Coping with internationalisation: business group affiliation in India

Professor Torben Pedersen
Professor Torben Pedersen (image courtesy of Copenhagen Business School)

Professor Torben Pedersen of the Copenhagen Business School addressed researchers on Tuesday (24 April) with findings from a co-authored paper on the influence of business group affiliation in coping with change brought on by the internationalisation of 403 Indian firms. Where existing academic literature considers the sociological or resource-based reasons for group affiliation in a domestic context, this paper seeks to expand on the theories surrounding emerging market multinational corporations (EMNCs); particularly, their entry and longevity into international markets and the advantage of affiliation with a business group during such times.

Inspired by the findings of research conducted with colleagues Alessandro Zattoni and Vikas Kumar in 2009 (Corporate Governance: An International Review), which illustrated a superior capacity for group-affiliated firms to deal with change during the first six years of inception followed by a decline in the proceeding 10 years, Professor Pedersen addresses, through this current paper, the impact of internationalisation in the trend. The decision to concentrate research around Indian firms was further informed by the team’s access to a large number of cases over an extended period – 21 years in this instance.

A guest of seminar Chair, Dr Stephanie Schleimer, and the Department of International Business and Asian StudiesTorben fielded questions regarding the impact of regulatory change, the ‘’ revolution, and the weight of industry and firm (i.e. Tata) representation within the larger population of 8 463 observations available. Leveraging experience and domestic placement are, he says, but a few advantages of group-affiliation. The study concludes that it is in fact the restraint brought on by affiliated firms’ embeddedness in a local market that sees the non-affiliated ones coping faster with change, and that this ‘dark side’ of being affiliated must be considered in future research examining group affiliation.

The Centre for Work, Organisation and Wellbeing co-hosted this event.