MNC

• create coordination mechanism that align the interests of an agent with those of a principal
  • f.Ex.: By giving the manager a variable income, based on profit or normative integration (reduces opportunism)

Remaining problems:

• Consider the risk bearing! Often the agent has an incentive to riskful actions because his rewards for success are stronger than punishmet for failure
• Results are difficult to observe

• Consider also the intrinsic motivation of some agents (stewardship theory)

• Companies as information processing systems
  • collection of data, transformation of data to information, diffusion of information within the company
  • heterogenity of information processing requirements/capacity of companies

• routine vs. non-routine
• sequential (turnus) vs. reciprocal (wechselseitig)
• simple vs. complex

Fit between Requirements and Capacity of the organization

• internationalisation is a slow process
• A result of incremental decisions (Schrittweise)
• Is an innovative process, stimulated by external and internal stimuli
• Is an adaptive process (new resource commitment and changes in management)
• Process occuring in stages, characterised by different speed of change
• during the process companies accumulate knowledge

• Internationalisation develops along
  • the establishment chain (different steps of internationalisation, the next step means a stronger commitment, more ressources, more knowledge--> 1. Agent 2. Sales subs. 3. Production subs.)
  • the psychic distance chain (development of abroad activities step by step, starting at a country with the closest cultural, political or economic distance
• Market knowledge is a limiting factor
• Market commitment is only increased with increasing market knowledge

• Model is to deterministic and neglects strategic choices by companies
• Companies often skip certain changes
• Stages considered are over simplified
• Model reduces explanation to a single variable, the market knowlege
• Learning by other mechanism is neglected (f.Ex. acquisitions)
• Learning from other markets not considered
• Influence of exogenous variables (Körperfremd) is not considered
• Change to lower forms of commitment not explained (production --> sales subs.)

Business organizations that, from inception, seek to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries

(Oviatt/McDougall)

Mostly Internationalization within two years of establishment

• no. of nations of which have joined the WTO
• Convergence of consumer tastes
• dynamism of foreign markets
• advancement in production, transportation and communication technologies
• regulatory environment of the home market

• innovative product with a short life cycle (niche)
• customer orientation
• organizational culture

• Environmental factors
• Organizational factors
• Managerial factors

• entrepreneurial behaviour of the management team
• global mindset
• level of international experience of the management team

Valuable resources create a competitive advantage and are a fundamental source of superior value creation

• Valuable
• Heterogenous
• Imperfectly mobile and imitable
• Unique for a firm

Imitability= Kopierbarkeit

Cons:

• Functionality and technical components of an online shop can be easily identified and acquired by competitors
• Easily replicable, and consequently have little, if any, competitive advantage period

Pros

• creation of ‘lock-in’ effects
• Fast internationalization

The ease with which a firm’s technology can be learned or replicated by outsiders

Intensifies the need to quickly transform the current advantage of the online shop into a customer base

• Low imitability: no pressure to quickly internationalize
• Medium to high imitability: faster internationalization
• Very high imitability: Internationalization likely to be slowed down

Hypothesis: A higher imitability of an online shop has a curvilinear influence on internationalization speed (inverted U Form)

• Complexity
• Firm face liability of foreignnes (Nachteile aufgrund von Fremdartigkeit)
• Close countries offer more familiar operating environments
• Firms need to absorbe experience and market knowledge

Hypothesis: A higher distance between the newly entered market and the home country has a negative influence on the internationalization speed.

• Opportunity for firms
• Experience as a prime source of learning
• Effective exploration of new capabilities
• Cons:the coordination cost, due to complexity surpass the benefits

Hypothesis: A higher level of diversity within the country portfolio has a curvilinear influence on the speed of internationalization (inverted u-form)

• Identification of online shop imitability: most important influence factor on internationalization speed 
• Diversity and distance have a significant impact on online shops internationalisation speed
• Online retailers from smaller home countries have a stronger need to internationalize quickly

Rather discontinuous than exclusively gradual evolutionary paths

• Network size
• Network density
• Centrality of a certain node/actor (Knoten)
• Centralisation of a network (Are all actors similar in their influence?)

• B2B-markets are characterised by longterm and stable exchange relationships
• Exchange of goods and services, but also complex exchange of information over time
• Atmosphere then is the framework within which future transaction episods are integrated.
• Interaction occurs between individuals!

• Markets consist of more than suppliers and customers
• Markets should be seen as relation network between actors
  • Meaning:
    • company might already cooperate with partners in other markets
    • other actors might cooperate or compete to each other

• Market entry in a specific market is influenced by relationships that are broader than this geographic market alone and are broader than a company‘s own direct network
• Local network might be more important than company network

• „Integration“ of external factor as definition criterion
  • integrating an external factor that is controlled by the customer
• Extension of network to (some) customers
  • customers‘ network as a further extension

• Dual meaning: Internal network/corporate embeddedness and external network/local embeddedness
• Subsidiary as a „linking pin“ (or bridging tie) between a foreign market and the MNC

• internal and external embeddedness are both needed and valuable
  • tensions as result: in most cases – subsidiaries either are internally embedded OR externally embedded