Linking Theory and Context: ‘Strategy Research in Emerging Economies’ after Wright et al. (2005)

Abstract

Emerging economies provide a laboratory for investigating the interaction between firm strategies and local contexts. Mike Wright and colleagues have shaped this research agenda by creating legitimacy for this line of research, and by outlining how research in four types of strategy contexts can advance theories. We assess how this agenda has progressed in eight leading journals in the past decade, particularly during the five years following their review, with the aims to identify broad trends of theorizing, and to outline future research challenges. Emerging economy contexts challenge some of the assumptions of theories originally developed for markets that are relatively stable and efficient. Researchers have advanced several theoretical perspectives by addressing these challenges. Wright and colleagues focused on institutional theory as a major foundation for such work, and we find it continuing to be the most popular theoretical perspective. In addition, new perspectives have emerged, focusing on learning, relationships, real options, and spillovers as focal concepts for theorizing.

Strategic decision implementation in an emerging market

“…This is true especially of domestic firms in emerging economies (He, et al, 2011;Xu and Meyer, 2013;Wu, 2013). Institutional contexts may alter over time, albeit slowly in many cases and this may change the effectiveness of organizational strategies (Khanna and Palepu, 2000).…”

“…al., 2011). It has also drawn attention to the context-specific nature of strategic management (Xu and Meyer, 2013). Strategic decision making in an emerging market context (Iran) has been studied (Zamani et al, 2013).…”

Home country institutions and the internationalization of state owned enterprises: A cross-country analysis

“…Hence, even firms with similar types of ownership may make different strategic choices when institutional contexts vary Xu & Meyer, 2013). Yet, how specific institutions affect the behavior of particular types of firms remains an insufficiently understood question in strategic management research Holburn & Zelner, 2010;Murtha & Lenway, 1994;Peng, et al, 2008).…”

Strategic management in private and family businesses

“…Compared with earlier studies of organizations by identifying the importance of institutions in the formation of organizational structure and business practices (Orrù, Biggart, & Hamilton, 1997;Whitley, 1990), recent research has further advanced the strategy literature through the examination of how contextual factors and institutional variables shape and influence firm strategy making and execution (Au, 2007;Chu, 2011;Filatotchev, Zhang, & Piesse, 2011;Huang, Chen, & Kao, 2012;Li & Peng, 2008;Lu et al, 2008;Peng, Bhagat, & Chang, 2010;Xu & Meyer, 2013;Yang & Terjesen, 2007).…”

“…As Xu and Meyer (2013) note, strategy research in emerging economies, including Asia Pacific regions, have encountered four main challenges in terms of (1) less efficient markets, (2) dominance of governments as both rule makers and players in economic activities, (3) preference for network-based behaviors, and (4) high risk and uncertainty caused by high volatility of key economic, political, and institutional variables. Interrelated with each other, all these relate to factors embedded in societal contexts.…”