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Summary/overview articles of International Strategy, UvA 2021
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Overview of the International Strategy articles for the exam on the 27th of May. UvA, 2021
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International Strategy articles - 2021 Universiteit van AmsterdamArticle Authors Year Key take-aways Conclusion
Week 1 - Theoretical
foundations for IS
1. An evolutionary Cantwell J., 2010 Co-evolution theory: The article emphasizes the crucial role of
approach to Dunning, argues there is no clear-cut choice between managerial institutions in determining MNE’s choice to enter
understanding J.H., and adaptation and environmental selection, but they occur (or not enter) a given country, as well as how to
international business Lundan, S.M. simultaneously and influence each other. behave as soon as the MNE has entered a
activity: the co-evolution à Integrative framework combining firm-level country.
of MNEs and the adaptation, importance of informal institutions,
institutional environment. importance of co-evolutionary processes. This paper provides a history-friendly approach
- Only looking at institutional level is not enough. about the MNE: important to include the history of
the MNE and the institutions to better understand
3 important reasons to include the role of institutions: why certain rules and informal constraints exist
1. The institutional aspect of IB have become more and how these shape behaviors.
important for the MNE (due to global interconnectedness)
2. Rising significance of non-ergodic uncertainty has placed
more emphasis on the development of new institutions that
help to reduce uncertainty
3. MNEs respond to high uncertainty by shifting to more
open businesses
Crucial to look at co-evolution of MNEs when crossing borders:
firms adapt the main institutional settings + trying to shape these
to help them with doing business abroad.
How MNEs engage with institutions:
1. Institutional avoidance
2. Institutional adaptation
3. Institutional co-evolution
à All three not mutually exclusive
2. Organizing knowledge Foss, N.J. & 2004 This paper focuses on knowledge creation and knowledge 3 key points:
processes in the MNC: an Pedersen, T. management within MNEs. 1. there is an absence of micro-foundations
introduction. • MNEs can be seen as knowledge-sharing networks whose (individual behave.)
existence can be understood in terms of greater ability to 2. insufficient attention to organizations (not clear
transfer, create, integrate and deploy knowledge. à past how knowledge is influenced by organizational
research: NOT ENOUGH attention to knowledge process. processes)
3. unclear causality (first govern structure or
5 articles on the importance of knowledge: knowledge issues?)
1. Buckley & Carter:
1
, International Strategy articles - 2021 Universiteit van Amsterdam
Theoretical piece on process model for knowledge in
combination with MNC.
2. Mudambi & Navarra:
Bargaining power: subsidiary has vital knowledge for MNE =
creates power. + how this impacts the overall effici. of the MNE.
3. Simonin:
process of knowledge transfer between international strategic
alliance partners
4. Dhanaraj et al:
- focus on knowledge in international strategy.
- main focus on importance of (social) relation between foreign
parent and intern. JV’s as key determinant of knowledge
transfer.
5. Bjorkman et al:
- explores a model based on the agency theory & socialization
theory that addresses organi. mechanisms used by the MNC hq
to control inter-unit transfer of subsidiary competences.
To conclude, this paper focuses on knowledge and supports
the idea that when studying MNCs it is key to focus on
knowledge. Knowledge processes and organiz. mechanisms are
important to transfer knowledge in an organization.
3. A note on the Rugman, 1992 Transaction Cost Theory (TCT): This paper provides a clear insight in how the TCT
transnational solution and A.M. & MNE form and competi of int. operations depend on 3 elements: contributes to studying and analyzing MNE
the transaction cost Verbeke, A. 1. firm specific advantages (FSA): know-how & transaction adv. activities and strategic choices.
theory of multinational 2. country specific advantages (CSA) derive from locating activi. - The transnational solution derives from 3
strategic management. 3. Internalization advantages: benefits from diff entry modes. considerations:
Market failure is crucial reason for internalization.
1. MNE cannot solely rely on FSAs developed in
Theory is linked to framework of Bartlett and Ghoshal who the home country.
identified 4 manners how companies expand aboard: 2. CSAs in a specific host country can contribute
1. the international: home country has clear leadership and to the development of new FSAs.
knowledge which flows from center to subsidiaries. 3. Internalization advantages depend on a
2. the multinational: portfolio of independent national companies company’s transactional FSAs to operate foreign
with low coordination and control. subsidiaries
3. the global: scale economies, weak subsidiaries that are tight
to the home country organizations. transnational solution builds upon 3 sources of
4. the transactional: balance scale, responsiveness & capability. comp. ad.: LB-FSAs, NLB-FSAs + dual use of
CSAs in home and host country. = difficult!
Transnational company able to benefit both high integration &
high responsiveness. other companies only one: high integration identify 4 types of typologies based on perceived
(standardization) or high responsiveness (adapt local needs) potential for CSAs for MNEs competitiveness and
2
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