision-making, and this gives it an advantage compared to operators it bargains with who do not possess such ability. Three such operators are discussed: labour, governments of nation-states and suppliers. In TNCs’ operations with foreign countries, a distinction is made between the spatial dimension and the regulatory regimes dimension. The interaction between these two dimensions leads to discussions on: regions within nation-states and their regulatory regimes, global value chains (GVCs) and free/investment zones (F/IZs). The conclusions draw policy implications and research agenda implications touching also on issues of TNCs as creator/destructors of social values.Research limitations/implicationsThe paper refers to other published work by the author – solo or as co-author – where the arguments are further developed, including the finding of a detailed case study. There are policy implications regarding labour and its trade unions (TUs) as well governments and their taxation and industrial policies. Details of such policies need further development.Practical implicationsThere are implications for theory development, policies and for research agendas.Social implicationsGovernments of nation-states and institutions within them – such as TUs – should try to co-ordinate rather than compete with each other in their bargaining with transnational companies. The breakaway of regions within nation-states further increases the power of TNCs.Originality/valueIn the development of theories of the TNC, this work shifts the focus from internal characteristics within the firm and its markets to external ones: to the nation-states as jurisdictional loci. The distinction between spatial and regulatory regimes dimensions in dealing with transnational activities allows a novel viewpoint on: regions, GVCs and IZs. A novel viewpoint is also given in relation to the role of TNCs in social value.

Forsgren, Mats; Yamin, Mo

2023 Critical Perspectives on International Business

doi: 10.1108/cpoib-03-2023-0019

The purpose of this paper is to respond to the comments by professor Ietto-Gillies on the paper on “The MNE as the Crown of Creation?”Design/methodology/approachThe authors argue that the key points made in the commentary are broadly complementary to the arguments set out in the “Crown of Creation?”FindingsThe authors agree with the commentary that sources of advantages of multinationality lie “outside the MNE” – through its interactions with national governments and organised labour. However, the authors would caution that the achievement of such advantages may encounter constraints.Research limitations/implicationsThe original paper (“The MNE as the Crown of Creation?”) was a critique of mainstream theories of the MNE regarding the assumed superiority of the MNE. The response to the paper makes the argument that any superiority associated with MNE must be sought in its interactions with other actors.Practical implicationsThe argument suggests that MNE managers seeking to exploit the advantage of multinationality through production shifting must be aware of the system-wide consequences of such actions.Social implicationsGiven the conceptual nature of the argument and the level of abstraction, solid social implications can only be drawn tentatively.Originality/valueThe key novelty in the response paper is the possible negative effect – for MNEs – of unconstrained exercise of production shifting.

Hatami, Akram; Hermes, Jan; Firoozi, Naser

2023 Critical Perspectives on International Business

doi: 10.1108/cpoib-03-2021-0029

To succeed in today’s dynamic and unpredictable business world, businesses are increasingly required to gain the trust of and inform the society in which they operate about the social and environmental consequences of their actions. Corporations’ claims regarding the responsibility and ethicality of their actions, however, have been shown to be contradictory to some degree. We define corporations’ deceitful implementation of their corporate social responsibility (CSR) policies as pseudo-CSR. We argue that it is the moral characteristics of individuals, i.e. employees, managers and other decision-makers who ignore the CSR policies, which produce pseudo-CSR.Design/methodology/approachThis is a conceptual paper.FindingsThe authors conceptualize the gap between true CSR and pseudo-CSR on a cognitive individual level as “moral laxity,” resulting from organization-induced lack of effort concerning individual moral development through ethical discourse, ethical sensemaking and subjectification processes. The absence of these processes prohibits individuals in organizations from constructing ethical identities to inhibit pseudo-CSR activities.Originality/valueThis paper contributes to the literature on CSR by augmenting corporate-level responsibility with the hitherto mostly neglected, yet significant, role of the individual in bridging this gap.

Boussebaa, Mehdi

2023 Critical Perspectives on International Business

doi: 10.1108/cpoib-12-2022-0121

The purpose of this paper is to encourage scholars of international business (IB) to engage with the “decolonizing the university” project and reflect on what decolonizing might mean for IB research and education. The paper also argues that it is particularly important for IB scholars to join the decolonizing project given that the field’s main object of study – the multinational enterprise – has been central to colonialism.Design/methodology/approachAn essay style is adopted to introduce the decolonizing project to IB and to explain why and how this scholarly field might benefit from engaging with it. As part of that, the paper calls upon IB scholars to work on decolonizing the field and to do so by not only interrogating its knowledge claims but also broadening the scope of its research so it can address the theme of neo-colonialism.FindingsThe paper reveals the conspicuous absence of IB scholars from the decolonizing project and situates such absence within a long-standing indifference within IB to the issue of colonialism.Social implicationsIn learning about and engaging with the decolonizing project, IB scholars will be able to not only enrich IB theory and education but also help to tackle one of the grand challenges facing the modern world society, namely, social inequality and injustice rooted in colonialism.Originality/valueIt is hoped that this paper will stimulate reflection on IB’s absence from the decolonizing project and assist scholars in developing an understanding of the project’s rationale and underlying literature. It is also hoped that the paper will open dialogue within IB about how this field might be decolonized and help scholars engage meaningfully with other disciplines as they do so.