Thomas Osegowitsch and André Sammartino
In this chapter, we revisit the empirical findings of Rugman and coauthors concerning the overwhelming home-regionalisation among the world's largest firms. Using a longitudinal…
Abstract
In this chapter, we revisit the empirical findings of Rugman and coauthors concerning the overwhelming home-regionalisation among the world's largest firms. Using a longitudinal research design and continuous measures of internationalisation, we observe a number of secular trends. Among other, we find that sales growth beyond the home region is faster than sales growth within the home region. We use our empirical results to critique and augment existing regionalisation theory. In particular, we raise doubts about the sharp distinction in the literature between expansion in the home region and expansion in host regions.
Colin Dale, Thomas Osegowitsch and Simon Collinson
Global trading of oil and gas means international markets are more open than at any previous time. As a result, the oil industry oligopoly is being deconstructed and vertically…
Abstract
Global trading of oil and gas means international markets are more open than at any previous time. As a result, the oil industry oligopoly is being deconstructed and vertically integrated MNCs are being reconstituted to address this fact. In parallel, emergent MNCs in the form of National Oil Companies are now entering the competitive arena. Traditionally dominant MNCs are adopting new operating models focused on technological and financial strength. We examine changes in the once-dominant industry paradigm of vertical integration using several theoretical lenses. These include transaction-cost economics, the resource-based view and institution theory. The giant MNCs operated globally for decades and are an important variant of the MNCs studied in strategic management literature. We suggest the current theoretical models do not explain sufficiently how these MNCs respond to current changes and by using industry observation we contribute to modernization of this literature.
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Andre Sammartino and Thomas Osegowitsch
The paper aims to motivate more rigorous theoretical and empirical specification of the home regionalization phenomenon, in particular the dynamics of shifting advantage over time…
Abstract
Purpose
The paper aims to motivate more rigorous theoretical and empirical specification of the home regionalization phenomenon, in particular the dynamics of shifting advantage over time within a multinational enterprise. It aims to improve dialogue among regionalization researchers.
Design/methodology/approach
Contrasting the economizing and behavioral perspectives on internationalization, the paper presents five different archetypes of the home‐regionalization phenomenon. These archetypes are predicated on strategic management stylizations of competitive advantage.
Findings
The paper demonstrates that the notion of home regionalization as a dominant and superior model for firm internationalization remains a promising yet under‐explained and inconsistently articulated thesis. By introducing and exploring the archetypes, it shows the diversity of home‐regionalization theses, and the prospect that multiple forms of regionalization may be at play for different firms, industries and locations.
Originality/value
The paper presents the full complement of archetypes of the home‐regionalization phenomenon and explores their corresponding assumptions. These explorations open up new empirical and theoretical research avenues for distinguishing any genuine region effects.
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Christian Geisler Asmussen, Bo Bernhard Nielsen, Tom Osegowitsch and Andre Sammartino
– The purpose of this paper is to model and test the dynamics of home-regional and global penetration by multi-national enterprises (MNEs).
Abstract
Purpose
The purpose of this paper is to model and test the dynamics of home-regional and global penetration by multi-national enterprises (MNEs).
Design/methodology/approach
Drawing on international business (IB) theory, the authors model MNEs adjusting their home-regional and global market presence over time. The authors test the resulting hypotheses using sales data from a sample of 220 of the world’s largest MNEs over the period 1995-2005. The authors focus specifically on the relationship between levels of market penetration inside and outside the home region and rates of change in each domain.
Findings
The authors demonstrate that MNEs do penetrate both home-regional and global markets, often simultaneously, and that penetration levels often oscillate within an MNE over time. The authors show firms’ rates of regional and global expansion to be affected by their existing regional and global penetration, as well as their interplay. Finally, the authors identify differences in the steady states at which firms stabilize their penetration levels in the home-regional and the global space. The findings broadly confirm the MNE as an interdependent portfolio with important regional demarcations.
Originality/value
The authors identify complex interdependencies between home-regional and global penetration and growth, paving the way for further studies of the impact of regions on MNE expansion.
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Wei Guan and Jakob Rehme
Strategic concentration is a key issue for manufacturing companies when designing a supply chain. As a corporate strategy and a supply chain governance strategy, vertical…
Abstract
Purpose
Strategic concentration is a key issue for manufacturing companies when designing a supply chain. As a corporate strategy and a supply chain governance strategy, vertical integration relates to organisational economics and strategic supply chain management. Numerous explanations have been created for vertical integration, and transaction cost economics (TCE) provides a theoretical basis to help understand the process. However, the current popularity of vertical integration seems inspired by something more than altering industry structure and minimising cost, which are the traditionally accepted explanations for vertical integration This paper aims to explore the driving forces for vertical integration, particularly downstream integration of distribution, and the consequences of vertical integration in a manufacturer‐distributor‐reseller chain.
Design/methodology/approach
This study adopted an exploratory case study approach to examine a Swedish‐based timber manufacturer that vertically integrated a distribution centre in the UK, which made it a direct supplier to DIY retailers and builders' merchants. Data were collected primarily through open‐ended, face‐to‐face interviews.
Findings
The study found that the most important factors driving the manufacturer's vertical integration of distribution were the demands of large retail chains and the manufacturer's decisions to focus on developing its positioning strategy in the supply chain. Vertical integration has transformed the manufacturer into a supplier to large timber products resellers, offering the firm a greater potential to provide integrated solutions and, therefore, become a strategic partner to its customers.
Originality/value
This empirical study examined a building material distribution channel, a subject that has rarely been studied. Study results add empirical evidence to explanations and impacts of vertical integration, especially the integration of customer interface.
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Distances between contexts that a multinational enterprise (MNE) is familiar with and those that it is not familiar with do not hinder the MNE from becoming global. In this sense…
Abstract
Distances between contexts that a multinational enterprise (MNE) is familiar with and those that it is not familiar with do not hinder the MNE from becoming global. In this sense, distance serves as a barrier between an MNE’s global intentions and its regional realizations. (Multi)regional strategies are a possible expression of an MNE’s inability to approach distances. Considering the managerially relevant distances is essential to analyze the internationalization and the resulting (multi)regional strategies. A deeper understanding of how distance works requires linking distance to micro-foundations. Besides bounded rationality, bounded reliability opens the conceptual pathway toward a deeper understanding of internationalization and (multi)regional strategies.