INTRODUCTION

Emerging market multinational corporations (EMNCs) can become successful global players across a wide spectrum of industries, as demonstrated by companies such as the Brazilian airplane manufacturer Embraer, the Mexican bakery Bimbo, the Russian information technology (IT) firm Kaspersky Labs, the Indian conglomerate Tata Group, the South African brewer SABMiller, and the Chinese computer manufacturer Lenovo. This has resulted in a plethora of publications that discuss how such companies can challenge established multinationals from advanced economies and the distinct sources of competitive advantage they develop to achieve this.

However, the paths EMNCs take toward global leadership have not always been smooth. Although many have benefited from the lessons learned from the mistakes made by their predecessors in advanced economies and the advice of academics and consultants on how to select and operate across countries, many also face new challenges that have been largely ignored in previous studies. These new challenges emerge from the conditions of EMNCs’ countries of origin, for example, lack of supporting institutions or weak innovation systems, and from firm characteristics that are more prevalent among multinationals from emerging countries, such as family or state ownership.

A large number of authors have analyzed topics that reflect on different aspects of EMNC behaviors. A first set has focused on providing managers of advanced economy multinational corporations (MNCs) with guidance on how to operate more profitably in the challenging conditions of emerging markets. This line of research tends to concentrate on how managers can use and modify capabilities developed in advanced economies in the differing contexts of emerging markets. A second set has focused on understanding how EMNCs represent new competition to MNCs from advanced economies. This line of inquiry tends to present case studies of leading EMNCs and discuss the different business models they have developed. A third set analyzes how the actual behavior of EMNCs differs from current theoretical expectations.

Rather than focusing on how EMNCs emerge as new competitors, and praising their advantages, in this book we take a contrasting and more critical stance, analyzing the challenges that these firms face and drawing lessons from past mistakes. We do, of course, marvel at many of these firms’ accomplishments in the last few decades; however, these achievements present a skewed picture of the reality of these firms. Everybody praises the success stories without realizing that, in many cases, firms have struggled in countless unacknowledged ways.