Our 2nd Spaces of International Economy and Management. (SIEM) meeting was quite a success! We had two speakers: Prof. Taira who gave a presentation about the future prospects of our research group and Prof. Schlunze who presented a methodology for surveying locational preferences of international managers.
Summary of Prof. Taira’s speech:
Professor Taira reported on the geographical FDI research including a future research agenda for SIEM. His topic was sorting out future the prospects of SIEM by conducting further research on Japanese corporations’ international expansion, anticipating the developments of international economy and management geography. He has presented an historical overview on the development of MNEs and discussed critically important theories of multinational corporations, stressing the need to investigate locational aspects in greater detail. Geographical studies on the development of a) the multinational manufacturing industry, and b) the multinational service industry were considered. The principle of corporate location was reconsidered with recognition of unevenness and disparities in the process of internationalization and globalization (Dicken 1992). Taira has indicated the need for theoretical research on globalization from a regional viewpoint to grasp the multi-scale spatial economic divisions of multinational corporations (Matsubara 2006). Taira (2005) himself has focused on spatial aspects of localization of MNEs by comparing locational patterns of Japanese-affiliated companies to those of domestic corporations. He has suggested a research framework that joins locational theories of MNEs and theories of industrial agglomeration by investigating the position, role and relations of the international firms within the industrial regions in the host country. In his ongoing research he is focusing on the eastern part of Kagawa Prefecture where a concentration of internationally expanding fashion goods manufacturers exists. Importantly, he has indicated the need for research from a cultural perspective, such as relations between corporate culture of the MNEs and the culture of the host country. He has argued about whether Japanese MNEs will become “local” firms after the acculturation process or become rather “hybrid” firms under the influence of their parent companies. In addition, he has introduced research frameworks such as the corporate network analysis and its locational implications (Yeung & Li 1999) and the corporate organizational theory (Perlmutter 1969) to be combined with the firms’ spatial orientation. Those topics mentioned above would be critical for SIEM’s research activity in the future.
Summary of Prof. Schlunze’s speech:
Rolf D. Schlunze gave a presentation about Locational Preferences in the international economy and management introducing a methodology of an actor-centered survey jointly developed with Dr. Michael Plattner (Trier University). Dr. Schlunze’s recent investigation on locational preferences of foreign executive managers in Japan is supported by a Grant-in-Aid for Scientific Research from the Japanese Ministry of Education, Science and Culture. He defined the research problem as follows: An entrepreneur/executive manager must make choices and decisions that increase profits for the company in the market environment, creating synergy in the corporate environment, meanwhile satisfying their personal goals as well as those of the spouse in the foreign living environment. An international manager searches for a location that satisfies all his/her needs as an optimizer based on their geographical knowledge. He indicated that there is a need to distinguish between neo-classical, behavioral, and institutional approaches. Whereas the neo-classical approach sees the entrepreneur or executive manager as an optimizer, the behavioral approach views the manager just as a satisfier and the institutional approach puts the focus on the negotiation between spatial actors. The criticism of the neo-classical approach is the fact that the homo economicus fails as an instrument of prediction of human behavior. The common criticism of the institutional approach is that this approach is not embedded in a broader context and omits factors such as individual motivation and strategic intent of entrepreneurs and managers. Since the behavioral approach takes the stated preferences of entrepreneurs and executive managers into account, it is the favored approach for our analysis.
The core concept of the behavioral approach sees the (business)man as a satisfier who allows himself/herself to be led by aspirations. Subjective considerations play a role in decisions; he or she is not fully informed about the individual business and living environments. This modest perspective on decision making is a more realistic assumption. Therefore, location satisfaction of executive managers can be categorised and investigated on three levels of managerial motivations or strategic intent of enterpreneural behavior: profit (market expansion, diversification, etc.), synergy (knowledge and innovation creation) and good living (private life satisfaction of manager and spouse). One remaining criticism is that the behavioral approach is preoccupied with quantitative techniques and often ignores the social context. To avoid this criticism, a social network analysis will be integrated into the framework. The assumptions underlying the concept of the satisfier are more realistic than those of the optimizer for investigating the locational preferences of foreign entrepreneurs and executive managers. It is an important feature of the methodology that non-rational elements, such as image and non-economic locational factors about the corporate, market and living environments, in the decision-making and synergy creation process are drawn into consideration. The key question of Dr. Schlunze’s research is what kind of environment does an international manager prefer in order to create cross-cultural synergy? Preliminary research showed that the foreign executive manager’s need for human resource support is significantly higher in Tokyo-Yokohama than in Kobe-Osaka. Additionally, international managers with strong acculturation have more balanced preferences and are able to perform well also in second and third tier global city locations. The methodology used can be described as an actor-centered approach that combines a quantitative and a qualitative analysis that investigates locational preferences and synergy potentials of international executive managers. A triangulation process to investigate the preferences of three environmental levels was conducted by using PC-based Conjoint-Analysis (CA). The reasons for analysis of locational preferences by CA are as follows: 1) CA is a well known and accepted tool for marketing analysis, 2) CA by PC provides instant results which can be discussed with the interviewee, 3) CA provides high reliability of results in multiple case studies. Rolf Schlunze showed in a CA simulation how the locational preferences were analysed during the interviews. It is planned to include the locational preference analysis as part of a manager self-evaluation system online. It is expected that many international managers will use the online service because of the instant feedback they will receive.
References
Jones, A. (2007) More than ‘managing across borders?’ the complex role of face-to-face interaction in globalizing law firms. Journal of Economic Geography (7) pp. 223-246.
Meester, W.J. (2004) Locational Preferences of Entrepreneurs in The Netherlands and Germany. Physica-Verlag, Heidelberg, New York.
Schlunze, R.D. & Plattner, M. (2007) Evaluating International Managers’ Practices and Locational Preferences in the Global City – An Analytical Framework. The Ritsumeikan Business Review (16) No.1, pp. 63-89.
Thrift, N. (2000) Performing cultures in the new economy, Annual of American Geographers (90) pp.670-692.
