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1 – 10 of over 12000Peter J. Buckley, OBE and Jean J. Boddewyn
The purpose of this paper is to show that the market-internalization framework can be applied to non-economic institutions because society’s non-market sub-systems – political…
Abstract
Purpose
The purpose of this paper is to show that the market-internalization framework can be applied to non-economic institutions because society’s non-market sub-systems – political, social and cultural – are subject to failures just like economic markets, and firms can contribute to their repair or replacement by selectively, strategically and responsibly internalizing the market and non-market arenas for these sub-systems’ functions.
Design/methodology/approach
Internalization theory is applied to a new area – that of societal failures.
Findings
Internalization theory can be applied to the joint failures of economic and non-economic institutions, and this helps explain the growing “political role” of multinational enterprises in economies in transition as well as the phenomenon of increasing multinational firm activity in underdeveloped economies.
Research limitations/implications
The limits and implications of internalization are drawn in terms of theory development, legitimacy and managerial strategies.
Originality/value
This paper is the first to analyze the selective internalization of societal failures by the multinational enterprises. It extends internalization theory and examines the contested notion of “public goods”.
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Peter J. Buckley and Jean J. Boddewyn
The purpose of this paper is to extend the purview of internalisation theory in understanding the global allocation of resources in different institutional contexts.
Abstract
Purpose
The purpose of this paper is to extend the purview of internalisation theory in understanding the global allocation of resources in different institutional contexts.
Design/methodology/approach
Theoretical extensions of internalisation theory are proposed in response to a comment.
Findings
The traditional focus of internalisation theory can be extended beyond the normal market exchange context, first, by expanding the range of transactions; second, by including non-market actors; and third, by expanding the relevant welfare criteria.
Originality/value
Comparative institutional analysis is enhanced by expanding the consideration of the range of intermediate goods that are traded, the potential providers examined and extending the criteria of assessment beyond efficiency to include equity, sustainability and legitimacy. These extensions add value to the internalisation theory.
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Any endeavor to circumscribe, with a certain degree of precision, the nature of the relationship between social science and critical theory would appear to be daunting. Over the…
Abstract
Any endeavor to circumscribe, with a certain degree of precision, the nature of the relationship between social science and critical theory would appear to be daunting. Over the course of the past century, and especially since the end of World War II, countless efforts have been made in economics, psychology, political science, and sociology, to illuminate the myriad manifestations of modern social life, from a multiplicity of angles. It is doubtful that it would be possible to do justice to all the different variants of social science, in an assessment of their relationship to critical theory. Moreover, given the proliferation of critical theories since the 1980s, the effort to devise a “map” that would reflect the particular orientations and intricacies of each approach to critical theory also would be exacting, in its own right.1
Any endeavor to circumscribe, with a certain degree of precision, the nature of the relationship between social science and critical theory would appear to be daunting. Over the…
Abstract
Any endeavor to circumscribe, with a certain degree of precision, the nature of the relationship between social science and critical theory would appear to be daunting. Over the course of the past century, and especially since the end of World War II, countless efforts have been made in economics, psychology, political science, and sociology to illuminate the myriad manifestations of modern social life from a multiplicity of angles. It is doubtful that it would be possible to do justice to all the different variants of social science in an assessment of their relationship to critical theory. Moreover, given the proliferation of critical theories since the 1980s, the effort to devise a “map” that would reflect the particular orientations and intricacies of each approach to critical theory would also be exacting in its own right.1
Jenny Hillemann and Alain Verbeke
– This paper aims to apply internalization theory in the context of economic efficiency-driven institutions interacting with societal institutions that pursue broader goals.
Abstract
Purpose
This paper aims to apply internalization theory in the context of economic efficiency-driven institutions interacting with societal institutions that pursue broader goals.
Design/methodology/approach
The analysis builds upon Buckley and Boddewyn’s (2015, this issue) recent work on the perceived need for multinational enterprises (MNEs) to supply public goods outside of their sphere of technical competences. This paper proposes a more restrictive approach: external markets will only be internalized if, on balance, the efficiency benefits of internalization outweigh its costs at the firm level, in line with orthodox internalization theory.
Findings
MNEs replacing the activities of failing (or even absent) public sector institutions is a business phenomenon commonly observed in less developed economies. However, positive distributional effects and societal externalities without the required efficiency benefits at the firm level are insufficient for MNEs’ supply to occur.
Practical implications
Managerial decisions in the internalization sphere will be guided by the transactional characteristics of the MNEs’ firm-specific advantages (FSAs) and the requisite complementary resources held by host country economic actors. Internalization theory thinking suggests applying various, specific principles to assess in a comparative institutional fashion whether “diversification” into supplying public goods will serve the MNEs’ efficiency goals, namely, the “cost of entry” test, the “better-off” test and the “value capture” test.
Originality/value
Internalization theory provides a solid, efficiency-driven rationale to guide MNE choices on which activities the firm will conduct internally. The nature of the MNEs FSAs and the most efficient, feasible option to bundle firm-level resources and locally held resources in host environments are critical to these choices.
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Augusto Sales, Steffen Roth, Michael Grothe-Hammer and Ricardo Azambuja
The literature on Mergers and Acquisitions (M&A), cultural differences between organizations have frequently been identified as one of the main challenges in the process of…
Abstract
Purpose
The literature on Mergers and Acquisitions (M&A), cultural differences between organizations have frequently been identified as one of the main challenges in the process of post-merger integration (PMI). Existing research has explored a broad variety of cultural differences in perceptions, such as those relating to expectations, norms, values and beliefs within the respective organizations, and how these affect the process and success of PMI. However, less attention has been paid to the relevance of the macro-societal context to PMI. The ambition of this article is, therefore, to advance our understanding of how macro-level societal factors define organizational cultures and affect the success of PMI.
Design/methodology/approach
We draw on social systems theory as devised by Niklas Luhmann, assuming that organizations are always embedded in the macro-level societal context of distinctive realms of social reality—such as the economy, politics, religion and the arts—that make up the so-called “function systems”. Looking at the case of the integration of a Brazilian technology start-up into a market-leading corporation, we analyze the dominant orientations towards these function systems, and the changes in these orientations over time.
Findings
The results suggest that differences in organizational culture in PMI can be partly explained by differences in orientations to the function systems. Moreover, forcing dramatic changes of orientations towards the function systems within a merged entity can severely damage its raison d'etre in the first place, potentially leading to, in some sense, an account of “culture murder”.
Originality/value
This article is unique in demonstrating that organizations are multifunctional systems whose culture is defined by the highly specific and potentially varying degrees of importance they place on individual function systems and that knowledge or neglect of these functional profiles may seriously affect the success of post-merger integration. Against this backdrop, the article presents a multifunctional profiling method that may easily translate into PMI management tools.
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