IDEAS home Printed from https://ideas.repec.org/a/kap/jbuset/v186y2023i4d10.1007_s10551-023-05433-w.html
   My bibliography  Save this article

Attention-Based Constraint to MNC Coevolution in China's Changing Stakeholder Environment

Author

Listed:
  • Meng Zhao

    (Nanyang Technological University)

  • Xufei Ma

    (Chinese University of Hong Kong)

  • Seung Ho Park

    (Nanyang Technological University)

  • Lingli Luo

    (Zhejiang University)

Abstract

The coevolution process enables organizations to adapt to and influence their external environment. Multinational corporations (MNCs) operating in dynamic foreign markets use this capability to achieve operational sustainability. MNCs in China operate in a changing stakeholder environment that features rising consumer activism and local stakeholders' persistent ethical problems and encounter recurrent consumer crises. Coevolving with this environment requires MNCs to react to consumer challenges and actively influence the environment by improving stakeholders’ ethical behavior. Based on the attention-based view and bounded rationality studies, we propose that the tension between expansion attention and stakeholder attention hinders MNCs from coevolving with this environment. Our analysis of MNC-linked consumer crises in China reveals that MNCs can reduce the consumer crisis risk by maintaining continuous attention to improving the ethical behavior of local employees, suppliers, and dealers. In contrast, MNCs' rapid local expansion weakens this stakeholder's attention, expanding MNCs' crisis risk. Our findings reveal an attention-based constraint to MNCs' coevolution and inform approaches to overcoming this constraint. This paper also extends international attention studies by affirming the significance of matching the focus of attention with environmental change for MNCs’ operational sustainability in foreign markets.

Suggested Citation

  • Meng Zhao & Xufei Ma & Seung Ho Park & Lingli Luo, 2023. "Attention-Based Constraint to MNC Coevolution in China's Changing Stakeholder Environment," Journal of Business Ethics, Springer, vol. 186(4), pages 797-814, September.
    • Handle: RePEc:kap:jbuset:v:186:y:2023:i:4:d:10.1007_s10551-023-05433-w
    DOI: 10.1007/s10551-023-05433-w
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10551-023-05433-w
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10551-023-05433-w?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. Donal Crilly & Pamela Sloan, 2014. "Autonomy or Control? Organizational Architecture and Corporate Attention to Stakeholders," Organization Science, INFORMS, vol. 25(2), pages 339-355, April.
    2. Ans Kolk & Rob van Tulder, 2002. "Child Labor and Multinational Conduct: A Comparison of International Business andStakeholder Codes," Journal of Business Ethics, Springer, vol. 36(3), pages 291-301, March.
    3. Bruce Kogut & Harbir Singh, 1988. "The Effect of National Culture on the Choice of Entry Mode," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 19(3), pages 411-432, September.
    4. John Cantwell & John H Dunning & Sarianna M Lundan, 2010. "An evolutionary approach to understanding international business activity: The co-evolution of MNEs and the institutional environment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(4), pages 567-586, May.
    5. Cyril Bouquet & Allen Morrison & Julian Birkinshaw, 2009. "International attention and multinational enterprise performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(1), pages 108-131, January.
    6. J. Michael Geringer & Stephen Tallman & David M. Olsen, 2000. "Product and international diversification among Japanese multinational firms," Strategic Management Journal, Wiley Blackwell, vol. 21(1), pages 51-80, January.
    7. Arie Y. Lewin & Henk W. Volberda, 1999. "Prolegomena on Coevolution: A Framework for Research on Strategy and New Organizational Forms," Organization Science, INFORMS, vol. 10(5), pages 519-534, October.
    8. Justin Tan, 2009. "Institutional Structure and Firm Social Performance in Transitional Economies: Evidence of Multinational Corporations in China," Journal of Business Ethics, Springer, vol. 86(2), pages 171-189, March.
    9. Arturs Kalnins, 2018. "Multicollinearity: How common factors cause Type 1 errors in multivariate regression," Strategic Management Journal, Wiley Blackwell, vol. 39(8), pages 2362-2385, August.
    10. David Ahlstrom & Jean‐Luc Arregle & Michael A. Hitt & Gongming Qian & Xufei Ma & Dries Faems, 2020. "Managing Technological, Sociopolitical, and Institutional Change in the New Normal," Journal of Management Studies, Wiley Blackwell, vol. 57(3), pages 411-437, May.
    11. Buckley, Peter J. & Chen, Liang & Clegg, L. Jeremy & Voss, Hinrich, 2016. "Experience and FDI Risk-taking: A Microfoundational Reconceptualization," Journal of International Management, Elsevier, vol. 22(2), pages 131-146.
    12. Donal Crilly, 2011. "Predicting stakeholder orientation in the multinational enterprise: A mid-range theory," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 42(5), pages 694-717, June.
    13. Birkinshaw, Julian & Holm, Ulf & Thilenius, Peter & Arvidsson, Niklas, 2000. "Consequences of perception gaps in the headquarters-subsidiary relationship," International Business Review, Elsevier, vol. 9(3), pages 321-344, June.
    14. Chen, Dong & Newburry, William & Park, Seung Ho, 2009. "Improving sustainability: An international evolutionary framework," Journal of International Management, Elsevier, vol. 15(3), pages 317-327, September.
    15. Luo, Lingli & Ma, Xufei & Makino, Shige & Shinkle, George A., 2020. "Cluster status and new venture creation," Journal of Business Venturing, Elsevier, vol. 35(5).
    16. Xufei Ma & Andrew Delios & Chung-Ming Lau, 2013. "Beijing or Shanghai? The strategic location choice of large MNEs’ host-country headquarters in China," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 44(9), pages 953-961, December.
    17. Rodolphe Durand & Anne Jacqueminet, 2015. "Peer conformity, attention, and heterogeneous implementation of practices in MNEs," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 46(8), pages 917-937, October.
    18. Wagner, Hardy, 2004. "Internationalization speed and cost efficiency: evidence from Germany," International Business Review, Elsevier, vol. 13(4), pages 447-463, August.
    19. Farok J. Contractor, 2007. "Is international business good for companies? The evolutionary or multi-stage theory of internationalization vs. the transaction cost perspective," Management International Review, Springer, vol. 47(3), pages 453-475, June.
    20. Thomas Hutzschenreuter & Torben Pedersen & Henk W Volberda, 2007. "The role of path dependency and managerial intentionality: a perspective on international business research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(7), pages 1055-1068, December.
    21. Tina C. Ambos & Julian Birkinshaw, 2010. "Headquarters’ Attention and Its Effect on Subsidiary Performance," Management International Review, Springer, vol. 50(4), pages 449-469, August.
    22. Durand , Rodolphe & Jacqueminet , Anne, 2015. "Peer Conformity, Attention, and Heterogeneous Implementation of Practices in MNEs," HEC Research Papers Series 1098, HEC Paris.
    23. Alan M. Rugman & Wenlong Yuan, 2005. "Subsidiary Autonomous Activities in Multinational Enterprises: A Transaction Cost Perspective," Chapters, in: Analysis of Multinational Strategic Management, chapter 9, pages 120-141, Edward Elgar Publishing.
    24. Ingemar Dierickx & Karel Cool, 1989. "Asset Stock Accumulation and the Sustainability of Competitive Advantage: Reply," Management Science, INFORMS, vol. 35(12), pages 1514-1514, December.
    25. Meng Zhao & Seung Ho Park & Nan Zhou, 2014. "MNC strategy and social adaptation in emerging markets," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 45(7), pages 842-861, September.
    26. S. Trevis Certo & John R. Busenbark & Hyun‐soo Woo & Matthew Semadeni, 2016. "Sample selection bias and Heckman models in strategic management research," Strategic Management Journal, Wiley Blackwell, vol. 37(13), pages 2639-2657, December.
    27. William Ocasio, 1997. "Towards An Attention‐Based View Of The Firm," Strategic Management Journal, Wiley Blackwell, vol. 18(S1), pages 187-206, July.
    28. John Cantwell & Ram Mudambi, 2005. "MNE competence‐creating subsidiary mandates," Strategic Management Journal, Wiley Blackwell, vol. 26(12), pages 1109-1128, December.
    29. Paul C. Godfrey & Craig B. Merrill & Jared M. Hansen, 2009. "The relationship between corporate social responsibility and shareholder value: an empirical test of the risk management hypothesis," Strategic Management Journal, Wiley Blackwell, vol. 30(4), pages 425-445, April.
    30. Meng Zhao & Justin Tan & Seung Park, 2014. "From Voids to Sophistication: Institutional Environment and MNC CSR Crisis in Emerging Markets," Journal of Business Ethics, Springer, vol. 122(4), pages 655-674, July.
    31. Ingemar Dierickx & Karel Cool, 1989. "Asset Stock Accumulation and Sustainability of Competitive Advantage," Management Science, INFORMS, vol. 35(12), pages 1504-1511, December.
    32. Arie Y. Lewin & Chris P. Long & Timothy N. Carroll, 1999. "The Coevolution of New Organizational Forms," Organization Science, INFORMS, vol. 10(5), pages 535-550, October.
    33. Ingmar Björkman & Wilhelm Barner-Rasmussen & Li Li, 2004. "Managing knowledge transfer in MNCs: the impact of headquarters control mechanisms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(5), pages 443-455, September.
    Full references (including those not matched with items on IDEAS)

    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. Klaus E. Meyer & Chengguang Li & Andreas P. J. Schotter, 0. "Managing the MNE subsidiary: Advancing a multi-level and dynamic research agenda," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 0, pages 1-39.
    2. Pisani, Niccolò & Kourula, Arno & Kolk, Ans & Meijer, Renske, 2017. "How global is international CSR research? Insights and recommendations from a systematic review," Journal of World Business, Elsevier, vol. 52(5), pages 591-614.
    3. Klaus E. Meyer & Chengguang Li & Andreas P. J. Schotter, 2020. "Managing the MNE subsidiary: Advancing a multi-level and dynamic research agenda," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(4), pages 538-576, June.
    4. Andrews, Daniel S. & Fainshmidt, Stav & Ambos, Tina & Haensel, Kira, 2022. "The attention-based view and the multinational corporation: Review and research agenda," Journal of World Business, Elsevier, vol. 57(2).
    5. Jingyu Li & Yigang Pan & Yi Yang & Caleb H. Tse, 2022. "Digital platform attention and international sales: An attention-based view," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(8), pages 1817-1835, October.
    6. 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.
    7. Gorgijevski, Alexander N. & Andrews, Daniel S., 2022. "Getting the seal of approval: Pathways to subsidiary initiative acceptance," Journal of International Management, Elsevier, vol. 28(2).
    8. Georgios Batsakis & Vasilis Theoharakis, 2021. "Achieving the Paradox of Concurrent Internationalization Speed: Internationalizing Rapidly in Both Breadth and Depth," Management International Review, Springer, vol. 61(4), pages 429-467, August.
    9. Helen Wei Hu & Jiamin Zhang, 2023. "How do Corporate Social Responsibility and Innovation Co-evolve with Organizational Forms? Evidence from a Transitional Economy," Journal of Business Ethics, Springer, vol. 186(4), pages 815-829, September.
    10. Nigel Driffield & Yong Yang, 2021. "Leveraging the benefits of location decisions into performance:A global view from matched MNEs," Working Papers 011, The Productivity Institute.
    11. Hutzschenreuter, Thomas & Horstkotte, Julian, 2013. "Performance effects of international expansion processes: The moderating role of top management team experiences," International Business Review, Elsevier, vol. 22(1), pages 259-277.
    12. Fortwengel, Johann & Gutierrez Huerter O, Gabriela & Kostova, Tatiana, 2023. "Three decades of research on practice transfer in multinational firms: Past contributions and future opportunities," Journal of World Business, Elsevier, vol. 58(3).
    13. Martin Johanson & Igor Kalinic, 2016. "Acceleration and Deceleration in the Internationalization Process of the Firm," Management International Review, Springer, vol. 56(6), pages 827-847, December.
    14. Sarianna M. Lundan & Jiatao Li, 2019. "Adjusting to and learning from institutional diversity: Toward a capability-building perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(1), pages 36-47, February.
    15. Thomas Hutzschenreuter & Fabian Guenther, 2009. "Complexity as a constraint on firm expansion within and across industries," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 30(6), pages 373-392.
    16. Angulo-Ruiz, Fernando & Pergelova, Albena & Dana, Leo Paul, 2020. "The internationalization of social hybrid firms," Journal of Business Research, Elsevier, vol. 113(C), pages 266-278.
    17. Rabbiosi, Larissa & Santangelo, Grazia D., 2013. "Parent company benefits from reverse knowledge transfer: The role of the liability of newness in MNEs," Journal of World Business, Elsevier, vol. 48(1), pages 160-170.
    18. Nan Zhou & Heli Wang, 0. "Foreign subsidiary CSR as a buffer against parent firm reputation risk," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 0, pages 1-27.
    19. Sidney G. Winter & Gabriel Szulanski, 2001. "Replication as Strategy," Organization Science, INFORMS, vol. 12(6), pages 730-743, December.
    20. Alexander Mohr & Georgios Batsakis, 2017. "Internationalization Speed and Firm Performance: A Study of the Market-Seeking Expansion of Retail MNEs," Management International Review, Springer, vol. 57(2), pages 153-177, April.

    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:kap:jbuset:v:186:y:2023:i:4:d:10.1007_s10551-023-05433-w. 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.