Abstract
This paper studies a new frontier in the understanding of International Strategy (IS). To explore it, we propose the analogy of the ecology of firms and places as a way to emphasize that the real problem is the colocation of different places with different types of firms. Locations are in fact the distinctive content of International Business Strategy. We deal with this problem with four different perspectives. First, differences across countries must be addressed with integrative frameworks able to represent the multidimensionality of ‘semiglobalization’, or intermediate states between total localization and total integration. Second, differences in the development of intermediary markets in a particular place influence firm positioning and industry structure in that place, but their impact also crosses different places, and it is endogenous to the ecology of places and firms in a systemic, integrative way that makes simplifications extremely risky in the design of competitive strategy in an international context. Third, places, firms, and strategies form a complex ecology that can be studied with a framework focused in understanding the geography–strategy link that incorporates different levels of analysis, new economic actors, and a set of primitives. Finally, firms around the ecology of places face the challenge of developing strategies and business models to serve the majority of humanity today excluded from world trade. It is a fundamentally different way to think about the ecology of places and firms. Overall, we present an intriguing New Frontier, with the capacity to impact both research and practice in the field of international strategy, based in understanding the interplay among firms and places.
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Notes
Admittedly, at this polar extreme there would still be room for interesting cross-country comparative research aimed at correcting for the US-centric approach that continues to pervade most ‘mainstream’ strategic thinking. However, such research should properly be classified as a contribution to single-country strategy: that is, domains 1 or 2 of the matrix in Table 3, rather than domains 3 or 4.
If pressed to unbundle the CAGE framework further, it would probably involve splitting the administrative category into institutional precommitments, government policies and interest group politics/political preferences that have the power to influence policies over time. It would also be necessary to elaborate further on variations in the usage specificity of the relevant economic factors, inputs, infrastructure, etc.
Porter's diamond framework does afford more degrees of freedom than, for example, the Global Competitiveness Index because of its industry specificity, the attractions of which are discussed below. However, the point about indexicality continues to apply to the diamond framework, given its focus on competitiveness without systematic attention to the variations in distance, along various dimensions, between countries.
For a somewhat more extended discussion of indexicality in a broader social science context, see Abbott (2001), especially pp 11–12 and Chapter 6.
According to Pike: ‘The etic view is cross-cultural in that its units are derived by comparing many systems and by abstracting from them units that are synthesized into a single scheme that is then analytically applied as a single system. The emic view is monocultural with its units derived from the internal functional relations of only one individual or culture at a time.’
Whereas one can posit conceptual links between institutional voids and sustainability, we know of no formal work that establishes whether positions are sustained for differentially long periods based on ambient institutional voids.
The field study also reached similar conclusions about Indian business groups during the several years following deregulation of cross-border activity (1991–1997).
Outside the realm of economic reasoning that informs this section, the issue of effects of multinationals is one that continues to receive much attention. For example, do multinationals compromise national sovereignty? Do multinationals crowd out local culture? and so on
Including CK Prahalad (University of Michigan), C Christensen (Harvard Business School), MA Rodríguez (IESE Business School), S Sharma (Wilfrid Laurier University), A Hammond (World Resources Institute), I Gomez and N Guttierez (Tec Monterrey), and J Johnson, T London, M Milstein, E Simanis, and L Jones (University of North Carolina).
The BOP Learning Lab's contributing members include DuPont, HP, J&J, P&G, SC Johnson, Ford, Dow, Coke, and Tetrapak. Non-profit organizations such as the Grameen Foundation and the World Resources Institute are also actively involved.
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Acknowledgements
This paper is based on a panel at the First Annual Conference on Emerging Research Frontiers in International Business Studies, organized by the Journal of International Business Studies (JIBS), to discuss several new lines of research in international strategy. Each panelist took particular responsibility to write his corresponding section. Excluding the introduction and conclusions, the order of authorship is P Ghemawat, T Khanna, M Enright, and S Hart. We wish to acknowledge the insightful guidance of A Lewin in the developments of this paper. The support of the ‘Anselmo Rubiralta’ Center for Globalization and Strategy is highly appreciated.
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Accepted by Arie Lewin, Editor in Chief, 12 February 2004. This paper has been with the author for two revisions.
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Ricart, J., Enright, M., Ghemawat, P. et al. New frontiers in international strategy. J Int Bus Stud 35, 175–200 (2004). https://doi.org/10.1057/palgrave.jibs.8400080
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DOI: https://doi.org/10.1057/palgrave.jibs.8400080