Mcdonald's- an Institution-Based View of International Business Strategy

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Michael Daley GMGT 6290-A Professor Godinez April 7, 2014 An Institution-based View of International Business Strategy This publication by Peng et al. explains that the institution-based strategy of international business is considered to be one-third of the “strategy tripod” of international business. As we know, an institution-based strategy is one that acknowledges industry-based and resource-based strategies but recognized their need for consideration of societal factors. This is of course relevant when it comes to firms that “go global” and reach beyond borders to other unknown or lesser-known nations. The paper argues that this particular view has emerged, thrived, and is an admirable strategy for any international business. At the risk of repeating the content of the paper they provide examples, suggest solutions, supply graphics, and help explain their point of view effectively. The paper references other works that make similar arguments that the institution-based strategy is one that is rising in international business, citing that more than half of selected papers in the Academy of Management Journal rely on this theory. As the text tries to explain the concept in relation to the other two (industry-based and resource-based) one cannot help but find the text to be very dense and tough to explain. This is not to suggest that the quality is poor or the topic is irrelevant, but it is difficult to digest. That being said, the flowchart labeled Figure 1 illustrates not only the strategy tripod but also allows for a simply understanding of the flow of events and train of thought in developing and implementing such a strategy. As seen above, the top two bubbles on the left relate to the other two strategies, while “Institutional conditions and transitions” represents our institution-based strategy and the perspective is applies to overall

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