Strategic group influence on entry mode choices in foreign markets

This study examines imitation behavior in the foreign entry mode of the members of a strategic group within the industry. Following the institutionalist perspective, we argue that legitimating actors (trade associations, training institutions and investors, among others) can exert pressure on strategic group members to conform to institutionalized organizational practices and structures. We hypothesize that a company’s choice of foreign entry mode is determined by the previous choices of other companies within the strategic reference group. Thus, the probability of entry with a wholly owned subsidiary (versus shared-control entry) increases when the number of wholly-owned subsidiaries established by companies within the strategic reference group of the home-country is higher. We analyze 351 foreign direct investments of 30 Spanish banks in 55 countries between 1986 and 2008. Our results reveal imitation behavior between members of the strategic group and highlight the important role of the strategic group in strategic thinking.     

Management framework guiding strategic thinking in rapidly changing markets

Developing a management framework to guide strategic thinking in changing markets is increasingly critical for researchers and executives in coping with the complex and rapidly changing global business environment. Conventional training and practices have too often led strategy researchers and executives to assume a stable competitive box around existing businesses, not recognising the effects of radical and increasingly disruptive change on markets and competitive space. New strategic thinking logic and initiatives require a conceptual framework to guide obtaining information, perceptive interpretation of strategic issues and trends, and choice of the right strategic initiatives. The conceptualisation begins by determining the market-based strategic capabilities needed to identify the nature and scope of determinants of market changes. These changes must be identified, driven by new competition, new business models, and creativity and innovation. Understanding fast changing markets requires identifying new market space, conducting strategic segmentation analysis, and determining customer value requirements. Finally, this knowledge guides strategic vision and formulation and implementation of market-driven strategies for changing markets. The framework is based on conceptual logic and empirical findings from multiple disciplines including marketing strategy and strategic management     

Dynamics in foreign markets — A study of strategic control in CEE

Effective coordination is crucial to managing a global network of subsidiaries. Although much has been said on the instruments multinational companies use to control their foreign operations, only very little is known on how they develop over time. An empirical longitudinal analysis of 40 multinationals shows that as subsidiaries mature, control strategies need to be adapted. Consequently, headquarters’ executives need to take into account a dynamic perspective on interactive effects of single control instruments when selecting control strategies during the internationalization process.     

Internal labour markets as a strategic tool: A comparative study of UK and Chinese hotels

This paper reports how internal labour markets (ILMs), operated by a multinational hotel chain in the UK and China, impact on a range of organisational outcomes. The study examines the effects of three main dimensions of ILMs: job security, training, and opportunities for advancement on the key organisational outcomes of job satisfaction, organisational commitment, and intention to leave, together with employee attitudes to work environment, co-workers, supervisor, service to guests, leadership, communication, and organisational goal achievement. The paper concludes that the operation of an ILM, underpinned by effective human resource management policies and actions, is associated with high levels of work commitment and job satisfaction together with reduced intention to leave. However, the importance of individual ILM variables differs between hotels in the UK and China.     

The neglected need for strategic renewal in emerging markets: Lessons from Vietnam in transition

Research on strategy in emerging markets is based on overly static representations, paying insufficient attention to the impact of contextual change on the value of firms’ resources. This article examines how a sample of the most successful Vietnamese private companies during the first decade of their country's transition from central planning was affected by the shifting rules of the game in their business environment. I suggest the primary takeaway is that sustained superior performance in an environment with changing keys to success requires dedicated and ongoing strategic renewal. I also suggest the need for both scholars and managers to immerse themselves in emerging markets if they care to fully understand the granular ways in which these settings differ from more familiar advanced economies.     

Unionized labor markets and globalized capital markets

This paper studies the effects of international integration of capital markets in a world where countries differ in their labor market institutions: one country has a perfectly competitive labor market while the other is unionized. We show that workers should favor autarky in the unionized country, but oppose it in the non unionized country and vice versa for owners of capital. Aggregate gains from integration, however, are negative. We also show that, under capital mobility, an increase in relative bargaining power of unions does not always improve workers' welfare.     

The effect of overspending on tariff choices and customer churn: Evidence from mobile plan choices

Understanding the relation between consumer overspending, tariff choices and customer churn is extremely important in many industries. If consumers are insensitive to their overspending and keep making mistakes in tariff choices, firms may profit from overspending and do not have to worry about customer churn. In this paper, using a rich panel data from a major mobile network operator in China, we show evidence that consumers respond to financial incentives and try to reduce overspending by switching to another plan or terminating the relationships with the operator. Given the trade-off between profiting from overspending and reducing customer churn faced by the operator, we conduct a simple policy simulation and show that the operator should encourage consumers to reduce their overspending. We also show that the effects of switching decisions on future overspending and the hazard of churn differ among upward switchers (i.e. consumers who switch to a larger plan) and downward switchers (i.e., consumers who switch to a smaller plan). Specifically, we find that consumers who switch down are more likely to reduce their future overspending, while consumers who switch up are less likely to churn.     

Three poems on markets and consumption

This account reflects an effort to address the crisis of representation emerging from some of my recent fieldwork on pilgrimage in the postmodern era. Bracketed by the relatively dispassionate field note and the reasonably narcissistic journal entry, each of these particular poems is a liminal playground for the contest between introspection and exteroception. In these poems, I exploit the coincidence of the ethnographic and lyric moment to examine an anthropologist’s engagement with his craft. They address the experience of researcher ambivalence – in this case, the uncomfortable unwillingness to suspend the voice of judgment – occasioned by prolonged immersion in spectacular venues. Neither autoethnographic nor reflexive in any formal sense, these poems invite the reader to participate in the mixed emotions of a persona locked in the embrace of consumer culture, where to resist is to accommodate, and to accommodate, resist. The sites represented in the poems are, respectively, the flagship brand store American Girl Place, the Caribbean port of call Costa Maya, and the temporary autonomous zone of the Burning Man festival.     

Capitalizing on emerging markets

Miller, R. (1998) Selling to Newly Emerging Markets, Westport, CT: Quorum Books, 274 pages, ISBN 1 56720 044 3 Dixon, J. and Newman, D. (1998) Entering the Chinese Market: The Risks and Discounted Rewards, Westport, CT: Quorum Books, 1 56720 137 7 Bullis, D. (1998) Doing Business in Today's India, Westport, CT: Quorum Books, 320 pages, ISBN 1 56720 136 9     

Shelf sequence and proximity effects on online grocery choices

Research on shelf effects in traditional grocery stores shows that a product's absolute and relative shelf position may strongly affect consumer choices. The authors examine whether and how such shelf effects translate to an online grocery context. We find that a product's choice probability increases when presented on the first screen or located near focal items, especially when the latter are out-of-stock. These primacy and proximity effects have stronger impacts on choice decisions when assortments are more difficult to evaluate and when a clear shelf organization facilitates the use of shelf-based choice heuristics.     

Overseas assembly and country sourcing choices

This paper studies the cross-country pattern of U.S. overseas assembly activities between 1980 and 2000 to examine how outsourcing decisions are affected by changes in country and competitor costs. A number of interesting regularities emerge. When a country's costs rise, the share of U.S. overseas assembly activities in that location decline. Conversely, a country's share grows when competitor country costs increase. While own and competitor country costs affect overseas assembly in all countries, the magnitude of these effects is larger for developing countries. In many cases, the measured cost responses appear to correspond with outsourcing theories that are based on search and customization costs.     

Food choices and the younger generation

Food choice is influenced by many factors including physical, social and psychological ones. In this research, the food choices of young people in the 9–15 age group were investigated and the possible factors influencing them examined. Observations and questionnaires carried out in schools within Northern Ireland indicated that many young people are inclined to choose high-fat and high-sugar products and often dislike fresh fruit and vegetables. This raises concern, especially with the continued high incidence of coronary heart disease within the province. Further work has suggested that young people are aware of current nutrition policies and the importance of healthy eating, but still fail to put this knowledge into practice.     

Slow and fast markets

Informed traders need liquidity in order to profit from their private information. Markets provide liquidity and are compensated by the information released through trading. Fast markets provide access to a limit order book. Slow markets provide execution in an auction-based trading floor. Hybrid markets combine both execution venues. It is shown here that the overall efficiency of a hybrid market is determined by its fast component. The introduction of a trading floor does not generate more informed trading, only takes trading away from the fast market. Trading floors are thus inherently competitive to the fast market. We provide conditions that determine the competitiveness of a trading floor with respect to a fast market.     

Returns on ADRs and arbitrage in emerging markets

In this paper we compare the distributions of ADR returns and the returns of the locally traded shares between Chile and Argentina. This comparison is interesting because both countries are emerging economies with a similar free market orientation and the trading hours in both countries virtually coincide with the trading hours in New York. Argentina and Chile differ, however, in two important aspects: During our sample period: (1) The Argentinean market was completely under a fixed-exchange rate system, while Chile maintained a flexible exchange rate regime; and (2) Argentina did not impose any restrictions on foreign investments, while Chile did. We find that the return distributions of the Chilean ADRs are significantly different from the distributions of the returns on the respective underlying Chilean shares. While the mean returns are the same, the return's S.D. are significantly different. In contrast, the hypothesis that the distributions of the returns on the Argentinean ADRs and the returns on their respective underlying shares are the same cannot be rejected. We then use a threshold model to estimate the transaction costs of trading the ADRs and the locally traded shares. We find that the transaction costs that must be added to the returns spread before arbitrage is possible were between 100 and 200 basis points for Chilean ADRs. It was between 66 and 165 basis points for the Argentinean ADRs. The daily return spread reversion caused by arbitrage activities was estimated to be approximately 30% for Chilean ADRs and 40% for Argentinean ADRs. Finally, we cannot reject the hypothesis that low liquidity was a major factor in the cost difference between the two countries.     

The impact of stereotyping on consumers' food choices

There is mounting evidence to show that people's food choices are influenced by social others. However, there is scant research on how consumers' food choices are affected by perceived competence of others present in the retail setting. The findings of Study 1 indicate that when the other customer is perceived as competent (i.e., paying with a Platinum Amex), the focal consumer chooses the same (organic vs. standard) chicken wrap. However, such a mimicking behavior is absent when the other customer lacks competency cues (i.e., paying with food stamps). Study 2 shows that social modeling doesn't occur in the context of indulgent food choices. Moreover, the findings of Study 2 demonstrate that competence cues perceived similarity between the other customer and the focal consumer.