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International Business Organization Summary
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Summary Global Strategic Management 2022 KUL, Antwerp
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Midterm Introduction to International Business
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Summary International Business Strategy
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SamenvattingInternationaal
Zakenwezen – Yann
Dekeyser
2017-2018
Deze samenvatting omvat:
*Samenvatting van de slides en het handboek van Alain
Verbeke ‘International Business Strategy second edition’ (enkel
de te kennen delen)
,List of Abbreviations
1
,2
,3
,4
,5
,Table of contents
Chapter one: Conceptual Foundations of International Business
Strategy
Chapter two: Critical Role of Firm-Specific Advantages
Chapter three: The Nature of Home Country Location Advantages
Chapter four: The Problem with Host Country Location Advantages
Chapter five: Combining Firm-Specific Advantages and Location
Advantages in a Multinational Network
Chapter six: International Innovation
Chapter seven: International Sourcing and Production
Chapter eight: International Finance
Chapter ten: Managing Managers in the Multinational Enterprise
Chapter eleven: Foreign Distributors
Chapter twelve: Strategic Alliance Partners
Chapter thirteen: Mergers and Acquisitions
Chapter fourteen: The Role of Emerging Economies
Chapter fifteen: Emerging economy Multinational Enterprise (EMNEs)
Chapter sixteen A: International Strategies of Corporate Social
Responsibility
Chapter sixteen B: International Strategies of Environmental
Strategies
6
,Chapter one: Conceptual
Foundations of International
Business Strategy
International Business Strategy
= International business strategy means effectively and efficiently matching a
multinational enterprise’s (MNE’s) internal strengths (relative to competitors
=concurrenten) with the opportunities and challenges found in geographically
dispersed (verspreid) environments that cross international borders.
Such matching is a precondition to creating value and satisfying stakeholder
goals, both domestically and internationally. (=in eigen land en internationaal)
Five learning objectives:
1. To develop an understanding of the seven concepts of this book’s unifying
framework.
2. To link specific types of transfers of firm-specific advantages (FSAs)
across borders with the four corresponding MNE archetypes of
administrative heritage(=erfgoed).
3. To describe the various motivations for foreign direct investment (FDI)
and to explain the linkages among non-location-bound (or internationally
transferable) FSAs, location-bound (or non-transferable) FSAs and location
advantages within each of the four MNE archetypes.
4. To explain the need for complementary resources of external actors and
the potential reasons for bounded rationality and bounded reliability when
doing international business.
In this chapter, we will look in greater detail at each of seven concepts of this
book’s unifying framework. The seven concepts are presented in figure 1.1. Each
concept will be evaluated trough this chapter:
1. Internationally transferable (or non-location bound) firm-specific
advantages (FSAs)
2. Non-transferable (or location-bound) FSAs
3. Location advantages
4. Investment in – and value creation through – resource recombination
5. Complementary resources of external actors (not shown explicitly in figure)
6. Bounded rationality
7. Bounded reliability
7
,The MNE’s unique resource base
1. Physical resources (natural resources, buildings, plant equipment).
2. Financial resources (equity and loan capital)
3. Human resources (individuals and teams, entrepreneurial and operational
skills).
4. Upstream knowledge (sourcing knowledge, product and process-related
technological knowledge).
5. Downstream knowledge (marketing, sales, distribution and after sales
service).
6. Administrative knowledge (organizational structure, culture and
systems).
7. Reputational resources (reputation for honest business dealings).
Building upon its resource base, as well as its access to location advantages, the
MNE will develop stand-alone FSAs (e.g., brand names, patents) and routines,
and will also engage in resources recombination.
FSAs reflect the firm’s distinct strengths vis-à-vis rivals, and are the source of its
competitive advantage in the marketplace.
8
, Routines
The distinct ability to combine further the firm’s resources, in unique ways valued
by the firm’s stakeholders.
Routines are stable patterns of decisions and actions that coordinate the
productive use of resources, and thereby generate value, whether domestically or
internationally. The combination ability expressed in routines is a higher-order
FSA.
Recombination
Constitutes the heart of international business strategy.
Artful orchestration of resources, especially knowledge bundles, as a
response to differences between national and foreign environments, and to
satisfy new stakeholder demands in these foreign environments.
Entrepreneurial judgment is at the heart of the MNE’s recombination
capability.
Precondition to value creation and satisfying stakeholder needs in complex
international settings.
Internationally transferable (= non-location-bound)
FSAs
The internationally transferred FSAs can be effectively deployed and profitably
exploited (=effectief kunnen worden ingezet en winstgevend worden
geëxploiteerd) in foreign locations.
It involves more than the technical transfer across borders of knowledge and
other company strengths, namely they need the knowledge base that is matched
to local stakeholder requirements.
Over time the firm learns and gains increased legitimacy(=haalbaarheid) in the
host country.
When faced with natural or government-imposed trade barriers, the MNE may
transfer some FSA’s abroad directly, as ‘intermediate’ products.
The transfer abroad can also be done by external actors (such as licensees), or by
network partners (vb joint venture partners or distributors), who may add their
own complementary resources to the foreign operation and thereby strengthen
the MNE’s position in the foreign marketplace by filling resource gaps.
Paradox: If the FSA consist of easily codifiable knowledge (can be articulated
explicitly), then it can be cheaply transferred, BUT it can also be easily imitiated
by other firms.
Tacit knowledge (= stilzwijgende kennis)
= requires person-to-person communication, difficult to imitate competitive
advantage when doing business abroad
Non-transferable (= location-bound) FSAs
These FSAs can’t be easily transferred, deployed and exploited in foreign
markets. We have four types of locations-bound FSAs:
9
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