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Practice Standardization in Cross-Border Activities of Multinational Corporations: A Resource Dependence Perspective

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Abstract

This study examines the relationship between power dependence and practice standardization in the context of cross-border alliances. Existing studies have typically assumed that standardization or adaptation is a unilateral decision made by multinational corporations (MNCs) but ignored the influence of the relative power of multinational and local partners under conditions of government influence. Drawing on resource dependence theory (RDT), we argue that the power imbalance between multinational and local firms may shape the standardization of practices in their established alliances. The results, based on a sample of 243 Fortune 500 US companies, indicate that when the level of government influence is high, the positive effect of MNCs’ resource importance on practice standardization diminishes and the negative effect of local firms’ alternative resources becomes stronger. These findings suggest that RDT has important implications for understanding standardization versus adaptation in cross-border alliances.

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Acknowledgments

We appreciates the support from National Natural Science Foundation of China (Project Number: 71332007) and Research Project of Ministry of Education of China (Project Number: 13JZD017).

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Authors and Affiliations

  1. Naveen Jindal School of Management, University of Texas at Dallas, Richardson, USA

    Xia Jun

  2. Goodman School of Business, Brock University, St. Catharines, Canada

    Marshall S. Jiang

  3. Moore School of Business, University of South Carolina, Columbia, USA

    Sali Li

  4. Schulich School of Business, York University, Toronto, Canada

    Preet S. Aulakh

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  1. Xia Jun
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  2. Marshall S. Jiang
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Correspondence to Marshall S. Jiang.

Appendix

Appendix

Appendix 1 Location and number of alliances

Argentina

2

Jordan

9

Austria

9

Korea

7

Australia

11

Malaysia

1

Belgium

7

Mexico

10

Brazil

7

Netherlands

3

Canada

3

New Zealand

1

Chile

3

Peru

2

China

7

Philippines

1

Columbia

5

Portugal

6

Czech

3

Puerto Rico

1

Finland

1

Russia

2

France

9

Singapore

5

Germany

11

South Africa

3

Greece

2

Spain

3

Hungary

4

Switzerland

1

India

8

Taiwan

3

Indonesia

4

Thailand

1

Israel

2

Turkey

3

Italy

8

UK

9

Japan

60

Venezuela

6

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Jun, X., Jiang, M.S., Li, S. et al. Practice Standardization in Cross-Border Activities of Multinational Corporations: A Resource Dependence Perspective. Manag Int Rev 54, 707–734 (2014). https://doi.org/10.1007/s11575-014-0218-3

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