Chapter 4 Flashcards
institution-based view
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
institution
Humanly devised constraints that structure human interaction— informally known as the “rules of the game”
institutional framework
A framework of formal and informal institutions governing individual and firm behavior
formal institution
Institutions represented by laws, regulations, and rules
regulatory pillar
How formal rules, laws, and regulations influence the behavior of individuals and firms
informal institution
An institution represented by norms, cultures, and ethics
normative pillar
How the values, beliefs, and norms of other relevant players influence the behavior of individuals and firms
norms
The prevailing practice of relevant players that affect the focal individuals and firms
cognitive pillar
The internalized, taken-for-granted values and beliefs that guide individual and firm behavior
transaction cost
The cost associated with the economic transaction—or more broadly, the cost of doing business
opportunism
Self-interest seeking with guile
relational contracting
Contracting based on informal relationships
informal, relationship-based, personalized exchange
A way of economic exchange based on informal relationships among transaction parties
- Also known as relational contracting
arm’s-length transaction
Transaction in which parties keep a distance, develop little social relationship and rely on contracts
formal, rule-based, impersonal exchange
A way of economic exchange based on formal transactions in which parties keep a distance
institutional transition
Fundamental and comprehensive changes introduced to the formal and informal rules of the game that affect organizations as players
firm strategy, structure, and rivalry
How industry structure and firm strategy interact to affect interfirm rivalry
factor endowment
The endowment of production factors such as land, water, and people in one country
related and supporting industries
Industries that are related to and/or support the focal industry
domestic demand
Demand for products and services within a domestic economy
intellectual property right (IPR)
Right associated with the ownership of intellectual property
bounded rationality
The necessity of making rational decisions in the absence of complete information
nonmarket (political) strategy
A strategy that centers on leveraging political and social relationships
institutional work
Purposive action aimed at creating, maintaining, and disrupting institutions
institutional logic
A socially constructed set of practices, assumptions, and values that shape behavior
institutional pluralism
The existence of multiple institutional logics
state-owned enterprise (SOE)
A firm owned and controlled by the state (government)
hybrid organization
An organization that incorporates elements from different institutional logic
culture
The collective programming of the mind that distinguishes the members of one group or category of people from another
power distance
The degree of social inequality
individualism
The perspective that the identity of an individual is most fundamentally based on his or her own individual attributes
collectivism
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)
masculinity
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
femininity
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
uncertainty avoidance
The extent to which members in different cultures accept ambiguous situations and tolerate uncertainty
long-term orientation
A perspective that emphasizes perseverance and savings for future betterment
ethics
The norms, principles, and standards of conduct governing individual and firm behavior
code of conduct (code of ethics)
Written policies and standards for corporate conduct and ethics
ethical relativism
The relative thinking that ethical standards vary significantly around the world and that there are no universally agreed-upon ethical and unethical behaviors
ethical imperialism
The imperialistic thinking that one’s own ethical standards should be applied universally around the world
corruption
The abuse of public power for private benefit usually in the form of bribery
Foreign Corrupt Practices Act (FCPA)
A US law enacted in 1977 that bans bribery of foreign officials
extraterritoriality
The reach of one country’s laws to other countries
in-group
Individuals and firms are regarded as part of “us”
out-group
Individuals and firms are not regarded as part of “us”
cultural distance
The difference between two cultures along some identifiable dimensions
institutional distance
The extent of similarity or dissimilarity between the regulatory, normative, and cognitive institutions of two countries
The name of Chapter 4
Emphasizing Institutions, Cultures, and Ethics
