When are global decisions strategic?

Abstract

A robust academic field must set and revisit boundary conditions that define where, when, and to whom its insights apply. This is particularly true for a field such as global strategy where the ubiquity of the key terms invites indiscriminate use of the phrase. This essay argues that it is useful to define the field of global strategy as the subset of questions that meet the criteria for both "global" and "strategic" decisions. We offer an a priori approach to identifying and formulating problems that are unique to the global

Offshoring, hierarchical control and transnational and dynamic environments

“…To address these gaps, this study employs two theoretical perspectives, namely, transaction cost economics (TCE) (Williamson, 1985) and resource-based view (RBV) (Barney, 1991), to integrate studies in the following research streams: exploratory innovation offshoring (Lampert and Kim, 2019;Visser and Scheepers, 2022), transnational environment and complexity concerns (Asimakopoulos et al, 2023;Casson and Li, 2022;Hung et al, 2022;Leiblein et al, 2022) and dynamic environment and obsolescence concerns (Chen and Yu, 2022;Wang, 2021;Yang et al, 2022). Additionally, this study aims to answer the key questions regarding governance decisions on innovation offshoring: (1) how much hierarchical control is needed for MNEs to govern their exploratory innovation offshoring investments and (2) how do exploratory innovation offshoring and transnational/dynamic environments interactively affect MNEs' governance decisions?…”

“…In a transnational environment, the complexity of the environment has been well captured in the extant literature (Casson and Li, 2022;Leiblein et al, 2022) and considered an important concern where complex environments can render MNE's operations more unpredictable, leading to greater uncertainty (Papanastassiou et al, 2020) and increased demands for information processing (Asimakopoulos et al, 2023;Larsen et al, 2023;Lin et al, 2022). The concepts of complexity and bounded rationality can add to our understanding of how the problems of cooperation and coordination are associated with various governance structures used by MNEs to govern their international activities (Elia et al, 2023;Lin et al, 2022).…”

Complexity and multinationals

“…The complexity of firm internationalization and global strategy is well‐captured in the existing literature (Casson & Li, 2022; Leiblein et al, 2022). A well‐established view of the internationalization process conceives that firms typically start internationalizing in markets close and relatively familiar to their home market, where present business models can be extended without substantial adaptations.…”

“…Organizations are complex when internal and external components are increasingly interdependent (see e.g., Albert et al, 2015; Porter & Siggelkow, 2008; Simon, 1962). Thus, decisions are “global” in the sense that they involve “cross‐border activities of economic agents” (Tallman & Pedersen, 2015, p. 237), and “strategic” in the sense that they engender interdependencies with other activities and choices within the firm, interdependencies with the choices made by other actors (individuals as well as organizations) in their competitive environments, and/or interdependencies with other choices made by the firm across time (Leiblein et al, 2018), as depicted in the internationalization process mentioned earlier (Leiblein et al, 2022). This also implies that an organization managing several different activities in a wide spread of countries can be regarded as more complex than a solely domestic organization dealing with only a few activities (Békés et al, 2021).…”

The future of global strategy

“…Ganson, He, and Henisz (2022) discuss how multinationals may contribute to social divisions as well as help to address them. Leiblein, Reuer, Larsen, and Pedersen (2022) provide a thoughtful discussion about the domain of global strategy. Meyer and Li (2022) introduce an international relations perspective to study multinationals and subsidiaries in the face of disruption in the global economy.…”