* Recent literature recommends greater analysis of institutional contexts in order to better adapt strategies in emerging market economies. This paper explores cognitive challenges in understanding institutional contexts, and reveals an outdated vernacular around emerging markets. Unwittingly, we may be crafting strategies based on how we would like emerging markets to be, rather than on how emerging markets actually are.
* Institutional context is investigated through metaphor analysis. As conceptual constructions that link the abstract to the concrete, metaphors can yield rich insights when analyzed. The metaphor analysis performed finds powerful cognitive simplifications and preconceptions of emerging markets.
* Eliciting novel metaphors around the labels 'emerging markets', 'developing countries', and 'third world' uncovers a fragmented rather than holistic view of institutional context. Strategies unresponsive to emerging markets may flow from a fragmented view of institutional context.
* In terms of theory, the use of metaphor analysis highlights the importance of considering subjective and even messy elements of institutional context. Prevailing discussions in the international business literature often locus on streamlined, objective measures of institutional context. This paper emphasizes that a complex process of institutionalization is being observed rather than a steady state of objective outcomes.
Keywords: Emerging markets * Developing countries * Third world * Strategy * Labels * Institutional context * Metaphor analysis
Institutionalism is an important determinant of emerging market strategy, and analyzing institutional context heightens our understanding of emerging market variations (Meyer et al. 2009). The complexities of emerging markets require breaking down customary silos of politics, economics, culture etc., and recasting the analysis holistically as institutional context. Institutional context is defined as: 'the environment around concrete social forms of the economy and political system, created and refined by the actors who use them, carried forward by the shared meaning embodied' (Turner 2006; Fligstein 2001; Dobbin 2005).
The value of institutional context from an analytical perspective is well understood. The international business literature urges increased responsiveness of strategies to the institutional contexts of emerging markets (Meyer et al. 2009; Hoskisson et al. 2000; Khanna et al. 2005; Prahalad and Doz 1987). The adaptation literature even prescribes numerous frameworks for tailoring bespoke approaches to institutional context (for example, Ghemawat 2007).
There is less certainty, however, in understanding why we are challenged in seeing institutional context clearly, even if the literature has made progress on what we find challenging and how adaptation to certain contexts should occur. The unexplored question of why there is insensitivity to variations in the institutional contexts of emerging markets has implications for strategy. Notably, strategies insufficiently adapted to emerging markets may be explained by inadequate understanding of variations in institutional context.
This paper utilizes metaphor analysis as a discursive method to examine the prevailing view of institutional context in emerging markets. Specifically, an analysis is undertaken of the discourse (Phillips and Hardy 2002; Fairclough 2003) of labels (Ashforth and Humphrey 1997) through metaphor (Quinn 1987; Schultze and Orlikowski 2001). The analysis finds veins of bias running through the discussion on emerging markets, revealing a fragmented view of institutional context.
A seemingly innocuous shorthand clouds or even precludes the understanding of emerging market variation. For example, what makes a country an emerging market as opposed to a developing country or third world country? …