Institutional interactions and foreign firms’ strategies under tribal rule complexities in emerging markets

Abstract

Purpose

International marketing (IM) researchers have underscored the need for scholars to develop more studies to investigate institutional interactions (II) and sources of complexities in emerging markets (EMs). In response to these calls, the purpose of this paper is to propose a framework that classifies the dominant conditions firms are likely to confront as they enter EMs. Further, using exploratory data, the study evaluates potential strategies that foreign firms can follow when they encounter one of the most challenging condition (tribal rule (TR)) identified in the framework. The primary research question explored is: what strategies do foreign firms adopt to succeed under conditions of TR in EMs?

Design/methodology/approach

The methodology is exploratory qualitative research. The authors conducted extended interviews to produce rich case study data from CEOs and executives who have experience doing business in countries with strong TR conditions, such as Nigeria, Saudi Arabia, and Qatar. The interview data/transcripts were evaluated using open, axial, and selective coding (Strauss and Corbin, 1998) to discover macro-narratives that guide entry strategies in EMs.

Findings

Overall, foreign firms successful strategies under TR conditions revolve around knowledge of tribal networks, understanding of their common interests, co-creation of commonality of interests and goals and internal assimilation of tribal leaders. Based on the findings, the authors argue strategies emphasizing co-creation of commonality of interest and goals and absorption of political risk environment perspective will outperform traditional standardization and relational trust approaches.

Practical implications

The findings from the study provided preliminary insights about relevant managerial strategic choices under conditions of tribal complexities.

Originality/value

This study is the first known study to expand the recent IM debate on II and sources of complexities to TR context. The recognition of a co-creation of commonality of interest dimension is an important contribution. The strategy of co-creation of commonality of interests is unique to this study.

Citation

Oyedele, A. and Firat, F. (2018), "Institutional interactions and foreign firms’ strategies under tribal rule complexities in emerging markets", International Marketing Review, Vol. 35 No. 2, pp. 236-257. https://doi.org/10.1108/IMR-08-2015-0185