Research on Business Strategies: Overview
The central theme motivating most of my scholarly research is the question how companies adapt their strategies and operations to the specific opportunities and challenges they encounter in different geographic contexts. the empirical field for most of my research is emerging economies such as Eastern Europe, South-East Asia and China, where I investigate in particular the entry and adaptation of foreign multinational enterprises (MNEs) to local context, and the impact of home context on outward investment by MNEs originating from emerging economies.
Theoretical contributions arising from this research advance in particular institution-based theories, which provides suitable angles to integrate contextual features in firm- or individual level studies. Other contributions integrate institutional and resource based perspective to explain the exploration and exploitation of resources under the conditions of an emerging economy. This essay synthesizes key ideas arising from this research.
Local Institutions and MNEs Strategies: My early work focused foreign investor's choice of entry mode and foreign acquisitions in transition economies, taking into consideration aspects of the local institutional environment. Starting with E my PhD thesis on foreign direct investment (FDI) in Central and Eastern Europe, I have explored the link between institution building during economic transition, transaction costs and the choice of foreign entry mode (Meyer, book 1998; Meyer, JIBS 2001a).
I have led two major research projects on foreign entry that have generated two books (Estrin & Meyer, ed., 2004; Meyer & Estrin, ed., 2007) and a stream of scholarly articles. The first project in collaboration with London Business School covers Egypt, India, South Africa and Vietnam; the second has been based at Copenhagen Business School and covers Hungary, Poland and Lithuania. The main theme in this research has been the interaction of local institutions and strategies of foreign investors.
This work enabled me and my co-authors to develop a more fine-grained understanding of how foreign direct investors adapt their strategies and operations to the peculiarities of a local institutional framework. A major line of work concerns the adaptation of entry modes to local contexts, notably the interaction between institutional development and resource acquisition by foreign investors (Meyer, Estrin, Bhaumik & Peng, SMJ 2008). Institutions, however, operate at different level of analysis. In a study that recent received a lot of attention attention, we develop the idea of sub-national level whose impacting on the location and mode choices of foreign investors (Meyer & Nguyen, JMS 2005). Other aspects of context we incorporated in the study of entry strategies are institutional distance (Estrin, Baghdasaryan & Meyer, JMS 2009), institutional pressures from the home country (Meyer & Thein, JWB 2014), and same-home-country agglomeration effects (Tan & Meyer, JIBS 2012). Because of such differences in institutional environment in host countries, foreign investors' local experience has varying effects on sub-sequent investment of experience across contexts, as we show in a study of Taiwanese investors (Li & Meyer, JWB 2009).
The conventional classifications of entry mode, however, are rather crude. Much of the adaptation happens not in the choice of mode but in the specific organizational arrangements. Insights from qualitative studies led me to propose new or refined terminology to capture the nature of foreign entry strategies, including brownfield acquisitions (Meyer & Estrin, JIBS 2001, Estrin & Meyer, MIR 2011), staged acquisitions and multiple acquisitions (Meyer & Tran, LRP 2006), and partial acquisitions (Meyer & Jakobsen 2008, 2007) and low-profile strategies (Meyer & Thein, JWB 2014). In a theoretical piece, we outline a resource-based classification of entry modes at its antecedents (Meyer, Wright & Pruthi, SMJ 2009), while in practitioner communications, I offer an integrated framework for firms to develop their entry strategy (Meyer 2008a, 2008b).
Subsequent to the initial entry, MNEs have to manage their foreign subsidiaries, and often readapt their subsidiary strategies to evolving local and international contexts. Two early qualitative studies thus investigated post-acquisition restructuring in respectively East Germany (Meyer & Mřller, EMJ 1998) and Hungary (Meyer & Lieb-Dóczy, JMS 2003). More recent work based on the afore mentioned multi-country datasets explore the choice and performance of subsidiary strategies (Meyer & Estrin, GSJ, 2014; Meyer & Su, JWB, 2015) as well as subsidiary growth (Bhaumik, Estrin & Meyer, CES 2006) and subsidiary exports (Estrin, Meyer, Wright & Foliano, IBR 2008).
A firm's international strategies evolves with its own resource formation process. The internationalization process (or 'Uppsala') model allows to analyze foreign expansion and entry in a dynamic perspective that take account of the time dimension. I have thus applied and developed this model to explore the interaction of firm internationalization and network internationalization (Meyer & Skak, EMJ, 2002), reviewing alternative conceptualizations of the model (Meyer & Gelbuda, JIM 2006), exploring discrepancies between intended and implemented strategies (Santangelo & Meyer, JIBS 2012). The internationalization model also provides a theoretical foundation for the study of experience effects in international business, albeit the direction of such effects may be theoretically ambiguous (Li & Meyer, JWB 2009; Meyer & Wang, chapter 2015).
Multinationals from emerging economies: Multinationals from emerging economies are still a relatively new phenomenon, and the challenges they face provide opportunities to refine theories. My earliest studies of local firms analyzed restructuring of resource portfolios and organizational learning under pressures of external economic change in transition economies (Uhlenbruck, Meyer & Hitt, JMS 2003; Dixon, Meyer & Day, HR 2007, JMS 2010, LRP 2014).
With respect to the internationalization of MNEs originating from emerging economies, I have advanced three lines of argument. First, most of these MNEs are at early stage of their internationalization process, and hence - even when they are large and successful in their home market - lack critical resources for managing international operations. Hence, they are appropriately viewed through the lens of the internationalization process model, which views foreign activities as accumulation of commitments that enable resource building, rather than solely the exploitation of existing resources (Meyer & Thaijongrak, APJM 2013; Meyer, chapter 2014). This perspective also suggests that international experience within the management team plays a critical role in explaining outward investments, as we found for Taiwanese (Tan & Meyer, JIM 2010) and Chinese firms (Cui, Li, Meyer & Li, 2015).
Second, in their pursuit of catch-up with world leaders, emerging economy MNEs often make strategic asset seeking acquisitions of firms with advanced technology or international brand names. These strategies aim to fast-track the creation of corporate capabilities, and are made feasible by access to financial resources. Yet, the implementation of such acquired firms creates challenges that few emerging economy MNEs have mastered so far (Cui, Meyer & Hu, 2014; Meyer, MBR 2015).
Third, many emerging economy MNEs often have a state entity as a major shareholder. On the one hand, this often facilitates access to scarce resources at home. However, in some host countries, state-ownership faces institutional pressures arises from the host society's lack of appreciation of this form of ownership. Thus, in Meyer, Ding, Li & Zhang (JIBS 2014), we argue that state-owned firms have to take extra initiatives to build local legitimacy and 'overcoming distrust' in the host society.
Global Strategy: This stream of research focuses on the global strategies that brings multinational enterprises into emerging economies in the first place. Globalization is changing the institutional contexts such as to diminish the value of resources that can be exploited by domestic diversification, while facilitating international growth in core lines of business. I thus coined the term 'globalfocusing' to describe the phenomenon of many firms converting from diversified conglomerates to specialists in a niche market with global supply chains and market presence. This work is progressing towards developing a neo-Penrosian theory of the growth of the firm (Meyer, JMS 2006, SC 2009). Related work integrates the global and the local perspectives, notably a special issue we edited on multinationals and local contexts that in particular addresses the challenges of exploiting the opportunities for MNEs operating in very diverse host countries (Meyer, Mudambi & Narula, JMS 2011).
Multinational Enterprises and Society: Beyond managerial research questions, I am interested in the impact of foreign investors on the economic transition and development of the host economies, for instance through technology spillovers. I have written two survey papers on the issue (Meyer, JIBS 2004a; Meyer, 2005), edited a collection of readings (Meyer, ed. 2008) and contributed one empirical study on technology spillovers from FDI in Estonia (Sinani & Meyer, JCE 2004). This work culminated in a highly cited meta-analysis of the spillover literature that explores cross-country variations in spillover effects finding a U-shaped relationship between received productivity spillovers and a countries economic and institutional development (Meyer & Sinani, JIBS 2009).
Research Methods: On a more methodological level, I have become involved in a debate over the future of Asian management research in the Asia Pacific Journal of Management. My central concern is that deep understanding of social science phenomena requires careful considerations of contextual influences, yet too often context is handled to superficially in management research (Meyer, APJM, 2006b; Meyer, APJM, 2007a; Meyer, JIBS, 2007b). I also have offered my views on the future directions for the field of international business (Meyer, AIB-Insights, 2013), and on different ways to handle context constructively when developing theory in emerging economy business research (Meyer, MOR, 2015).
Defining the Field of Emerging Economy Business Studies: Along the rapid changes in emerging economies, business research in these economies has been evolving, to which which my work has contributed. Periodically, I have stepped back to review and reassess the progress of the field. Specifically, I have been involved in two reviews of the international business literature on Eastern Europe in view of region-specific issues (Meyer 2001b) and the implications for theory development (Meyer & Peng, JIBS 2005). A recent review focuses on strategy research in a broader range of emerging economies (Xu & Meyer, JMS 2013). Background materials for these review papers are available on this website, including a bibliography of the Central/Eastern Europe related literature until 2003, and a citation analysis of strategy research in emerging economies. The 2005 JIBS paper, was recently awarded the JIBS decade award, and in our retrospective we review the contribution of different streams of research within the institutions-based literature, and offer perspectives to further advance our understanding of business challenges in emerging economies through the application of institution-based analysis (Meyer & Peng, JIBS, 2016).
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