Search results

The previous decade has been characterized by emerging market firms expanding into international markets. This trend has led to scholars in the IB arena to grapple with the new phenomenon of emerging multinational enterprises (EMNEs), specifically the relationship between internationalization and performance of the EMNEs. This paper seeks to add to the literature by capturing the impact of firm resources on the internationalization‐performance relationship. Empirical analysis on a sample of 787 Indian manufacturing firms indicates that there is a non‐linear relationship between internationalization and performance. Findings also indicate that a firm’s capabilities in cost efficiency and marketing have a moderating impact on this relationship.

John Dunning’s Eclectic Model, introduced in 1976 (Dunning, 1977) and refined by him several times since then (1988, 1993), is a key contribution to the separation of international business studies (IBS) from international economics and trade theory and to the development of global strategy. Dunning’s proposed model was preceded by Stephen Hymer’s (1960) application of industrial organization economics to the study of international trade and investment, and Ray Vernon’s (1966) definition of an international product lifecycle, both critical steps for IBS away from macro-economic trade theory. He was contemporaneous with the work of McManus (1972) and Buckley and Casson (1976) that introduced Coasian economics to the study of international markets and multinational firms. He was also working at the same time that Stopford and Wells (1971) began the work that led to much of the modeling of global industries at Harvard University. These and related works were important to the development of IBS. However, these other models tended to take a narrowly defined perspective and therefore to examine only a part of the rapidly expanding phenomenon of the global firm. They also tended toward industry-level analysis. Dunning’s Eclectic Model, however, by its inclusive nature, opened up the study of multinational firms to broader influences from organizational studies and business strategy. Its strong grounding in economic theory provided a basis for further development and for the integration of strategic models based on similar theories, while its focus on firm-level characteristics provided opportunities to incorporate new ideas from organizational studies into the study of international strategy. For this reason, I see it as the key theoretical model in the process of turning IBS from a mix of macro-level theoretical approaches to national differences and case-based analysis of industry effects into theoretically grounded studies of business organizations functioning in extra-national markets. While Dunning himself makes the point that the Eclectic Model is aimed at the study of multinational firms (1988), not at evaluating individual firm decisions, it does provide a framework for both descriptive and normative studies of individual firms. This shift in emphasis brought much new insight to the study of international business and added considerable richness to developing theory in strategic management and other business disciplines. It has also led to the incorporation of IBS into most business disciplines and a concomitant decline in the study of international business as a separate area for scholarly endeavor – a sometimes disconcerting example of the law of unintended effects.

The concept of the “business model” is increasingly popular in the strategy literature as a way to outline an integrated approach to value creation, delivery, capture, and allocation. It addresses firm strategy but also the resources and capabilities needed to support that strategy and the structure needed to operationalize it. The global marketplace challenges our concepts of all parts of the business model, yet business-model concepts tend not to consider the effects of location or geographical dispersion on the viability of business models. The value of resources and capabilities to customer needs vary from country to country, forcing strategies to adapt. Institutional factors limit structural possibilities in global, regional, and national markets. Currency values, tax regulations, consumer protection and the like make capturing value for the firm and its network much more than simply designing profit margins into pricing structures. This paper offers an integrated but modular approach to the business model, applying concepts from international business studies to show that the very concept of business models as well as each part of the puzzle must be adapted to deal with much greater complexity in the relationships between the environment and the firm in the globalizing marketplace.

The Globally Networked Organization (GNO) is an archetype of the geographically distributed, globally integrated, and organizationally networked information-age multinational enterprise. While its organizational form has been widely discussed, methods for providing strategic direction to all or part of a GNO have been largely overlooked. We propose the concept of strategic animation as an innovative leadership approach to strategic management in the GNO and offer a set of guiding principles for installing such a system in organizations. Strategic animation employs sophisticated incentives to motivate voluntary buy-in, utilizing principles of self-organization to replace the command and control of the unitary firm and the uncertainty and transactional costs of real markets. This makes possible virtual integration of the multiple highly separable businesses that comprise the value-added proposition of the firm and encourages the development of emergent processes for both exploitation and renewal of assets. From a scholarly perspective, this model suggests a new framework for studying the strategic direction of GNOs. For practice, it offers an organizational solution to conditions where process control is preferred, but command of resources is limited. Strategic animation, set in motion through multiple managerial actions, facilitates the timely and flexible responses to chaotic environments that are the sine qua non of today’s global businesses.

Before I comment on the substance of the paper offered by Professor Yves Doz in this issue, I believe that a few comments on the author are appropriate, since this issue celebrates him as a distinguished scholar in international management. The importance of Yves to the development of international strategic management is evident in his discussion of the evolution of the theory of the MNC. The study of the interaction of international economics and management studies that has resulted in modern concepts of the multinational corporation is, to a significant degree, the consequence of his own work. The paper offered in this volume is a natural development from his stream of work and in many ways reflects the patterns that have made Professor Doz such an important scholar. As a management scholar, he is embedded in the tradition that he calls the phenomenon-driven approach to the MNC, and the distinct characteristic of most of his work is its grounding in the real world of organizations. However, the models with which he is most associated also display solid theoretical bases, removing them from the realm of small sample, case-based, observational empiricism, and providing the resonance for other studies that have made them classic. As one example, the Integration–Responsiveness model (Doz et al., 1981) is closely tied to observation of the strategies used by firms in different industries to pursue international markets. However, it also incorporates Industrial Organization theory to establish how the Structure-Conduct-Performance paradigm plays out in the international realm.

This study addresses an international data set with a model of strategy that attempts to bridge the gap between generic and situational models of strategy by assessing relative commitment to quality and to cost control. It opens with a discussion of generic models and situational models of strategy and their relationship to manufacturing strategies. Then, a proposed model which would permit interaction of quality and cost concerns is developed and tested.

Examines the determinants of International Joint Venture marketing performance in Thailand. Uses the results from a survey of 1047 Thai‐foreign IJVs in Thailand from firms that were mainly engaged in agriculture, metal working, electrical and chemical industries. Applies exploratory factor analysis and discriminant analysis to identify these critical determinants as market characteristics, conflict, commitment, marketing orientation and organisational control.

Many FDI studies focus on the advantages that businesses can gain through internationalization and internalization. More recent research has indicated that such traditional theories or perspectives may not sufficiently explain the subsequent success or failure of a firm’s operation in a foreign country, because the advantages gained through FDIs could be greatly affected by their strategic management in the host country environment. This study focused on the issue of a firm’s resources on its subsidiary’s competitiveness in a foreign country. A survey was undertaken in China. All companies participating in the study were small and medium‐sized Singapore‐China joint ventures and Singaporean wholly owned enterprises in China. The findings indicated that the variance in a firm’s performance in a foreign country can be largely explained by the six dimensions of firm resources: (1) technological resources, (2) owner/top manager’s managerial skills and capabilities, (3) employee’s Guanxi skills, (4) employee’s professional/technical knowledge, (5) the firm’s internal relationships and, (6) the firm’s external relationships. Among these six dimensions, employees’ professional knowledge and Guanxi skills, as well as a firm’s internal and external relationships, are significant predictors of Singaporean SMEs’ success in China.