Theoretical Perspectives

Question 1

• Explain short each of the perspectives
• Who are the author?
• Draw the model for the four theoretical perspectives

Answer 1

Four theoretical erspectives
o	Institutional-economic perspective
o	Learning perspective
o	Strategic competition perspective
o	Inter-organizational perspective

Author: Rask M & Håkonson DD (2008)

Question 2

Explain the Learning perspective, use as many articles as you can to strengthen your answer

Answer 2

the company as a whole, experience, objective knowledge, commitment, psychic distance

• Johanson & Vahlne (1977)
• Johanson & Wiederoheim (1975)
• Weerawardena, Mort (2007)
• learning paradox

Question 3

Explain the Strategic competition perspective. Furthermore, explain the elements/model of the three phases. (model: phases of pre-internationalization)

Answer 3

Industry-company relation business area/unit

Model:
phase of pre-internationalization: 
o	1) initial foreign market entry; 
o	2) local or national market expansion; and 
o	3) globalization.

Question 4

Explain the inter-organizational perspective, and explain and draw the belonging model

Answer 4

company-tocompany relation. social relations, economic relations, technical relations, legal relations ect.

see model

Question 5

Explain the institutional-economic perspective. also define the terms ex ante cost / ex post cost

Answer 5

The transaction or set of transactions. Transactions costs (search, contracting, monitoring, and enforcement) and control costs

• Ex ante cost – are the cost of resources used by the exchange party for market searches, and drawing up and settling contracts
• Ex post costs – are costs associated with enforcement and monitoring.

Question 6

Define and explain the Uppsala model to detail. also name the author

Answer 6

Distingush between four different modes od internationl involvement/market commitment:
• Stage 1: no regular export activities (sporadic export)
• Stage 2: Export via independent representatives (export modes)
• Stage 3: Establishment of a foreign sales subsidary
• Stage 4: foreign production/manufacturing units

Result: Incremental commitment

author:

• Johanson J & Vahlne J-E (2009)
• Book: Hollensen

Question 7

Define psychic

Who is the author of the term? Are this term build upon or can be linked to other theories, explain?

Define:
PDS
PPD

Answer 7

Psychic distance: orginally defined: ”factors preventing or disturbing the flow of information between firms and the market” ex. Differences in language, culture, political system, level of education, level of industrial development ect.

Link:
(Used Ghemawat’s (2001) framework to get a more holistic view on concept of distance)

• Psycic distance stimuli (PDS) = objectives differences in country characteristics that are related – but distinct from PPD
• Perceives psycic distance (PPD) = seen as a funciton of PSD (subjectivrly perceived differences)

Question 8

Explain Yip (1989) global strategy framework

Answer 8

see on slide for lecture day 6

Question 9

Define the term born global

- who are the author of this term?

Answer 9

a firm there from being seek to derive significant competitive advantages from the use of resources and the sale of outputs in multiple countries

often having export share above 25% with the first 3 years (scope)

Question 10

Define the term born global

- who are the author of this term?

Answer 10

a firm there from being seek to derive significant competitive advantages from the use of resources and the sale of outputs in multiple countries

often having export share above 25% with the first 3 years (scope)

author: Weerawardena, Mort (2007)

Question 11

Explain the EPRG-framework - linked to the strategic competition perspective, and mention the author

Answer 11

Author: Douglas & Craig (1989)

EPRG framework
• (E) In the first stage, ethnocentrism, overseas operations are viewed as subordinate to domestic operations, and domestic performance standards are applied to overseas subsidiaries.
• (P) The polycentric or host country orientation emphasizes local cultural differences, and evaluation and control procedures are established locally, with little communication between headquarters and subsidiaries
• (R) A regiocentric orientation focuses on regional organization of authority and communication flows,
• (G) while a geocentric or global orientation aims for collaboration between headquarters and subsidiaries to identify standards and procedures which meet both worldwide and local goals and objectives.
The EPRG approach provides few explicit guidelines for strategy formulation and implementation.

Question 12

What are the proposed antecedents of accelerated internationalization in born globals, in the Weerawardena article, 2007?

Answer 12

Owner-manager profile 
Market focused learning capability 
Internally-focused learning capability 
Networking capability 
Knowledge intensive products
Marketing capability

Question 13

Explain the establishment chain

Answer 13

no regular export activities
export via independent representatives (agent)
sales subsidiary
production subsidiaries

Question 14

What is added to the Uppsala Model in the 2009 paper by Johanson and Vahlne?

Answer 14

trust-building 
knowledge creation (new knowledge is created in relationships)

“Claim that existing business relationships, because they make it possible to identity and exploit opportunities, have a considerable impact on the geographic market a firm will decide to enter and on which mode to use”.

emphasize “network position”

Question 15

To which theoretical perspective is the article by Johanson & Vahlne (2009) related?

Answer 15

The inter-organizational perspective
emphasis on internationalization through network
emphasis on commitment to and investment in relationships
Liability of outsidership
network position

Question 16

What are the underlying assumptions of the learning perspective?

Answer 16

Risk averseness
Lack of relevant knowledge due to psychic distance
Bounded rationality

Based on experiential learning, firms are pushed to more and more risky markets and entry modes”

Question 17

What are the underlying assumptions of the strategic competition perspective?

Answer 17

It is possible to find an optimal position based upon the firm specific advantages and comparative country advantages

Question 18

What are the underlying assumptions of the institutional economic perspective?

Answer 18

Bounded rationality

Opportunistic behavior

Question 19

Define bounded rationality

Answer 19

“Bounded rationality is the idea that when individuals make decisions, their rationality is limited by the tractability of the decision problem, the cognitive limitations of their minds, and the time available to make the decision. Decision-makers seeking a satisfactory solution rather than an optimal one”