Hitt, M. A., Franklin, V., & Zhu, H. 2006. Culture, institutions and international strategy.

Journal of International Management

報告人 洪一碩 D954010011January 6, 2008方至民 教授

Increasing globalization: some reasons• IT, • internet, • free trade, • EU, • opened market economies ( China and Russia)

• Purpose of this paper: examine the importance of national culture to international strategy.

1. The importance of identifying and understanding the impact of cultural differences on international strategies.

2. Emerging markets, the growing importance of BRIC

Construct building –

Step1. Examine the interrelationship between c

ulture and institutions

Step2. Explore the effects of institutional enviro

nments on international strategic chosen.

• Construct building –

•Step3. Discussion of the (2.1)selection of markets entered, (2.2)the mode of market entry, and how knowledge and learning drive these a

ctivities.

•Step4. •Examine the importance of (3)emerging markets and the geographic clustering of international activities.

2. International strategy, culture and institutions

Strategic behavior are affected by home country and of where they operate (Oliver, 1996)

Strategic behavior is embedded in networks of social relations represented by institutional environment (Granovetter, 1985)

Competitive advantage: superior value by knowing culture values

Competitive advantage: resources (Barney, 1991, 2001) financial, technological, human, relational.

Human capital, relational capital (Hitt et al.) in culture.

2.1  Selection of markets

Cultural similarity: need, employee management, reduce ‘foreignness’ (Zhheer and Mosakowski, 1997)

Economic opportunity factor, (going internationally): size of the market; gain special resources.

The similar, the less a firm learn (through new market entry)

Knowledge: learn the ‘hard’ lesson; the important of difference (Tihanyi et al., 2005)

Culture and institutional (intellectual property rights, transportation, regulations etc.) factors

• 2.2  Mode of entering new markets

• Culture distance affects the choice of entry mode (Harzing, 2004. et. al)

• National culture and institutions have an interaction effect on mode choosing.

 2.2.1  strategic alliances

International markets: share risks; but managing alliance is difficult;

Outsourcing, offshoring because of TC and RBV

A source of new knowledge

Success? Longer-term relationships

Alliance is more on sharing than on control

2.2.2   mergers and acquisitions (M&As)

Control

To enter new international markets.

Previous experience; diversification in product portfolios

Uncertainty avoidance

Advantage: “ready to use” yet target selection is an issue

Integration problems

•2.2.3 Greenfield ventures

•Maximum control of operation but without knowledge and help from local partners

•No buffer from different cultures and institutional deficits.

•Must learn by doing

3. Geographic clustering: regionalization

Agglomeration, locating in a region, for better assess to human capital, suppliers, and tech.

But the leader…knowledge, top employee concerns. (Shaver and flyer, 2000)

May disallow a frim from exploiting new opportunities in other region

• Future research and conclusions

•The most successful international firms used a distinctive mix of strategies to build knowledge capabilities and enrich their innovation output. (Knight, 2004)

•Effective strategic leadership (Ireland and Hitt, 2005)

•The ‘problem’ and ‘difference’ of emerging market.

The End