THEME 1: introduction International Business Context & Institutional Contextual Perspectives
Three levels of corporate governance: Article 1: North – Path depende
1. Institutional and political governance - The national and international arenas where rules that shape market governance are
framed. Institutions = The humanly devis
2. Industrial or value-chain governance – The organisation of ties between various actors engaged in a global supply chain. structure political economic and so
3. Corporate or intra-firm governance – The firm’s organisation and accountability to various stakeholders, shareholders, There are three types of primitive
employees,
Article etc.
2: Williamson – New Institutional Economics (NIE) 1. Tribal society
2. Regional economy with bazaar
New Institutional Economics (NIE) = An economic perspective that attempts to extend economics by focusing on the social
3. Long distance caravan trade
and legal norms and rules (institutions) that underlie economic activity and with analysis beyond earlier institutional economics
and neoclassical economics. The NIE has four levels: Path dependency = Organisation
1. Embeddedness level – Informal rules such as customs, norms, traditions, etc. existence to the opportunities prov
2. Institutional Environment – Formal rules such as constitutions and laws and informal institutional framewo
3. Governance Level – The creation of contracts and agreements opportunity sets lead to different h
4. Resource allocation and employment level – Consists of institutions that guide the operation of an organisation.
Article 3: DiMaggio & Powell - Institutionalism
The cause of bureaucratisation and rationalisation have changed. Organisational structure, used to arise from the rules of efficiency in the marketplace, but now arises
constraints imposed by the state and professions. The efforts to achieve rationality with uncertainty and constraint lead to homogeneity of structure (institutional isom
Isomorphism = A constraining process that forces one unit in a population to resemble other units that face the same set of environmental conditions. Meaning that o
characteristics are modified in the direction of increasing compatibility with environmental characteristics
1. Competitive isomorphism – A system rationality that emphasises market competition, nice change, and fitness measures.
2. Institutional isomorphism – Organisations compete not just for resources and customers, but for political power and institutional legitimacy, and social and econom
1. Coercive isomorphism – Pressures from other organisations in which they are dependent and by cultural expectations from society.
2. Mimetic isomorphism – Resulting from standard responses to uncertainty. Uncertainty encourages imitation.
3. Normative isomorphism – Pressures from professions.
Organisational-level predictors: Dependence, centralisation, uncertainty, ambiguity, reliance, participation.
Field-level predictors: Dependence, transact, number of alternatives, uncertainty, professionalisation, structuration.
Article 4: Berry – Cross-national distance based on an Institutional perspective
Cross-national distance is approached from an institutional perspective to capture the ways in which countries differ. This approach is based on three conceptualisation
institutions: (1) Whitley - NBS; (2) Henisz and Williamson - National Governance Systems; and (3) Nelson and Rosenberg – National Innovation Systems. Berry stated 9
countries can differ:
1. Economic – Economic development and macroeconomic characteristics
2. Financial – Financial sector development
3. Political – Political stability, democracy, and trade block membership
4. Administrative – Colonial ties, language, religion, and legal system
5. Cultural – Attitudes toward authority, trust, individuality, and importance of work and family
6. Demographic – Demographic characteristics
7. Knowledge – Patents and scientific production
8. Connectedness – Tourism and Internet use
9. Geographic – Great circle distance between geographic centre of countries
, THEME 2: Societal cross-national Context: Varieties of Capitalism & New Business Systems
Article 5: Whitley – National Business Systems (NBS) Article 6: Fainshmidt – Varieties of institutional Systems (VIS)
Variation between countries was explained as different stages on the one true path of The literature on institutional systems consists mainly of two primary fr
development toward free market capitalism. However, there is not only one model of Varieties of Capitalism (VOC); and (2) National Business Systems (NBS).
capitalism countries are not all on the same trajectory, and free market capitalism is not the to assess whether these frameworks capture the full variety of econom
ultimate outcome for all countries (liberal/coordinated market economy). in newly-developed, emerging, and developing market economies. The
Fainshmidt – the Varieties of Institutional Systems (VIS) – more com
Business systems = Distinctive patterns of economic organisation that vary in their captures the institutional context.
degree and mode of authoritative coordination of economic activities, and in the
organisation of, and interconnections between owners, managers, experts and other VOC
employees. Tempts to explain how economic activity is organised among capital, la
management within advanced economies. Countries are divided into (1
General characterisation of market economies and differences in the nature of controlling Economies; and (2) Coordinated Market Economies.
groups, suggest 8 key business-system characteristics: (1) Owner control; (2) Ownership
integration of production chains; (3) Ownership integration of sectors; (4) Alliance NBS
coordination of production chains; (5) Collaboration between competitors; (6) Alliance Economies can be compared as different kinds of systems of economic
coordination of sectors; (7) Employer-employee interdependence; and (8) Delegation to according to the prevalent ways in which economic activities and relati
employees. coordinated and controlled, based on four different dimensions.
Additionally, there are six ideal types of business systems: (1) Fragmented; (2) Coordinated
industrial district; (3) Compartmentalised; (4) State organised; (5) Collaborative; and (6) VIS
Highly coordinated. Integrates the VOC and NBS typologies and adds the role of the state a
It includes five institutional dimensions of economic activity: (1) Role of
There are a number of key institutions that help to generate and reproduce different kinds of financial markets; (3) Role of human capital; (4) role of social capital; an
business systems: (1) The state; (2) Financial systems; (3) Skill development and control corporate governance institutions.
Article 7: Tempel – Comparison between New Institutionalism (NIE) and Business Systems (NBS)
systems; and (4) Trust and authority relations.
New Institutionalism and Business Systems approach share in common their focus on the adaptation of organisations to institutional environments but come to very di
to the global standardisation of organisational forms and management practices.
New Institutionalism New Business Systems New Institutionalism New Business Sy
Emphasis The global diffusion of practices and How business continues to be influences Mechanisms of Global diffusion of concepts Reproduction of tig
the adoption of these by by the national institutional frameworks adaptation through isomorphism and business syste
organisations. in which it is embedded.
Unit of Organisational field – borders are Business system –
Focus The influence of the societal or The influence of societal or cultural analysis drawn at national orders with national borde
cultural environment on environment on organisations.
organisations. Definition of Normative and cognitive Structural-regulativ
institutions institutions: patterns of thought state, financial syst
Argument Beliefs and expectations exist in Varied systems of economic organisations and taken for granted assumptions and control system
society which determine how firms, will continue to develop and be concerning organisational forms relations
schools or hospitals should be reproduced through different institutional and management practices
organised, why they are useful and arrangements at a national level because
which functions they do and do not nation states constitute the prevalent
Portrayal of Passive: emphasis on factors which Passive: tight feedb
perform. arena in which social and political
organisations make actors unlikely to recognise business systems a
competition is decided in industrial
or act on their interest
capitalist societies.
Three levels of corporate governance: Article 1: North – Path depende
1. Institutional and political governance - The national and international arenas where rules that shape market governance are
framed. Institutions = The humanly devis
2. Industrial or value-chain governance – The organisation of ties between various actors engaged in a global supply chain. structure political economic and so
3. Corporate or intra-firm governance – The firm’s organisation and accountability to various stakeholders, shareholders, There are three types of primitive
employees,
Article etc.
2: Williamson – New Institutional Economics (NIE) 1. Tribal society
2. Regional economy with bazaar
New Institutional Economics (NIE) = An economic perspective that attempts to extend economics by focusing on the social
3. Long distance caravan trade
and legal norms and rules (institutions) that underlie economic activity and with analysis beyond earlier institutional economics
and neoclassical economics. The NIE has four levels: Path dependency = Organisation
1. Embeddedness level – Informal rules such as customs, norms, traditions, etc. existence to the opportunities prov
2. Institutional Environment – Formal rules such as constitutions and laws and informal institutional framewo
3. Governance Level – The creation of contracts and agreements opportunity sets lead to different h
4. Resource allocation and employment level – Consists of institutions that guide the operation of an organisation.
Article 3: DiMaggio & Powell - Institutionalism
The cause of bureaucratisation and rationalisation have changed. Organisational structure, used to arise from the rules of efficiency in the marketplace, but now arises
constraints imposed by the state and professions. The efforts to achieve rationality with uncertainty and constraint lead to homogeneity of structure (institutional isom
Isomorphism = A constraining process that forces one unit in a population to resemble other units that face the same set of environmental conditions. Meaning that o
characteristics are modified in the direction of increasing compatibility with environmental characteristics
1. Competitive isomorphism – A system rationality that emphasises market competition, nice change, and fitness measures.
2. Institutional isomorphism – Organisations compete not just for resources and customers, but for political power and institutional legitimacy, and social and econom
1. Coercive isomorphism – Pressures from other organisations in which they are dependent and by cultural expectations from society.
2. Mimetic isomorphism – Resulting from standard responses to uncertainty. Uncertainty encourages imitation.
3. Normative isomorphism – Pressures from professions.
Organisational-level predictors: Dependence, centralisation, uncertainty, ambiguity, reliance, participation.
Field-level predictors: Dependence, transact, number of alternatives, uncertainty, professionalisation, structuration.
Article 4: Berry – Cross-national distance based on an Institutional perspective
Cross-national distance is approached from an institutional perspective to capture the ways in which countries differ. This approach is based on three conceptualisation
institutions: (1) Whitley - NBS; (2) Henisz and Williamson - National Governance Systems; and (3) Nelson and Rosenberg – National Innovation Systems. Berry stated 9
countries can differ:
1. Economic – Economic development and macroeconomic characteristics
2. Financial – Financial sector development
3. Political – Political stability, democracy, and trade block membership
4. Administrative – Colonial ties, language, religion, and legal system
5. Cultural – Attitudes toward authority, trust, individuality, and importance of work and family
6. Demographic – Demographic characteristics
7. Knowledge – Patents and scientific production
8. Connectedness – Tourism and Internet use
9. Geographic – Great circle distance between geographic centre of countries
, THEME 2: Societal cross-national Context: Varieties of Capitalism & New Business Systems
Article 5: Whitley – National Business Systems (NBS) Article 6: Fainshmidt – Varieties of institutional Systems (VIS)
Variation between countries was explained as different stages on the one true path of The literature on institutional systems consists mainly of two primary fr
development toward free market capitalism. However, there is not only one model of Varieties of Capitalism (VOC); and (2) National Business Systems (NBS).
capitalism countries are not all on the same trajectory, and free market capitalism is not the to assess whether these frameworks capture the full variety of econom
ultimate outcome for all countries (liberal/coordinated market economy). in newly-developed, emerging, and developing market economies. The
Fainshmidt – the Varieties of Institutional Systems (VIS) – more com
Business systems = Distinctive patterns of economic organisation that vary in their captures the institutional context.
degree and mode of authoritative coordination of economic activities, and in the
organisation of, and interconnections between owners, managers, experts and other VOC
employees. Tempts to explain how economic activity is organised among capital, la
management within advanced economies. Countries are divided into (1
General characterisation of market economies and differences in the nature of controlling Economies; and (2) Coordinated Market Economies.
groups, suggest 8 key business-system characteristics: (1) Owner control; (2) Ownership
integration of production chains; (3) Ownership integration of sectors; (4) Alliance NBS
coordination of production chains; (5) Collaboration between competitors; (6) Alliance Economies can be compared as different kinds of systems of economic
coordination of sectors; (7) Employer-employee interdependence; and (8) Delegation to according to the prevalent ways in which economic activities and relati
employees. coordinated and controlled, based on four different dimensions.
Additionally, there are six ideal types of business systems: (1) Fragmented; (2) Coordinated
industrial district; (3) Compartmentalised; (4) State organised; (5) Collaborative; and (6) VIS
Highly coordinated. Integrates the VOC and NBS typologies and adds the role of the state a
It includes five institutional dimensions of economic activity: (1) Role of
There are a number of key institutions that help to generate and reproduce different kinds of financial markets; (3) Role of human capital; (4) role of social capital; an
business systems: (1) The state; (2) Financial systems; (3) Skill development and control corporate governance institutions.
Article 7: Tempel – Comparison between New Institutionalism (NIE) and Business Systems (NBS)
systems; and (4) Trust and authority relations.
New Institutionalism and Business Systems approach share in common their focus on the adaptation of organisations to institutional environments but come to very di
to the global standardisation of organisational forms and management practices.
New Institutionalism New Business Systems New Institutionalism New Business Sy
Emphasis The global diffusion of practices and How business continues to be influences Mechanisms of Global diffusion of concepts Reproduction of tig
the adoption of these by by the national institutional frameworks adaptation through isomorphism and business syste
organisations. in which it is embedded.
Unit of Organisational field – borders are Business system –
Focus The influence of the societal or The influence of societal or cultural analysis drawn at national orders with national borde
cultural environment on environment on organisations.
organisations. Definition of Normative and cognitive Structural-regulativ
institutions institutions: patterns of thought state, financial syst
Argument Beliefs and expectations exist in Varied systems of economic organisations and taken for granted assumptions and control system
society which determine how firms, will continue to develop and be concerning organisational forms relations
schools or hospitals should be reproduced through different institutional and management practices
organised, why they are useful and arrangements at a national level because
which functions they do and do not nation states constitute the prevalent
Portrayal of Passive: emphasis on factors which Passive: tight feedb
perform. arena in which social and political
organisations make actors unlikely to recognise business systems a
competition is decided in industrial
or act on their interest
capitalist societies.
