Implementation of Global Strategy

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Manag Int Rev (2011) 51:179–192 DOI 10.1007/s11575-011-0071-6 R e s e a R c h a Rt i c l e

Effective Global Strategy Implementation
Structural and Process Choices Facilitating Global  Integration and Coordination Attila Yaprak · Shichun Xu · Erin Cavusgil

Abstract: 
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this article offers a contingency framework of global strategy implementation effectiveness on firm performance. The research question we seek to address is what the structural and process requirements are for MNEs to successfully implement global strategy through increased efficiency and effectiveness of integration and coordination across world markets. Our central premise is that MNEs’ capabilities in establishing supporting structural and process mechanisms will enhance the effectiveness and efficiency of implementing their global strategies which would, in turn, lead to better firm performance.

Keywords:  Integration and coordination · Global strategy · Firm performance · contingency framework

Received: 25.12.2009 / Revised: 15.08.2010 / Accepted: 11.10.2010 / Published online: 02.04.2011 © Gabler-Verlag 2011 Prof. A. Yaprak () Department of Marketing, Wayne State University, Detroit, USA e-mail: Attila.yaprak@wayne.edu Asst. Prof. S. Xu Department of Marketing and Logistics, University of Tennessee, Knoxville, USA Asst. Prof. E. Cavusgil Department of Marketing, University of Michigan-Flint, Flint, USA

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Introduction The globalization of the world economy and markets has given rise to the growth of multinational enterprises (MNEs). With the expanded geographical scope and dispersed operations across national borders, managing MNEs effectively has become a challenging task for managers. As such, numerous studies have been conducted to understand what contributes to the success of MNEs in the global market. Many studies have adopted the resource-based view (RBV) of the firm as the theoretical basis of such an exploration, arguing that the competitive advantage of MNEs is sourced primarily in their ability to access and acquire rare and inimitable resources that create better value for customers around the world (e.g. Peng et al. 2008). These resources are considered indicators of firm performance levels in the global market (Lu et al. 2010; Peng et al. 2008). While RBV has been instrumental in explaining the performance differences among MNEs, arguments have been advanced that the mere possession of resources is insufficient to generate superior performance (Sirmon et al. 2007). For instance, Barney and Arikan (2006) state that assuming appropriate strategic action will automatically follow from the recognition of valuable resources within the firm is an intellectually naive assumption. Specifically, how resources can be used through strategic actions to create superior value to create a competitive advantage for the firm remains unclear (Priem and Butler 2001). While firm resources have a more or less direct impact on the strategic courses of action a firm may pursue, implementation of such strategies to realize value creation potential remains an under-researched topic (Barney and Arikan 2006). This deficiency in the literature has led to the distinction between resources and capabilities. Lu et al. (2010) propose that resources and capabilities are clearly distinguishable from each other. While Grant (1991) defined resources as stocks of tangible and intangible assets which firms use to convert into products and services while capabilities are viewed as intermediate goods generated by the firm to enhance the productivity of resources (Amit and Schoemaker 1993). As such, capabilities are different from resources since they act as enablers for firms to create value more effectively from the resources they possess. This distinction between resources and capabilities has encouraged researchers to examine the effect of MNEs’ capabilities on firm performance. Research regarding the capabilities of MNEs has...
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