The learning perspective Flashcards

1
Q

What type of theory?

A

Behavioral theory: the choice between markets and entry modes

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2
Q

What type of drivers?

A

Internal drivers (risk aversion), emergent nature of decision (gradual fitting the strategy)

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3
Q

Mention core assumptions in the learning perspective:

A
  1. Risk aversion - the firm should only increase commitment through experience
  2. Experiental knowlegde is crucial in foreign operations.
    Ojective knowlede + Experiental
    Incremental decision making in foregn operations through gradual acquisitution.
    + increasing commitment moving down the estbalishment chain
  3. Increase long-term profit knowlegde.
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4
Q

Unit of anaysis?

A

Experience, commitment, knowlegde and psychic distance

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5
Q

How should the manager acc. to the learning perspective go about internationalizaiton?

A

Choose the countries with lowest pshysic distance and entry mode with lowest risk

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6
Q

Mention relevant authors related to the learning perspective

A

Johanson & Vahlne (a model of knowlegde development and increasing foreign market commitment)

Johanson and Paul (four swedish cases) - firms tend to internationalize down the establishment chain.

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7
Q

Draw the typical canvas of entry mode choice.. (degree of risk/commitment) and degree of control + different equity modes

A

Sporadic export, license production, export through agents, joint venture, sales subsidiaties, production subsidiares

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8
Q

Explain how control evolves in Tesla’s IP

A

Use canvas of entry mode choice.

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9
Q

Explain different types of knowlegde

A

Objective: Easy to get, less valuable
Experiental: Comes with increased resource commitment. Vital.
General knowlegde: the skills the firm has obtained over time.
Market specific knowlege: obtain through experiences in the market

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10
Q

Explain the model of knowlegde

A

Johanson & Vahlne

  1. Market knowlede
  2. Commitment decision
  3. Current activiteis (primary source to learning)
  4. Market Commitment

So if unvertainty rises, market commitment should be lowered. Lack of market knowlegde also increases risk -> decrease commitmetnt.

If the firm has superior resources, phychic distance is less important.

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11
Q

Define an entry mode

A

Entry mode definition: An international market entry mode is an institutional arrangement that carries a company’s products and/or services from one market context to another and regulates transactions between these market contexts

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12
Q

Explain degree of risk and control in the Canvas for entry mode

A

Degree of risk: Means degree of sources you commit to the market. How much you loose if you fail.

Degree of control: Fully owned s ubdiaries vs small stake in the subsidiary. The higher the ownership, the igher the control. But higher control also leads to higher risk.

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13
Q

Provide criticism of the learning perspevtive.

A
  1. The flow of informaiton from foreign markets have been enhanced -> lowe phychic distance
  2. The cost of internaitonal travel + communication have been enhanced -> easier to coordinate cross boarder activities.
  3. International managerial experiance have become more avialable -> great knowlegde can be obtained through recruitment.
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14
Q

What are born-globals:

A

The born global are Firms that from inception seek to derive significant competitive advantages from the use of resources and the sale of outputs in multiple countries.

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15
Q

How do we define a bornglobal?

A

The defining characteristic of a born global is its accelerated internationalization:
- Often defined as having an export share above 25% with the first 3 years (scope)

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16
Q

What does the learning theory say about born globals?

A

These should not excist according to the learning theory - due to not taking account for incremental learning per country

17
Q

Draw the uppsala model

A

Y = Markets,
X = Establishment chain
Arrow: Degree of internaitonalization