Culture, Institutions and International Strategy

1193 Words Jul 20th, 2008 5 Pages
Culture, Institutions and International Strategy.
For those firms who want to expand their business internationally, it is inevitable for them to face the cultural challenge. This article stresses the impact of culture on international operation as well. According to institutional-based view, informal and formal institutions have their own way to reduce risk. For informal ones, they rely on relational contact which is informal relationship based and personalized exchange. What is more, Human capital and Relationship capital are important factors to perform successfully in international market which is related to informal institution thought. Also, the article help me to understand the relationship between institution, firms and strategic
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It obviously promotes specialization within specific region which firm can fully utilize the human capital and other related resources such as regional pool of specialized suppliers. What’s more, firm can gain better understanding of cultures and institutional environments. However, closely located competitors might seize the important resources such as talented employee and, also, imitate its technology and knowledge. Also, in this fast changing business world, responding faster should be more appropriate. The firms that pursue agglomeration always take slower action than other do since they focus their resources on specific region and it is difficult for them to move or to exploit emerging market.
Future Research and Conclusion
For future research, an issue that interested me is the increasing of cultural convergence. Can MNCs leverage resources and standardize organizational practices across cultural boundaries? In my opinion, it is possible but really difficult to achieve even the world is becoming more global since there is no truly 100% globalization. Globalization does not mean that every country will become the same but it makes people realize the differences between them when they move out of their shells. When a firm goes abroad different strategy will be used differently on each country so there is no universal strategy or standardize organizational practices.
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