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Management International Review

Erschienen in:

01.12.2011 | Focused Issue: 50 Years of MIR

Mode Combinations and International Operations

Theoretical Issues and an Empirical Investigation

verfasst von: Prof. Gabriel R. G. Benito, Prof. Bent Petersen, Prof. Lawrence S. Welch

Erschienen in: Management International Review | Ausgabe 6/2011

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Abstract

An enduring characteristic of extant literature on foreign operation modes is its discrete choice approach, where companies are assumed to choose one among a small number of distinctive alternatives.
In this paper, detailed information about the operations of six Norwegian companies in three key markets (China, UK and USA) is used as the basis for an exploration of the extent to which, and how and why, companies combine clearly different foreign operation modes. We examine their use of foreign operation mode combinations within given value activities as well as within given countries.
The study reveals that companies tend to combine modes of operation; thereby producing unique foreign operation mode “packages” for given activities and/or countries, and that the packages are liable to be modified over time—providing a potentially important optional path for international expansion.
The data show considerable variation across cases; ranging from extensive use of mode combinations to a singular focus on a specific mode of operation. The study contributes to a refinement of our understanding of the path of internationalisation, and throws up a number of awkward theoretical questions about the process.

Vorheriger Artikel Advancing New Theory Development in the Field of International Management

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For example, divisions of the Norwegian multinational Norsk Hydro developed operations in India independently of each other—with limited utilisation of the others’ experiences (Tomassen et al. 1998).

Transaction cost theory focus on safeguarding specific assets against opportunistic actions; resource-based theory emphasizes the appropriation of rents generated by the possession of valuable and unique resources and capabilities; institutional theory emphasizes the (structural and behavioral) adaptation to external demands, regulations, and norms.

A distinct contribution, however, is that of Hennart (1993) who argues that mixed methods of organisation are commonplace (i.e. the simultaneous use of rules as well as prices), and that activities (transactions) are seldom carried out in the extreme (caricatures) of either bureaucracies or spot markets. Nevertheless, it must be noted that Hennart’s thesis is that real-life solutions to the organisation-problem—say, the choice of a foreign operation mode—typically involve combinations (“mixes”) of different organisation methods, not that different FOMs are used simultaneously. Hence, his approach is also rooted in a discrete-choice perspective.

In one case (Marine Harvest), Chile replaced USA as the key American location.

The value activities performed by the companies in the three chosen locations were mapped using the conventional classification of activities into (i) primary activities such as production, logistics and marketing, and (ii) support activities like procurement, IT, finance and accounting, R&D, and HRM.

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Titel: Mode Combinations and International Operations
Theoretical Issues and an Empirical Investigation
verfasst von: Prof. Gabriel R. G. Benito
Prof. Bent Petersen
Prof. Lawrence S. Welch
Publikationsdatum: 01.12.2011
Verlag: SP Gabler Verlag
Erschienen in: Management International Review / Ausgabe 6/2011
Print ISSN: 0938-8249
Elektronische ISSN: 1861-8901
DOI: https://doi.org/10.1007/s11575-011-0101-4

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