Lance Eliot Brouthers

Acquisition or greenfield start-up? Institutional, cultural and transaction cost influences

In this paper, we develop and test a model of diversification mode choice (how firms decide between acquisitions and greenfield start-up ventures) which includes institutional, cultural, and transaction cost variables. Using a sample of Japanese firms entering western Europe, our results show the model correctly predicts over eighty-seven percent of the mode choices. Thus, we provide strong initial evidence to support using institutional, cultural and transaction cost variables to predict firms’ choices between acquisitions and greenfield start-ups in international expansion. Our findings also suggest that organizations which have developed strong intangible capabilities may be able to more readily leverage these capabilities through greenfield start-ups. Copyright

Strategic alliances: Choose your partners

Abstract In the never-ending search for ways of gaining a sustainable competitive advantage, global corporations have increasingly turned to the use of strategic alliances as a method of international expansion. Unfortunately, many firms have been unpleasantly surprised by the outcomes of their strategic alliance relationships. In this paper, we draw upon previous theoretical and empirical work to develop a framework for analysing the likely success of international strategic alliances. Dubbed ‘the 4 Cs’, we show how this analytic framework can assist firms in their efforts to avoid picking the wrong alliance partners.

Dunning's eclectic theory and the smaller firm: The impact of ownership and locational advantages on the choice of entry-modes in the computer software industry

This paper set out to investigate the entry-mode selection activities of small- and medium-sized service firms. Based on Dunnings eclectic theory (1988, Journal of International Business Studies, Vol. 19, No. 1, pp. 1-31; 1993, Multinational Enterprises and the Global Economy, AddisondashWesley) and previous entry-mode research, the entry-mode selection activities of US computer software firms were examined. The findings tend to indicate that ownership and locational advantages influence the entry-mode choice of small- and medium-sized firms in a manner similar to that of larger firms. Additionally, this study confirms the applicability of the eclectic theory of foreign direct investment to a second sector of the services industry.

Key Factors for Successful Export Performance for Small Firms

What key factors result in superior export performance for small firms from small countries? Drawing on the internationalization process model and organizational learning theory, the authors hypothesize and find that (1) emphasizing international sales while (2) restricting exports to a few foreign markets results in superior perceived export performance for the sample of small firms from Greece and several Caribbean countries. Emphasizing international sales while focusing on a few markets enables small firms to develop expertise in those markets, build strong distribution networks, and manage export activities effectively.

Influences on Strategic Decision-making in the Dutch Financial Services Industry

Following recommendations by Rajagopalan, Rasheed, and Datta (1993) and Schwenk (1995), this study attempts to extend what is known about integrative models of strategic decision-making by examining decision-making variable interactions in a field study of non-North American managers. We find some evidence to support the use of integrative models and variable interaction. We also find that some previous results seem to generalize to our Dutch setting, whereas others do not. The study concludes by noting that: (1) integrating multiple perspectives (environmental-based decision-making and managerial characteristics) and including variable interactions enhances what we know about the strategic decision-making process; and (2) much more research is needed before knowing which aspects of strategic decisionmaking can be generalized and which cannot.

An Evaluation of State Sponsored Promotion Programs

Abstract In this analysis, we test hypotheses concerning the effectiveness of government export promotion programs on firm export success by examining the relationships between program offerings and state exports. We find that: (1) trade shows are positively related to direct exports, (2) trade missions are negatively associated with high-tech growth exports, (3) foreign offices are not associated with exports, and (4) objective market information programs, such as computer-generated trade leads, are negatively associated with direct exports. Implications for business are offered as are directions for future research efforts.

Industrial sector, perceived environmental uncertainty and entry mode strategy

Abstract Utilizing a multi-dimensional measure of perceived environmental uncertainty (PEU), we investigate both similarities and differences between services and manufacturing with respect to the impact of PEU (risk) on their international entry mode strategies. We hypothesize that due to unique product characteristics and modes of delivery, (1) for certain types of PEU (government/political, product market), services and manufacturing will respond similarly, while (2) services will respond quite differently from manufacturing to other particular types of perceived risk. The hypotheses were generally supported, showing that the use of a multi-dimensional measure of PEU is important in gaining a better understanding of strategic behavior in different industries.

Formal and Informal Corruption Environments and Multinational Enterprise Social Irresponsibility

Using an institutional theory framework we theorize, hypothesize, and empirically show that higher levels of formal and informal corruption environments found in a firms operating portfolio are related to higher levels of corporate social irresponsibility (CSiR). Failing to consider corruptions informal dimension leads to potentially false perceptions about a multinational enterprises (MNE) operating environment, particularly when the formal dimension is low but the informal corruption dimension is high, as is the case in about one third of our sample. Including the informal corruption environment component provides additional explanatory power over the formal corruption environment alone in predicting CSiR and yields a superior understanding of both the formal and informal dimensions of the corruption institutional environments influence on corporate social irresponsibility levels of MNEs. Managerial implications and future research directions are discussed.

R&D mode choices in Central and Eastern Europe

Abstract Scholars have suggested that there is a lack of research which uses a parsimonious framework to examine international research and development (RD19:149–68; Cheng JLC, Bolon DS. The management of multinational RD24:1–18]. In this article, we explore two issues: (1) does Dunnings OLI framework explain how firms which invest in CEE RD and (2) do firms whose choices can be predicted by Dunnings framework appear to be more satisfied with their RD and (2) firms whose choices are predicted appear to be more satisfied with the performance of their R&D facilities.

The Five Stages of the Co-operative Venture Strategy Process

Many co-operative or joint ventures fail. Can the risk be reduced? A process is advocated which both summarises recent research and provides a systematic method to address underperforming ventures.