| Playing Football in a Soccer Field: Value Chain Structure, Capability Transfer, Co-Specialization and Global Expansion in Mortgage Banking |
| | Jacobides, Michael G. | U. of Pennsylvania | jacobides@wharton.upenn.edu | (215) 898-1224 |
| | What determines success in global expansion? Firms expanding in foreign
countries face potentially hostile environments, because of lack of access
to local resources, imperfect knowledge of operating environment &
difficulties in establishing competitive positions. As Hymer indicated,
firm-specific advantages outweigh these liabilities. Some such advantages
are only relevant in specific countries and economies, and may be hardly
transferable. This paper expands the study of success drivers in global
expansion and the nature of "firm-specific advantages" in two ways. First,
by shifting from a manufacturing to service industry. Studying Mortgage
Finance, through five focused case studies and an industry overview, we
uncover determinants of success in global expansion, that may have been
overlooked by over-reliance in non-representative manufacturing industries.
Second, and more important, we examine the role of the value chain
structure and the resulting business environment. Activities de-compose in
different ways, hence sub-industries vary widely between countries. The
architecture of a value chain can take many different forms, and is
characterized by co-specialization and co-evolution between its constituent
parts. This leads to internationally heterogeneous competitive landscapes
& value chains. Prospects for international expansion depend on the
relevance of the firm's capabilities in one country (and business model) to
that of the host country, largely determined by comparative value chain
structures. This provides a new account for the "geographical specificity"
of competitive advantage. Finally, generic (value-chain) strategies for
global expansion are identified and the impacts of standardization on
international transferability of competitive advantage, often prompted by
information technology, are discussed. |
| | Keywords: Global Expansion; Value Chain; Exportability of Advantage |
| International Strategic Fit: A Causal Model of Environmental and Resource Linkages With Foreign Entry Mode and Performance |
| | Rasheed, Howard S. | U. of South Florida | hrasheed@coba.usf.edu | (813)-974-1727 |
| | Contingency theorist suggest that corporate performance depends on the successful alignment or strategic fit between an organization's internal processes (strategy, structure, and resources) and the external environment. Yet unresolved is whether this contingency theory of strategic fit holds true for international expansion. This study extends previous literature by using domestic and foreign environmental factors, as well as resource-related theory to illuminate the productivity-based performance of foreign entry modes.
Previous attempts to measure strategic fit with bivariate interactions have been methodologically inadequate. Using a causal model of strategic fit for international expansion, the complex inter-relationships of domestic and foreign environmental factors, tangible resources of the firm, foreign entry mode strategy and subsequent performance outcomes for small and medium-sized enterprises (SME) are hypothesized. The proposed structural equation model is tested using path analytic techniques in LISREL 8 and temporally-sequenced data from 140 publicly-held small and medium-sized, U.S. based, manufacturing firms. The results indicate significant linkages between all four dimensions of the model. |
| | Keywords: International business; Strategic fit; Causal model |
| Coping With Environmental Uncertainties in Market Entry: A Conceptual Framework |
| | Nguyen, Thang Van | U. of Oregon | tvn26901@darkwing.uoregon.edu | 541-346-3367 |
| | Recent literature on market entry either treats environmental uncertainty as a single dimension or focuses just on one type of environment factor, leaving others excluded. This paper provides an integrated framework which helps managers profile environmental uncertainty and acknowledge the interaction among different uncertainties in a market entry strategy. Managerial and research implications are discussed. |
| | Keywords: Market Entry; Uncertainty; Strategy |
| Foreign Producers: A Neglected Form of Multinational Corporation |
| | Craig, Jane F. | U. of New South Wales | j.craig@agsm.edu.au | 612 9931 9359 |
| | Yetton, Philip W. | U. of New South Wales | phily@agsm.edu.au | 612 9931 9257 |
| | Davis, Jeremy G. | U. of New South Wales | jeremy@agsm.edu.au | 612 9931 9360 |
| | This paper argues that the management theory literature on internationalization neglects the issue of organizational configuration for one subset
of multinational corporations (MNCs): those which choose to serve foreign markets primarily by foreign production. In the prevailing internationalization literature,
a foreign producer strategy is assumed to be either an early, and thus transitory, phase of a firm's internationalization process, or an unsustainable strategic choice because
competitors are moving inevitably towards global integrated strategies. However, the strategic choice made by the majority of large Australian manufacturing firms, which
consistently adopt a foreign producer strategy, provides evidence that these assumptions do not hold for all MNCs. The salience of foreign producers in the Australian national
context brings to light the comparative lack of research attention focused on managing such MNCs. Stages models of internationalization imply that, over time, all MNCs will
engage in a mix of both exporting and foreign production. Strategy and organization theory frameworks focus empirical and normative attention on either global exporters or
complex diversified MNCs which pursue a mixed strategy entailing both exporting and foreign production. None deal with the organizational configuration that would optimize
a foreign producer strategy. This gap between the internationalization literature and the observed data provides the motivation for and subject of the paper. |
| | Keywords: foreign producer strategy,; internationalization,; organizational configuration |
| Perceived Environmental Uncertainty, Entry Mode Choice, and Satisfaction with MNC Performance |
| | Brouthers, Lance Eliot | U. of Texas, San Antonio | lbrouthers@utsa.edu | 210 615 1470 |
| | Brouthers, Keith D. | U. of East London | k.d.brouthers@uel.ac.uk | 44 181 849 3661 |
| | Werner, Steve | U. of Houston | swerner@uh.edu | (713)-743-4672 |
| | Previous theoretical and empirical research provides substantial support for a contingency approach toward international entry mode selection. Similarly, additional emprirical research supports the notion that different international entry modes tend to be associated with varying performance levels. In this study we provide an initial attempt to use multiple measures of perceived environmental uncertainty (PEU2) to predict the entry mode choices of firms and link these risk-adjusted mode choices to managerial satisfaction with firm performance. We hypothesize and find that firms which make risk-adjusted entry mode choices are significantly more satisfied with their firm's performance than firms whose entry mode choices cannot be predicted using the PEU2 measures. |
| | Keywords: Perceived; Environmental; Uncertainty |
| Transaction Cost Theory, Entry Mode Choice, and MNC Performance |
| | Brouthers, Keith D. | U. of East London | k.d.brouthers@uel.ac.uk | 44 181 849 3661 |
| | Brouthers, Lance Eliot | U. of Texas, San Antonio | lbrouthers@utsa.edu | 210 615 1470 |
| | Nakos, George | Clayton College and State U. | georgenakos@mail.clayton.edu | 770 961 3507 |
| | According to transaction cost theory, firms select the international mode of entry which provides the most efficient form of governance. However, past transaction cost studies examining mode of entry issues have not investigated the performance implications of the transaction cost based mode choices. In this study, we do so and find that firms selecting transaction cost-predicted international entry modes perform better than firms using other modes of entry. Based on our results we conclude that transaction cost theory appears to be normative as well as descriptive. |
| | Keywords: Transaction cost; performance; entry mode |