Network cohesion in global expansion: An evolutionary view |
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| Authors: | Faith Hatani Sara L McGaughey |
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| Institution: | 1. Manchester Business School, University of Manchester, Booth Street West, Manchester M15 6PB, UK;2. Department of International Business and Asian Studies, Griffith Business School, Griffith University, 170 Kessels Road, Nathan, QLD 4111, Australia;1. Faculty of Economics and Business, University of Groningen, 800 Postbus, 9700 AV Groningen, The Netherlands;2. College of Business Administration, The University of Tennessee, 416 Stokely Management Center, 916 Volunteer Boulevard, Knoxville, TN 37996-0545, USA;3. School of Business and Economics, North Carolina A&T State University, Quiester Craig Hall, Greensboro, NC 27411, USA;1. University of Paderborn, Department of International Business, Warburger Strasse 100, 33098 Paderborn, Germany;2. University of Duesseldorf, Faculty of Business Administration and Economics Chair of Management, Universitaetsstrasse 1, 40225 Duesseldorf, Germany;3. University of Giessen, Department of Human Resource Management, Small- and Medium-Sized Enterprises, and Entrepreneurship, Licher Str. 62, 35394 Giessen, Germany;1. Faculty of Business, Bond University, Queensland 4229, Australia;2. Game Development Department, Guild Hall, Southern Methodist University, Dallas, TX 75275-0333, United States;1. IAE Aix-en-Provence (Aix-Marseille Université), and SKEMA Business School, 60 rue Dostoïevski, BP 085, 06 902 Sophia Antipolis, France;2. John Molson School of Business, Concordia University, 1450 Guy Street, MB 13.355, Montréal, Québec H1H 1L8, Canada |
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| Abstract: | Increasingly, competitive advantage does not reside in a single firm's capabilities or resources, but in interfirm networks that compete with other networks. Recognizing that deployment of the network as a cohesive and coordinated organization is critical when it operates globally, we ask: How does global expansion, in particular entry into emerging markets, affect the cohesion of a large interfirm network and with what consequences? We examine this question through an evolutionary perspective, conceptualizing the process of variation–selection–replication–retention as one cycle of a network-level routine of global expansion. Movement through the cycle accelerates with high levels of network cohesion such that market entry and foreign establishment may become more rapid. We present a longitudinal analysis of the Toyota Group from founding through to its more recent entry into emerging markets, and identify the dangers of a diversion in any stage of this network routine. Our findings highlight the role uncertainty in the emerging market context and speed-based competition plays in the loss of network cohesion, and point to the ongoing, and possibly increased, importance of the core firm's role in maintaining network cohesion and global competitive advantage. |
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