A New Normal environment for business has emerged in the years after the 2008 financial crisis based on numerous changes in the world's economic, technological, demographic, and sociopolitical ...factors. This combination of changes has created a New Normal environment for firms with major implications for managers, strategists, and entrepreneurs alike. It has resulted in an environment with new challenges and opportunities that are considerably different from what firms had to contend with in the years previous. In this paper, we present the main changes that characterize the current New Normal business environment and highlight some key implications for strategy and management. Then, we present the nine articles in this special issue dealing with different dimensions of this new environment for firms. Subsequently, we outline some future research questions that could help to advance our knowledge of the New Normal environment and its implications for firms and management theories. In examining the New Normal, it is important to be reminded that the world is indeed round and even small actions on one side of the globe can have a major impact on organizations on the other side of the globe.
Hennart, Majocchi, and Forlani propose and validate a new explanation of family firms’ internationalization heterogeneity shedding light on the role of a family firm’s global niche business model. ...This type of family firm can avoid the dominant internationalization problems usually depicted in the literature on family firms’ internationalization. Starting from the same diagnosis on extant research, we explore another perspective to explain this heterogeneity: the structure of the family institution. We examine the relationships of family structures, developed by Emmanuel Todd in social anthropology, to family firms’ internationalization. We explain how Todd’s typology of family structures can influence the new mechanisms proposed by Hennart and colleagues for family firms in Europe with a global niche business internationalization. Finally, using these family structures, we also reexamine two analyses on family firms’ internationalization. Therefore, we introduce a new perspective for research on family firms’ internationalization that is based on context and has critical importance for understanding family firms’ strategies. This new perspective has significance for international business research on family firms.
What is the interrelationship among formal institutions, social networks, and new venture growth? Drawing on the theory of institutional polycentrism and social network theory, we examine this ...question using data on 637 entrepreneurs from four different countries. We find the confluence of weak and inefficient formal institutions to be associated with a larger number of structural holes in entrepreneurial social networks. While the effect of this institutional order on the revenue growth of new ventures is negative, a network's structural holes have a positive effect on revenue growth. Furthermore, the positive effect of structural holes on revenue growth is stronger in an environment with a more adverse institutional order (i.e., weaker and more inefficient institutions). The contributions and implications of these findings are discussed.
To survive and thrive, multinational enterprises (MNEs) have had to adapt to dramatic changes and increasing complexity in the global competitive landscape over the past 50 years. MNEs’ international ...strategies and the academic research on the various attributes and outcomes of these strategies have evolved accordingly. This work reviews the evolution of international strategy research over the past five decades. In particular, the research on international diversification and the timing and speed of entering international markets is closely examined. In recent years, the influence of formal and informal institutions on international strategy has become a central research topic. Furthermore, MNEs’ strategies often seek to explore and exploit critical capabilities to build advantages in international markets. Finally, emerging research themes, such as institutional complexity, business sustainability, emerging economy firms and international new ventures are highlighted.
Dynamic managerial capabilities focus on managers' resource-related decisions. Asset orchestration, a central component of dynamic managerial capabilities and of resource management, highlights the ...importance of integrating (matching) resource investment and deployment decisions. Building on these recent theoretical advances, we examine the contingent nature of resource investment and deployment decisions. The results, based on a sample of banking firms, indicate that firm performance suffers when managers' investment decisions deviate from the norms of rivals for both human and physical capital. However, when deployment decisions support investment decisions, greater investment deviation, both high and low, generally enhances performance. Specifically, firm performance is optimized by making congruent resource investment and deployment decisions as opposed to maximizing or economizing either decision independently. Therefore, resource management via asset orchestration is vital for superior performance.
We propose that the mixed findings of research on the internationalization-performance (I-P) relationship reflect its failure to adequately consider the moderating role of firms’ home country formal ...and informal institutions. This general hypothesis is supported in a meta-analysis of the firm-, industry-, home country–, and host country–level factors driving the I-P relationship across 32 countries between 1972 and 2012 from 359 primary studies—the largest sample of primary studies of any meta-analysis on this topic to date. We make three main contributions to the I-P and global strategy literatures. First, we develop a novel integration of the theoretical logics from the I-P research and the institution-based view of strategy to explain how embeddedness in home country institutions affects the strength of the I-P relationship. Second, we show the importance of including both formal and informal institutions in analyses of firms’ institutional embeddedness, thereby extending our knowledge of the effects of institutional complexity. Our third contribution is methodological and reflects our use of advanced meta-analytical techniques based on both product-moment and partial correlations as effect sizes, which allow us to address unresolved debates about the sign and shape of the I-P relationship. Our results show that the I-P relationship is positive, although the overall effect is small and varies greatly across firms’ home countries. We conclude by discussing the findings’ relevance and promising future research avenues, including novel research questions, multilevel theoretical and empirical frameworks, and improvements in methodological rigor.
Building new space for institutional theory, we propose how the severity of formal and informal institutional voids shapes the productivity of entrepreneurial activities within society. Our theory ...makes the key assumptions that voids can exist in both formal and informal institutions and that they are capable of hindering entrepreneurial behavior that is favorable to development progress. We extend new theoretical domains by conceptualizing informal institutional voids and proposing how both formal and informal institutional voids and their interaction influence two qualitative outcomes within localities: (1) the unique forms of entrepreneurial activity, and (2) the objectives underlying this entrepreneurial activity.
The COVID-19 pandemic produced a significant environmental jolt that has altered the trajectories of economies and institutions and the strategies of MNEs. We examine the pandemic effects on ...countries’ political and regulatory institutions, the interplay between their formal and informal institutions and the resulting environmental uncertainty. These changes are transforming the global landscape, MNEs’ raison d’être and their international strategies. MNEs are having to change or develop new country- and firm-specific advantages, refashion their FDI, focus supply chain networks, and emphasize regional strategies and localization. Although these strategies may help them to bound uncertainty, they produce other forms of risk. A new economic order is likely to arise along with transformed MNEs.
We address current criticisms of the RBV (oversight of dynamism, environmental contingencies, and managers' role) by linking value creation in dynamic environmental contexts to the management of firm ...resources. Components of the resource management model include structuring the resource portfolio; bundling resources to build capabilities; and leveraging capabilities to provide value to customers, gain a competitive advantage, and create wealth for owners. Propositions linking resource management and value creation are offered to shape future research.
Pursuit of international markets and resources from foreign sources has increased dramatically during the past two decades, and the academic study of international diversification has increased ...concurrently. Reviewing the literature in management and related disciplines, the authors discuss recent findings of research on international diversification. A conceptual model groups key relationships, including antecedents, environmental factors, performance and process outcomes, moderators, and the characteristics of international diversification. The authors synthesize intellectual contributions, highlight unresolved issues, and provide recommendations for future research.
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