Cost, Value and Foreign Market Entry Mode : The Transaction and The Firm  

Oleh:

Madhok, Anoop

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: Strategic Management Journal vol. 18 no. 1 (1997), page 39-62.
Topik: FIRM; cost; value; foreign market; transcation; firm

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: SS30.1 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

This paper compares and contrasts the mode of foreign market entry decision from the transaction cost / internalization and organizational capability perspectives. Each of these perspectives operates at a different level of analysis, respectively the transaction and the firm, and consequently differs in the primary arena of attention, namely transaction characteristics and the capabilities of firms. In making the comparison, a key distinction is made between the cost and the value aspects in the management of know - how, based on which issues pertaining enhancement of competitive advantage are closely examined. The main purpose of this paper is to demonstrate the implications of a shift in frame from cost to value in the analysis of decisions related to firm boundaries. Entry into foreign markets is used primarily as a vehicle for the accomplishment of this purpose. The paper shows how the value - based framework of the organizational capability perpective radically and fundamentally shifts the approach towards the governance of firm boundaries and argues that, even though TC / internalization theory raises some valid concerns, the organizational capability framework may be more in tune with today's business context. Some of the assumptions of the TC / internalization perpective, both direct - opportunism, exploitation of existing advantage - and indirect - preservation of the value of know - how across locational contexts, asymmetry between bounded rationality for transaction and production purposes - are critically examined and questioned. Implications of a shift from a cost to a value - based framework are discussed and the need for a shift in research focus is emphasized.

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