Business Theory: The Institution Based Theory In International Business

1355 Words 6 Pages
Register to read the introduction… These institutions differ from place to place, and to a large extent affect the performance of the organization. Politics, legal system, culture and the society in general play a crucial role in mapping out the organizations strategy especially in emerging markets. Peng & Khoury (2008) stated that the issues of institutional constraints need to be addressed in the forefront of international business theory and need not be considered as part of the background or underpinnings.

In support of their argument Peng, Wang & Jiang (2008) used four cases to illustrate the absolute importance of institutions in international business. These are (1) antidumping as entry barriers, (2) competing in and out of India, (3) growing the firm in China, and (4) governing the corporation in emerging
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The government had decision to invest in higher the education and its legal and regulatory reforms had liberalized the economy and attracted much need FDI into the system. Western Firms such as GE, IBM and Microsoft have made huge investment in the country even though recent legislations in the US have banned the award of contracts to Indian firms. This therefore means that the overall performance of the Indian business process outsourcing industries will inevitably be dependent on both the local and international institutional frame …show more content…
& Jiang, Y. (2008) ‘An institution-based view of international business strategy: A focus on emerging economies’, Journal of International Business Studies, 39 (5), pg. 920–936. [Online] Available at (Accessed on 28 January, 2012)

Peng M.W. and Khoury T. A. (2008) ‘Unbundling the Institution based View Of International Business Strategy’ in Rugman A. M. (ed), The Oxford Hand Book of International Business Second Edition Oxford University Press New York. [Online] Available at (Accessed on 30 January, 2012)

Xie Y. H., Zhao H. H., Xie Q. J. and Arnold M. (2011) ‘On The Determinants Of Post-Entry Strategic Positioning Of Foreign Firms In A Host Market: A “Strategy Tripod” Perspective’, International Business Review, 20 (4), pg 477-490 [Online] Available at
(Accessed on 30 January,

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