IB Doctoral Seminar Day 2 CFVG 2018 Slides PDF

Research in International Business
Doctoral seminar
CFVG (HCM)
Day 2
Jean-Paul Lemaire, ESCP Europe

November 29th & 30th 2018
1
DAY 2
THE THEORETICAL EXTENSION AND REAPPRAISAL
OF IB AREA
• Early steps of I.B. for internationalization:
– Incentives for internationalisation: (1) Johansson&Vahlne, 1977, (2) Bilkey & Tesar, 1977, (3) Dunning (1988)
– Strategy and Organization (5 & 6), Bartlett & Goshal, 1987 a & b
– Multicultural approach (7), Hofstede, 1983
– The impact of the environmental changes since the late 70’s, introduction to the PREST model, (9) Lemaire, 2000
• Complements to day 1
– Environment impact , Lemaire (2000),
– Founding theories (to complete): Oviatt & Mc Dougall 1994, Bartlett & Goshal (1987 a & b), Hofstede, 1983,
• The legacy of the founding IB concepts

– From Uppsala 1 to Uppsala 2 (Johansson & Vahlne 1977 & 2009)
– From stages theories to « born globals » (Oviatt & Mc Dougall 2005)
– Designing a new global perspective , Buckley & Ghauri (2004)
• Exploring new IB areas:

– New frontiers in International strategies ; Ghemawat (2001)
– New players in globalization : Matthews (2006), Ricart et al (2004), Ghemawat & Hout (2008), Bonaglia et al.
(2007)
– Functional approaches of IB (HR example): Rosenzweig & Nohrian (1994)
– Major areas for further IB explorations ; Lemaire, Mayrhofer, Milliot (2012)
• Conclusion of Day 2: IB inputs for my doctoral research
2
all rights reserved Jean Paul Lemaire / cannot be used without specific permission
Early steps of IB research
– The international economics influence: classical to neo-

classicals to Commercial International policy
– The MNCs’ legacy debate and the internationalization

process of SMEs
– From incentives to stages theory and MNCs organizational

questionning
– The multicultural dimension between assessment and

explanation towards action
3
Late 90s/early 00s
international environment
upheaval
Political regulatory
Economic and Social
Technological
60s to early 70s MNCs International New stakeholders

the MNCs threats Stages theory Strategic & Champions from FGE of international
debate 80s organization 2005 opening
Late 70s Dunning’s Netwoks

« Born globals »
the progresive OLI theory Uppsala 2
1994-2005
SMEs approach 80/90 2009
Uppsala 1
4
Content of the articles presentations
• Key words
• Authors background and contributions
• Contextualization of the article
• Structure of the article
• Major issues and problematic addressed
• Literature review
• Methodologies employed
• Key findings
• Key contributions of the article (academic, managerial)
5
THE THREE STAGES OF CORPORATE DEVELOPMENT
Integrating export + FDI
MULTINATIONALISATION
/GLOBALIZATION
Mainly global activities
relying on multinational
structures
LOCAL DEVELOPMENT
("go native")
multi-local activities
INITIAL INTERNATIONALIZATION relying on de-localized
("first landing") structures/connections
mainly local activities
with some cross border
developments, relying on domestic
and proximity
structures/connections
RATIONALE OF “PREST” MODEL
Identification of the major « universal » external Vietnamese pressures creating new
opportunities / constraints within the area of reference for all the companies operating in
Vietnam and, especially, in the considered sector (e.g. hostellery in India)
Political-Regulatory: (positive/negative?) impact of deregulation and access to new
domestic/national/economic zones
Economic and Social: (positive/negative?) impact of demography and improvement of living
standards (Vietnam as an emerging country),
Technology: (positive/negative?) impact of infrastructures improvements, technology transfer
expectations, quicker technological trends diffusion through internet and communication
networks
Evaluating resulting main challenges on specific target sector (hostellery) :

Competition: assess the nature of competition, the impact of environment changes on the various
groups of competitors, evaluate likely new comers from mature/emerging economies
Adaptation: react  anticipate to new expectations from local/foreign customers, identify
institutional, structural and process adjustments
Re-deployment: evaluate the level of necessity to embark on new services and new target areas
Defining the actors’ possible « levers » to operate (for every company involved)
Profitability: cut costs, improve revenue and margins, provide « fuel » for furtherl growth
Structuration: extend more largely the organisation in the target area (and beyond)
throughfranchise, management contracts, coordinate/adjust structures and procedures
Innovation: create & market new services, develop new production and/or distribution processes
© all rights reserved Jean Paul Lemaire / cannot be used without specific permission
P.R.E.S.T. model
triggers for a new international (dis)order
at macro-level
• Political Regulatory
– The fall of the Berlin wall (1991) + the « Deng Xiao Ping syndrom »
 a dilution of socalism into liberalism?
– From GATT to WTO (1995): the extension of the « in’t trade community»
 a larger display for the intensified trade and FDI flows?
– A come back of the history (Fukuyama denied) + Brexit + Trump
 towards a renewed protectionism
• Economic & Social
– Towards a demographic and standards of living re-balancing
 mature economies decay v. emerging economies leadership?
– The resistive influence of market imperfect competition and crises accelerated
transmisison
 the impact of forex and world prices fluctuations, as on int’l demand/offer
– Isomophism v. globalization
 behavioural convergences v. cultural preferences?
• Technological
– Communication revolution
 logistical + digital = tangible + intangible integration?
– Technology transfers systematization
an accelerated capacity to catch up? 8
The external pressures
PREST level 1
Lemaire J.P. 1993, 1995, 1997, 2000, 2003, 2003,, 2013
Applying to foreign and local sevice sector’s players
POLITICAL-REGULATORY TECHNOLOGICAL
PRESSURES PRESSURES
+++ National: ++/+++
governance evolution/transition
Expectation of improved and
adapted services
Bi-lateral
Country of origin  Target countri(es-) Technology transfers through
Education and partnerships
Sub-continental/Regional Target Increasing transparence

integration progression/regression Specific Service Sector due to quick development of
Area in S.E.A. information systems
BANKING SERVICES IN VN
Quantitative evolution of needs Qualiitative evolution of needs

(related to increasing ECONOMIC /SOCIAL (related to culture, sensitivity
demography, PRESSURES to international trends etc..)
and standards of living), Open and market economy new
++/+++
especially in urban areas needs
The geo-sector challenges
PREST level 2
Lemaire J.P. 1993, 1995, 1997, 2000, 2003, 2003,, 2013
PRESSURES PRESSURES
INCREASING COMPETITIVE CHALLENGE
(MATURE v. EMERGING)
- Market share and customer expectations
(price,customers’ proximity,..)
- New local entrants
- Run for size
Target
Specific Service Sector
Area in S.E.A.N.
GEO-SECTOR REDEPLOYMENT CHALLENGE ++ Banking
OFFER ADAPTATION CHALLENGE ++
Services
(MATURE v. EMERGING): (MATURE v. EMERGING)
In VN
- Customers’ segmentation and geo display Quali & quantitative offer ‘s adjustment
to permanently reconsider following regulations’ as customers’ evolving
- Continuous adjustment of services portfolio expectations.
ECONOMICAL AND SOCIAL PRESSURES
POSITIONNING THE KEY COMPETITORS:
FINDING THE AXES TO DISCRIMINATE ACTORS/STRATEGIES (SIZE & GEO REACH)
FINANCIAL
SOUNDNESS limited branches
(bad debts) creation allowance
Foreign
banks
equitization
STATE OWNED
BANKS
consolidation
(« equitized »)
Joint
stock
banks
URBAN DISPLAY
n° of urban branches
POSITIONNING THE KEY COMPETITORS:
FINDING THE AXES TO DISCRIMINATE ACTORS /STRATEGIES (CUSTOMER’S EXPECTATIONS
SATISFACTION)
state of the art banking services offer
QUALITY/RANGE
OF SERVICES Foreign
banks
same +
State trustwothiness
STATE OWNED
proxy familiarity
+ benchmarking
BANKS
(« equitized »)
Joint
stock
banks
CUSTOMER BASE
n° of urban branches
On which « levers » actors can operate
facing vietnamese banking sector’s challenges?
(P.R.E.S.T. MODEL / 3)
PRESSURES PRESSURES
COMPETITION
CHALLENGE
°
- Increase profitability of VN facilities
- Take advantage of economies of Profitability: Structuration - Gain critical mass through partnerships with
scale/scope cost/funding Organization local/foreign investors
- Select best investment opportunities in improvement enhancement - Promote harmonized- but flexible
VN. procedures stimulating harmonious growth
- Enlarge & diversify customers base as Innovation - Enhance internal benchmark of good
develop their brand loyalty products practices
REDEPLOYMENT ADAPTATION
process
CHALLENGE CHALLENGE
++ +++
- Create new services environment friendly and
locally embedded
- Conciliate proximity stake holders concern and
capacity to adjust to customers’ diversity
- Improve technical and relational processes
SOCIAL ANDECONOMICAL PRESSURES
Alternative and progressive entry modes
INTEGRATED
INTEGRATED
SUBSIDIARY
SUBSIDIARY
Level of
investment Exploration strategy
JOINT PRODUCTION
JOINT PRODUCTION
VENTURE SUBSIDIARY
VENTURE SUBSIDIARY
DISTRIBUTION
DISTRIBUTION
SUBSIDIARY
SUBSIDIARY
Penetration strategy
LICENCE FRANCHISE
LICENCE
DELEGATED
DISTRIBUTOR
MANAGEMENT
Creaming off
Level of control
Huawei: a progressive internationalisation process
Stage # 3
MULTINATIONALISATION
 GLOBALIZATION
Multi countries,
multi continental,
Stage # 2 to world spread activities
"GO NATIVE " relying on coordinated and
harmonized structures
Multilocal activities
relying on permanent
Stage # 1 although differenciated
"FIRST LANDING" networks and structures
Domestic extension of activities
beyond boundaries
on an occasional or exploratory basis
(fequently i a proxymity
geograhic or cultural area)
1980’ 1990’ 2000’ 2010’ 2020’?

15
« Concentric » international growth
Huawei example
Diversification
Diversification
Of customers’ segments
of the offer
Development
on mature markets
and systematic world markets coverage
00’/10’
Households
B to C
Cf. handsets
modems, box, smartphones
Professionnals
Development on
similar maturity markets
90’/00’ B to B
Telco
Cf.
operators infrastructures
Initial télécom
development
On the Chinese
market
80’/90’
External determinants of internationalisation
Authorities support
Infrasstructures improvements and
stuctural economic policies
• direct support to international
development
Big market effect Application to FDI spillover effect

•Access to a larger • Technologies and know how
customer base
« international champions » tranfers
•Economies of scale from FGE • Image building for local
contributing actors
Proximity
opportunities
• Regional integration
•Links with proximity areas
Source:
Lemaire 2008
Internal incentives to internationalize
After J.Dunning
Resources seeking Strategic assets seeking

•Access to raw paterial •Technologies, brand image,
and to commodities Managerial competences
Application to
« international champions »
from FGE
Market seeking Efficiency seeking

•Access to diversification/volume Cost reduction ,
markets , experience improvements, better product adaptation,
and protectionism bypassing investment subsidies..
Source:
Dunning 1994
Researching on services in S.E.A.:
considering an appropriate research approach
• Dealing with the geographic and the services sector s’ diversity and
dynamics in SEA
• Adopting a parallel research approach scheme applying to specific

/comparable « geo-sector areas of reference », maybe through specific
services S.E.A. ‘observatories’ (by zones/activities)
• Combining permanent updated secondary data collection on legal,

commercial, social, technological …issues, explaining
existing/evolving/potential opportunities and threats for foreign
players
• In relation with local realities/grounds which could be explored by

groups of researchers (academics connected to professionals)
• Using some panels of experts for validation and testing approach

and temptative implementations
A POSSIBLE RESEARCH PROCESS
FROM SECONDARY DATA ANALYSIS TO GROUND CONFRONTATION
CASE STUDIES
 CONFRONTING
THE PROCESS TO
REAL SITUATIONS
COUNTRIES AND
SECTOR’S CORPORATE AND
MAJOR DRIVERS MANAGERIAL
IDENTIFICATION IMPLICATIONS
ACTION RESEARCH
SECONDARY DATA  EXPERIENCING
EXPERTS PANEL
STRUCTURED
VALIDATION
AND IMPLEMENTING
ANALYSIS THE APPRAOCH
DELPHI ROUND 1 & 2
PREST 1-2-3
REALITY ASESSMENT
AND RESEARCH APPLICATION
As a conclusion of the seminar:
Challenges of International
Management on the Dawn of the
21st Century
Lemaire, Mayrhofer, Milliot (2012)
21
Introduction: lessons learnt from structural &
conjectural changes in a turbulent
environment
• Political and Regulatory
– Liberalization of mature economies
– Economic transition of emerging/fast growing economies
 Decompartmentalization > Globalization
• Economic and Social
– Progressive shift of the world gravity center from “North/West” to
”South/East”, for economic power, as for offer and demand
– Redeployment of trade and investment flows, with an increasing
concern (if not action) in favor of enduring development.
 New stakeholders and new expectations
• Technological
– Accelerated obsolescence, quick evolving standards, including pollution
– Speeding up of physical and virtual communications as of crises diffusion
 Increasing transparency and reactivity
 Necessity for organizations to conciliate numerous new structural
and conjectural constraints & opportunities
22
1. Relate more analysis and diagnosis to
decision-making
• Following a three steps “funneling” process, encompassing

entity(ies)/organization(s) nowadays “exposed”/internationally “open”:
– At a macro-level, the review of the permanent and accelerating

transformations of the major dimensions of the target/reference geographical
area in which it/they operate(s).
– At a meso/intermediate level, the assessment of their consecutive impact on

all entities operating in the same activity/sector/industry , in this area, to
identify the possible strategies, for them to select /implement.
– At a micro level, the formulation by each entity’s corporate decision, first

strategic, and, then, structural, cultural and functional. (e.g.HR, R&D, supply
chain, marketing, finance, control, legal , tax..)
24
The « funnel » approach
the three successive steps through FOLLOWING THE PREST MODEL
-Political-regulatory, economic & social, technological- three layers approach
Lemaire J.P. 1993, 1995, 1997, 2000, 2003, 2003,, 2013
Increasing
1. “MACRO-ECONOMIC” PREST
Acceleration
ANALYSIS OF THE GLOBAL  REGIONAL AREA OF REFERENCE level 1
Instability
of its evolution in the short, medium and long term External
Integration
in a defined area (sub continent, country, region) pressures
2. “MESO-ECONOMIC”
PREST
Constant SECTORIAL /LOCAL DYNAMIC
level 2
evolution definition of the impact of the environment
Geo Sector’s
of sectors and on the industry/the sector/the activity and
challenges
economic areas what is therefore at stake
in the selected area
Continuous 3. “MICRO-ECONOMIC”
adjustment INTL CORPORATE STRATEGY PREST level 3
of objectives, AVAILABLE Corporate/
activities with regards to the corporate organization’s
and structures assets and functions at the « levers »/KFS
convenient geo level
2. Consider the extending range of
economic and political stakeholders
internationally “exposed”..
• Beyond “horizontal” international -market seeking- expansion analyses
(Markusen, 1984; Glass, 2008), focus more on “verticalization” -i.e.
optimization of the value chain- (Helpman, 1984).
• Consider partnerships and networks among the diversity of entities/

organizations, to gain access to unfamiliar territories, to face increasing
competition and to share resources better than acting alone.
• Include public and private entities newly and increasingly concerned by

international opening (non-governmental organizations, multi-governmental
organizations, local authorities etc.).
• Focus on interactions among these various entities, especially between

authorities representing territories at different levels, whose objectives have to
conciliate with hosted or potentially hosted institutions.
Conciliate the interest of various entities:
the example of the localization decision
MACRO-ECONOMIC LEVEL OF THE HOST TERRITORY
Openness, stability and credibility of local authorities
Objectives of valorization of the national/regional/local
economic territories
Restrictions imposed and advantages offered
LOCALIZATION DECISION (go/no go)

Object of territorial choice (horizontalization/verticalization)
Identification of favored industries/sectors/activities
Optimization of entry mode /relation/setting-up
•FINALIZATION OF THE STRATEGY FOR THE TERRITORIAL APPROAC
MICRO-ECONOMIC LEVEL OF THE ORGANIZATION

Stimulation of development of relations with the territory
Horizontalization/verticalization
Resources and strengths specific to the organization
Capacity to bear local/international risks
27
3. Question more traditional incentives and
international development frameworks
• Due to the loss of relative importance, in terms of GDP, between mature economies
(essentially the countries in the Triad) and emerging economies (notably the fast
growing economies / FGE)
• Activities/sectors/industries dynamics more or less “globalized”, deserve to be

deepened, to better understand constraints and favorable perspectives for the
involved actors from different geographical origins.
• Beyond Dunning’s and Uppsala 1 & 2 rationale, organizations tend to diverge in

terms of incentives and international development schemes:; facing the new
technological environment as the new balance of power
• For instance, organizations such as born global from quick evolving activities are
aiming at immediate international expansion , as international champions from FGE
are seeking worldwide technological leadership.
Example of new international development
scheme: International champions from FGE
29
4. Enlight the role of multicultural interactions
in organizations’ development schemes and
relationship networks
• Organizations tend to adopt evolving international structures, characterized by
an increased flexibilization, that generate, internally and externally, intercultural
relationships of very different natures.
• A diversity of cultural interactions could be associated, with internationalization

such as intercultural negotiation, leading multicultural teams, relations between
HQ and foreign operations, or the design and adaptation of products from/for
different cultural as geographical contexts..
• While organic growth facilitates corporate culture diffusion, external growth,

through mergers and acquisitions (amicable or hostile), as well as partnerships
developed within larger geographical frameworks, place the organizations, in
complex and, even, strained cultural situations.
• During their development and geographical deployment, it is therefore

interesting to better measure the transformation of their organizational culture
and to consider its diffusion among their various locations.
Building up an intercultural
corporate model
Develop the cultural lever during the
international development
Valorization of
the company
culture
Global
Unequivocal
diffusion of
Central the home
culture
d’origine
Birth and
development Diffusion Multi-local
of the company Of the home culture
culture and stimulation of Extensive and interactive
feedbacks enrichment of a shared
company culture
Contributions Organizational
Local from the de-
diversity of compartementali
local cultures
zation (geo-
sectorial and
Initial Local Multinationalization cultural)
internationalization development J.P LEMAIRE, adapted from J.P.LEMAIRE and N.PRIME (2002)
31
Conclusion
• These four perspectives, in no way exhaustive, cover essential aspects of the IB
field and already federate a number of reflections and analyses, responding to new
questions raised by organizations, more and more exposed in an increasingly open
international space.
– They favor transversal and environmental analysis and systemic approaches of

internationalization, by giving, notably, to crisis situations, all the importance dictated by
the evolutions of the past two decades.
– They engage to better apprehend the most innovative incentives and orientations
among the actors concerned by international openness (traditional and new) and to
consider more specifically organizational and cultural dimensions associated with
international development.
– They encourage, to consider the impact of internationalization on the functions, by

connecting them with one another, and emphasizing their interdependence within the
framework of the internationalization strategy fromulation and implementation.
32
Three pages feedback
• Is this « international » dimension developped in the seminar seemed to
you necessary, whatever the focus of your own research? (even purely
domestic)?
• To what extent the concepts developped during the seminar could be
useful to your own research? Which ones ?
• Which of the articles presented during the seminar seemed to you most
interesting/inspiring? Less interesting/inspiring? On which aspects
(subject, problematics, methodology, model proposed..)?
• Which has been (if any) the new research ideas which, during this
seminar, would have enriched your reflexion (understanding of the
international environment, importance of the sector specificities, of the
companies features..).
• Which type of pedagogical approaches used by the instructor
(presentation/exchange of/on participants research, articles
peresentaiton & discussion, instructors own contributions/models..)
would have seemed to you more/less effective?
• Which would be your suggestions for improving this seminar structure
33
and pedagogy?

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Research in International Business

Jean-Paul Lemaire, ESCP Europe

• The legacy of the founding IB concepts

• Exploring new IB areas:

• Conclusion of Day 2: IB inputs for my doctoral research

– The international economics influence: classical to neo-

– The MNCs’ legacy debate and the internationalization

– From incentives to stages theory and MNCs organizational

– The multicultural dimension between assessment and

60s to early 70s MNCs International New stakeholders

Late 70s Dunning’s Netwoks

Evaluating resulting main challenges on specific target sector (hostellery) :

Sub-continental/Regional Target Increasing transparence

Quantitative evolution of needs Qualiitative evolution of needs

ECONOMICAL AND SOCIAL PRESSURES

state of the art banking services offer

SOCIAL ANDECONOMICAL PRESSURES

1980’ 1990’ 2000’ 2010’ 2020’?

Big market effect Application to FDI spillover effect

Resources seeking Strategic assets seeking

Market seeking Efficiency seeking

• Adopting a parallel research approach scheme applying to specific

• Combining permanent updated secondary data collection on legal,

• In relation with local realities/grounds which could be explored by

• Using some panels of experts for validation and testing approach

Lemaire, Mayrhofer, Milliot (2012)

• Following a three steps “funneling” process, encompassing

– At a macro-level, the review of the permanent and accelerating

– At a meso/intermediate level, the assessment of their consecutive impact on

– At a micro level, the formulation by each entity’s corporate decision, first

• Consider partnerships and networks among the diversity of entities/

• Include public and private entities newly and increasingly concerned by

• Focus on interactions among these various entities, especially between

LOCALIZATION DECISION (go/no go)

MICRO-ECONOMIC LEVEL OF THE ORGANIZATION

• Activities/sectors/industries dynamics more or less “globalized”, deserve to be

• Beyond Dunning’s and Uppsala 1 & 2 rationale, organizations tend to diverge in

• A diversity of cultural interactions could be associated, with internationalization

• While organic growth facilitates corporate culture diffusion, external growth,

• During their development and geographical deployment, it is therefore

– They favor transversal and environmental analysis and systemic approaches of

– They encourage, to consider the impact of internationalization on the functions, by

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