•We examine development of peer-to-peer sharing platforms as a strategic threat to hotel chains.•We use transaction cost theory to explain key features of sharing platforms.•We offer strategic and ...tactical recommendations for the hotel industry to respond to sharing platforms.•Hotel chains can leverage both transaction uncertainty and asset specificity to develop integrated sharing platforms.
The ‘sharing economy’ is in the process of transforming numerous industries. Among these, the hotel sector is especially vulnerable to the strategic disruption that sharing platforms present. Companies such as Airbnb represent the epitome of this threat. This paper sets out to achieve two fundamental research objectives. First, it develops a set of exploratory research propositions based on a qualitative application of transaction cost theory (TCT) to the emergence of sharing platforms. Second, it offers specific strategic and tactical recommendations for the hotel industry based on the TCT analysis referred to above. The paper suggests that, in revising their business models to cope with the new competitive challenges posed by sharing platforms, hotel chains can leverage their superior capacity to deal with three key features of transactions drawn from TCT (frequency, uncertainty and asset specificity) and develop what this paper terms ‘integrated platforms’. By employing the TCT lens to understand the emergence of sharing platforms, this is the first study to systematically develop a theoretically grounded approach to understanding how transaction features impact the emergence of sharing platforms, and it hence has clear implications for numerous industries being impacted by these developments, not least the hotel industry.
Nonmarket strategy – strategic actions directed at influencing the governmental, legalregulatory, and societal environment of business – is a key factor in an airlines' competitive position yet ...remains relatively under-analyzed in aviation research. The COVID-19 crisis has created a heightened role for nonmarket strategy and our paper argues that in deciding how to respond to a variety of policy measures introduced by governments, airline executives need to take into account the perceived legitimacy from the flying public of their response to governments. Our paper presents an integrative framework to analyze airlines' nonmarket response to COVID-19 governmental policy measures. Using a two-by-two matrix, we identify key conceptual links between industry's nonmarket response, the health impacts of a given policy measure as well as its economic costs for the airlines. Our study concludes that, unless economic stakes in a given policy measure are high, airlines do not risk active bargaining with governments over the content of that measure. Such bargaining could trigger a delegitimation cascade: a self-reinforcing process in which key stakeholders reassess their view of airlines' conduct and the industry's broader societal impact. Bargaining is pursued when economic impacts of policy measures are high, and in that case, the choice between cooperative and adversarial posture towards the government depends on the health impact of a given policy.
•Airline executives need to take into account the perceived legitimacy of their response to COVID-19.•We identify four distinct nonmarket strategic options for airlines in response to governments.•We link those options with both a health impact felt by society and an economic impact felt by the airlines themselves.•Bargaining with governments runs a risk of triggering a delegitimation cascade.
This article addresses a theoretical gap in the literature by highlighting the significance of nonbargaining nonmarket strategies of firms. Relying on neo-statist political theory, we propose a ...theoretical model that hypothesizes a reliance on nonbargaining nonmarket strategies in situations marked by historically and situationally conditioned weakness of societal forces relevant to a firm (including the firm itself) as well as when relevant state institutions display high degrees of professional, structural, and ideological bureaucratic insularity. We survey 165 managers (each representing a separate firm) from 14 countries in Eastern Europe and Central Asia about the strategic importance of the nonmarket strategic initiatives. Our novel survey instrument captures a broader range of nonmarket strategic initiatives than previous empirical research has examined. The survey results provide preliminary support for our model, although the findings suggest the need for more research in different regional contexts.
This textbook focuses on strategic management in emerging market contexts. It delineates the border between business level strategy and corporate strategy to better align business level and corporate ...level strategy.
•We examine nonmarket strategies in East Europe and Central Asia.•We develop managerial agency in three types of firms.•We analyze strategic posture and risk.•Nonmarket strategies become proactive ...and less risky as countries develop.
Why do nonmarket strategies of businesses in peripheral economies of Eastern Europe and Central Asian (EECA) differ from those in post-socialist member states of the European Union? This paper suggests an explanation, by offering three advances in our theoretical understanding of the problem. First, we develop a focus on managerial agency in a nonmarket strategic process. Second, we disentangle two distinct features of nonmarket strategies: the firm's strategic posture vis-á-vis the external environment and the level of nonmarket risk associated with a particular strategy. Third, we draw upon a broader array of business actors, paying attention to both multinational and local firms. The resulting enriched framework is applied in an exploratory study of the differences in nonmarket strategies between peripheral and core EECA economies. Using original qualitative data, we develop theoretical propositions linking heterogeneity of nonmarket strategies to the levels of political-economic institutionalization of various EECA markets.
Purpose
This study aims to investigate the moderating effects of subsidiary size on the association between institutional distance and subsidiary’s access to complementary local assets (ACLA) in a ...transition economy.
Design/methodology/approach
The data of 1,027 subsidiaries located in Vietnam were extracted from the survey of General Statistics Office of Vietnam. Hausman’s test shows that random effect model is appropriate to estimate the moderating effects of subsidiary size on the association between the institutional distance and subsidiary’s ACLA.
Findings
The findings revealed that the greater formal and informal institutional distances between home and host countries, the lower a subsidiary’s ACLA in a transition economy. In addition, larger subsidiaries’ ACLA in a more formal and informal institutional distant country are higher than smaller subsidiaries.
Research limitations/implications
Multinational enterprise (MNEs) have a continuous need to use their foreign subsidiaries operating in host countries, particularly those with transition economies, to overcome institutional differences to ACLA in a transition economy. In addition, subsidiaries should be invested with greater resources to collaborate with local partners to serve for accessing to complementary local assets in transition economy characterized by an uncertainty institutional environment.
Originality/value
By integrating the institutional theory and the resource-based view, the study developed a theoretical model about the moderating role of subsidiary size on the association between institutional distance and subsidiary’s ACLA in transition economy. The findings confirmed that simultaneously applying the institutional theory and the resource-based view to investigate location-specific advantages exploitation of subsidiaries is relevant not only in developed economies but also in a transition economies.
Purpose - The purpose of this paper is to feature a cross-national study that investigates the relationship between national culture and corruption. Design/methodology/approach - The study is based ...on the so-called "Grid-Group" framework of culture. An analysis based on a sample of 55 countries is employed to estimate the relationship between corruption and cultural, economic and political variables. Cultural dimensions were developed using the World Values Survey (WVS) Wave 4 and 5. Findings - The study finds robust and statistically significant relationships. Cultures with strong hierarchy and fatalism are positively correlated with corruption whereas egalitarian cultures correlate with lower corruption. The regression model employed demonstrates robust statistical significance when all variable categories (culture, economic and political) were employed. Research limitations/implications - First, as a function of available data, future research should include more countries. Second, as with all previous culture-corruption studies to date, there is no explicit treatment of sub-cultures within a given country in this study: research on culture and corruption in large, multi-ethnic countries such as India, China or the USA where researching regional, sub-cultural differences may be important and insightful. Practical implications - Strengthening whistle-blower processes open to managers in hierarchical and fatalistic cultures will be an important tactical weapon in fighting corruption. Multinational companies who have progressively phased out expatriate managers in their subsidiaries and replaced them with local managers should invest in training for these managers designed to combat their cultural responses to corrupt behavior. Public policy must focus on institutional reform, breaking down hierarchies, promoting greater efficiency, transparency and accountability. This is a broad and far-reaching target that has to be tackled at all levels of society and across multiple stakeholders. Public policymakers should develop strategies closely with the private sector to develop anti-corruption education and training programs for both public sector and private sector managers. Originality/value - This is the first time quantitative empirical research has used the Douglas "Grid-Group" framework to estimate the role of culture in explaining corruption. From a policy and strategy perspective, the paper offers specific recommendations to governments and companies.
Post-transition countries are coming of age and are approaching the status of fully-blown developing states. While the main problems highlighted in a classical transition storyline, such as ...large-scale privatization, institutional formation, and private sector establishment have largely been solved, the recent financial crisis has revealed fresh challenges which demand maximum differentiated attention. Such important contemporary issues as capital markets formation, monetary transmission mechanism, economic integration, financial sector sophistication, remittance management, social welfare reform, and competitive fringes remain to be tackled in a systematic, policy-oriented manner. "Neo-Transitional Economics" fills this escalating literature gap by presenting a comprehensive collection of viewpoints from the established scholars and practitioners of the field. The ultimate goal of this book is to offer an all-encompassing policy toolkit for a successful overcoming of all contemporary challenges that lie ahead in the age of neo- transitional economics.
Purpose
First developed in the 1980s, one of the most essential ideas in international business research has the been the concept of emerging markets. Since the start of the twenty-first century, ...empirical research has shown that there is no clear correlation between long-term real growth in gross domestic product and real equity returns in firms active in emerging markets. The purpose of this paper is to develop an explanation for both the pervasiveness and endurance of the emerging market discourse despite empirical evidence that substantially questions its very robustness.
Design/methodology/approach
The author offers a “weak form” critique of the emerging market discourse that identifies weaknesses and gaps in the emerging market concept and offers suggestions on how to modify it without fundamentally rejecting its conceptual and ideological core. This paper also offers a “strong form” critique of emerging markets as a discourse arguing that the discourse itself is actually propagated to maintain and reinforce global economic inequality and should, therefore, be fundamentally transformed.
Findings
Based on the strong form critique of emerging markets discourse, this paper shows how a three-phase process allows emerging market discourse to engender strategic and public policy practice. Scholars and educators play a pivotal role through their writing and discursive interactions with students and executives in their classroom. The centrality of scholars and educators is supported by the broader media ecosystem as well as being reinforced by interactions between executives and policymakers.
Practical implications
This paper makes the case that international business scholars and educators should play a leading role in fundamentally transforming the emerging market discourse and to launch a renewed critical, inter-subjective discussion of dependency and global inequality through three mechanisms: peer-review research; course syllabi and programs; and public intellectualism.
Originality/value
Through critical discourse analysis, this paper addresses for the first time how emerging markets as a concept has prospered in academic and managerial circles despite credible empirical evidence of its lack of robustness.
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