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A dual Canadian and German citizen, Andreas Schotter is an Associate Professor of International Business. He also serves as Ivey’s Academic Director of the CEMS Global Alliance Masters in International Management program. Dr. Schotter has lived in Canada, Europe, Asia and the USA and holds permanent resident status in Hong Kong. As an international business expert he helps executives and organizations understand the challenges and opportunities posed by the ever increasing turbulences in the global economy. He specializes in how to think strategically and drive the agile decision-making that will prevail in today’s volatile, uncertain, complex, and ambiguous business world. His current areas of endeavour include the development of strategies for business system disruption and investigations into boundary-spanning leadership capabilities in global organizations. Dr. Schotter’s research has been published in leading academic and practitioner journals including the Academy of Management Journal, the Journal of International Business Studies and the MIT Sloan Management Review amongst others. He has authored numerous book chapters, cases, and a book on strategic management frameworks. In addition to his academic work Dr. Schotter collaborates closely with leading multinational corporations from North America, Europe, Asia, the Middle East and Latin America on emerging market strategies and international leadership development.
Before embarking on an academic career Dr. Schotter was a senior executive with several multinational corporations in the luxury consumer goods, automotive and industrial equipment industry. He was the Asia Pacific Regional Managing Director for Bitzer International, a leading manufacturer of commercial HVAC equipment headquartered in Germany. He also worked as General Manager for Linde AG in China and in various executive functions for Volkswagen and the Lancaster Cosmetics Group.
Dr. Schotter holds a Masters in Economics and Business Management from the University of Kassel, Germany and both an Executive MBA and a Ph.D. from Ivey. Prior to joining Ivey as a faculty member in 2013, Dr. Schotter taught at the Thunderbird School of Global Management in Arizona, where The Wall Street Journal recognized him twice as a “WSJ Distinguished Professor of the Year.” A hockey enthusiast and passionate rower, he represented his native Germany internationally at Rowing World Championships.
Teaching
Global Strategy (MBA)
Ivey Global Lab (MSC)
CEMS Block Seminar (MSC)
Education
Master in Business Economics, University of Kassel, Germany
Abstract: The rapid development of emerging market firms and their foray into global value chains has attracted significant attention. In this perspectives paper, we draw on case studies from the automotive industries in India and China, to describe the coevolution of domestic firms and advanced economy multinational enterprises (AMNE) entrants. We first show that domestic firms that used catch-up strategies such as capability upgradation, investments into internal R&D and globalization through mergers & acquisitions have managed to succeed in local markets as well as climb into global value chains. We next illustrate that the strategy adopted by the most successful AMNEs involves combining the formation of vertical partnerships with local sub-assembly suppliers and horizontal collaborations with local network orchestrators. Simultaneously weaving together embeddedness in these two cortical sides of the local business eco-system on the one hand and within its global corporate value chain networks on the other – generates a “double helix” effect, whereby its local and global capabilities reinforce each other. The double helix improves cost competitiveness and pushes the product innovative envelope in both local and global markets.
Abstract: Research summary:
Digitalization has enabled firms with so-called platform business models to emerge in many sectors of the economy. By facilitating transactions between different groups of users (e.g., buyers and sellers), platform firms are disrupting industries around the world. However, little is known about the international strategies of platform firms, as research has mostly examined platforms in single-country contexts. We address this gap by integrating insights from platform research in strategy and economics—specifically the notion of network externalities—with internalization theory. We extend the existing typology of network externalities by distinguishing between within-country and cross-country network externalities. We derive testable propositions regarding the foreign entry modes of platform firms, their international strategic posture (multidomestic vs. globally-integrated), as well as foreign market selection criteria and market exit.
Managerial summary:
Many companies in the digital economy operate platform business models, which create value by connecting different groups of users, such as buyers and sellers. We examine how network externalities—the notion that a platform becomes more valuable to each user as more users join—influence the international expansion of these firms. We show that it is important to consider the geographic scope of network externalities, i.e., whether network externalities operate across national borders or whether platform firms have to create separate user networks in each country. The distinction between within-country and cross-country network externalities affects key internationalization decisions, such as how to enter foreign markets, whether to pursue multi-domestic or global strategies, how to select foreign markets, and when to exit from a foreign market.
Abstract: We show how the initial subnational entry location of foreign multinational enterprises (MNEs) in China influences their subsequent within-country location choices and expansion speed. We distinguish between MNEs that establish their first subsidiary in co-ethnic coresdense agglomerations of other firms from the same country of originand MNEs that locate their first subsidiary in the periphery, i.e., outside of these co-ethnic cores. To identify co-ethnic cores in China, we employ a geo-visualization methodology, which draws the boundaries of cores organically and dynamically over time. We contrast our findings with the prevailing approach of using static administrative boundaries for identifying agglomerations. Our results provide evidence of path dependency, in that (a) entry through subnational locations with strong co-ethnic communities is followed by expansion into other locations where co-ethnic communities are present, and that (b) entry through co-ethnic communities accelerates the pace at which MNEs establish additional subsidiaries in China. We also find that co-ethnic community effects continue to influence within-country MNE activities over time, despite a host of economic, institutional, and investment developments.
Abstract: This research examines region-bound headquarters disaggregation in multinational enterprises (MNEs). We link the formation of regional management centersboth dedicated regional headquarters (RHQs) and regional management mandates (RMMs) granted to operating subsidiariesto the complexity argument underlying organizational information processing theory. We demonstrate how different dimensions of complexity associated with the number and dispersion of an MNE’s subsidiary network in a focal region affect whether, and in which form region-bound headquarters disaggregation takes place. Additionally, we consider boundary conditions affecting RMC formation based on within-region experience, global MNE footprint, and between-region effects. Empirically, we utilize a large global dataset of Japanese MNE foreign investment for the period from 1992 to 2014, which allows us to perform longitudinal event history analyses.
Abstract: Prior research into the effects of cultural differences between MNE home and host countries on expatriate staffing decisions in foreign subsidiaries has produced a large number of conflicting findings. We address some of these conflicting findings and aim to advance theory in two ways. First, we draw on transaction cost economics to explain why and how the effects of cultural distance on the proportion of expatriate parent-country nationals form a curvilinear instead of a linear relationship, as commonly proposed. Second, we integrate the values-based cultural distance concept with the norms-based tightness-looseness concept. This allows us to simultaneously account for cultural differences between countries and location-bound normative cultural effects within countries, which cannot be overcome solely through expatriate learning and adaptation. Using a large global dataset of Japanese MNEs, we find support for a convex relationship between cultural distance and the proportion of expatriate parent-country nationals. We also find a moderating (steepening) effect of tightness-looseness on this relationship. The results reconcile some of the tensions between the subjectivists' values-based approach, which positions culture in the shared cognitions realm, and the structuralists' approach, which places culture in a normative situational environment.
Abstract: In multinational enterprises (MNEs), regional management centres (RMCs) most frequently take the form of either dedicated regional headquarters (RHQs) or regional management mandates (RMMs) assigned to operating subsidiaries. We identify a series of critical differences in characteristics and performance between RHQs and RMMs, using a longitudinal sample of 855 Japanese RMCs across 41 countries. We also investigate parent-level differences between MNEs with distinct RMC configurations. We propose a structural complement to regional strategy extensions of the integration-responsiveness framework, and provide an important large sample baseline, aiding new theoretical and empirical research into MNE regional management strategy and structure.
Abstract: Intellectual property (IP) protection is the No. 1 challenge for multinational corporations operating in China. According to the U.S. government, China accounted for nearly 80% of all IP thefts from U.S.-headquartered organizations in 2013, amounting to an estimated 300 billion in lost business. Among European manufacturers, the loss of IP in China reduced potential profits by 20%.The effects from IP leakage in China are ubiquitous. They are visible in counterfeited items including toys, luxury goods, automotive and aircraft parts, pharmaceuticals and other complex high-tech products. But IP violations go beyond products. They extend to pirated operational processes and the replication of entire business and service models. Although multinational corporations can’t afford to stay away from China, in order to remain competitive they must develop mechanisms that enable them to shift some of their innovation capabilities to China safely, without losing critical know-how. To learn about how companies are managing the China IP protection challenge, we studied more than 50 multinational corporations. We identified nine IP protection practices that can be used as a web of protection including (1) Developing strategic clarity (2) Collecting business intelligence (3) Following legal fundamentals (4) Creating interest alignment (5) Disaggregating processes (6) Implementing a controls discipline (7) Creating dynamism (8) Managing human resources strategically and (9) Engaging in focused corporate social responsibility activities. These practices allow corporations to expand faster within China and across other emerging markets while enhancing local and global innovativeness, which leads to improved performance.
Abstract: As we transition toward a worldwide knowledge economy, where and how innovation gets done is shifting dramatically. Leading innovators have learned to leverage elite talent in networked knowledge clusters around the world including places like Shanghai, Bangalore, Rio de Janeiro, Cairo, Tel Aviv and Saigon. No longer do the US, Japan and Western Europe remain dominant sites for innovation instead emerging markets play an increasingly more important role in the knowledge creation activities of multinational enterprises (MNE). Consequently, many MNEs have shifted away from centralized R&D to new forms of knowledge creationincluding offshoring, outsourcing, and networking, and this particularly in industries where talent-related challenges threaten innovation success. The fieldwork underlying our study showed that successful networked innovators create talent architectures to grow, share and exploit strategically mindsharethe aggregated exploitable sum of what individual knowledge workers know and how they use this knowledge. The combined global mindshare of talented employees creates crucial levels of innovation and economies of ideas, the basic building blocks of knowledge based competitiveness. We looked at people practices in innovation networks to identify what leading networked innovator organizations do to achieve success in the knowledge economy.
Abstract: Until recently, corporations have taken mostly reactive positions on climate change by applying mitigation and adaptation strategies in response to eminent political or actual physical risks to their businesses. Few corporations have taken a pro-active, opportunity-seeking strategic approach to improve competitiveness over and above the mitigation and adaptation requirements set by policymakers, industry norms, or shifting consumer preferences. Considering that the climate change discussion no longer focuses on whether or not human activities have an impact on the changing climate, or how much impact they have, corporations should now focus on how to maximize competitiveness based on the actual and predicted climate change effects. The purpose of the current special issue is to stimulate an interdisciplinary, integrated discussion across a wide range of issues related to climate change and multinational corporations, including: 1.) Are adaptation and mitigation actions are complementary and mutually achievable? 2.) How can or do MNCs capitalize on this synergy? 3.) How do MNCs assure visibility and influence with regulatory decision makers in formulation of policy? 4.) How should return on investment (ROI) in adaptation and mitigation be measured? What are the appropriate metrics? 5.) How do MNCs influence relevant stakeholders and bring them into the climate strategy process? 6.) What are current best practices in pro-active climate strategy that go beyond adaptation and mitigation? Is there room for arbitrage?
Abstract: The global economic crises that began in 2008 had profound effects on the supply chains of many multinational firms across all industries including altering some fundamental supply chain characteristics. This study discusses the effects of the crises on lower-level supply chain members in the context of the textile and garment industry in emerging markets. The fieldwork for this research and the integration of new United Nations data provide evidence for the vulnerability of those supply chain members that provide only commoditized basic services that do not depend on talent skills or resource availability. Most of these, less sophisticated supply chain members are located in non BRIC’ emerging economies including Vietnam, Bangladesh, Pakistan, Haiti, Honduras etc. We present a framework that is transferable across industries. The framework is useful for managers when evaluating the feasibility and reliability of different suppliers from emerging and developing countries in particular.
Abstract: This study investigates the widely overlooked phenomenon of MNE location avoidance, utilizing a multi-method research design and data on 131 foreign investment locations. It complements economic choice based location research by adding contextual dimensions at the country level that matter to managers personally and affect decisions at the firm level. We provide a connection between international business research, the behavioral stream in economic geography and the micro-foundations stream in the strategic management literature. The results suggest that in addition to traditional location choice criteria (including investment potential, internationalization strategy, and various geographic and psychic distances), foreign location decisions in MNEs are influenced by how troublesome it is for managers to travel to or live in certain places. An eleven-item measure composed of travel inconveniences shows a significant negative moderating effect on the relationship between foreign direct investment potential and investment intensity. The effect is stronger for non-resource-seeking industries. We call this phenomenon the Hassle Factor.
Abstract: Favors are a medium of exchange for social capital. Social capital creates social, political, and economic benefits for individuals, organizations, communities, and societies around the world. Favors promote cooperation between individuals and are used to bond individual actors with other individuals, groups, communities, and institutions. Favors are prevalent in business in emerging markets because of the presence of institutional voids, limited social and geographic mobility, and strong reciprocity norms. Favors create benefits and liabilities for business organizations and their networks. They produce outcomes beyond the favor exchange process that can be characterized as productive or perverse. Despite their prevalence and importance, favors and their dynamics are not well understood. We explore the antecedents, content, process, and consequences of favors. We conclude our multi-level analysis of favors with a discussion of the breakeven point for favorsthe point where favors tip from having a positive effect to having a negative effect on organization performance. We present an integrated framework to explain the dynamics of favors in emerging market business contexts, and develop propositions to guide future research.
