Institution-based view
INFORMAL INSTITUTIONS
,Learning outcomes
► Outline and illustrate the institution-based view of
strategy
► Develop awareness of how the sociocultural
environment can affect the suitability of a potential
market
► Explain key frameworks giving insights to culture
► Appreciate the importance of cross-cultural skills and
sensitivities in international business
, Institutions, Firms, and Strategic Choices
Sources: Adapted from (1) M. W. Peng, 2000, Business Strategies in Transition Economies (p. 45), Figure 4.4
Thousand Oaks, CA: Sage Publishing.; (2) M. W. Peng, 2002, Towards an institution-based view of
business strategy (p. 253), Asia Pacific Journal of Management, 19 (2): 251–267.
Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website,
in whole or in part.
, Two Core Propositions
► Managers and firms rationally pursue their interests
and make choices within the formal and informal
constraints in a given institutional framework.
► While formal and informal constraints combine to
govern firm behavior, in situations where formal
constraints are unclear or fail, informal constraints
will play a larger role in reducing uncertainty to
managers and firms.
Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website,
in whole or in part.
INFORMAL INSTITUTIONS
,Learning outcomes
► Outline and illustrate the institution-based view of
strategy
► Develop awareness of how the sociocultural
environment can affect the suitability of a potential
market
► Explain key frameworks giving insights to culture
► Appreciate the importance of cross-cultural skills and
sensitivities in international business
, Institutions, Firms, and Strategic Choices
Sources: Adapted from (1) M. W. Peng, 2000, Business Strategies in Transition Economies (p. 45), Figure 4.4
Thousand Oaks, CA: Sage Publishing.; (2) M. W. Peng, 2002, Towards an institution-based view of
business strategy (p. 253), Asia Pacific Journal of Management, 19 (2): 251–267.
Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website,
in whole or in part.
, Two Core Propositions
► Managers and firms rationally pursue their interests
and make choices within the formal and informal
constraints in a given institutional framework.
► While formal and informal constraints combine to
govern firm behavior, in situations where formal
constraints are unclear or fail, informal constraints
will play a larger role in reducing uncertainty to
managers and firms.
Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website,
in whole or in part.
