Turning the Spotlight on Service Multinationals: New Theoretical Insights and Empirical Evidence

Turning the Spotlight on Service Multinationals: New Theoretical Insights and Empirical Evidence One of the most noteworthy aspects of today’s international business (IB) landscape is the growing importance of service multinationals (SMNCs). As the services sector expands, the prominence of SMNCs in producing and delivering value-creating services across national borders continues to grow more than ever before. Data from UNCTAD show that between 1990-1992 and 2008-2010 global inward FDI flow in services grew almost 843% (from 95,772 to 903,256 million U.S dollars) compared to 570% in manufacturing (52,181 to 349,720 million U.S. dollars) during the same time-period. Success stories of SMNCs from different parts of the world, both developed and developing economies, have caught the attention of the IB community. Yet SMNC research has not kept pace with the unprecedented growth of services and SMNCs over the years. While Li and Guisinger (1992: 691) noted in 1992 that “results of our study suggest that service FDI can be explained by a rich variety of theories,” Capar and Kotabe (2003) lamented that “the service sector has been explored to a limited extent so far, although service firms have contributed to the majority of the job growth in the industrialized nations.” The state of SMNC research was summed up by Kundu and Merchant (2008), who observed that the “the challenge lies ahead in the development of theories of service multinational enterprise to explain the intricacies of service firms.” The aim of this special issue is to encourage research that develops new theory, provides robust empirical evidence, and promotes novel practitioner insights on SMNCs.

The importance and contribution of services and SMNCs in IB caught the attention of scholars almost a quarter of a century ago (Boddewyn et al., 1986, Dunning, 1989, Erramilli, 1990). Over time, researchers have attempted to draw on various theories, traditionally used for the manufacturing sector, to explain competitiveness and internationalization of SMNCs. But compared to studies in the manufacturing sector, empirical examination in the services sector has continued to remain grossly inadequate. We are yet to fully understand how SMNCs differ from their manufacturing counterparts, along crucial business dimensions such as birth, growth, evolution, performance and sustenance. The scholarly community has continued to remain divided on whether business theories that apply to manufacturing MNCs aptly suit the context of SMNCs. Meanwhile, the IB landscape has gradually changed and factors such as greater connectivity across nations, firms and individuals; global economic meltdown; increasing natural calamities, global terrorism and stakeholder power; increasing global participation of emerging markets, etc. have become powerful determinants of firm performance and competitive advantage. While paucity of research on SMNCs constrains valuable knowledge generation, it represents useful opportunity for IB scholars to develop new, insightful theories and empirical evidence.

Against this backdrop, this special issue solicits manuscripts that advance our understanding of SMNC dynamics in the context of today’s IB environment. The following is an illustrative list of research themes and questions that contributors might consider:

• How do SMNCs decide on location choice and handle the associated organizational and managerial issues (Kundu & Contractor, 1999)?
• How do SMNCs manage the antecedents, processes and outcomes of corporate diversification, internationalization and multi-nationality?
• Does distance (psychic, organizational, geographical, etc.) matter in the growth, internationalization, competitiveness and performance of SMNCs (Berry et al., 2010)?
• How do SMNCs organize and manage various resources and capabilities (Lahiri & Kedia, 2009) to efficiently formulate and implement localization, regional or global strategies?
• How do SMNCs’ growth, diversification and performance differ across industry domains within the services sector?
• How do SMNCs plan, execute and manage foreign market entry mode strategies?
• How do SMNCs organize and manage their human resources?
• How does organizational and strategic behavior of SMNCs differ across developed and emerging markets? (Aulakh, 2007).

Submission instructions

The deadline for manuscript submission is February 28, 2014.  Manuscripts should be prepared in accordance with Journal of International Management’s Style Guide for Authors: http://www.elsevier.com/journals/journal-of-international-management/1075-4253/guide-for-authors. Intending contributors relatively new to JIM may find the work of Kothari and Lahiri (2012) useful.

Manuscripts should be electronically submitted to: http://ees.elsevier.com/intman. To ensure that all manuscripts are correctly identified for review in relation to the special issue it is important that authors select “Service Multinationals” when they reach the “Article Type” step in the submission process. All submissions will be subject to the regular double-blind peer review process at JIM. Manuscripts may be conceptual or empirical (quantitative or qualitative). Preference will be given to manuscripts that compare and contrast SMNCs with manufacturing MNCs. This special issue is expected to be published in the latter half of 2015.

Please direct any questions regarding the Special Issue to Sumit K. Kundu (kundus@fiu.edu) and Somnath Lahiri (slahiri@ilstu.edu).

References

Aulakh, P.S. 2007. Emerging multinationals from developing economies: Motivations, paths and performance. Journal of International Management, 13(3): 235-240.

Berry, H., Guillén, M.F., & Zhou, N. 2010. An institutional approach to cross-national distance. Journal of International Business Studies, 41: 1460-1480.

Boddewyn, J J., Halbrich, M.B., & Perry, A C. 1986. Service multinationals: Conceptualization, measurement and theory. Journal of International Business Studies, 17 (3): 41-57.

Capar, N., & Kotabe, M. 2003. The relationship between international diversification and performance in service firms. Journal of International Business Studies, 34: 345-355.

Dunning, J.H. 1989. Multinational enterprises and the growth of services: Some conceptual and theoretical issues. Service Industries Journal, 9(1): 5-39.

Erramilli, M.K. 1990. Entry mode choice in service industries. International Marketing Review, 7(5): 50-62.

Kothari, T., & Lahiri, S. 2012.Yesterday, today and tomorrow: An overview of research publications in the Journal of International Management. Journal of International Management, 18(1): 102-110.

Kundu, S.K., & Contractor, F.J. 1999. Country location choices of service multinationals: An empirical study of the international hotel sector. Journal of International Management, 5(4): 299-317.

Kundu, S.K., & Merchant, H. 2008. Service multinationals: Their past, present, and future. Management International Review, 48 (4): 371-377.

Li, J., & Guisinger, S. 1992. The globalization of service multinationals in the" triad" regions: Japan, Western Europe and North America. Journal of International Business Studies, 23(4): 675-696.

Lahiri, S., & Kedia, B.L. 2009. The effects of internal resources and partnership quality on firm performance: An Examination of Indian BPO providers. Journal of International Management, 15(2): 209-224.