Philosophy of Science and Meta-Knowledge in International Business and Management: Volume 26

Timothy M. Devinney is a Professor of Strategy at the University of Technology, Sydney. He has published seven books and more than 80 articles in leading journals, including Academy of Management Review, Strategic Management Journal, Organization Science, Journal of Management, Journal of International Business Studies, Journal of Business, Journal of Business Ethics, MIT Sloan Management Review and California Management Review. In 2008 he was the first recipient in management of an Alexander von Humboldt Research Award and was Rockefeller Foundation Bellagio Fellow. He is a Fellow of the Academy of International Business, an International Fellow under the auspices of the AIM Initiative in the UK and a Fellow of ANZAM (Australia New Zealand Academy of Management). He served as Chair of the International Management Division of the Academy of Management. He is Co-Editor of Academy of Management Perspectives and the head of the International Business & Management Network of SSRN. He is on the editorial board of more than 10 of the leading international journals.

The first part of Volume 26 is dedicated to our annual feature from a leading scholar. The 2012 Recipient of the Booz & Co./Strategy + Business Eminent Scholar in International Management Award was Professor Jean-François Hennart of Tilburg University. Professor Hennart was honoured by this Award by the International Management Division of the Academy of Management at its annual conference in Boston, Massachusetts. His acceptance speech discusses the role of his work on transaction cost economics on international business and organizational structure. The speech is followed by the commentaries of Alain Verbeke and Jenny Hillemann of the University of Calgary and Arjen Slangen of Tilburg University.

The Booz & Co./strategy+business Eminent Scholar in International Management is an annual award given by the International Management Division of the Academy of Management and Sponsored by Booz & Co./strategy+business.

In this chapter I would like to recall how I got started on my research on the multinational enterprise (MNE) and outline how my thinking on this important economic institution has evolved through the years.11I thank Sondra Grace of Gracefully Put for editing this manuscript.

We discuss Professor Jean-François Hennart’s key contributions to international strategic management theory, with a special focus on his integrative, 2009 Journal of International Business Studies article, ‘Down with MNE-centric theories! Market entry and expansion as the bundling of MNE and local assets’. In Hennart’s (2009) model, complementary assets co-determine the MNE’s initial entry mode choice and the subsequent evolution of the MNE foreign operations’ governance. Hennart (2009) describes this perspective on MNE governance as one based on asset bundling. We focus on the paper’s conceptual insights and discuss how Hennart’s model of foreign market entry informs managerial practice in the realm of international strategy.

In this chapter I will elaborate on Professor Jean-François Hennart’s impressive career in honour of him receiving the 2012 Booz & Co./Strategy+Business Eminent Scholar in International Management award. I will first present a sevenfold typology of his publications, classifying them into (1) conceptual studies on why multinational enterprises (MNEs) exist and use specific entry modes, (2) industry-focused case studies, (3) statistical studies of foreign entries, (4) review studies of entry mode choice, (5) country-level studies of international business activity, (6) conceptual studies scrutinizing multinationality-performance research, and (7) studies of emerging-market MNEs. I will then point out some of his qualities that in my view have contributed to his scholarly success. I will also describe the main academic and practical contributions of his work, and finish with a short conclusion.

If we look to the uniqueness of IB/IM scholarship and ask where it stands separate from standard and traditional management and business research we really have only two differentiating, but exceedingly important, factors that justify discussing IB/IM as a separate research paradigm (See, e.g., Devinney, Pedersen, & Tihanyi, 2010).

International business (IB) research is traditionally heavily reliant on economics. In this chapter, we review selected debates in the philosophy of science of economics and consider their relevance for economics-based IB research, given important characteristics of IB such as phenomenon-orientedness, concern with data and facts and limited use of formal mathematical models and unrealistic assumptions in the analysis. We argue that, like in the case of mainstream economics, Lakatos’ concept of scientific research programmes (SRPs) is more useful for understanding the philosophy of science of economics-based IB than Popper’s falsificationism. Following this, we discuss characteristics of two possible IB SRPs, internalization theory and Dunning’s Ownership-Location-Internalization paradigm. Finally, we discuss the approach to modelling in IB, finding it to reflect a relative commitment to scientific realism.

International business theory leans heavily on neoclassical economics, ignoring its unrealistic assumptions and the many changes in the environment. The chapter calls for a revision of the theory to a contingency theory. The major contingent elements analysed are the political system, business–government and NGOs relations, industries, regimes, ownership patterns, the degree of reliance on ethical behaviour, the institutional environment and social norms.

This chapter reports on a rapidly growing trend in data analysis – analytic comparisons between baseline models and explanatory models. Baseline models estimate values for the dependent variable in the absence of hypothesized causal effects. Thus, the baseline models discussed in this chapter differ from the baseline models commonly used in sequential regression analyses.Baseline modelling entails iteration: (1) Researchers develop baseline models to capture key patterns in the empirical data that are independent of the hypothesized effects. (2) They compare these patterns with the patterns implied by their explanatory models. (3) They use the derived insights to improve their explanatory models. (4) They iterate by comparing their improved explanatory models with modified baseline models.The chapter draws on methodological literature in economics, applied psychology, and the philosophy of science to point out fundamental features of baseline modelling. Examples come from research in international business and management, emerging market economies and developing countries.Baseline modelling offers substantial advantages for theory development. Although analytic comparisons with baseline models originated in some research fields as early as the 1960s, they have not been widely discussed or applied in international management. Baseline modelling takes a more inductive and iterative approach to modelling and theory development. Because baseline modelling holds substantial potential, international-management scholars should explore its opportunities for advancing scientific progress.

Setting the multinational enterprise (MNE) apart on the basis of a weakly specified idea of foreignness may impede progress in international business (IB). The discipline lacks a paradigm to assimilate the idea of foreignness as an incident of internationality, a global condition describing the political context within which the MNE functions and which confers uniqueness on that institution. However, a plausible re-imagining of the MNE is possible and useful, and here a candidate for such an ontological shift is proffered. Rather than a firm struggling in one or more foreign contexts, the MNE is reconstructed as a foreigner contending with the responsibilities of a firm. The proposed re-imagining of the MNE is experimentally substituted for the received ontology in different IB research contexts. It transpires that this ontological revision maintains intelligibility in those contexts while usefully exposing new directions in which to pursue knowledge. In consequence of re-imagining the MNE, that institution may be situated more precisely amid the international system’s primal constituents, and links may be more effectively established with other bodies of research addressing the functioning of the international political economic system.

This chapter introduces and discusses the concept of turning points from the ontological, epistemological and methodological perspectives, applying it to the de-internationalization phenomenon to exemplify its deployment. As a concept that adds to the variance and complexity of the international business and management field, the turning point is seen as a valuable unit of analysis within the research field. It is expected that this chapter will encourage a dynamic scholarly conversation about the concept of turning point and how it can aid international business researchers in the development of a generalizable international business and management theory.

Meta-analysis is one of a number of scientific approaches for accumulating knowledge in a research domain. It provides a quantitative synthesis of a literature using various statistical instruments. This chapter introduces the main points underlying meta-analytic methodology by discussing its merits when compared to a conventional literature review and covers the fundamental approaches used when conducting a meta-analysis. Criticism of meta-analysis is briefly discussed in the context of the major issues facing meta-analysis in international business.

Over the past decade, international business and international management researchers have utilized meta-analytic approaches to synthesizing findings in the extant literature. This chapter reviews the studies published in the top five international business and management journals from 2004 to 2012. The review investigates major problems in the published meta-analyses by evaluating their overall analyses as well as the approaches utilized. The findings of this review reveal differences among the journals and improvements in the approaches applied in recent years. The chapter ends by discussing why and how international business and management researchers need to focus more on methodological fundamentals in their applications of meta-analysis.

In this chapter we examine the extant research in international business (IB) by conducting a bibliometric study of the articles published in three leading IB journals – International Business Review, Journal of International Business Studies and Management International Review, over their entire track record of publication available in the ISI – Institute for Scientific Information. In longitudinal analyses of citation data we ascertain the most relevant works of the IB field. We also identify intellectual interconnectedness in co-citation networks of the research published in each journal. A second-tier analysis delves into publication patterns of those articles that are not at the top citation listings. Our results permit us better understand and depict the extant IB research and, to some extent, its evolution thus far.

We examine patterns and changes in the use of various theoretical perspectives, and in the approach to testing individual or combinations of theories, within the field of international strategy that constitutes one of the major areas of international business (IB) research. We conduct a systematic bibliometric analysis of 22 years’ worth of empirical papers. We generate tabular evidence and introduce the use of network graphing methodology to report and analyse the co-occurrence of theories. We find a changing distribution of theoretical perspectives, indicative of a re-centring of the field around strategic and organizational perspectives. This is accompanied by use of more complex approaches to testing contingencies of the sort likely to result from these theory combinations, especially across firm, interfirm and institutional levels of analysis. We thus generate and discuss critically a quantitative and graphical overview of the progress of international strategy research. This creates unique and comprehensive insights into the development of theory and empirics in IB. We draw lessons for academics and report practical recommendations for the conduct of research. Overall, our study sheds new light on the disciplinary nature of IB research and its interplay with related fields and disciplines. It explicates patterns of theory accretion alongside patterns of theory testing and refinement. It provides a comprehensive map of the field of IB strategy as it evolved since 1990 and illuminates its future.

Rather than add another review of the numerous scholarly publications of success factors and performance of International Joint Ventures (IJVs) this study offers an overview of the extant research based on the findings, criticisms and recommendations of previous reviews. Scholars and practitioners interested in the research field may profit from our contribution in several ways. First, we provide a comprehensive overview of the state-of-the-art of the field in a table listing the characteristics of the most relevant review studies published in leading management journals. These special reviews offer more detailed analyses of the studies under investigation, different frameworks and proposals for future research directions. Finally, we summarize the criticisms and recommendations of previous researchers that have been ignored and discuss why many of those recommendations have gone unheeded and how future research may benefit from more systematic development of this field.

In this chapter, we embrace the recent phenomenon of early internationalizing firms with the goal of understanding these firms in light of decades of research on multinational firms, which has long stressed liabilities of foreignness. It is often implicitly assumed that the only way to reduce liabilities of foreignness is by doing business in foreign markets and learning about the local business environment. However, in this chapter, we focus on several distinctive antecedent firm characteristics that have been shown to facilitate early international expansion by firms, but which are not commonly considered in the international business literature. We perform a systematic review of the literature on early internationalizing firms (following David & Han, 2004), based on the seminal work of Oviatt and McDougall (1994) to guide our analysis of early internationalizing firms and to identify important ways in which these firms differ from multinational firms. We argue that long-standing arguments about the impact of liabilities of foreignness on firm foreign expansion apply to newly internationalizing firms, but that these liabilities are reduced by the experiences and knowledge of the founders and top managers in these firms acquired prior to the inception of these firms.

In international business international technology transfer is an important part. It involves several modes. Product or process technologies can be transferred to a host country within a multinational company. Other modes include sale or licensing of technology. In these cases a company other than the technology owner takes technology to a host country. International technology transfer involves many matters such as transfer mode, government trade policies, risk of losing technology and influence of industry associations. In this chapter I report a longitudinal case study (1950–1980) of the diffusion of new manufacturing technology, suspension preheating, within the U.S. cement industry. Here I employ concepts from the literature on international technology transfer. Based on this analysis I identify what impact international technology transfer literature has on dominant design theory. Here I address in more detail the era of ferment of the most recent technology adoption (that is innovation).The U.S. cement industry was included in the original development of the dominant design model. However, technology adoption or innovation was defined as the first commercial introduction of a product made by a new manufacturing technology or process in the United States. This domestic definition of technology adoption neglects all aspects of international technology transfer mentioned earlier.While comparing the results of these two studies of the U.S. cement industry I found differences in the adoption time of technology and inconsistence in the introduction of the technology in the United States. I found that the length of the era of ferment was 29 years – contrary to the seven years reported in the development of dominant design model. This time difference has naturally impacted on the analysis of diffusion. It seems that the international business and international technology transfer literature have impacted on the dominant design model and theory.

This chapter presents a review of the state of the art on the topic of knowledge transfer following post-merger integration (PMI) in international mergers and acquisitions (M&A) and identifies points of agreement and disagreement, recognizes underexplored areas and provides suggestions on how they could be explored in future studies. The chapter points to the limited amount of literature that describes knowledge transfer following international acquisitions, while highlighting it as an emerging field of research. The knowledge transfer literature mainly refers to innovation and innovation capabilities, while areas such as marketing and customer knowledge are vitally absent in the literature. In any international acquisition, such knowledge transfer would be of fundamental importance, given the acquisition motive to reach new markets or customers. Two case studies on the transfer of knowledge about customers following international acquisitions are provided. The case illustrations point to a focus on knowledge transfer on strategic levels in the post-merger integration following international acquisitions, while the operational sales forces’ transfer of knowledge is largely disregarded in practice. Since much of the tacit knowledge about customers is handled on that level, it needs to be recognized and developed. The chapter indicates that raising the awareness of the transfer of knowledge about customers following international acquisitions is important from a practitioner’s as well as a research point of view.

Yair Aharoni is a Professor Emeritus at the Faculty of Management, Tel-Aviv University. He received his DBA from the Harvard University Graduate School of Business Administration. His doctoral dissertation – The Foreign Investment Decision Process – was published in a book version and was translated to Spanish and Japanese. He is a Fellow of the International Academy of Management and the Academy of International Business. During his long and distinguished academic career, Aharoni was the Daniel and Grace Ross Professor of International Business and later the Issachar Haimovic Professor of Business Policy – both at Tel Aviv University. He was the Thomas Henry Caroll Ford Foundation Visiting Professor of Business Administration, Harvard Graduate School of Business Administration (1978–1979). He was also the J. Paul Stitch Visiting Professor of International Business at Duke University (1987–1995) and the director of CIBER (Center of International Business Education and Research) (1992–1995). He published several dozens books and monographs in Hebrew and in English, more than 100 papers and chapters in books and more than 150 cases. For his academic achievements he was awarded both Landau Prize (2007) and Israel Prize in management science (2010).