Search results

Laszlo Tihanyi is the B. Marie Oth Professor in Business Administration in the Mays Business School at Texas A&M University, USA. He received a PhD in Strategic Management from Indiana University and a Doctorate in Business Economics from Corvinus University of Budapest in his native Hungary. He is also an honourary Professor at Corvinus University. His main research areas are internationalization, corporate governance in multinational firms and organizational adaptation in emerging economies. His current research interests include the involvement of board of directors in foreign direct investment, the institutional environment of internationalization decisions and the effects of social movements on multinational firms. His papers have been published in the Academy of Management Journal, Academy of Management Review, Strategic Management Journal, Organization Science, Journal of International Business Studies and others. He served as Associate Editor of the Journal of Management Studies. He is currently on the Editorial Boards of the Academy of Management Journal, Journal of International Business Studies, Journal of Management Studies and Business Horizons.

Timothy M. Devinney is a Professor of Strategy at the University of Technology, Sydney. He has published seven books and more than 80 articles in leading journals, including Academy of Management Review, Strategic Management Journal, Organization Science, Journal of Management, Journal of International Business Studies, Journal of Business, Journal of Business Ethics, MIT Sloan Management Review and California Management Review. In 2008 he was the first recipient in management of an Alexander von Humboldt Research Award and was Rockefeller Foundation Bellagio Fellow. He is a Fellow of the Academy of International Business, an International Fellow under the auspices of the AIM Initiative in the UK and a Fellow of ANZAM (Australia New Zealand Academy of Management). He served as Chair of the International Management Division of the Academy of Management. He is Co-Editor of Academy of Management Perspectives and the head of the International Business & Management Network of SSRN. He is on the editorial board of more than 10 of the leading international journals.

For many exporting firms, success in foreign markets hinges to a large extent on the performance of their foreign intermediaries (Albaum, Strandskov, & Duerr, 2002; Ellis, 2000; Root, 1987). In spite of the key role played by intermediaries in foreign markets – i.e. sales agents and independent distributors (Solberg & Nes, 2002) – exporters often regard them as temporary arrangements and second-best alternatives to conducting foreign marketing, sales, and service activities in-house. The typical assumption is that foreign intermediaries are low-control entry modes (Hill, 2003; Root, 1987) that do not have the potential of exploiting the full sales potential of export markets. In other words, foreign intermediary arrangements could have inherent limitations that foster mediocre rather than excellent market performance. Several studies report that exporters generally distrust foreign intermediaries and suspect them of shirking at any given occasion (Beeth, 1990; Nicholas, 1986; Petersen, Benito, & Pedersen, 2000). Poor performance is sometimes expected. On the other hand, foreign intermediaries often find that exporters put in place incentive structures that do not induce them to achieve excellent performance. Hence, it is asserted that foreign intermediaries may deliberately seek mediocrity rather than very poor or outstanding performance.

Purpose – The purpose of this contribution is to clarify some of the institutional approaches in international business research and to identify opportunities to extend research on the role of institutions in international business.

Design/methodology/approach – Building on Douglas North's (1990) analogy of institutions as the rules of the game, we illustrate some of the differences between different institutional approaches in international business (IB) through a discussion of the rules and institutions surrounding the world of association football. We then briefly revisit the recent review by Hotho and Pedersen (2012) and compare and contrast three dominant institutional approaches in international business: new institutional economics, new organizational institutionalism and comparative institutionalism.

Findings – Our discussion illustrates that different institutional approaches address and explain different facets of international firm behaviour. The ways in which institutions matter for international business are therefore greatly dependent on how institutions are conceptualized and measured.

Originality/value – We highlight two recent developments in the literature on institutions which we believe offer important implications and opportunities for international business research. The first development is a move towards less deterministic approach to institutions. The second development is the recognition of institutional plurality and complexity, in the sense that organizations are often exposed to multiple logics with potentially contradictory prescriptions. These notions, we believe, offer important opportunities to advance our understanding of the relations between institutions and multinational enterprises (MNEs).

The present study develops an international joint venture (IJV) partner selection framework to explain the choice between state-owned or privately owned local partners in the context of emerging economies. We suggest that once an IJV is selected as the mode of entry, a multinational enterprise's strategic motivations – that is, efficiency seeking, market seeking and knowledge seeking – will influence its choice of IJV partner type: state-owned enterprise or privately owned firm. We argue that liability of foreignness and rule of law moderate the multinational enterprise's selection of IJV partner type.

Do multinational enterprises evolve differently in emerging and developed economies? Although one camp argues that emerging economy multinationals are different from their developed country counterparts owing to the underdeveloped institutions in their home countries, another camp counters that they are the same and the existing international business theories can fully explain their strategies. A third camp suggests a more nuanced perspective by finding value in both approaches. In this introductory chapter, we review this debate and offer new perspectives on how to extend existing theories by accounting for four specific aspects of the home country institutional environments of emerging economies: breadth, depth, timing, and duration of exposure to institutional development. We then discuss how the chapters in this volume extend these ideas.

The Booz & Co./strategy+business Eminent Scholar in International Management is an annual award given by the International Management Division of the Academy of Management and sponsored by Booz & Co./strategy+business.

The Booz & Co./Strategy+Business Eminent Scholar in International Management is an annual award given by the International Management Division of the Academy of Management and Sponsored by Booz & Co./Strategy+Business.

The Booz & Co./strategy+business Eminent Scholar in International Management is an annual award given by the International Management Division of the Academy of Management and Sponsored by Booz & Co./strategy+business.