Competing in (and out of) transition economies

Toward an institution-based paradigm

As part of the broader intellectual movement throughout the social sciences that is centered on new institutionalism, the institution-based view has emerged as a leading perspective in the strategic management literature. This article (1) traces the emergence of the institution-based view, (2) reviews its growth in the last two decades, and (3) responds to three of its major criticisms. We also identify four promising research directions—deglobalization and sanctions, competitive dynamics, hybrid organizations, and corporate social responsibility. Overall, we demonstrate that the thriving research on institutions has culminated in an institution-based paradigm, which has significant potential for future growth.

Chief Executive Officer Regulatory Focus and Competitive Action Frequency

Using regulatory focus, the Chief Executive Officer-Top Management Team (CEO-TMT) interface, and upper echelons theories, the present study casts additional light on the competitive action frequency of firms, as determined by their chief executive officers (CEOs) regulatory focus under the contingent effect of the CEO–TMT dissimilarity of informational demographics. Applying regulatory focus and upper echelons theories, this study first hypothesizes how CEO regulatory focus influences competitive action frequency. Next, leveraging CEO–TMT interface research, this study suggests moderating effects on the part of CEO–TMT dissimilarity, across functional background and tenure, and on the relationship between CEO regulatory focus and competitive action frequency. Drawing on a sample of 218 firms from India for a 5-year period (2010–2015), we find that a CEO promotion focus enhances a firm’s competitive action frequency and that a prevention focus diminishes the same. Furthermore, dissimilarities in terms of both CEO–TMT functional background orientation and tenure in the organization moderate this relationship. This study concludes with a discussion of the article’s theoretical and practical implications.

Developing a marketing framework for the bottom of the pyramid consumers

Purpose

This paper develops a comprehensive marketing framework that firms could use as a foundation for developing a successful business model that ensures sustainability in BOP markets.

Design/methodology/approach

The study employs a qualitative research approach based on semi-structured in-depth interviews with founders or senior managers of Indian firms who have been successfully operating in the Indian BOP market. The data is then systematically coded and categorized with the help of software to get better insights.

Findings

The findings of the paper indicate that although the traditional 4As of marketing are important, they do not explain the success of firms adequately. Based on the findings of the interviews, we propose an 8A model that comprises the original 4As along with adaptability, assistance, action innovation and accelerating scale.

Practical implications

The proposed 8A framework would be useful for domestic and multi-national firms aiming to make a foray into the Indian BOP market.

Originality/value

The paper contributes to the literature on the BOP market by identifying the factors important for succeeding in the BOP market. It builds on the 4A model to propose 8As marketing framework in the context of BOP markets.

Subsidiary autonomy and knowledge transfer

Purpose

This paper aims to explore the effect of subsidiary autonomy on knowledge transfers during captive offshoring to emerging markets.

Design/methodology/approach

Five longitudinal cases of captive R&D and manufacturing offshoring to emerging markets.

Findings

The propositions entail the dual effect of operational subsidiary autonomy on primary knowledge transfer and reverse knowledge transfer. For newly established subsidiaries, operational subsidiary autonomy has a mainly negative effect on primary knowledge transfer and a mainly positive effect on reverse knowledge transfer and local collaboration activities increase this effect. Strategic subsidiary autonomy is mainly negative for primary and reverse knowledge transfer.

Research limitations/implications

Limitations concerning the applied exploratory case study approach suggest that further research should test the identified relationships using surveys, after the initial pilot study.

Practical implications

A gradual increase of operational subsidiary autonomy as the subsidiary capability level increases is beneficial to ensure primary knowledge transfer. Allowing subsidiaries to collaborate locally within the confines of their mandates benefits reverse knowledge transfer.

Originality/value

This paper extends the secondary knowledge transfer concept to include knowledge flows with local collaboration partners, not only other subsidiaries and clarifies the distinction between operational and strategic autonomy concerning local collaboration. A subsidiary asserts operational autonomy when its collaboration with local partners relates to its existing mandate. A subsidiary asserts strategic autonomy when it collaborates with local partners beyond this mandate.

Organizational characteristics of cross-border mergers and acquisitions

Purpose

Given that several publicly announced international merger and acquisition deals have been abandoned in recent years, the purpose of this paper is to present a synthesis of influential articles that examine organizational characteristics of cross-border acquisition transactions. The synthesis is framed through general traits and resources, learning and prior acquisition experience, and top-level management and governance attributes. Specifically, the paper conceptualizes key organizational attributes influencing the propensity of cross-border negotiations, and the most common characteristics and post-deal effects by illustrating several case examples from around the world.

Design/methodology/approach

Owing to fairness and integrity principles of the literature survey studies, the paper adopts an exploratory review design to present a synthesis of several influential articles published in strategy, international business and corporate finance journals. Since case method and storytelling are the best qualitative approaches to conceptualizing extant theoretical contributions, a number of case examples—successful, delayed and abandoned—from around the world have been discussed by leveraging the case information from archival sources.

Findings

Drawing on resource-based view, organizational learning, upper echelons and agency theory perspectives, the paper underscores three observations. First, organizational characteristics such as firm age, firm size, ownership structure, slack resources, marketing resources, technological intensity, export intensity and business group affiliation have different impacts on the propensity of publicly announced cross-border deals. Second, firm’s prior acquisition experience and firm’s acquisition experience in the target country have positive or moderating effects on the success of a cross-border merger. Third, top-level management characteristics such as CEO foreign nationality and CEO international career experience, and governance characteristics such as board size, the number of independent directors and directors with overseas experience, have mixed effects on the incidence of cross-border acquisitions.

Practical implications

The paper puts forth several recommendations for top-level managers participating in cross-border acquisition negotiations, such as learning from peers in the same industry, learning from predecessors in the target country and learning from failure negotiations in the same industry and other industries.

Originality/value

Nested within the organizational, international business strategy and corporate finance literature, the paper presents a synthesis of influential publications that study organizational characteristics affecting the propensity of cross-border acquisitions. The cases discussed in this paper are unique examples from around the world.

Resources, Aspirations, and Emerging Multinationals

Drawing on the resource-based view and the behavioral theory of the firm, we examine how resources and aspirations affect rapid internationalization of firms from emerging economies. Using a 5-year panel from 257 publicly listed manufacturing firms from China, we find that neither technological resources nor marketing resources—two knowledge-based drivers traditionally identified to be behind internationalization—directly drive these firms’ growth in internationalization. Instead, we find that emerging multinationals’ performance relative to aspirations has a U-shaped impact on their growth in internationalization. In addition, technological resources amplify the U-shaped effect of performance relative to aspirations, while marketing resources weaken the effect.