Chapter 4

Question 1

institution-based view

Answer 1

A leading perspective of strategy that argues that in addition to industry-based and resource-based views, firms also need to take into account wider influences from sources such as the state and society when crafting strategy

Question 2

institution

Answer 2

Humanly devised constraints that structure human interaction— informally known as the “rules of the game”

Question 3

institutional framework

Answer 3

A framework of formal and informal institutions governing individual and firm behavior

Question 4

formal institution

Answer 4

Institutions represented by laws, regulations, and rules

Question 5

regulatory pillar

Answer 5

How formal rules, laws, and regulations influence the behavior of individuals and firms

Question 6

informal institution

Answer 6

An institution represented by norms, cultures, and ethics

Question 7

normative pillar

Answer 7

How the values, beliefs, and norms of other relevant players influence the behavior of individuals and firms

Question 8

norms

Answer 8

The prevailing practice of relevant players that affect the focal individuals and firms

Question 9

cognitive pillar

Answer 9

The internalized, taken-for-granted values and beliefs that guide individual and firm behavior

Question 10

transaction cost

Answer 10

The cost associated with the economic transaction—or more broadly, the cost of doing business

Question 11

opportunism

Answer 11

Self-interest seeking with guile

Question 12

relational contracting

Answer 12

Contracting based on informal relationships

Question 13

informal, relationship-based, personalized exchange

Answer 13

A way of economic exchange based on informal relationships among transaction parties

• Also known as relational contracting

Question 14

arm’s-length transaction

Answer 14

Transaction in which parties keep a distance, develop little social relationship and rely on contracts

Question 15

formal, rule-based, impersonal exchange

Answer 15

A way of economic exchange based on formal transactions in which parties keep a distance

Question 16

institutional transition

Answer 16

Fundamental and comprehensive changes introduced to the formal and informal rules of the game that affect organizations as players

Question 17

firm strategy, structure, and rivalry

Answer 17

How industry structure and firm strategy interact to affect interfirm rivalry

Question 18

factor endowment

Answer 18

The endowment of production factors such as land, water, and people in one country

Question 19

related and supporting industries

Answer 19

Industries that are related to and/or support the focal industry

Question 20

domestic demand

Answer 20

Demand for products and services within a domestic economy

Question 21

intellectual property right (IPR)

Answer 21

Right associated with the ownership of intellectual property

Question 22

bounded rationality

Answer 22

The necessity of making rational decisions in the absence of complete information

Question 23

nonmarket (political) strategy

Answer 23

A strategy that centers on leveraging political and social relationships

Question 24

institutional work

Answer 24

Purposive action aimed at creating, maintaining, and disrupting institutions

Question 25

institutional logic

Answer 25

A socially constructed set of practices, assumptions, and values that shape behavior

Question 26

institutional pluralism

Answer 26

The existence of multiple institutional logics

Question 27

state-owned enterprise (SOE)

Answer 27

A firm owned and controlled by the state (government)

Question 28

hybrid organization

Answer 28

An organization that incorporates elements from different institutional logic

Question 29

culture

Answer 29

The collective programming of the mind that distinguishes the members of one group or category of people from another

Question 30

power distance

Answer 30

The degree of social inequality

Question 31

individualism

Answer 31

The perspective that the identity of an individual is most fundamentally based on his or her own individual attributes

Question 32

collectivism

Answer 32

The perspective that the identity of an individual is most fundamentally based on the identity of his or her collective group (such as family, village, or company)

Question 33

masculinity

Answer 33

A relatively strong form of societal-level sex role differentiation whereby men tend to have occupations that reward assertiveness and women tend to work in caring professions

Question 34

femininity

Answer 34

A relatively weak form of societal-level sex role differentiation whereby more women occupy positions that reward assertiveness and more men work in caring professions

Question 35

uncertainty avoidance

Answer 35

The extent to which members in different cultures accept ambiguous situations and tolerate uncertainty

Question 36

long-term orientation

Answer 36

A perspective that emphasizes perseverance and savings for future betterment

Question 37

ethics

Answer 37

The norms, principles, and standards of conduct governing individual and firm behavior

Question 38

code of conduct (code of ethics)

Answer 38

Written policies and standards for corporate conduct and ethics

Question 39

ethical relativism

Answer 39

The relative thinking that ethical standards vary significantly around the world and that there are no universally agreed-upon ethical and unethical behaviors

Question 40

ethical imperialism

Answer 40

The imperialistic thinking that one’s own ethical standards should be applied universally around the world

Question 41

corruption

Answer 41

The abuse of public power for private benefit usually in the form of bribery

Question 42

Foreign Corrupt Practices Act (FCPA)

Answer 42

A US law enacted in 1977 that bans bribery of foreign officials

Question 43

extraterritoriality

Answer 43

The reach of one country’s laws to other countries

Question 44

in-group

Answer 44

Individuals and firms are regarded as part of “us”

Question 45

out-group

Answer 45

Individuals and firms are not regarded as part of “us”

Question 46

cultural distance

Answer 46

The difference between two cultures along some identifiable dimensions

Question 47

institutional distance

Answer 47

The extent of similarity or dissimilarity between the regulatory, normative, and cognitive institutions of two countries

Question 48

The name of Chapter 4

Answer 48

Emphasizing Institutions, Cultures, and Ethics