Academic journal article Management International Review

Process Perspectives in International Business Research in CEE (1)

Academic journal article Management International Review

Process Perspectives in International Business Research in CEE (1)

Article excerpt

Abstract

* Internationalisation processes have been a core interest of international business research since the seminal contribution by Johanson and Vahlne (1977).

* The unique context of economic transition in CEE directs the attention to dynamic aspects of these processes, and to the interaction with changing environmental conditions.

* This introductory paper reviews the contributions of recent CEE research, and this special issue in particular, to advance our understanding of internationalisation processes.

Key Results

* Research in this special issue advances the IP model by exploring concepts of "opportunity creation", "discovery", "emotions" and "subsidiary roles".

* Future research on these concepts, as well as on the interaction of internationalisation processes of firms and their networks, may further enhance our understanding of internationalisation.

* In addition to the dominant theories, contextual organization theory and new economic sociology may provide appropriate foundations for process-oriented research.

Introduction

The opening of Central and Eastern Europe (CEE) has created unique 'quasi-societal experiments' and thus opportunities to test and advance theories in international business (IB) and management. This research has developed two broad traditions: 'variance theories' and 'process theories' (Langley 1999). The former aim to explain determinants of variation in corporate performance or behaviour, and are typically tested with cross-sectional data. Process theories seek to explain how businesses evolve over time. CEE research has advanced both agendas of research, with variance theories obtaining most of the attention in top Journals (Meyer/Peng 2005, Wright/ Filatotchev/Hoskisson/Peng 2005). The ahistorical, aprocessual and acontextual character of such research however limits its explanatory power (Pettigrew 1990), a concern that applies in particular to research in dynamic contexts such as CEE. Thus, transition economies require indigenous theory-building as existing theories developed in other contexts may fail to identify effects and concepts that are important to understanding business under these conditions (Tsui 2004). Thus, in this introductory paper, we aim to provide an alternative perspective focusing on processes in IB.

Variance theories focus on strategic decisions made by managers at a given point in time, and compare the merits of alternative strategies. Theories employed by this type of research in IB, such as transaction costs economics or the resource-based view, focus on how firms minimize costs or maximize revenues under the given circumstances and with the information available to decision makers. Empirical research in this tradition employs primarily cross-sectional analysis of firm-level datasets, and tests hypotheses concerning for instance the determinants of alternative organizational arrangement, or the implications of alternative arrangements for corporate performance. Such research in CEE has tested for example hypotheses concerning the impact of corporate governance on firm performance, or institutional peculiarities on foreign entry strategies (Wright et al. 2005). Longitudinal aspects are generally of lesser interest to this research, though some studies control for preconditions such as prior commitments and experiences.

Process theories focus on longitudinal developments, and aims to explain how and why firms advance or decline over time (Langley 1999). This research combines economic theories based on rational actors with behavioural and cognitive theories to explain the expansion and contraction of firms. In addition to internal processes and decision-making, it investigates the dynamic interaction of firms with their environment, and their business networks in particular. In CEE, such research by for example Newman (2000), Johanson (2001) and Michailova (2002) enhances our understanding of change processes under way at the level of individuals, organizations, and networks. …

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