How do organizations make strategic choices during the time of fundamental and comprehensive institutional transitions such as those sweeping emerging economies? This project addresses this question both theoretically and empirically. It first develops a two-phase model of market-oriented institutional transitions. It then focuses on the longitudinal process to move from a relationship-based, personalized transaction structure calling for a network-centered strategy to a rule-based, impersonal exchange regime suggesting a market-centered strategy. The central hypothesis is that as institutional transitions progress, networks and connections, previously thought to be imperative for business success, may become less important. Instead, competitive resources and capabilities are likely to be more significant determinants of firm performance.
Empirically, the project proposes three large-scale, multi-year studies. Study 1 will collect longitudinal case data from two partner organizations with operations in over a dozen cities in China. Study 2 will employ a two-wave survey methodology to collect data from approximately 300-450 firms in China, separated by two years between each survey. Finally, Study 3 will replicate and extend the China studies in two other important emerging economies, Thailand and Russia, using a similar two-wave survey methodology. The project.s dynamic integration of institutional and strategic choice theories and its longitudinal and multinational empirical design promise especially interesting insights. It synthesizes a diverse but scattered literature on emerging economies to form a coherent contribution. It explains, predicts, and aims to empirically document the mechanisms through which the importance of networks is gradually eclipsed by the importance of capabilities. This project thus highlights the relative decline of networks and connections (albeit still important) vis-a-vis competitive capabilities during institutional transitions.
In terms of its broader impacts, the project advances discovery while promoting teaching, training, and learning. The primary educational component includes the development of three .Emerging Markets Field Study. courses, one for MBAs, one for Executive MBAs, and another for undergraduates, that capitalize on the learning from this project. It also allows me to infuse the excitement of research into general courses/modules in International Business and Strategy at the MBA, undergraduate, and executive levels. It also enhances infrastructure for international research and education in Asia and Europe. It facilitates broad dissemination through publications in practitioner-oriented journals and online media as well as briefings to partner organizations and other interdisciplinary outreach activities. Finally, it fosters connections between discoveries and their benefits to the global society. Given the rising importance of emerging economies, our research and teaching activities need to move out of our familiar OECD mindset and pay more attention to emerging economies, if we endeavor to remain globally relevant. This project aims to help steer the research and education agenda toward focusing more needed attention on emerging economies.
