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Article

Anne H. Koch

The purpose of this paper is to address the question how multinational corporations (MNCs) can respond to different domains of formal voids associated with informal…

Abstract

Purpose

The purpose of this paper is to address the question how multinational corporations (MNCs) can respond to different domains of formal voids associated with informal institutions in emergent markets.

Design/methodology/approach

The author advances the institution-based view of international business strategy by developing a framework and six propositions. The theoretical distinction of informal institutions as an additional aspect when disrupting formal institutional voids are instrumental in developing a refined understanding of how MNCs can respond to institutional voids.

Findings

By emphasizing the notion of informal institutions that are associated with formal institutional voids, the author moves away from a unidimensional toward a multidimensional view of substituting formal voids. The presented response variety includes a variety of substitutes.

Research limitations/implications

Further research can apply qualitative research to further examine where, when and why social innovations can be used efficiently to address institutional weaknesses or absences. The author suggests further research opportunities in the implication section.

Social implications

Constituting substitutive formal institutions with complementary informal institutions can help strategic managers navigate business activities in emerging markets. Institutional weaknesses can be used as opportunities to create legitimacy and serve social needs. To help facilitate such impacts public policies need to be developed accordingly.

Originality/value

The paper provides a new and critical perspective on how MNCs can use institutional voids as opportunities. The author’s key contribution is to highlight specific substitutive actions from MNCs to institutional voids when different cultural-cognitive and normative circumstances apply in emerging markets.

Details

critical perspectives on international business, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1742-2043

Keywords

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Article

Attique ur Rehman, Muhammad Shakeel Sadiq Jajja, Raja Usman Khalid and Stefan Seuring

Base-of-the-pyramid (BoP) markets are frequently characterized by institutional voids. However, it remains unclear how institutional voids impact corporate and supply…

Abstract

Purpose

Base-of-the-pyramid (BoP) markets are frequently characterized by institutional voids. However, it remains unclear how institutional voids impact corporate and supply chain risk and performance. This intersection will be analyzed in this paper.

Design/methodology/approach

This paper presents a systematic literature review of 94 BoP papers published between 2004 and 2019 in peer-reviewed, English-language journals available on Scopus. Drawing upon established frameworks for examining institutional voids, supply chain risks and BoP performance, frequency, and contingency analyses are conducted. Contingencies are established to provide insights into the associations between different constructs from the selected frameworks.

Findings

Supply chain risks are pervasive in the BoP discourse, especially when BoP markets are characterized by institutional voids. The frequency analysis of the constructs suggests that the key supply chain risks discussed in the BoP literature include social risk, credit risk, product market and operating uncertainties, knowledge and skill biases and decision-maker risks due to bounded rationality. The contingency analysis suggests that institutional voids are associated with supply chain risks that affect performance.

Research limitations/implications

A theoretical framework aligning three research streams in the context of BoP calls for future studies to test the causality of highlighted constructs that are significantly associated. The analysis is confined to the constructs that are taken into account based on specific conceptual frameworks.

Practical implications

The study provides practitioners with a framework to manage supply chain risks in BoP-related firms to enhance firm performance. Managers can use key dimensions of supply chain risk, such as the product market, the input market and operating uncertainties, to evaluate performance in the BoP context.

Originality/value

Specifically, this research has strengthened the inquiry of supply chain risks in the presence of institutional voids that may have an impact on firm performance

Details

The International Journal of Logistics Management, vol. 31 no. 4
Type: Research Article
ISSN: 0957-4093

Keywords

Content available
Article

Florian Becker-Ritterspach, Katharina Simbeck and Raghda El Ebrashi

This paper aims to provide multinational corporations (MNCs) with a portfolio of corporate environmental responsibility (CER) responses that help curbing the exacerbated…

Abstract

Purpose

This paper aims to provide multinational corporations (MNCs) with a portfolio of corporate environmental responsibility (CER) responses that help curbing the exacerbated negative environmental externalities caused by their business activities in emerging and developing economies.

Design/methodology/approach

This paper transposes the market-related concept of institutional voids to the context of CER, that is, to the context of exacerbated negative environmental externalities as result of absent, weak or incoherent institutions.

Findings

This paper proposes that the transfer of products, processes and business models from developed to emerging or developing economies often gives rise to exacerbated negative externalities because of institutional voids in environmental protection. Thus, it suggests a portfolio of CER responses – circumventing, coping and compensating – that allow MNCs to mitigate the exacerbated negative environmental externalities caused by them.

Research limitations/implications

The authors present an analytical framework for identifying and navigating environment related institutional voids, which serves as a starting point for an action research approach. In tune with recent calls for critical performativity in critical management studies, the action research approach aims at tackling the real-life problem of exacerbated negative environmental externalities caused by MNCs’ activities in emerging and developing economies.

Social implications

This paper sensitizes scholars, policymakers and managers to exacerbated negative environmental externalities within the context of international business activities in emerging and developing economies. The contribution provides stakeholders with a better understanding of the causes as well as alternative responses to the problem.

Originality/value

This paper transposes the market-related concept of institutional voids and the strategic responses to dealing with them to the non-market context of CER. The authors argue that institutional voids can be seen as the absence or poor functioning of formal and informal institutions for environmental protection, resulting in exacerbated negative environmental externalities.

Details

critical perspectives on international business, vol. 15 no. 2/3
Type: Research Article
ISSN: 1742-2043

Keywords

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Article

Fareesa Malik, Richard Heeks, Silvia Masiero and Brian Nicholson

While digital labour platforms are being increasingly studied across the Global South, the existing literature does not conceptualise the theoretical link between such…

Abstract

Purpose

While digital labour platforms are being increasingly studied across the Global South, the existing literature does not conceptualise the theoretical link between such platforms and socio-economic development. This paper theorises such a link drawing on the notion of institutional voids defined, as in Khanna and Palepu (2010), as “the absence of intermediaries to efficiently connect buyers and sellers” in an economy. We frame digital labour platforms as means to fill institutional voids, seeking to create “development” in the form of earning opportunities in contexts of deprivation.

Design/methodology/approach

We draw on an interpretive case study of an online work training project in a deprived region of Pakistan, where members of marginalised communities were trained to become freelancers for global digital labour platforms. We use the notion of market-enabling institutions aimed at filling institutional voids as a lens to study the project's declared goals, examining the extent to which these were met in practice for the workers who participated in the training.

Findings

Our analysis reveals three types of market-enabling institutions–credibility enhancers, aggregators and distributors, and transaction facilitators–through which digital labour platforms seek to fill institutional voids. However, workers' narratives reveal that institutional voids are only partially filled by these platforms, and their perpetuation results in diverse forms of power asymmetries leveraged by clients and owners of the platforms. We also observe the formation of solidarity networks among workers, networks that are intra-familial and societal rather than characterised by formal unionisation.

Originality/value

The paper offers a novel perspective to theorise the link between digital labour and socio-economic development. Applying such a perspective in a Global South context, it also finds the limits of the digital platforms' institutional void-filling potential, highlighting the emergence of power asymmetries and the emerging formation of worker solidarity networks.

Details

Information Technology & People, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0959-3845

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Book part

Michael Hilb

This paper introduces a conceptual framework to assess the foreign market entry behavior of emerging market multinationals (EMMs). By introducing strategic cognition as…

Abstract

This paper introduces a conceptual framework to assess the foreign market entry behavior of emerging market multinationals (EMMs). By introducing strategic cognition as the underlying theoretical perspective, this paper postulates that different levels of institutional voids in home markets shape the strategic cognition of EMMs, influencing their market entry behavior due to the prevalence of organizational imprinting in the early stages of internationalization. The paper aims to contribute to the strategic cognition literature by introducing emerging markets as a relevant context in which to apply and extend current thinking. Additionally, it aims to contribute to the institutional voids literature by providing a cognitive framework of behavioral patterns that is rationalized by institutional voids. Finally, the paper contributes to the entry mode literature by proposing strategic cognition as a relevant moderator for foreign entry mode choices, particularly those of EMMs.

Details

Emerging Economies and Multinational Enterprises
Type: Book
ISBN: 978-1-78441-740-6

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Article

William Murithi, Natalia Vershinina and Peter Rodgers

The purpose of this paper is to offer a conceptual interpretation of the role business families play in the institutional context of sub-Saharan Africa, characterised by…

Abstract

Purpose

The purpose of this paper is to offer a conceptual interpretation of the role business families play in the institutional context of sub-Saharan Africa, characterised by voids within the formal institutional setting. Responding to calls to take a holistic perspective of the institutional environment, we develop a conceptual model, showcasing the emergence of relational familial logics within business families that enable these enterprising organisations to navigate the political, economic and socio-cultural terrain of this institutional context.

Design/methodology/approach

The authors undertake a review of extant literature on institutional theory, institutional voids, family business and business families and examine the relevance of these theoretical constructs in relation to the institutional environment of Sub-Saharan Africa. The authors offer tentative propositions within our conceptualisation, which the authors discuss in an inductive fashion.

Findings

The review underlines the relevance of informal political, economic and socio-cultural institutions within the sub-Saharan context, within which the family as an institution drives business families engagement in institutional entrepreneurship. In doing so, the authors argue business families are best positioned to navigate the existing Sub-Saharan African institutional context. The authors underline the critical relevance of the embeddedness of social relationships that underpin relational familial logic within the sub-Saharan African collectivist socio-cultural system.

Originality/value

By challenging the assumptions that institutional voids are empty spaces devoid of institutions, the authors offer an alternative view that institutional voids are spaces where there exists a misalignment of formal and informal institutions. The authors argue that in such contexts within Sub-Saharan Africa, business families are best placed to harness their embeddedness within extended family and community for entrepreneurial activity. The authors argue that family and business logics may complement each other rather than compete. The discussions and propositions have implications for future research on business families and more inclusive forms of family organisations.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 26 no. 1
Type: Research Article
ISSN: 1355-2554

Keywords

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Article

John Manuel Luiz, Kondwani Kachika and Tapfumaneyi Kudzurunga

This paper aims to analyse how processes of institutional change in environments of institutional 'voids' affect smallholder farmer market access in Zambia and Malawi, and…

Abstract

Purpose

This paper aims to analyse how processes of institutional change in environments of institutional 'voids' affect smallholder farmer market access in Zambia and Malawi, and explores the role of different dis/enabling institutional agents and logics. The authors examine this in the context of two divergent routes of institutional change – one externally imposed and the second driven from within the ecosystem itself. The authors consider how these different institutional processes impact upon smallholder farmers and how they are able to adapt to these changes.

Design/methodology/approach

A qualitative research approach is used which lends itself to an analysis of multiple institutional logics that is based upon the multiple positions of market actors. It uses a comparative case study design methodology focused on two broad cases of smallholder farmers in Zambia and Malawi.

Findings

The research demonstrates the tension that multiple institutional logics can create especially amongst those most vulnerable particularly where these are not embedded in local realities and mindful of social settings.

Originality/value

It contributes to the understanding of poverty alleviation in rural developing regions, on overcoming institutional voids, market inclusivity and the role of social entrepreneurs and intermediaries, and builds on the perspective of markets as social spaces for economic exchange.

Details

Society and Business Review, vol. 14 no. 4
Type: Research Article
ISSN: 1746-5680

Keywords

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Article

Kerry Chipp, Albert Wocke, Carola Strandberg and Manoj Chiba

Literature on modes of entry has focussed on firm-level strategies. The predominant theories used are institutional theory and the resource-based view. Using an alternate…

Abstract

Purpose

Literature on modes of entry has focussed on firm-level strategies. The predominant theories used are institutional theory and the resource-based view. Using an alternate approach – network theory – this paper aims to demonstrate an additional mode of entry: multiple firms entering together as an extension of an existing loose network, known as a bridging network. The extension of an external network across borders is an appropriate mode of entry in emerging markets, with no pre-existing networks or existing networks within a market that are weak, immature or missing.

Design/methodology/approach

A conceptual review, which develops four propositions, demonstrating that market entry with bridging networks may be the preferred mode of entry in the presence of institutional voids. Alternative modes may not be viable because of costs and risks associated with overcoming such voids.

Findings

Existing theory and case examples support the contention that market conditions facilitate firms to enter as networks rather than as singular entities. These conditions are found in markets with institutional voids and explain the dominant form of business groups in many countries and the operation of loose strategic alliances in emerging markets. Network entry facilitates market access speed may allow for local ties to remain undeveloped or be a first step in building in-country networks.

Originality/value

This paper heeds to the call for a network ecosystem approach to market entry, arguing that firms may enter as a collective in subsistence and emerging markets, which would explain the preponderance of business groups and loose alliances found.

Details

European Business Review, vol. 31 no. 3
Type: Research Article
ISSN: 0955-534X

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Article

Ruicheng Wang and William Chongyang Zhou

Two types of institutional constraints, namely, institutional voids and policy uncertainty, have been recognised and elaborated, including their influence on new venture…

Abstract

Purpose

Two types of institutional constraints, namely, institutional voids and policy uncertainty, have been recognised and elaborated, including their influence on new venture performance. However, not enough attention has been paid to the multidimensional attribute of institutional transformation. By hinting at a relatively underexplored third type of institutional constraints, i.e. institutional fragility, this paper aims to build a comprehensive framework of institutional constraints to analyse how innovative start-up performance is influenced by institutional constraints.

Design/methodology/approach

Using Chinese manufacturing firms as the empirical sample, the authors use an econometric method to test the relationship between institutional constraints and the performance of innovative start-ups.

Findings

On the basis of a uniquely constructed database from 2005 to 2007, the authors find that institutional constraints are negatively associated with innovative start-up performance proxied by return on assets, sales growth and new product sales.

Originality/value

The study offers researchers and practitioners a detailed view of institutional constraints and innovative start-up performance.

Details

Chinese Management Studies, vol. 14 no. 3
Type: Research Article
ISSN: 1750-614X

Keywords

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Article

Sibylle Heilbrunn

In an extreme and intentional institutional void, African refugees in Israel are bricoleuring by building an entrepreneurship market next to an “open” detention camp. The…

Abstract

Purpose

In an extreme and intentional institutional void, African refugees in Israel are bricoleuring by building an entrepreneurship market next to an “open” detention camp. The purpose of this paper is to analyze how refugee entrepreneurs overcome institutional voids through bricolage in an illegal marketplace outside the detention camp.

Design/methodology/approach

In order to deal with the question of why and how people act entrepreneurial under extreme circumstances, the interpretive/social constructionist paradigm is applied in form of the multiple stories milieu case study pattern. Data were gathered via official reports, interviews and observations.

Findings

Outside the detention camp it is via bricolage that entrepreneurs address the economic detour in the intentional institutional void. At a place which is meant to make asylum seekers leave Israel by coining them “infiltrators” and by “making their lives miserable,” bricoleurs attend their own and the needs of fellow detainees providing goods and service and community space.

Originality/value

By contextualizing entrepreneurial practices, the paper contributes to the understanding of refugee entrepreneurship by demonstrating how refugees – within the pressure and constraints of context – initiate entrepreneurial activities. Theoretically the paper extends knowledge of minority entrepreneurs who are acting as bricoleurs, explaining how their entrepreneuring can be a kind of space creation process.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 25 no. 5
Type: Research Article
ISSN: 1355-2554

Keywords

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