Acquiring firm-specific advantages: Organizational innovation and internationalization at Indian multinational corporations

Abstract

Purpose - This study seeks to contribute to the relatively sparse literature on how emerging market firms (EMFs) acquire firm-specific advantages (FSA), how they adjust their organizational structures, processes, HR policies, leadership and cultures in the internationalization process, and how they interact with their domestic institutional context. Design/methodology/approach - We report the results of a survey sent off to the most internationalized Indian firms, measured by foreign income. Our survey includes 26 variables measuring individual aspects of organizational innovation. Findings - Our respondents report significant changes along all 26 organizational variables over the period investigated (2003-2008). Based on self-reported assessments by top managers, our findings suggest firstly, that Indian firms are rapidly transforming their organizations, secondly that Indian executives are increasingly confident that they will be able to compete successfully on an international scale, and thirdly that Indian firms may increasingly benefit from organizational innovation complementing their low cost advantages. Research limitations/implications - Firstly, our sample size is relatively small at 76. Secondly, the ratings on the organizational variables we studied are based on self-reporting. Finally, our survey especially captures developments at the largest and most international Indian companies. Practical implications - With its organization-wide scope of analysis, our study may guide EMF managers looking at organizational innovation in the internationalization context. Originality/value - This paper elucidates the interplay of Indian firms’ internationalization and organizational innovation.