International Business

Abstract: The extant literature suggests that it is sensible to deploy a host-country national (HCN) general manager (GM) successor in the local-market-seeking subsidiaries of multinational enterprises. However, limited attention has been paid to whether subsidiary GMs come from outside or inside an organization. By simultaneously considering the nationality and origin of subsidiary GM successors, our case-based study provides a sharper theory of succession decision-making in the context of local-market-seeking subsidiaries. We demonstrated that the use of HCN GMs is not always the best strategy, and can even be the worst option because ex post opportunism may arise for HCN GM successors promoted from within the subsidiary. Using HCNs from outside the subsidiary can limit ex post opportunism but may entail a new bounded reliability issue resulting from identity-based discordance. Our interview data revealed a managerial safeguard, which we term ex ante socialization, to address this issue.

Abstract: We offer a novel view of formal institutions as a layer cake, suggesting a structural relationship between higher-level and lower-level institutions. In this context, inter-layer conflict imposes complex pressures on multinational corporations (MNCs). These tensions have become more rife amid the growth in global connectedness and the commensurate increase in the importance of within-country differences. Drawing on political science and economic geography research, we introduce regime type and the distribution of economic resources as conditions under which inter-layer conflict is most likely to arise. We leverage two caselets to illustrate inter-layer conflict and the novel response options MNCs can deploy. Our perspective advances the theoretical understanding of intra-national institutional diversity, laying the groundwork for future research at the nexus of institutional theory and global strategy.

Abstract: Purpose Trust is an important facilitator of successful B2B relationships. The purpose of this study is to investigate affect-based antecedents of both interpersonal and interorganizational trust, and their impact on the performance of buyer–supplier relationships. The authors ask two research questions: (1) What are affect-based dimensions of interpersonal and interorganizational trust? (2) How do interpersonal and interorganizational trust influence buyers’ operational performance? Design/methodology/approach The authors use data from an original survey of 156 buyer–supplier relationships between multinational enterprise subsidiaries and local suppliers in the Thai manufacturing sector to develop a structural model in which the authors test the hypotheses. Findings Consistent with social exchange theory and social psychology, the empirical analysis shows that affect-based dimensions at the individual level, namely, likeability, similarity and frequent social contact, and at the organizational level, namely, supplier firm willingness to customize and institutionalization of cooperation, are important for establishing trust. In addition, interpersonal trust enhances buyers’ operational performance indirectly via interorganizational trust. Practical implications Buying and selling firms may develop organizational trust by developing processes that enhance organizational trust. Individuals with purchasing or sales responsibilities may enhance trust in their personal relationship. However, such interpersonal trust needs to be translated to the organizational level to benefit organizational performance. Originality/value The findings contribute to the literature on affect-based antecedents and outcomes of trust. Specifically, the authors offer theory and empirical evidence regarding the contribution of salespersons toward affect-based dimensions of trust and its impact on buyer’s operational performance.