The New Frontiers of International Business

In this chapter, we survey the current state of international business (IB) theorizing and propose a future research agenda that takes into account both the “bright” and “dark” sides of international business strategy. We argue that, in recent years, IB scholarship has at times been too focused on opportunities presented by contemporary business phenomena, to the neglect of potential challenges, and sometimes vice versa. We identify ten contemporary phenomena that represent “grand challenges” in IB research and practice: (1) digital globalization; (2) headquarters-subsidiary relationships; (3) cultural diversity and global teams; (4) new forms of nationalism; (5) external disruptions and risk mitigation in global value chains; (6) the role of boards in firm governance; (7) environmental, social, and governance expectations and the rise of private equity; (8) global innovation ecosystem and institutional fracture; (9) contemporary CSR expectations; and (10) the role of the MNE in climate change mitigation. For each theme, we highlight both the bright and dark sides, thereby advocating for a “full canvas” approach to IB scholarship.

This study presents an overview of emerging themes in the international business research. We analyze the special issues in two leading IB journals between 2015 and 2021—Journal of International Business Studies and Journal of World Business—to identify the themes that journal editors and thought leaders consider as important areas for future scholarship. Based on the content analysis of the special issue calls, we identify the research questions posed by the SI editors, the main theoretical frameworks used, and the thematic and geographic focus in these special issues. Our analysis identifies new topics such as sustainability, global value chains, migration, digitization, and innovation while also suggesting revival of topics such as globalization and regionalization in the light of a surge in anti-globalization trends.

This chapter offers an insider’s view of the “big” questions that need to be explored by anybody interested in doing work in Sub-Saharan Africa (SSA). In addition to our own research, we have also worked extensively with MNEs, governmental agencies, and African scholars for more than two decades. This has led to our insights and conclusions on the most important questions that international business (IB) scholars should explore in Sub-Saharan Africa.

We offer broad suggestions, and there are many specific questions that can be asked under each of our themes. This is deliberate: To understand Sub-Saharan Africa requires an understanding of the diversity of the region and its recent historical past, both of which continue to shape institutions and the business environment and will do so for the foreseeable future. In this way, we suggest research themes that assist MNEs, stakeholders, and scholars to find relevant and practical approaches to problems such as the unique institutions and instability in SSA, understanding how the legacies of slavery and colonialism still influence the way of doing business in Africa and how MNEs subsidiaries interact with the complexity of stakeholders in the countries in SSA. The chapter begins by providing a necessary overview of the SSA region and how recent histories of slavery and colonialism have influenced FDI and IB in the region. We then introduce four research themes and suggest research questions that we feel scholars interested in SSA may want to engage with.

Central Asia has largely been ignored by international business (IB) research. Using Kazakhstan, a stable, relatively prosperous country, as a lens into the region, we argue that the Central Asian context, comprising Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, and Turkmenistan, holds promise for advancing international business (IB) scholarship. We present three cases of Kazakh firms that have attempted to internationalize their operations. We find that classical motives for internationalization, such as market-seeking, apply to the internationalization patterns of these firms. Furthermore, we argue that Central Asia presents four broad opportunities for advancing IB research. First, Central Asia is fertile ground for supranational studies of how MNEs evaluate, anticipate, and respond to exogenous geopolitical risk affecting their business operations, a key gap in the IB literature. Second, due to Central Asia’s importance to the security, economic, and geopolitical interests of China, Russia, and the United States, MNEs’ nonmarket strategies (NMS), specifically bargaining with their home country governments, are likely to be salient in overall strategy. Studying MNEs investing in Central Asia will enable refinement of scholarly understanding of MNE bargaining models. Third, the Central Asian context challenges the dominant assumption that state-owned enterprises (SOEs) respond to interests of unitary domestic political actors as they internationalize since informal ethnic alliances, which pre-date and co-exist with modern state apparatus, may be a potent influence on the direction, level, and location of foreign direct investment (FDI). Finally, Central Asia could allow scholars to fruitfully examine whether developed country MNEs (DMNEs) outperform emerging market MNEs (EMNEs) when competing in a third (smaller) emerging market.

The MENA region is strategic from an IB perspective since it

I will briefly deconstruct the perception of the Middle East North Africa (MENA) region. Then I will present new areas of research relevant to international business in the region but not captured in current IB publications. Finally, I will offer recommendations to remedy the situation by adding more promising topics to the IB research agenda.

This chapter discusses relevance issues of IB research. First, we outline that the meaning of relevance depends on the perspective a person or group being interested in or being part of IB research takes and that the field’s social structure and its social processes heavily influence the predominant meaning of relevance. Then, we present some examples indicating that IB research’s practical relevance has abated over the years. While earlier IB studies were heavily focused on decisions practitioners had to make, during the last decades, this link became much weaker. Further, we debate the fact that many IB studies present results which almost never got confirmed in subsequent studies, what reduces the reliability of IB research. And finally, we argue that the IB community is still quite closed. Potential approaches to overcome these problems are discussed.

Despite a large academic interest in the topic of international business policy in recent years, there remains substantial ambiguity about its meaning. In this chapter, we define international business policy as the mix of actions that a public authority takes to shape international business with the goal of addressing societal challenges. We use this definition to delineate the field of international business policy and to demonstrate its distinctive characteristics. We discuss the central role that traditional international business research can play in the development of new studies on international business policy.

Digitalization is not new, and we have been moving from analog to digital applications and systems for many decades now. However the pace of change, the explosion of data with its infinite replicability, and the new business models and competitors that are now emerging means we are at a very different juncture, one that will have a profound impact on consumers, businesses, and society at large.

Digital and platform businesses, such as Apple, Facebook, Amazon, and the list goes on are now formidable economic players who can influence the competitive landscape, are gatekeepers in terms of what consumers can and cannot access with some having sufficient clout to potentially influence the outcome of elections.

We are in the midst of real digital disruption. While some of these disruptions can be positive to economies and societies, some may well have an adverse impact and will need a holistic whole of government policy response. The same will hold true of organizations; those that successfully adapt and embrace digitalization and digital technologies may prosper, and those that do not may well disappear.

In this chapter, we explore what digitalization means, what digital technologies are emerging, how they are converging, what impact this may have, and how organizations must respond.

We examine the role of technology in the conduct of international business. After providing theoretical background, we examine the most important technologies and technological trends in the current decade, including big data, blockchain, 5G, the internet of things, artificial intelligence, robotics, additive manufacturing, and digital platforms. We discuss the implications of such trends for organizational activities and operations around the world. Emergent technologies are improving coordination and knowledge-sharing across network partners, as well as enhancing performance and reducing costs in manufacturing, distribution, logistics, and general value chain activities of MNEs. Such technologies are shifting the pattern of global manufacturing. Current technological trends hold implications for traditional views on the global production ecosystem.

This explorative study, which complements research on manufacturing, supplier, and governance flexibility, identifies and aims to fill a gap in extant research related to firms’ location flexibility in global supply chains. In an increasingly dynamic and globally integrated economic environment, firms are compelled to develop the capacity to swiftly relocate tasks and resources in order to reduce the impact of location-specific risks and to benefit from location opportunities as they emerge. From this perspective, the study outlines basic modes for developing location flexibility in order to sustain competitiveness in global sourcing and discusses the managerial tradeoffs between cost efficiency and imitability associated with these modes. We also touch upon various tradeoff-shifting mechanisms and propose principles for combining location-flexibility modes in a balanced way.

Research in international business emphasizes the importance of market and non-market risks such as economic/financial and political/institutional risks in firm internationalization. While political and institutional risks are important non-market factors affecting location and ownership decisions and the performance of multinational enterprises (MNEs), there are growing concerns about emerging non-market risks such as natural disasters, technological disasters, political conflicts, and social conflicts. The challenges facing MNEs in dealing with these emerging non-market risks are likely to grow. To understand these emerging non-market risks better, this chapter explains their characteristics and factors determining MNE awareness of, preparedness for, and response to those risks. The chapter concludes with recommendations for future research agendas.

While a great deal is written about the challenges facing large multinational enterprises (MNEs) in today’s fast-changing world, there is less said about the how resilient they are to external threats. For example, of the Fortune 500 companies in 2020, only 17 did not exist 25 years ago—the other 487 have been around a long time and have adapted very effectively. In this paper I argue that the size and diversity of MNEs, coupled with their embeddedness in the institutions of capitalism, makes them “bastions of stability” in a sea of change. I discuss some of the ways they have adapted, and why this level of stability is largely a good thing.

In this chapter, we explore the role of multinational enterprises (MNEs) in the circular economy (CE). MNEs play a key role in reshaping business systems as they orchestrate a significant part of value activities in various locations across the globe. We argue that MNEs’ adoption of CE opportunities differs due to corporate and contextual influences. In particular, we suggest that MNEs’ corporate strategies regarding value activity integration, product diversification, and location choices influence how they approach CE. Industry and location factors also play roles in facilitating or impeding CE advancement. Regarding the international business ramifications of CE, we discuss the impact of MNEs’ geographical scope in terms of a local, multi-local/regional, or global focus and show how formal and informal institutional contexts influence the design and implementation of CE. Our analysis demonstrates that established conceptualizations in the international business field of MNEs and the business systems in which they operate are useful for understanding CE, but further international business research is needed about how MNEs can help implement the transition towards CE.

In this study, we discuss the multinational enterprises’ (MNEs) Corporate Social Responsibility (CSR) engagement from the perspective of the Sustainable Development Goals (SDGs) and the role of culture in these activities. As societal expectations of corporate responsibilities are largely embedded in a particular cultural context, we explore how MNEs may not easily implement a global CSR strategy in different cultural contexts. Furthermore, the characteristics of some cultural contexts are more conducive for MNEs’ SDG-supporting activities, and thus MNEs are more likely to pursue SDG-driven initiatives in these cultures. Based on our literature review, we propose a conceptual model that considers the influence of culture within the host country along with other contingencies while exploring how MNEs’ CSR activities may or may not help attain SDGs in host countries.

This chapter discusses multinational enterprises’ (MNEs) sustainability practices and how they report them to engage with stakeholders worldwide. Taking an institutional theory perspective, we explore how achieving the United Nations Sustainable Development Goals is becoming part of formalized business standards issued by institutions globally. However, the requirements on businesses can vary from one country to another, and MNEs must ensure that they meet their obligations and prepare the reports according to globally accepted standards (such as the Global Reporting Initiative (GRI)). Furthermore, MNEs have the added challenge of maintaining and enforcing standards in developing countries, where the expectations for sustainability impact of actions is not well understood, and MNEs have to adjust accordingly. Using examples of well-known incidents involving MNEs in developing economies, we identify the key events, what the MNEs learned from them, and how they have adjusted their practices and enhanced their reporting activities. Finally, the study provides an agenda for future research.

Studies on the effects of foreign direct investment (FDI) on host countries have largely focused on the economic consequences of FDI. For example, the FDI spillover stream of research highlights the effect of FDI on the economic productivity of host country firms. In contrast, the broader effect of FDI on social and human outcomes, such as on human development, has received comparatively less attention. Human development comprises the education, health, and income opportunities available to people in a country. It is fundamental to human well-being and constitutes the bedrock of freedom and opportunity for any human population. We explore the positive and negative human development consequences of FDI and present an inverted U-shaped conceptualization of the “net effect” of FDI on human development. We also argue that this effect will be stronger in host countries with weak institutions. We complement these conceptual ideas with some empirical observations that are consistent with our conceptualization.

Migration research is commonly the domain of disciplines outside of international business (IB), such as economics, psychology, sociology, and political science. We argue that IB’s limited contributions to migration research so far may be partly due to a limited metaphor for understanding it, which we attempt to update. Akin to the small, unidirectional flow of rivers, IB’s foundational migration-related research was largely about the home-to-host flow of expatriates. Instead, we propose that tidal flows more accurately represent migration with respect to being both multidirectional and larger in scale. This inclusive conceptualization of migrants—referring to anyone who moves across international borders, including refugees, economic immigrants, temporary foreign workers, and expatriates—ought to be central to both the research and practice of IB. We illustrate how the tidal flows metaphor generates new research questions with respect to international flows of social ties, capital, innovation, and knowledge.

The chapter “IEDC and CEEMAN: A Historical Response to the Societal Role of Business Schools” contains a brief case description of two institutions, founded with a vision to put societal role in the center of business schools, businesses, and business leaders. It offers an example of how a particular institution implements social responsibility and research and spreads ideas of social responsibility in Central and Eastern Europe and beyond. The chapter also offers suggestions and recommendations for the achievement of social responsibility, making it an integral element of the missions of business schools.