JOINT Fund series: Developing Nations and the leadership of Multinational companies (MNCs)
In March, the first 10 projects funded under Loughborough University London’s innovative JOINT Fund came together to share their progress. Each week we will be posting this year’s projects on our blog. The first blog is Dr Philipp Kern’s who is investigating management challenges of Multinational companies (MNCs) emerging from developing nations.
Multinational companies (MNCs) impact the communities they operate in by bringing practices honed in their home country to their host nations. Whilst this is a fairly well understood phenomenon regarding MNCs from advanced economies, we know very little about it in the context of MNCs from emerging economies such as China. Our research project aims to investigate how various motivations to move into Europe—such as expanding markets, accessing resources, or gaining knowledge—relate to the way Chinese MNCs run their European operations, the challenges they face in operating there, and the headquarter-subsidiary relationship. We therefore seek to partner with Chinese multinational companies operating in the UK and/or wider Europe and interview subsidiary managers as well as those at headquarters. The work enabled by the JOINT fund is a pilot study that will inform a larger project focused on MNCs from emerging markets, which will bring together international scholars in a network led by the Institute for International Management.
So far, we have been focusing our efforts on two issues: First, we are refining our research approach and developing our lines of enquiry. We are drawing on lessons learnt and insights from the ‘Globalizing Actors in Multinational Companies’ project, which has some parallels with this work, as well as taking on board current developments with Huawei, which have increased public attention to the activities of Chinese MNCs in Europe. Second, we are pursuing a number of leads to secure access to suitable firms. On the Loughborough side, we have contacted the China-Britain Business Council, who are reaching out to their members firms to generate contacts. Through this channel, we are currently in discussions with a Chinese telecom firm and hope to have further contacts come through soon. We are also working with the Loughborough alumni office to identify potentially suitable contacts. Our project partner at Renmin University, Wei Huang, is also in active discussions with Chinese firms for access, including Geely, Huawei, and others. At the end of last year, Geely looked to be committed to participating in our research. Unfortunately, they have since backtracked, making their involvement much less certain. Taken together, have a number of promising leads, but are finding it more challenging than anticipated to secure access to suitable firms. What we hear from Wei Huang as well as other researchers working on Chinese companies is that recent events concerning Huawei—the arrest of the founder’s daughter in Canada and national security concerns over 5G networking equipment—have put Chinese firms on the defensive, making them reluctant to engage with external researchers. While we keep pursuing access to Chinese MNCs, we have also started reaching out to contacts in MNCs from other emerging markets, including Russia and India. Although our JOINT application was focused on Chinese firms—and Geely in particular—this broader remit is fully consistent with our research aims and indeed with the larger project this is pilot work for. We therefore hope to make a virtue of these challenges and engage with a wider set of firms than originally anticipated.