Peter J Buckley - International Business Strategy: Theory and Practice

International Business Strategy

With stagnated demand in many home economies, the need to internationalize and exploit foreign market opportunities has never been more paramount for businesses to succeed at a global level. However, this process raises a number of questions, such as: Can firms use their knowledge of one market in the next? Can firms pursue internationalization on several fronts at the same time? How should firms handle cultural and institutional differences between markets?

This textbook provides students with the core research in international business strategy, including organization, efficiency, external relationships and the challenges found in an increasingly multicultural world. Each part begins with a presentation of the issues and controversies faced in that particular area, followed by a synthesis of the research, which provides avenues for future research. To facilitate and encourage further debate and learning, each part also includes at least one original case study.

Compiled by two world-leading scholars of international business, and supplemented with critical commentaries and a range of integrative case studies, this comprehensive textbook provides advanced students of international business strategy with a resource that will be invaluable in their studies and beyond.

Peter J Buckley is Professor of International Business at the University of Leeds, UK.

Pervez N Ghauri is Professor of International Business at Kings College London, UK.

International Business Strategy

Theory and practice

Edited by

Peter J Buckley and Pervez N Ghauri

First published 2015

by Routledge

2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN

and by Routledge

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Routledge is an imprint of the Taylor & Francis Group, an informa business

2015 Peter J Buckley and Pervez N Ghauri

The right of the editors to be identified as the authors of the editorial material, and of the contributors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988.

All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers.

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British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library.

Library of Congress Cataloging in Publication Data

International business strategy: theory and practice/edited by Peter J. Buckley and Pervez Ghauri.

pages cm

1. International business enterprisesManagementCross-cultural studiesCase studies. 2. International tradeCase studies. I. Buckley, Peter J., II. Ghauri, Pervez N.,

HD62.4.I5496 2014

658.049dc23

2014024753

ISBN: 978-0-415-62469-5 (hbk)

ISBN: 978-0-415-62470-1 (pbk)

ISBN: 978-1-315-84836-5 (ebk)

Typeset in Times New Roman

by Sunrise Setting Ltd, Paignton, UK

Contents

YAIR AHARONI

RAYMOND VERNON

JAN JOHANSON AND JAN-ERIK VAHLNE

JOHN H. DUNNING

PETER J. BUCKLEY AND MARK C. CASSON

JENS GAMMELGAARD

PETER J. BUCKLEY AND PERVEZ N. GHAURI

PANKAJ GHEMAWAT

JEAN-LUC ARREGLE, TOYAH L. MILLER, MICHAEL A. HITT, AND PAUL W. BEAMISH

PETER J. BUCKLEY, TIMOTHY M. DEVINNEY AND JORDAN J. LOUVIERE

GABRIEL R. G. BENITO, BENT PETERSEN AND LAWRENCE S. WELCH

SYLVIE HERTRICH, MICHEL KALIKA AND ULRIKE MAYRHOFER

CHRISTOPHER A. BARTLETT AND SUMANTRA GHOSHAL

JAY BARNEY

ANDREW C. INKPEN AND PAUL W. BEAMISH

SENGUN YENIYURT, JANELL D. TOWNSEND, S. TAMER CAVUSGIL AND PERVEZ N. GHAURI

CHRISTOPH BARMEYER AND ULRIKE MAYRHOFER

SRILATA ZAHEER

JEAN-FRANOIS HENNART

AMJAD HADJIKHANI, JOONG-WOO LEE AND PERVEZ N. GHAURI

CYRIL BOUQUET AND JULIAN BIRKINSHAW

ULF ELG AND JANINA SCHAUMANN

ODED SHENKAR

ALVARO CUERVO-CAZURRA AND MEHMET GENC

MARY YOKO BRANNEN AND MARK F. PETERSON

LARS HALLN AND FINN WIEDERSHEIM-PAUL

STEFAN SCHMID, DENNIS J. WURSTER AND THOMAS KOTULLA

PETER J. BUCKLEY, L. JEREMY CLEGG, ADAM R. CROSS, XIN LIU. HINRICH VOSS AND PING ZHENG

PERVEZ N. GHAURI, VERONIKA TARNOVSKAYA AND ULF ELG

TARUN KHANNA, KRISHNA G. PALEPU AND JAYANT SINHA

WITOLD J. HENISZ AND BENNET A. ZELNER

SURENDER MUNJAL

Christoph Barmeyer (University of Passau, Germany)

Ulf Elg (Lund University, Sweden)

Jens Gammelgaard (Copenhagen Business School, Denmark)

Sylvie Hertrich (EM Strasbourg, University of Strasbourg, France)

Michel Kalika (Dauphine University, France)

Thomas Kotulla (ESCP Europe, Germany)

Ulrike Mayrhofer (IAE Lyon, France)

Surender Munjal (Leeds University, UK)

Janina Schaumann (Lund University, Sweden)

Stefan Schmid (ESCP Europe, Germany)

Dennis J. Wurster (ESCP Europe, Germany)

What is international business?

At its simplest, international business is easily defined: doing business across international frontiers. As this book will show, in practice this is far from simple. There are many methods (modes) for companies to engage in business internationally and the management and coordination of these complex activities has become a specialized field of study as international management.

The academic subject of international business approaches the empirical phenomena of doing business across borders at a variety of levels of analysis, using a variety of theoretical frameworks (Buckley and Lessard, 2005). The most important levels of analysis are:

the individual manager;

the firm;

the industry;

the country;

the global economy.

In each category, there is great heterogeneity.

Over the history of international business, different phases of research dominance have led to one level or another being privileged in order to give clarity to the analysis. For instance, internalization theory ().

In order to reconcile these differing levels of analysis, the international business research community has often focussed on a big question. This has included explaining the flows of foreign direct investment (FDI), exploring the existence, strategy and organization of multinational enterprises (MNEs) and understanding and predicting the development of the internationalization of firms and globalization. It is arguable that the current (2014) big question is the rise of emerging economies, particularly the BRIC countries (Brazil, Russia, India and China) and the impact this has on the international economy, not least by their outward FDI. All these themes are examined in this book.

The domain of international business research is given by its empirical subject matter. International implies comparative. It is the international heterogeneity and variance of business activity that gives the subject matter its inherent interest and importance; international business is imbued with comparative method. The key comparators are: geographical, across space; historical, across time; counterfactual, a thought experiment comparing different (hypothetical) conditions of the world.