| This paper aims at generating research propositions regarding the strategies implemented by Western firms in emerging countries. We examine three approaches to the relationships between Western firms and the environments of emerging countries. These are firms that are involved in foreign direct investment activities, whether through wholly-owned subsidiaries or joint ventures. We are not focusing here on entry modes, but on the strategic process once an emerging market has been entered.
First we analyze the institutionalist approach, centered on local constraints and the need for adaptation on the part of Western firms. We suggest that researchers look beyond the conventional typologies based on product-market positioning and make use of organizational theory in order to have a broader perspective on strategy implementation in emerging countries. Then we examine the global strategy approach, together with the Schumpeterian tradition, as the two approaches share significant similarities. Finally, we examine the interactionist model (i.e., local and global), as illustrated in Giddens’ structurationist theory and in the emergent paradigm of international entrepreneurship. These approaches differ on key and interrelated dimensions of dynamic capability building. First, they are characterized by specific interpretations of what is rational in an international context. Then these various forms of rationality correspond with particular conceptualizations of knowledge and learning. Illustrative cases of Canadian companies involved in Brazil are provided to exemplify each approach.
|
