Many scholars have recognized the importance of institutions in international business over the years. Peng (2002) touched upon the importance of institutions and states that there is substantial room to integrate the more established resource-based view with the emerging institution-based view of business strategy. Peng notes that it is important to recognise that these perspectives are not mutually exclusive. The institution-based view supplements and enriches mainstream strategy research by drawing attention to the often overlooked importance of institutions, both formal and informal, which are broader than the traditional notion of national cultural differences. Following on from Peng’s 2002 study, Peng, Wang and Jiang (2008) assert that a growing number of scholars now understand that institutions matter and that international business strategy research, especially in emerging economies (also in developed economies) cannot simply focus on industry conditions and firm capabilities. An institution-based view in combination with the industry and research based views makes the strategy tripod stronger, they claim. An institution-based view of international business strategy in combination with the industry and resource based view will help sustain a strategy tripod and will bring fundamental questions confronting international business to the stage, in relation to the driver’s of firm strategy, and the determinants of international successes and failures of firms. Peng, Wang and Jiang (2008) pay tribute to Douglass North’s concept of institutions, namely that institution-related assets have become more important. He promotes the idea that international business scholars must place utmost importance on institutional issues over th... ... middle of paper ... ...y, and enforceability of property rights and contracting institutions. These measurements are useful tools in understanding the institutional context of strategy and entrepreneurship in international business. Furthermore, Dung presents a short definition of resources and capabilities investment that is a significant mechanism through which the three legs of the strategy tripod come together and interact rather than being separate forces governing firm’s behaviour and successes. Furthermore, McKinley, Mone, and Moon (1999) argued that whether a particular theory gains prevalent recognition depends on its continuity, novelty, and scope. The scholars conclude that the institution-based view shines in all three attributes, thereby propelling its recent rise as the third leading perspective in strategy, in combination with the resource-based and the industry-based views.
”Theories tell how and why things work; how and why one variable is related to another. Research findings that are theory based can be place in a framework that advances science further than findings that are unconnected to formal theory.” (O'Connell, 2009, p. 33).
Valaskakis, K. (1998). The challenge of strategic governance: Can globalization be managed? Optimum, vol. 28, no. 2, pp. 26-40.
Outsiders wondered how each company’s internal changes would affect their endless competitive battle in the industry. The case illustrates how global competitiveness depends on the organizational capability, the difficulty of overcoming deeply rooted administrative heritage, and the limitations of both classic multinational and global models.
A Multinational Corporation (MNC) can be defined as “a single entity that controls and manages group of goal-disparate and geographically dispersed productive subsidiaries” (Triandis and Wasti, 2008, p. 2). Multinational corporations are entities that make Foreign Direct Investment (FDI) and produce added value in countries other than the country in which they are headquartered. One of the key objectives of the MNC is to obtain capital where is it cheapest and to invest FDI and undertake production in areas that yield the highest rates of return (De Beule and Van Den Bulcke, 2009). However, many theories have been advanced to account for the decision-making process that MNCs undertake in relation to FDI. The purpose of this paper is to explain the two main theories – internalization theory and OLI eclectic paradigm theory – and to critique these in relation to some of the other conceptual models that have been advocated.
Wit, BD & Meyer, R 2010, Strategy: process, content, context : an international perspective, Cengage Learning EMEA, London.
Hill, C.W.L (2005). International Business: Competing in the Global Marketplace (5th ed.). McGraw-Hill/Irwin. New York, NY
The scope of this essay is to address coherently with examples a number of key areas of strategy; strategy and its importance, challenges in relation to development and implementation of strategies, and a discussion of the relevance of strategy in the modern
Multinational enterprise (MNE) is “a company that is headquartered in one country but has operations in one or more other countries” (Rugman and Collinson 2012, p.38) that has at least one office in different countries but centralised home office. These offices coordinate global management in the context of international business. MNEs have increasingly essential influence on the development of the global economy and coordinate with other companies in different business environments. However, there are many issues involved with how MNEs operate well overseas, especially in emerging markets (EMs) (Cavusgil et al., 2013, p.5).
Ahlstrom, D., & Bruton, G. D. (2010). International Management: Strategy and Culture in the Emerging
THE POLITICAL ENVIRONMENT: The critical concern Political environment has a very important impact on every business operation no matter what its size, its area of operation. Whether the company is domestic, national, international, large or small political factors of the country it is located in will have an impact on it. And the most crucial & unavoidable realities of international business are that both host and home governments are integral partners. Reflected in its policies and attitudes toward business are a governments idea of how best to promote the national interest, considering its own resources and political philosophy. A government control's and restricts a company's activities by encouraging and offering support or by discouraging and banning or restricting its activities depending on the government. Here steps in international law. International law recognizes the right of nations to grant or withhold permission to do business within its political boundaries and control its citizens when it comes to conducting business. Thus, political environment of countries is a critical concern for the international marketer and he should examine the salient features of political features of global markets they plan to enter. THE SOVEREIGNITY OF NATIONS From the international laws point of view a sovereign state is independent and free from external control; enjoys full legal equality; governs its own territory; selects its own political, social, economic systems; and has the power to enter into agreements with other nations. It is extension of national laws beyond a country's borders that much of the conflict in international business arises. Nations can and do abridge s...
Globalisation has been one of the most significant developments of the last half century, and issues such as trade and international commerce have become increasingly important. In consequence, problems such as poverty, unfair wages and poor working conditions in third world countries have been drawn to the attention of consumers (Hayes and Moore, 2007). This is a growing global issue which cannot be ignored by anyone concerned about the problems in developing countries. Free trade and Fair Trade have both been offered as solutions to these issues.
International business contains all business transactions private and governmental, sales, investments, logistics, and transportation that happen between two or more regions, nations and countries beyond their political limits. Generally, private companies undertake such transactions for profit governments undertake them for profit and for political reasons. It refers to all those business activities which involve cross border transactions of goods, services, resources between two or more nations. Transaction of economic resources includes capital, skills, and people. for international production of physical goods and services such as finance, banking, insurance, and construction.
The word theory emanated from the Greek word meaning “contemplate” It has been viewed by scholars in different ways. Theory can be defined literally as an explanation of phenomena and its associations with variables that it is attempting to predict. There are no general agreed definitions of theory because scholar’s views of what constitute theory differ based on the purpose, nature and what make up of a good theory (Gelso, 2006; Harlow, 2009; Stam, 2007, 2010; and Wacker 1998). For instance, Wacker, (1998), pointed out that a theory must have four basic criteria such as conceptual definitions, domain limitations, relationship-building, and predictions. He, also, opined that for any theory to be regarded as a good theory, it must have qualities for `good ' theory, such as “uniqueness, parsimony, conservation, generalizability, fecundity, internal consistency, empirical riskiness, and abstraction, which apply to all research methods” (p.364). Stam (2010) interpreted theory as ...
Hitt, M., Ireland, and Hoskisson, R. (2009).Strategic management: Competitive and Globalization, Concepts and Cases. In M.Staudt & Stranz (Ed).
I found this topic so interesting and motivating and I believe that I got some new knowledge and skills after attended this assignment topic. My experience has been successfully expanded as a result of attending classes, to include global approach to the international business. I found out that practice for international business has become little bit complicated due to influence of globalization.