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International strategy 2020 detailed summary
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Articles from International Strategy course are summarized as well as the knowledge clips.
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International Strategy,Spis treści
Week 1: Theoretical Foundations of International Strategy ..................................................4
Rugman, A.M. & Verbeke, A. (1992). A note on the transnational solution and the transaction
cost theory of multinational strategic management. .................................................................... 4
Foss, N.J. & Pedersen, T. (2004). Organizing knowledge processes in the multinational
corporation: An introduction ........................................................................................................ 5
Cantwell, J., Dunning, J.H. & Lundan, S.M. (2010). An evolutionary approach to understanding
international business activity: The co-evolution of MNEs and the institutional environment ..... 5
Porter, M. E. 1986. Changing patterns of international competition ............................................. 6
Ghemawat, P. 2008. Reconceptualizing international strategy and organization ......................... 7
Session 1: Knowledge Clips ........................................................................................................... 8
Theme 2: Where Do MNEs Invest? .......................................................................................11
Benito, G.R.G. & Gripsrud, G. (1992). The expansion of foreign direct investments: discrete
rational location choices or a cultural learning process? ............................................................. 11
Mariotti, S., Piscitello, L. & Elia, S. (2010). Spatial agglomeration of multinational enterprises:
the role of information externalities and knowledge spillovers .................................................. 13
Demirbag, M. & Glaiser, K.W. (2010). Factors determining offshore location choice for R&D
projects: A comparative study for developed and emerging regions. ......................................... 15
Laamanen, T., Simula, T., & Torstila, S. (2012). Cross-border relocations of headquarters in
Europe......................................................................................................................................... 15
Case study: Qualtrics: Rapid International Expansion ................................................................. 16
Knowledge clips: ......................................................................................................................... 17
Theme 3: How Do MNEs Invest Abroad? .............................................................................19
Brouthers, K. D. & Hennart, J. F. 2007. Boundaries of the firm: Insights from international entry
mode research. ........................................................................................................................... 19
Meyer, K., Estrin, S., Bhaumik, S.K., & Peng, M.W. (2009) Institutions, resources, and entry
strategies in emerging economies. .............................................................................................. 20
Kogut, B. (1991). Joint ventures and the option to expand and acquire...................................... 20
Gubbi, S.R., Aulakh, P.S., Ray, S., Sarkar, MB, & Chittoor, R. (2010) Do international acquisitions
by emerging-economy firms create shareholder value? The case of Indian firms. ...................... 21
Case study: Costco Wholesale Corporation: Market expansion and global strategy ................... 21
Knowledge clips .......................................................................................................................... 23
Theme 4: When Do MNEs Invest Abroad? ...........................................................................27
Lieberman, M.B. & Montgomery, D.B. (1988). First mover advantages. ..................................... 27
Kerin, R. A.; Varadarajan, P. R.; Peterson, R. A. 1992 First-mover Advantage: A Synthesis,
Conceptual Framework, and Research Propositions. .................................................................. 27
Gaba, V., Pan, Y., & Ungson, G.R. (2002). Timing of entry in international market: An empirical
study of US Fortune 500 firms in China. ...................................................................................... 29
, Frynas, J.G., Mellahi, K., & Pigman, G.A. (2006). First mover advantages in international business
and firm-specific political resources. ........................................................................................... 29
Case study: CircusTrix: The Ups and Downs of International Expansion...................................... 30
Knowledge Clips: ......................................................................................................................... 31
Theme 5: How Do MNEs Manage Foreign Subsidiaries?......................................................34
Birkinshaw, J., N. Hood & S. Jonsson (1998). Building Firm-Specific Advantages in Multinational
Corporations: The Role of Subsidiary Initiative. .......................................................................... 34
Monteiro, L.F., Advidsson, N. & Birkinsahw, J. (2008). Knowledge flows within multinational
corporations: Explaining subsidiary isolation and its performance implications. ........................ 35
Mudambi, R. & Navarra, P. (2004). Is knowledge power? Knowledge flows, subsidiary power and
rent- seeking within MNCs. ......................................................................................................... 36
Feinberg, S.E. & Gupta, A.K. (2009). MNC subsidiaries and country risk: Internalization as a
safeguard against weak external institutions. ............................................................................. 37
Case study: Eurasian Brewing Company (EBC): Forbidden City: Launching a Craft Beer in China 38
Knowledge clips: ......................................................................................................................... 39
Theme 6: Multinationality and Performance .......................................................................43
Lu, J., & Beamish, P. (2004). International Diversification and Firm Performance: The S-Curve
Hypothesis. ................................................................................................................................. 43
Knowledge clips: ......................................................................................................................... 43
, Week 1: Theoretical Foundations of International Strategy
How MNE theories help us understand what an international strategy is?
How could/should we define international strategy (in this course)?
What are the main issues to consider for a cross-border strategy?
Rugman, A.M. & Verbeke, A. (1992). A note on the transnational solution and the
transaction cost theory of multinational strategic management.
Bartlett and Ghoshal state that "in the future, a company's ability to develop a transnational
organizational capability will be the key factor that separates the winners from the mere
survivors in the international competitive environment".
Transaction cost theory as a predictive model argues that both the form and competitiveness
of the international operations of an MNE depend crucially upon the configuration of three
elements.
The three elements of the transaction cost theory of the multinational enterprises are:
1. Firm-specific (or ownership-specific)advantages (FSAs), including both proprietary
know-how (unique assets) and transactional advantages.
2. Country-specific(or locational)advantages(CSAs),which state that some benefits are
associated with locating certain activities in particular countries
3. Internalization advantage. These refer to the relative benefits associated with different
entry modes when serving foreign markets.
Two types of FSAs must be distinguished; non-location- bound (NLB-FSAs) and location-bound
ones (LB-FSAs). The former are defined as FSAs that can be exploited globally, and lead to
benefits of scale, scope or exploitation of national differences. In the context of FDI, the NLB-
FSAs can be transferred abroad at low marginal costs and used effectively in foreign
operations without substantial adaptation. In contrast, location-bound FSAs can be defined as
FSAs that benefit a company only in a particular location (or set of locations), and lead to
benefits of national responsiveness. In the context of FDI, these LB-FSAs cannot easily be
transferred and require significant adaptation in order to be used in other locations.
As concerns CSAs, it should be recognized that CSAs of other countries, rather than those of
the home country.
Three partly overlapping trends in the operations of MNEs:
1. foreign subsidiaries are being set up as replicas of the parent company
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