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Discussion of Results and Implications

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Success Factors of Regional Strategies for Multinational Corporations

Part of the book series: Contributions to Management Science ((MANAGEMENT SC.))

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Abstract

The empirical results of the previous chapter shed light on the success factors of regional MNC strategies, or more specifically, on the extent to which regional management autonomy and regional product/service adaptation lead to regional success – taking into consideration the influence of contextual variables on these relationships. We substantiated this novel perspective on the regional competitiveness of MNCs with further research findings about regions, regional strategies, regional success, and the regional strategy–performance relationship. Collectively, these empirical results have both theoretical and practical implications that we will present in the following.

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Notes

  1. 1.

    Cf. Sect. 1.2.

  2. 2.

    For further evidence at the macro-level regarding the importance of such non-triad-regions in the processes of regionalization, provided by both trade and FDI patterns, cf. Poon et al. (2000).

  3. 3.

    A comparison of MNCs from the same home region may lead to similar results – uncovering firms with regional strategies that are considerably less home-regional than those of other companies of the same home region.

  4. 4.

    Here, even though it overstates home-regional strategies – mainly for comparability reasons, as outlined in Sect. 5.2.1 – we utilize Rugman’s (2005b: 4) sales-based classification of regional strategies according to the 50% home region and 20% host region thresholds.

  5. 5.

    The liability of foreignness is given here by the MNC’s unfamiliarity with the environment of a foreign host region (Zaheer 1995: 343).

  6. 6.

    The classification of different types of regional success (e.g., home-regional, host-regional, bi-regional, etc.) – mainly for comparability reasons, as outlined before in this chapter and in Sect. 5.2.1 – is based on Rugman’s (2005b: 4) classification scheme according to the 50% home region and 20% host region thresholds.

  7. 7.

    For a review of further literature related to different home-regionally successful MNCs cf. Sect. 2.2.2.

  8. 8.

    Whereas the relative number of MNCs with tri-regional and even quad-regional success slightly also increased from 2000 to 2008, as outlined in Sect. 6.2.1, the share of bi-regionally successful firms rose much more strongly during this period, because of this, this form of regional success represents the main focus of our explanations here.

  9. 9.

    Cf. Sect. 6.2.1.

  10. 10.

    The methodological underpinnings of these findings on the home-regional success of MNCs are different from the classification of home-regionally successful firms, which we presented earlier (cf. Sect. 5.2.1 for a more detailed explanation of these methodological differences).

  11. 11.

    More specifically, this shows that the non-home-regional sales in one foreign host region increasingly exceed the 20% host region threshold for a bi-regional success classification.

  12. 12.

    This also shows that any classification scheme for different forms of particular MNCs’ regional success – or for their regional strategies, as outlined earlier in this chapter – should be utilized with caution, while more detailed analyses should be based on industry-by-industry comparisons.

  13. 13.

    Cf. Sect. 2.2.8 for a more detailed description of these risks.

  14. 14.

    It should be noted that several academic scholars (Contractor 2007a: 471; Contractor 2007b: 19–21; Contractor et al. 2003: 16; Lu and Beamish 2004: 606) have shown that these recent research results on the S-curve development of the multinationality-performance relationship present a reconciliation of prior research findings about (upright) U-shaped patterns (e.g., Lu and Beamish 2001: 580; Ruigrok and Wagner 2003: 77) and about inverted-U-shaped developments (e.g., Geringer et al. 1989: 117; Hitt et al. 1997: 790) of this relationship.

  15. 15.

    Mainly for comparability reasons – as outlined earlier in this chapter and in Sect. 5.2.1 – the classification of different types of regional strategies is based on Rugman’s (2005b: 4) classification scheme according to the 50% home region and 20% host region thresholds.

  16. 16.

    Cf. Sect. 4.1.1.5.

  17. 17.

    Cf. Sect. 6.1.

  18. 18.

    Cf. Sect. 2.2.6.

  19. 19.

    Cf. Sect. 4.1.2.5.

  20. 20.

    Cf. Sect. 4.1.3.2.

  21. 21.

    Here, given the marginal, almost non-existent, interaction effect of regional orientation on the relationship between regional management autonomy and regional success – no further theoretical implications can be drawn from the rejection of our research hypothesis H3a.

  22. 22.

    Cf. Sect. 4.1.3.4.

  23. 23.

    However, it should be noted that this influence of the external contingency inter-regional distance on the relationship between regional management autonomy and regional success – as described in Sect. 6.3 and depicted in Table A.12 – was not found to be significant after considering the control variables firm size and regional competition. Therefore, the degree to which inter-regional distance influences a delegation of decision-making to the regional level – depending on a MNC’s firm size and/or its regional competition – should be interpreted with caution (cf. Sect. 7.2.1).

  24. 24.

    Approximately two-thirds of the MNCs in our study have completed the answers to our survey for their most successful foreign region (cf. Sect. 6.1). Even if taking into consideration the reductions in sample size for the modeling of our data – as explained in Sect. 5.2.3 – half of the modeling results are still based upon the MNCs’ respective most successful foreign region.

  25. 25.

    Nearly half of the MNCs in our study have been operating more than 30 years in either their most successful foreign region or in their home region (cf. Sect. 6.1). It should be noted that this also applies to the reduced sample in the modeling of our data – as outlined in Sect. 5.2.3 – where half of the firms in our modeling sample have such a high regional experience, almost equally, in either their most successful foreign region or in their home region.

  26. 26.

    Cf. Sects. 2.3.1 and 2.4.2.

  27. 27.

    This overview in Table A.13 summarizes Figs. A.26, A.31, A.32 and A.33 regarding the relative importance assigned by our survey sample MNCs, which – according to the five-point Likert scales of our survey – ranges from very low, low, moderate, high, to very high, for each observed element of their regional strategies. Those terms that are presented in brackets in Table A.13 show the second, third, or fourth preference of our respondents for a certain element of their regional strategy – according to the illustrations in Figs. A.26, A.31, A.32 and A.33.

  28. 28.

    This finding corresponds to the weakly significant rejection of our research hypothesis H1 (cf. Sect. 6.3).

  29. 29.

    This is due to the fact that we could not find support for any notable influence of this internal contingency variable on the relationship between regional management autonomy and regional success – contrary to its hypothesized, respective positive effect in our research hypothesis H3a (cf. Sect. 6.3).

  30. 30.

    This result relates to the weakly significant rejection of our research hypothesis H4a (cf. Sect. 6.3).

  31. 31.

    Cf. Sect. 6.2.2.

  32. 32.

    Due to the fact, as outlined earlier, that a MNC’s regional orientation does not have to be considered in its decision about the degree of regional management autonomy, we will not consider this internal contextual variable in this reflection of corporate practices.

  33. 33.

    In our study, several MNCs with home-regional strategies – despite being mainly active in their home region – have completed the answers of our survey for their most successful foreign region (cf. Sect. 6.1).

  34. 34.

    Cf. Sect. 6.2.2.

  35. 35.

    Cf. Sect. 6.2.2.

  36. 36.

    Cf. Sect. 7.1.

  37. 37.

    Cf. Sect. 6.2.2.

  38. 38.

    Cf. Table A.13 and Sect. 6.2.2.

  39. 39.

    Cf. Sect. 7.1.

  40. 40.

    Cf. Sect. 6.2.2.

  41. 41.

    Cf. Table A.13, and Sects. 6.2.2 and 7.1.

  42. 42.

    Here, we utilize the expression “many of our sample firms”, as our explanations above are largely based on a reflection of those current practices of our sample firms that – according to Table A.13 – are based on average values for different elements of their distinct regional strategies. Thus, it would be possible that some of our sample firms already apply this regional success factor in a proper manner.

  43. 43.

    It should be noted, however, that the extent to which a firm’s inter-regional distance has an influence on the delegation of decision-making autonomy to regional management – as outlined in Sects. 6.3 and 7.1 – depends on a MNC’s firm size and/or its regional competition.

  44. 44.

    This finding relates to the highly significant confirmation of our research hypothesis H2 (cf. Sect. 6.3).

  45. 45.

    Cf. Sect. 6.3.

  46. 46.

    This result corresponds to the highly significant confirmation of our research hypothesis H3b (cf. Sect. 6.3).

  47. 47.

    This finding is derived from the results for our research hypothesis H4b, for which we found a highly significant confirmation (cf. Sect. 6.3).

  48. 48.

    In our study – even though operating mainly within their home region – several MNCs with home-regional strategies have completed the answers of our survey for their most successful foreign region (cf. Sect. 6.1).

  49. 49.

    Cf. Sect. 6.2.2.

  50. 50.

    Cf. Sect. 2.3.2.1.

  51. 51.

    Cf. Sect. 6.2.2.

  52. 52.

    Such market-oriented investments are perceived by our bi-regional sample firms as a well-suited means to increase their regional commitment. Cf. Table A.13 and Sect. 6.2.2.

  53. 53.

    Cf. Sect. 6.2.2.

  54. 54.

    Cf. Sects. 2.1.1, 2.1.2.4, and 7.1.

  55. 55.

    Cf. Sect. 6.2.2.

  56. 56.

    Here, we use the term “many of our sample MNCs”, as our explanations are largely based upon a reflection of those current practices of our sample MNCs that – according to Table A.13 – are based on average values for different elements of their distinct regional strategies. Therefore, maybe some our sample companies already apply this regional success factor appropriately.

  57. 57.

    More specifically, the figure of 20,000 data points is derived from dividing the total number of 179,010 data points in our database by the 9 years of our sample period – which results in 19,890 data points in each year (cf. Sect. 5.1.2).

  58. 58.

    Cf. Sect. 5.1.1.

  59. 59.

    Cf. Sect. 6.1.

  60. 60.

    Cf. Sects. 6.1 and 6.2.

  61. 61.

    Cf. Sect. 5.2.3.

  62. 62.

    Cf. Sects. 3.1 and 5.2.3.

  63. 63.

    Cf. Sect. 5.1.2.

  64. 64.

    Cf. Sect. 5.2.2.2.

  65. 65.

    Cf. Sect. 5.2.2.2.

  66. 66.

    Cf. Sects. 5.2.1 and 5.2.3.

  67. 67.

    Cf. Sect. 5.2.2.1.

  68. 68.

    Cf. Chap. 5.

  69. 69.

    Cf. Sect. 3.1.

  70. 70.

    Cf. Sect. 1.2.

  71. 71.

    Cf. Sects. 2.2.7 and 4.1.1.

  72. 72.

    Cf. Sects. 2.2.1, 2.2.8, and 4.1.2.

  73. 73.

    Cf. Sects. 2.3 and 4.1.3.

  74. 74.

    Cf. Sect. 2.4.1.

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  1. University of Erlangen-Nürnberg, Erlangen, Germany

    Patrick Heinecke

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Heinecke, P. (2011). Discussion of Results and Implications. In: Success Factors of Regional Strategies for Multinational Corporations. Contributions to Management Science. Physica-Verlag HD. https://doi.org/10.1007/978-3-7908-2640-1_7

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