Sorry for cross-listing.
Dear Colleagues,
We welcome you to join our open discussion. No pre-registration is needed.
Victor Zitian Chen & Raveedra Chittoor
Submission: 15674 | Sponsor(s): IM | PDW Cosponsor(s): BPS/OMT
Scheduled: Saturday, Aug 2 2014 9:00am-11:00am at
Pennsylvania Convention Center in Room 108B
AN INSTITUTIONAL DIVERSITY PERSPECTIVE OF GLOBAL STRATEGY
Co-Chairs:
Raveendra Chittoor (Indian School of Business)
Victor Z. Chen (University of North Carolina, Charlotte)
Distinguished panel (alphabetically listed by last name):
Michael A. Hitt (Texas A&M University)
Robert Hoskisson (Rice University)
Tarun Khanna (Harvard Business School)
Mona Makhija (Ohio State University)
Aldo Musacchio (Harvard Business School)
Ravi Ramamurti (Northeastern University)
Michael A. Witt (INSEAD)
Local insights panel (alphabetically listed by country):
China: Guoming Xian and Benny Bing Yan (Nankai University)
India: Raveendra Chitoor (Indian School of Business)
Israel: Dan Catarivas (Manufacturers Association of Israel)
Thailand: Kiattichai Kalasin (Mahidol University)
Abstract
In the context of rising emerging-market (EM) players outside the developed world, the purpose of our PDW is to explore the future agenda of integrating the diversity of institutions in different countries into the study of global strategy. Historically evidenced as a definitive explanation in performance differentials, institutional factors are considered the third leg in the "strategy tripod", with industry- and resource factors constituting the other two legs. EMs are an exciting natural experiment setting for building new theories as well as extending extant propositions in this strand of global strategy research. EMs as a setting offer unique, varying and diverse home institutions in capital markets, product markets, labor, law and order, politics, and social-cultural characteristics, which significantly differ from those in developed markets and among EMs themselves. Although an institution-based view has been introduced for years in international business, our knowledge of EM institutions, their dynamics, and the specific pathways by which they exert their influence is very limited. In particular, few efforts have been made to integrating timely local insights and a holistic paradigm that specifies the dimensions, evolution, and in(con)fluence of institutions into global strategy studies. This PDW aims to highlight how the diverse institutional settings in EMs can be used to expand our theoretical horizon and generate managerially impactful research in the area of global strategy.
*Selected as a Best Paper
Objectives and Overview:
In the thirteen years since the AMJ special issue of Hoskisson et al.'s (2000) "Strategy in Emerging Economies", we have witnessed a shift of attention from MNEs going into emerging markets (EMs) to MNEs coming out of emerging markets. Indeed, outward FDI flows from emerging markets have risen from US$150 billion (around 10% of the world total) in 2000 to US$ $482 billion (34%) in 2012. "What is really different about emerging market multinationals?" remains a hotly debated question (Ramamurti, 2012: 41). In particular, our knowledge of these firms' home institutional contexts remains limited and lags behind their fast evolution. This is in large part because we lack a global cooperative network of indigenous scholars permanently based in EMs, with the Emerging Market Global Players (EMGP) project[1] being a welcome exception.
In this PDW, entitled "An Institutional Diversity Perspective of Global Strategy", we seek to advance our knowledge of the unique institutional environments in EMs (e.g., Khanna, Palepu, and Sinha, 2005; Musacchio and Lazzarini, 2013). In particular, our understanding of the specific pathways through which institutions, and their dynamics, exert their influence on firm performance remains very limited (Makhija and Steward, 2002). A fruitful research agenda is to enrich the current institutional voids view (Khanna et al., 2013), which sets US/EU as the benchmark, by incorporating unique home-country perspectives and path dependence (Witt and Redding, 2013) and eventually building an institutional diversity view (Ostrom, 2010) that is more holistic as well as neutral to any institutional benchmarks. Such an effort also entails a distinction from a long historical perspective[2] between the dimensions that are converging (and the drivers of such convergence) and others that are evolving without convergence.
Institutional factors are considered the third leg in the "strategy tripod", particularly in the global context, with industry and resource factors constituting the other two legs (Peng, Wang and Jiang, 2008). Indeed, marshaling extraordinary historical evidence from the Roman Empire, the Mayan city-states, medieval Venice, the former Soviet Union, Latin America, England, Europe, the United States, Korea Peninsula, and Africa, Acemoglu and Robinson (2012) found that regions with the same people, geography, resource endowments, and industries but different institutions have reached completely different levels of economic performance and conclusively suggested that institutions were the definitive explanation in the regional differentials in performance. Beyond historical contexts, today's EMs are an exciting natural experiment setting to build new theories as well as test the extant propositions in this strand of strategy research (Cuervo-Cazurra, 2012). Emerging markets (EMs) as a setting offer unique, varying and diverse home institutions in capital markets, product markets, labor, law, politics, and social-cultural characteristics, which significantly differ from those in developed markets and among EMs themselves (Hoskisson et al., 2000; Khanna et al., 2005).
Although an institution-focused agenda has been introduced for years in strategy (Peng et al., 2009) and international business (Peng et al., 2008), our knowledge of EM institutions, their effects on firm-level outcomes, and an integrative paradigm generalizable to various institutional settings remains limited. Some welcome efforts have been made in international business in recent years to adopt an institutional diversity-type of thinking, for instance, varieties of capitalism (e.g., Witt and Redding, 2013), varieties of state capitalism (e.g., Mussachio and Lazzarini, 2013), as well as polycentric governance (e.g., Batjargal, Hitt, Tsui, Arregle, Webb, and Miller, forthcoming; Xu and Hitt, 2012; see also contributions by Michael McGinnis, Elinor Ostrom, and Armando Razo in a 2010 special issue of Transnational Corporations Review). More efforts, however, are needed to not only apply existing institution-based theories (usually developed in other disciplines) but to enrich and advance the theoretical foundations of the institution-based view based upon unique insights of global business activities.
In this workshop, we will explore the most notable institutional contexts in some of the largest EMs and discuss whether these contexts share any common natures and how, and to what extent, these contexts shape the global strategy of their MNEs. The key focus would be on the mechanisms through which home institutions support and constrain EM firms, thereby affecting different firm-level outcomes such as firm performance, entrepreneurship, innovation, internationalization, social responsibility, and so on.
The panelists will share their work and/or research ideas broadly focused on the following questions: (1) What are the most notable and unique institutional contexts (capital/product/labor markets, law and order, regulations and incentives, socio-political environments etc.) and their dynamic patterns in each focal EM, and are they sharing any common paradigms?(2) What are the specific pathways (e.g., corporate governance; organizational structures; etc.) through which these contexts exert their influence on EM firms? (3) How do these pathways in turn influence the global strategy (e.g., location choice, entry mode, entrepreneurship and innovation, local community engagement, etc.) of EM MNEs? (4) How would these discussions and findings advance the institution-based perspective of global strategy?
As scholars of management, context and phenomena are important to us, if they are likely to change our view of the world as it exists today or if they have the potential to change some of our existing theories. Special focus is needed on EMs because they are interesting, important and have the potential to significantly question and/or change some of the management theories that have been primarily developed in entirely different contexts. This PDW aims to explore some interesting research opportunities in the context of institutional diversity in emerging economies and its consequences.
Proposed Schedule:
1) Welcome and Introduction (10 minutes)
Welcome and introduction by the organizers
· Raveendra Chittoor (Indian School of Business)
· Victor Z. Chen (University of North Carolina, Charlotte)
2) Unique institutional settings and global strategy of EM firms (80 minutes)
Moderated by the organizers, Tarun Khanna will revisit his seminal work "institutional voids" and start the discussion with an opening question "from institutional voids to institutional diversity?", followed by an interactive discussion among all our panelists as well as the audience to share research findings and to explore new agenda around the four questions mentioned above.
· Michael A. Hitt (Texas A&M University)
· Robert Hoskisson (Rice University)
· Tarun Khanna (Harvard Business School)
· Mona Makhija (Ohio State University)
· Aldo Musacchio (Harvard Business School)
· Ravi Ramamurti (Northeastern University)
· Michael A. Witt (INSEAD)
· Representatives from EMGP project
3) Questions from Audience and Discussion (30 minutes)
(Total Time: 2 hours)
References
Batjargal B, Hitt M, Tsui A, Arregle J-L, Webb J, Miller T. TBA. Institutional polycentrism, entrepreneurs' social networks and new venture growth. Academy of Management Journal, forthcoming.
Cuervo-Cazurra A. 2012. How the analysis of developing country multinational companies helps advance theory: Solving the Goldilocks debate. Global Strategy Journal, 2(3), 153-167.
Hoskisson RE, Eden L, Lau CM, Wright M. 2000. Strategy in emerging economies. Academy of Management Journal, 43(3), 249-267.
Khanna T, Palepu KG, Sinha J. 2005. Strategies that fit emerging markets. Harvard Business Review, 83(6), 63-76.
Makhija MV, Steward AC. 2002. The effects of national context on perceptions of risk: A comparison of planned versus free-market managers. Journal of International Business Studies, 33(4), 737-756.
Musacchio A, Lazzarini SG. 2013. Reinventing state capitalism: Leviathan in business, Brazil and beyond. Cambridge, MA: Harvard Business Press, forthcoming.
Ostrom E. 2005. Understanding institutional diversity. Princeton, NJ: Princeton University Press.
Peng MW, Wang DYL, Jiang Y. 2008. An institution-based view of international business strategy: A focus on emerging economies. Journal of International Business Studies, 39, 920-936.
Ramamurti R. 2012. What is really different about emerging market multinationals? Global Strategy Journal, 2(1), 41-47.
Transnational Corporations Review, 2(2), a special issue "celebrating Elinor Ostrom's 2009 Nobel Prize in Economic Sciences", open access at http://www.tnc-online.net/page/2010NO2/index.php.
Witt MA, Redding G. 2013. Asia business systems: Institutional comparison, clusters, and implications for varieties of capitalism and business systems theory. Socio-Economic Review, 11(2), 1-36.
Xu K, Hitt M. 2012. Entry mode and institutional learning: A polycentric perspective. Advances in International Management, 25, 149-178.
VICTOR ZITIAN CHEN, Ph.D.
T: +1 (980) 636-9207| E: EMGP.Editor@gmail.com | W: http://www.VictorZChen.com/
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Assistant Professor of International Management
UNIVERSITY OF NORTH CAROLINA, CHARLOTTE | The Belk College of Business | 9201 University City Blvd, Charlotte, NC 28223-0001 | http://belkcollege.uncc.edu/
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Fellow, Global Coordinator and Editor, Emerging Market Global Players (EMGP) Project
COLUMBIA UNIVERSITY | Vale Columbia Center on Sustainable International Investment | Columbia Law School - The Earth Institute | 435 West 116th Street, New York, NY 10027 | http://www.vcc.columbia.edu/
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Co-founder and Associate Editor
TRANSNATIONAL CORPORATIONS REVIEW | 《跨国公司评论》
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