week 10 Flashcards
(15 cards)
Why is managing geopolitical complexity important for international management?
Firms face institutional contradictions, rising multipolarity, and fragmentation; they must adapt to regional tensions, trade barriers, and divergent regulations.
What is multipolarity?
A global system where multiple countries or regions hold significant power and influence (e.g., US, China, EU), instead of a single or dual superpower.
What are key features of fragmentation in the global economy?
*Regionalism
*Deglobalisation
*Rival institutional logics
*Strategic decoupling
What is the KOF Globalisation Index?
A composite index measuring globalisation across economic, social, and political dimensions — de jure (policy) and de facto (actual flows).
What challenges do managers face in the current global business environment?
*Adapting to different institutional logics
*Managing across conflicting national policies
*Addressing digital transformation and sustainability
*Navigating fragmented markets
What is the Varieties of Capitalism (VoC) framework?
A theory classifying economies as LMEs or CMEs based on how firms coordinate in areas like labour, education, finance, governance, and inter-firm relations.
How can managers apply the VoC framework?
*Analyse business environments
*Compare institutional systems
*Understand comparative advantages and constraints
*Assess innovation capacities
What are limitations of the VoC framework?
*Too binary (LME vs CME)
*Underestimates informal institutions
*Ignores emerging markets and digital/platform economies
*Neglects institutional change and hybridity
What are common institutional contradictions in geopolitics?
*GDPR (EU) vs Chinese cybersecurity law
*Gig economy vs co-determination
*EU strategic autonomy vs China’s state-led model
What strategies do firms use to navigate geopolitical complexity?
1.Compliance – Adhere to all systems (e.g., HSBC and dual finance)
2.Buffering – Separate operations to meet different standards (e.g., TikTok US infrastructure)
3.Bridging – Harmonise goals between systems (e.g., Siemens EU-China)
How did Toyota adapt CME practices to the US LME context?
*Hybrid HR: non-union plants, job security, team incentives
*Inter-firm: more US suppliers, local adaptation
*Corporate governance: balance between long-term vision and shareholder interests
What challenges did Amazon face in India’s state-permeated capitalism?
*FDI restrictions
*Infrastructure gaps
*Informal institutions and local competition
*Market diversity and regulatory complexity
How did Amazon adapt to India’s context?
*Created marketplace model
*Opened Amazon Easy stores
*Launched Hindi interface
*Partnered with small retailers
*Offered cash-on-delivery and trained SMEs
What does Amazon’s case show about VoC in practice?
*Firms must go beyond LME/CME logic
*Adapt to hybrid environments and institutional voids
*Blend formal and informal strategies in emerging markets
What are key takeaways about managing across institutional environments?
*No one-size-fits-all model
*Institutions matter deeply for strategy, innovation, and legitimacy
*Successful firms are institutionally adaptive and context-sensitive
