The optimal performance of the global firm: formalizing and extending the integration-responsiveness framework
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Date
2000-10-15Author
Devinney, T. M.
Midgley, D. F.
Venaik, S.
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Show full item recordAbstract
With the increasing globalization of business, there has been
growing interest in how to create and manage a successful international
enterprise. Although researchers and practitioners
have grappled with the issue of globalization for some time,
there is no one model that encompasses the range of phenomena
we observe in the global economy, nor have those models that
do exist been precisely formalized.
This paper provides an expanded approach to thinking about
the organizational forms and linkages that exist in international
business operations. Building on the popular integrationresponsiveness
framework of international strategic orientation,
we develop a more expansive approach that is better able to
account for the diversity of organizational forms and strategic
choices open to managers. By adding a third set of environmental
pressures, incorporating the beliefs of managers, and by
employing the idea of efficient frontiers, we reformulate the
integration-responsiveness framework, making it more consistent
with modern economic models of the firm. Our integrationresponsiveness-completeness
(IRC) model argues that global
firms can respond to these fundamental and competing pressures
by configuring themselves in a variety of ways—rather
than normatively prescribing that the transnational form is optimal.
In addition, our model has methodological ramifications.
Its formal structure suggests that empirical techniques that focus
on the best rather than average performance are necessary to
adequately investigate the performance differences among alternative
organizational forms. This may explain the paradoxical
lack of empirical support for a link between organizational
form and performance.
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