Week 1 [Cantwell, Dunning & Lundan, 2010]

Question 1

What is the [Cantwell, Dunning & Lundan, 2010] paper about? [long text]
[Cantwell, Dunning & Lundan, 2010]

Answer 1

This paper examines the co-evolution of MNE activities and institutions external and internal to the firm. The paper develops a theoretical framework for this analysis.

They argue that a driving force in this evolutionary process is the way in which MNEs adjust their strategies and structures to counter uncertainty and complexity in the development of their own activities and in their environment.

Question 2

What are ‘institutions’?

[Cantwell, Dunning & Lundan, 2010]

Answer 2

Patterns of human interaction that relate to the division of labor and the mode of coordination of human activity (or social technologies) –> They set/are the “rules of the game”; formal (laws, etc.) and informal constraints (norms etc.)

Question 3

What is an ‘MNE’?

[Cantwell, Dunning & Lundan, 2010]

Answer 3

Coordinated system or network of cross-border value-creating activities.

Question 4

IB activities can be asset/competence ‘exploiting’ or ‘creating’, elaborate on both (2).
[Cantwell, Dunning & Lundan, 2010]

Answer 4

1. Asset/competence exploiting - organizational coherence and commonality matters
2. Asset/competence creating - innovation, entrepreneurship and variety play a role

Question 5

What are three (3) ways in which MNEs engage with institutions?
[Cantwell, Dunning & Lundan, 2010]

Answer 5

1. Institutional avoidance
2. Institutional adaption
3. Institutional co-evolution
   (Role of path dependency, environmental selection and managerial intentionality)

Question 6

What is ‘institutional avoidance’?

[Cantwell, Dunning & Lundan, 2010]

Answer 6

MNEs take the institutional environment as a given, exit in case of non-match.

• E.g. avoid hostile institution of North Korea.
• Also, non-match after institutional change -> leave.

Question 7

What is ‘institutional adaption’?

[Cantwell, Dunning & Lundan, 2010]

Answer 7

In this case the environment is also exogenous.
MNEs adjusts its own structure and policies to better fit the environment.
- E.g. Subway, if ingredient is banned, adjust the recipe for bread rather than leave Europe

Question 8

What is ‘institutional co-evolution’?

[Cantwell, Dunning & Lundan, 2010]

Answer 8

Environment is partly endogenous.
Introduction of new organizational routines and best practices.
- E.g. CEO of Unilever calls Mark Rutte
(Role of path dependency, environmental selection and managerial intentionality)