Abstract: Wasta is the use of a mediator to acquire an advantage or to speed an undertaking usually in relation to government authorities in the Arab World. Though understudied, wasta is essential to understanding decision-making in the Middle East. This conceptual paper aims to bridge the gap between wasta and organizational theory by investigating the factors that explain the institutionalization of wasta usage by firms in the region, and what firms, including MNEs, can do to better leverage the use of wasta. Drawing on institutional and social capital perspectives, it is argued that as isomorphic pressures and organizational social capital increase, the use of organizational wasta by firms also increases. Furthermore, wasta usage depends on familiness, prior usage of wasta, and organizational cooperation.

Abstract: In an era of global competition, there is a growing interest within the strategy field to study how the institutional environments influence firm strategies and competitive advantage. In this paper, we further this research by examining how institutional stimulus through a government program (Technology Upgradation Funds Scheme (TUFS)) influenced the global competitive advantage of the Indian textile firms. Results from a panel of firms during the 1989-2010 period show that while accessing the resources provided by the government program enhanced global market share, this accrued at the cost of lower profitability. Furthermore, we find that the relationships between the institutional stimulus and global market share and profitability are moderated by quasi-institutions within which individual firms are embedded, namely business groups.

Abstract: This paper explores the mechanisms by which interpersonal ties spanning international bridging institutions generate network value for firms going abroad. Defined as the aligned intentions and legacies of people embedded in historically-formed city dyads across national boundaries, international bridging institutions have the potential to provide explanatory power beyond existing conceptions of home-host country differences. Drawing on insights from the rich literatures on networks and institutions, we look at the implications for firm internationalization of long-standing person-to-person relationships fostered through sister city ties. We develop propositions concerning the entry timing and mode of firms and their performance in a previously unstudied context, and offer preliminary thoughts on our empirical approach. Our work represents an effort to incorporate individual and city level constructs into research on international strategy.

Abstract: In this paper, we investigate how multinational enterprises (MNEs) can use transparency as a non-market strategy to manage political hazards abroad. We propose the degree to which MNEs sacrifice transparency for security depends upon the ability to leverage a non-market resource unexplored in the strategy literature: diplomatic capital. We employ network theory to examine the global web of relationships in which firms and states are embedded, for as a network resource, diplomatic capital exists within relationships, not in firms or states themselves. We argue a country’s ability to defend a constituent MNE depends upon the strength of home-host diplomatic ties and international affinity. Further, we propose state-owned enterprises have an advantage in leveraging these resources by virtue of their intrinsic ties to the state.

Abstract: This study proposes that the evolution of institutional reforms and the resulting competing institutional logics influences the mechanisms through which the Transitional Economy Firms (TEFs) establish legitimacy and overcome financial constraints in cross-border acquisitions. Specifically, we suggest that TEFs that use market-legitimacy processes, exemplified by cross-listing, to fill institutional voids perform better in cross-border acquisitions. In contrast, TEFs that use non market legitimacy processes, exemplified by political connections, perform less well. Studying how TEFs reconcile multiple competing institutional logics while they refine their scope and boundary through cross-border acquisitions, this research unpacks the legitimacy processes that TEFs engage in, and reveals their impact on firm performance in the global corporate control market.

Abstract: This paper examines the relationship between corruption and nonmarket strategy in a cross-border context, using a unique dataset with accurate, firm-specific measures of corruption. We first examine the effects of home country corruption norms on firms’ strategy to corrupt abroad. We then move beyond the institutional context to explore the rationale behind the heterogeneity among firms from the same corrupt country in different compliance with host governments’ bribery request. We find that firms from corrupt countries are more likely to pay bribes abroad, and propose that firms’ past exposure to corruption develops their capacity to use bribery to do business abroad. It contributes to the strategy literature by connecting corruption to firms’ nonmarket capability developed through their previous experience in dealing with their home governments.