The aim of this article is to identify which economic model is applied in Eritrea. The government claims to follow the market economy model(s), however, the actual practice seems to be different and casts doubts on the government's commitment to market economy. Against this background, the author has examined Eritrea's economic development model. Confirming to his doubts, the author found out that the government is applying a militarist command economy model, however, in an improperly planned, poorly coordinated and extremely mismanaged approach, with its serious negative impacts on the economic, social, cultural, diplomatic and political conditions in the country.
The purpose of this article is to examine the social dimension of the nation building process in Eritrea. A qualitative case-study method which is composed of primary and secondary data is applied to conduct the research. The main findings show that (i) the social dimension of the nation building process was a complete failure, (ii) the main reason for the failure is the inappropriateness of the leadership to lead the task properly and (iii) a directive, visionary, participative and interactive leader that possesses, quality, legitimacy, justice, care, competence and character, i.e. honesty, integrity, trustworthiness and principle-centeredness is a leader that can accomplish the task successfully.
There is much research into strategic business alliances in emerging markets, but none focuses on this form of collaboration within Europe’s emerging economies. This is a critical absence, as the European transition region is not only different from other European and Western regions but also from other regions with developing economies. Partners in the European transition region have unique cultural and social backgrounds, and consequently, unique ways of doing business.
Transformations of Strategic Alliances in Emerging Markets focuses on this important gap. This book, the first of a two-volume set, makes a unique contribution to emerging market research by investigating the transformation of alliances in Eastern and central Europe over the past forty years. It provides a conceptual framework to describe and analyse the formation, development and functional mechanisms of strategic alliances in the European transition region, ultimately offering an in-depth overview of the challenges and opportunities around strategic alliance formation in emerging European markets.
Transformations of Strategic Alliances in Emerging Markets, Volume I, is a must-read for academics and postgraduate students of development economics and business administration.
Transformations of Strategic Alliances in Emerging Markets focuses on this important gap. This book, the second of a two-volume set, makes a unique contribution to emerging market research by investigating the transformation of alliances in Eastern and central Europe over the past forty years. It provides a conceptual framework to describe and analyse the formation, development and functional mechanisms of strategic alliances in the European transition region, ultimately offering an in-depth overview of the challenges and opportunities around strategic alliance formation in emerging European markets.
Transformations of Strategic Alliances in Emerging Markets, Volume II, is a must-read for academics and postgraduate students of development economics and business administration.
Firms increasingly have to compete globally in order to survive. An understanding of the host country’s local culture arguably being one of the most important aspects of this survival. The greater the cultural difference, the higher the risk of miscommunication and of mismanagement. Given that cross-cultural management is acknowledged as an intrinsic part of firm establishment in foreign markets today, we set out to explore the linkages between the competence of international firms in managing cultural differences and the effectiveness of their business operations. How this ‘cross-cultural competence’ is acquired is of particular interest to this study. Swedish firms operating in Kenya, Lithuania, Poland and Russia are examined. The findings show that international firms tend not to formulate any preparatory measures to become ‘culturally competent’ prior to entering foreign markets. Learning takes place by doing. A Process Model of Acquiring Cross-Cultural Competence in Foreign Markets is constructed.
Our understanding of the process of firm establishment of foregin firms within the developing and emerging countries remains limited, while the market-specific context-driven nature of the firm establishment process has been largely overlooked in the literature. We aim to address these omissions and explore the establishment process of a Spanish multinational telecommunication firm, Telefónica, in Brazil and Chile applying the "Four Stages Firm Establishment Process Model" by Abraha (1994). We identify strategic responses crafted by Telefónica to overcome competitive challenges during its establishment process. We revise Abraha's model in view of the findings and conclude with implications for managerial practices and future research.
Focus on the particular entry mode a firm uses to enter a new market, rather than the process of establishment dominates in extant literature. To fill this void, we apply an establishment process model developed from the network approach to illuminate the web of relationship forms embedded in the establishment process of two Scandinavian firms as they attempt to establish themselves in transition economies. In one case, the results show that Statoil’s process of establishment in Estonia was both less time- and resource-consuming because the firm drew support from significant actors in their network of exchange relationships. In the second case, a lack of home and host country support for Scania in Croatia resulted in an arduous and costly process and less stable position in the market, with the firm’s position changing several times as different problems cropped up. In light of the findings from the two cases, theoretical and practical implications for managing the establishment process are discussed.
The Scandinavian market has changed significantly over the past half-decade with several online distributors, particularly of digital files such as music, originating locally. This ineffect has significantly further increased globalization of commerce in the Nordic countries. The purpose of this research is to examine the effect of more traditional models of consumer choice regarding local vs global products in this context. While the major metro areas of Scandinavia have always been largely global, this research reaches further into the central part where attitudes and globalization tends to be adopted at a slower pace
Purpose – The purpose of this paper is to address the issues of how business people perceive the business environment, how government policies impact the environment and how the environment impacts the establishment processes and position development of new firms in the Eritrean market. The process is discussed by keeping a strict focus on the main actors and the activities they carried out, as well as how the available resources are utilized and exchanged in the market.
Design/methodology/approach – Drawing on the establishment process model developed from the network approach, case studies based on interviews and focus group discussions have been used to shed light on the extent to how government policies and the environment impacts the establishment processes and position development in the Eritrean market.
Findings – An important conclusion of this paper is that the main obstacle for business establishment is the hostile attitude of the government to the private sector. Another significant obstacle for building a successful position in the market is the state-owned command economy network of relationships. An additional crucial hindrance is the non-existence of a market economy network of relationships that can provide firms in the private sector with the resources they need to perform their operations.
Research limitations/implications – All firms in this paper have demonstrated that the main obstacle for establishment is the hostile attitude of the government to the private sector. Another obstacle is the state-owned command economy network of relationships, which hinders firms from building a successful position in the market. An additional crucial hindrance is the non-existence of a market economy network of relationships that can provide firms in the private sector with the resources they need to perform their operations. Since the paper is based on case studies and focus group discussions, conducting a similar study on a representative sample of firms selected from a larger population will be very useful.
Originality/value – This paper makes a unique contribution by focusing on the establishment process in a market, which is regulated, controlled and owned by the one party government. The other unique contribution is that a firm has to identify the secrets of business success and to follow the same strategy.
Applying a qualitative case-study method this article examines the establishment processes of IKEA and HELDING Share Company (HSC). The findings show that establishment in China is a complex, time and resources consuming process. This is because the Chinese culture makes it a pre-requisite to build social networks of harmonious interpersonal relationships, i.e. guanxi_to achieve success. The rules are changing continuously and there is an excessive involvement of the authorities in the economic activities in the market. It thus takes time and consumes enormous resources to understand the problems and to develop strategies to achieve success in establishments. IKEA and HSC developed interpersonal networks (guanxi) with the JV partners and the various influential people (facilitators) in the different phases of establishments. The developed guanxi enabled the two firms to understand and to handle; the cultural constraint, the complicated and continuously changing legal system, the bottlenecks in authorities relationships, the most complex and time consuming bureaucratic structures, the unique style of negotiations, to get operations and import license, license for the land for running the business and to get various types of assistance in the network development.
Abstract: This article examines the Diplomatic Dimension of Nation building in Eritrea in light of the diplomatic vision adopted in 1994 by the so called the Peoples Front for Democracy and Justice (PFDJ). Both secondary and primary data are used to write this article. The primary data is collected through telephone interviews, personal interviews, skype-interviews and focus-group discussions with some veteran liberation fighters, former government officials, diplomats and some Eritreans who were holding key positions in the government and who have experience and knowledge as to how the narcissists and psychopaths deal with the neighboring countries and regional as well as international cooperation and relationships. The main findings show that the leadership has committed a diplomatic, moral and ethical blunder scoring one of its main failures in the diplomatic dimension of nation building. This is due to the fact that it has applied a militarist and one man owned, designed, decided and mismanaged diplomatic relationships which is not at all co-operative, although it claims that it applies a healthy neighborly, regional and international cooperation and relationships as stipulated in the diplomatic vision. Moreover, the dysfunctional militarist and one man owned, designed, decided and miss managed relationships and diplomatic approach is not properly planned and it is poorly coordinated and terribly mismanaged. This reality has a serious negative consequence on the diplomatic, economic, social, cultural, organizational and political conditions of the country. The other finding of this study is that the reason why the failed, i.e. narcissistic and psychopathic leadership applies a militarist and one man owned diplomatic relationships model is because it clearly understands that to maintain and strengthen its political, economic, cultural, organizational and social power i.e. power of all aspects it has to have a full control of all the diplomatic, economic, financial and human resources in the country. The reason why the psychopaths spear headed by the self-appointed destructive dictator do not implement the diplomatic vision is because like all the other visions envisaged in the 1994 charter, the diplomatic vision was not designed to be implemented but to help the dictator to get enough time to create the conditions necessary to implement the hidden vision which the Eritrean people couldn’t yet design appropriate strategies to fight it adequately and to dismantle its power apparatus. The last reason for the failure of the diplomatic dimension of nation building is the lack of a competent and authentic leadership that possesses the qualities of an effective, legacy building and developmental leadership.
Abstract: The main results of this article are (i) the PFDJ and in particular Isayas has committed a political blunder in the political dimension of nation building by refusing to implement the constitution, (ii) the PFDJ militarized political ideology is a poisonous tool applied to secure the political power of the dictator, (iii) the political vision was not developed to be implemented but to consolidate the raw political power’ of the ‘raw dictator’ in the raw and secretive underground party by liquidating all democratic elements, (iii) the dictator is incompetent to lead the task successfully, and (iv) the other cause for the failure is the lack of an authentic leader who possesses the qualities of a developmental and legacy-building leaders.
The purpose of this paper is: to highlight the impact of industrial networks on strategic alliances; to determine if alliances help firms to build up new or strengthen existing networks; to find out whether alliances succeed or precede networks. Our findings show that well-developed networks have a positive impact on how alliances function and the results that they can achieve. The other finding is that alliances defend and strengthen networks, and also enable firms to build new ones or penetrate those of their alliance partner(s). The final conclusion is that it is difficult to determine if alliances succeed or precede networks.
The purpose of this article is to highlight the journey to and from strategic alliances and if alliances lead to the creation of new Alliances, how existing networks are managed and strengthened and to identify the factors which impact and determine the journey to and from strategic alliances. One of the findings of this chapter is that, in the pre-strategic alliance phase firms can have direct and indirect relationships which can lead to the formation of strategic alliances under certain circumstances, whereas in just the opposite circumstances those relationships might not lead to alliances formation. The other finding is that one of the main factors which determines the journey of strategic alliances is the degree of internationalization of the firm and the market. It is also found out that the journey of alliances can be different in the different groups of Central Europe countries depending on the pace or degree of adaptation of those countries, i.e. whether they are fast-, or medium or slow adapting countries.
Factors influencing firms’ standardization and adaptations decisions tend to be treated as static isolated entities in the extant literature. Further, the focus is predominantly on Western MNCs and product development or marketing functions with manufacturing firms and the emerging/developing country perspective underrepresented. We explore factors, as well as their interrelations that determine standardization and adaptations decisions when a developed country manufacturing firm establishes operations in a developing country. Purposefully, Italian manufacturing firms with operations in Vietnam are examined. We identify functions, processes, and practices that are standardized/transferred and those that are adapted. A theoretical model is developed based on the findings.
Our understanding of the process of firm establishment in foreign markets is relatively limited especially in relation to host-developing and host-emerging markets. The market-specific and context-driven nature of the firm establishment process is largely overlooked in the literature. Against this background, we aim to chart the establishment process of a Spanish telecommunication firm, Telefonica, in Brazil and Chile by applying the 'four stage firm establishment process model in foreign markets' (Abraha, 1994). We identify strategic responses crafted by Telefonica to overcome the challenges during its establishment process. We revise Abraha's model in view of the findings and conclude with implications for managerial practices.
While the scholarly focus has shifted from strategic alliance formation to alliance performance and thus alliance outcome, the process that leads to a particular outcome: alliance success or alliance failure remains indeterminate. Given their high failure rate, this study aims to identify factors that contribute to an alliance failure to better understand the strategic alliance management process to help alliances survive. Purposefully, the Volvo-Renault alliance break-up is investigated. A Process Model for International Strategic Alliance Lifecycle is developed. The findings establish that post-formation, the strategic alliance process necessitates managing interactions among: partners’ objectives; partners’ resource contribution; access to partner’s network; and alliance performance. However, for an alliance to sustain, learning and assessment must be an integral part. Learning and assessment are critical strategic inputs that serve as ‘binding forces’, and as an ‘alert mechanism’ whereby timely corrective managerial actions are triggered in favor of an alliance sustainability and vice versa.
While the advantages of globalization are numerous, (including economies of scale in research and development, production, marketing, access to large and many markets, access to new ideas, technologies, competencies, resources), globalization also brings with it new challenges. Cultural differences arguably being one of the most important of these challenges. Literature suggests that cultural differences and the firms’ ability to deal with them have a significant impact on firms’ operations as well as performance. Against this background, this study explores the relationship between cultural differences and the effectiveness of international business operations. The data is drawn from a sample of North European firms operating in diverse foreign markets. The findings show that for the European firms in our sample the learning, in the main, tended to take place 'by doing' over time. The paper concludes with managerial implications.
Purpose – In the extant literature a firm's development of its competitive advantage is seen to be the task of the firm alone. The purpose of this paper is to introduce a new and a broader approach of how competitive advantage can be developed and maintained in today's highly competitive and dynamic markets. To this end, how a firm handles its relationships with significant actors in its network becomes very decisive for the development of its competitive advantage.
Design/methodology/approach – Drawing on a network approach, case studies have been used to shed lights on the extent to which the development of competitive advantage of firms affect and are affected by their interaction with some actors in a network of exchange relationships.
Findings – An important conclusion of this study is that a firm's highly valued performance, an indication of its strong position or competitive strength, has its roots in its regular and intensive interaction with some significant actors in its network.
Research limitations/implications – All firms in this study have demonstrated that competitive advantage can be achieved by building up a strong position through interaction, learning and adaptation with some significant actors in the marketplace. Since the study is based on one setting, extending a similar study to several settings will be very useful.
Originality/value – The paper provides insights into how a firm, in the effort to build its competitive advantage, draws on its own capabilities and complementary capabilities of its partners in a network.
Purpose - The purpose of this study is to provide deeper insights into the extent to which an independent actor(s) actively collaborates with the internationalizing firm so as to jointly determine the choice of market, the mode of entry and the level of investment committed in the market to be entered and even after the entry (i.e. the ongoing activities). Design/methodology/approach - Against the previous purpose section, a qualitative research approach is selected to guide the exploratory nature of this study. Thus qualitative data are used to build the two case studies because case studies are generally a more appropriate approach when "how" and "why" questions are being posed and when the investigator has little control over events. Findings - Based on two multiple case studies, one major finding of the study shows that independent actors, with their interconnected networks, have played and are still playing a major role in influencing the internationalization processes of each of the two firms in this study. Originality/value - This is an original paper developed based on two case studies which have not been published in any journal before. The paper highlights the role of external independent actors in internationalization, which is not mentioned at all or stressed in the extant literature.
Purpose – To examine how customers, both men and women entrepreneurs, perceive service quality of the latest counselling encounters with their banks, and to find out if men and women differ in their satisfaction for two or more counselling encounters.
Design/methodology/approach – A combination of research methods is used. First, data have been collected through focus-groups interviews in a pilot-study; second, data have been collected through a survey study. The focus is on perceived service quality and customer satisfaction and further business, personal and situational factors are included. A total of 215 women and 487 men participated in the survey.
Findings – There are few gender-related significant differences among women and men in their perceptions of service quality, and no signs which indicate that women perceive the service quality as less good. One group of women, in retail services, has perceived the service quality as being significantly different and positive compared with a group of men. Further, there are no gender-related significant differences between women and men regarding customer satisfaction. Another result is that significant differences are observed between one group of women and one group of men depending on the place where the parties met. The encounters took place more often in the women customers' office or somewhere else outside the bank.
Originality/value – This paper shows that the belief that women as business owners, in general, are discriminated against by financial institutions is a myth rather than a reality.
Do consumers of the same brand from different culture have the same perceptions while assessing the advertisements on Social Networking Sites’ (SNSAs)? To answer this question, the data for this study were collected from brand communities’ consumers (BCCs) on SNSs. 278 respondents from three different cultural backgrounds (Egyptians, Dutch and British) answered the questionnaires. Five main variables to collect the consumers’ assessment of SNSAs were tested (information value, entertainment value, credibility value, interactivity value, and irritation value). Based on the empirical findings, the three groups perceived five of the six variables with significant difference F ratios. Consequently, their perception of the entertainment value of SNSAs has no significant differences between the three groups. Based on the cross-cultural theory, the findings of this study have some agreements and some contradictions, especially the influences of power distance and uncertainly avoidance. Moreover, the researchers used the One-way analysis of variance (ANOVA) with Post Hoc tests to compare between the assessments of the three groups.
Marketers act on social networking sites (SNSs) in order to be more efficient in merchandising their products and/or services. Even so, the scope of the published studies regarding the assessment of advertisements on social networking sites (SNAs) is limited. Consequently, the present study aimed to consider credibility and interactivity, in addition to information, entertainment and irritation values, as main factors for consumers’ assessment of SNAs, as perceived by SNSs’ users.An analysis of empirical data helped to identify four main factors for assessing SNAs. These were: information value, entertainment value, credibility value and interactivity value. Irritation value was the only factor that had no significant effect on the assessment of SNAs. Furthermore, based on the beta coefficients, the information and entertainment values of SNAs, in conjunction with credibility and interactivity values, had different outcomes from previous studies. Consequently, the interactivity value was the strongest among the four predictors for assessing SNAs.
Among China and India, former Eastern European countries, and especially Russia has been identified as one of the most lucrative market, e.g. in retail sector. However, this market has experienced quite enormous changes during the last two decades, and manufacturing establishment is considered to contain numerous risks, especially functionality of supply chains (incoming flows and distribution) is one of the main reasons. Our longitudinal case study research confirms this, and shows how difficult it is to achieve comparable cost efficiency in Russia as compared to other factories inside of the same company, but operating in well-developed high-cost country. Due to this, and by the fact that foreign companies still favour export based strategies, we develop mathematical models to evaluate which foreign transit harbours would provide lowest distribution costs. Our research results show that only small number of seaports needs to be considered, if distribution costs are the only issue to be concerned.
This study aims to explore factors affecting the formation and operation of strategic alliances, and the impact of these factors on performance. The underlying premise being that different cultures affect strategic alliances differently. The study is based on the analysis of 20 alliances between firms in Eastern and Central Europe and their Swedish partners. Significant differences were found across countries. The paper concludes with implications for managers responsible for managing international alliances in terms of effectiveness of their role, as well as their cultural awareness and ability to deal with cultural differences.
Purpose - The study deals with institutional factors that have impact on the operation of east-west alliances. Applying Kostova and Roth's terminology of institutional and relational contexts, this paper aims to address how alliance relationship based on resources, learning and performance organizes and functions, and how institutional factors influence the alliance relationship. Design/methodology/approach - To properly highlight the role of institutional factors, eastern and central Europe (ECE) is divided into four categories, namely fast adapters, high and low medium adapters and slow adapters. A total of 20 alliances operating in different country categories have been selected for the study. In all alliances, foreign partners are Swedish firms and engaged in the manufacturing industry, Semi-structured interviews containing both a fixed set of questions and a set of open-ended questions have been used for data collection. Findings - The impact of institutional factors on firms in slow-adapting countries was uniformly high, the initiatives taken were usually fruitless and ineffective. In the case of medium-adapters, the impact was largely mitigated over time as alliances passed through the different stages. The least impact was, as expected, observed among the alliances in fast-adapting countries. However, the result needs to be taken with some caution as the data include alliances where partners come from a single western country. Practical implications - For direct investment, managers need to take the institutional factors seriously as ECE countries undergo a transition period and the economical situations of these countries shows a wide variation. For example, if need of return is quick, the managers should invest in a fast-adapting country or in a medium-adapting country but not at all in a slow-adapting country. Originality/value - This paper makes a unique contribution by focusing institutional factors which affect strategic alliances in ECE. One future study can concern cultural impact on business environment and new business development in ECE. Another interesting area of research could deal with medium-adapting countries because the members of this group show different level of adaptation and performance.
Abstract: By applying a longitudinal perspective, this study examines how an alliance formulates and implements its marketing strategy based on motives, resources, learning, network and performance, in Central and Eastern Europe(CEE). An in-depth study on a Hungarian alliance between a Swedish medical engineering company and a local partner has been conducted. The data is collected in two periods: 1999 and 2009, and for the convenience of the analysis, the result has been presented in two phases. By comparing the phases, it is shown how the environment in which the alliance operates changes and how the alliance responses by improving its marketing strategy. Major variation of the strategy includes focus on small and dental clinics, development of intensive contacts with big hospitals to gain huge contracts after the reformation of the healthcare sector and finding a balance between lowering price and maintaining high quality of the products and services.
Major studies on strategic alliances have until now concentrated on large firms, thus opportunities and problems related to the formation and operation of alliances by small- and medium-sized firms remain unexplored. This study concentrates on product and skills development
in high-tech small- and medium-sized firms (SMHT) through international strategic alliances. Due to the explorative nature of the study, a qualitative method has been used for data collection and analysis. A theoretical framework consisting of motives, resources, learning, network, and performance has been applied to analyse case studies. Learning, complementarity of resources, and development of long-term relationships are found to be closely related with performance. Another finding is that environmental issues often have significant impact on the development of alliances.
The importance of the Baltic states has increased due to increase of capital inflow from the West. A large part of the foreign involvement takes the form of alliance with local partners in the region. But how these alliances operate and fulfill the objectives of the partners in the Baltic states remain almost unexplored. By the help of depth interviews, four alliances, two in Estonia and the other two in Lithuania, have therefore been studied in this research work. The theoretical framework is based on the concepts of motives, resources, learning, network, performance and general environment. Cost reduction, market seeking, and development and maintenance of services have been the main motives of foreign firms in entering into the alliances. No clear cut motive is observed from the local partners’ side. Learning has been found important for both the partners and concerns cultural differences, local knowhow and adaptation to the Western way in doing business. A broader view of performance is presented by including network development in the article. Profitability, market share, and sales have been seen as short term while network development and relationships as longterm performance criteria in the alliances. The role of general environment on alliances and its impact on network development have also been observed. This study further suggests that alliances offering service dominated products concentrate on the local markets, while alliances offering products with less service elements have export as the target.
Innovation capability has been recognized as important approach for organizations to be competitive. The purpose of this study is to understand how innovation capability,with the notion of cloud computing, trust and open innovation affect supplychain agility.The main research question to be addressed is How Does Innovation Capability enabledby cloud computing, trust and open innovation affect supply chain agility of a firm? The methodology used in this study is to review existing literature in innovation capability, cloud computing, trust, open innovation and agility and develop some propositions on how firms can achieve supply chain agility. Some of the expected results from the study are, development and interaction of trust with cloud computing and open innovation is crucial in innovation capability building process. Second, innovation capability building process enabled by cloud computing, trust and open innovation will influence agility of a firm, leading to firm competitiveness
The objective of this study is to investigate the characteristics and behavioral tendencies of Swedish consumers in relation to their involvement with various types of retail stores as well as their shopping and patronizing behaviors under varying circumstances. In particular, the study focuses on examining the underlying dimensions of Swedish consumers' retail shopping behavior incorporating their lifestyles and attitudinal orientations as well as demographic and socio-economic characteristics. Data for the study were collected through personal interviews in Sweden. The study findings indicate that the most dominant lifestyle dimensions include fashion orientation, adventure orientation and aesthetic orientation. Several of these lifestyle dimensions apparent among the Swedish retail shoppers were found to be related to the number of stores shopped in a given period of time. Also, the most dominant factors were one-stop shopping, merchandise quality and assortment, and store communication factors. When the dimensions extracted based on the grocery store choice are used in explaining the number of stores visited, then we see an inverse relationship between the number of stores visited and the factors of one-stop shopping, merchandise quality, and poverty of time. On the other hand, there is a direct relationship between the number of stores visited and the factor of store communication and convenience. The findings of the study offer important research, public policy and managerial implications for retailer distributors and consumer goods manufacturers.
The purpose of this article is to examine the establishment processes of Scania in Croatia and Statoil in Estonia applying a model developed from the network approach. The findings show that Statoil’s ability to leverage significant actors in its network to support its establishment made the process less cumbersome and less resource-consuming. Scania’s lack of home- and host country support resulted in an arduous and costly process, with Scania’s market position changing several times as different problems cropped up. We also found that relationship orientation requires adaptation by the firm and, more critically, by its managers. A lack of cross-cultural competence is also observed to be an impeding factor in the process.