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The impact of product attributes and emerging technologies on firms’ international configuration

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Abstract

International business literature has largely explained the international dispersion of firms’ activities as a choice based on trade-offs between cost minimisation, knowledge seeking, managing transaction costs and maintaining control. By incorporating insights from operations management, we propose a framework that explicitly takes into account products’ physical and knowledge attributes that constrain the viable international configuration options available to firms. Linking the characteristics of a product to the scope for horizontal and vertical decoupling in a value network allows us to re-frame recent discussions in the literature about fragmentation of activities vs tasks and to develop an overall picture of the way industry-specific peculiarities characterise (and also constrain) viable international configurations. We show how our framework can be used to interpret data on the scope for decoupling and dispersion collected from industry experts and elucidate the relationships between configuration options and measures of product characteristics. We then utilise this framework to predict how emerging technologies will reshape the international configuration options available to firms.

Abstract

La littérature en management international a largement expliqué la dispersion internationale des activités des firmes comme un choix fondé sur des compromis entre la minimisation des coûts, la recherche de connaissances, la gestion des coûts de transaction et le maintien du contrôle. En intégrant les éclairages de la gestion des opérations, nous proposons un cadre conceptuel qui prend en compte de manière explicite les attributs physiques des produits et ceux liés à la connaissance, qui imposent les options de configuration internationale viables qui sont possibles pour les entreprises. Associant les caractéristiques d’un produit au champ du découplage horizontal et vertical dans un réseau de valeur nous permet de reformuler les discussions récentes dans la littérature sur la fragmentation des activités vs. des tâches et de développer une image globale sur la manière dont les spécificités industrielles caractérisent (et imposent également) des configurations internationales viables. Nous montrons que notre cadre conceptuel peut être utilisé pour interpréter des données sur le champ du découplage et la dispersion, collectées auprès d’experts industriels et éclairer les relations entre les options de configuration et les mesures des caractéristiques des produits. Nous utilisons ensuite ce cadre conceptuel pour prédire comment les technologies émergentes vont modifier les options de configuration internationale possibles pour les entreprises.

Abstract

La literatura de negocios internacionales ha explicado extensamente la dispersión internacional de las actividades de las empresas como una elección basada en el equilibrio entre la minimización de costos, la búsqueda de conocimiento, la gestión de los costos de transacción, y mantener el control. Mediante la incorporación de aprendizajes de gerencia de operaciones, proponemos un marco que explícitamente tome en cuenta los atributos físicos y de conocimiento del producto que limitan las opciones viables de configuración internacional disponibles para las empresas. Asociando las características de un producto a la posibilidad de disociación horizontal y vertical en una red de valor nos permite re-enmarcar las discusiones recientes en la literatura sobre la fragmentación de las actividades frente a las tareas, y establecer un panorama general de la manera en la que las peculiaridades específicas de cada industria caracterizan (y limitan) las configuraciones internacionales viables. Mostramos cómo nuestro marco puede ser usado para interpretar datos sobre el alcance de la disociación y dispersión obtenida por expertos en la industria y elucidar las relaciones entre opciones de configuración y las medidas de caracterización del producto. Entonces, utilizamos este marco para predecir cómo tecnologías emergentes van a reformar las opciones de configuración internacional disponibles para las empresas.

Abstract

A literatura em negócios internacionais tem explicado em grande detalhe a dispersão internacional das atividades das empresas como uma escolha baseada em trade-offs entre a minimização de custos, a busca de conhecimento, gerenciamento de custos de transação e manutenção do controle. Ao incorporar insights de gestão de operações, nós propomos uma estrutura que incorpora atributos físicos e de conhecimento dos produtos que limitam as opções de configuração internacional viáveis ​à disposição das empresas. A ligação das características de um produto ao escopo da dissociação horizontal e vertical em uma rede de valor nos permite reenquadrar recentes discussões na literatura sobre a fragmentação das atividades versus tarefas, e desenvolver uma imagem geral da forma pela qual peculiaridades específicas da indústria caracterizam ( e também restringem) configurações internacionais viáveis. Mostramos como a nossa estrutura pode ser usada para interpretar dados sobre o escopo da dissociação e da dispersão coletadas de especialistas da indústria, e elucidar as relações entre as opções de configuração e medidas das características do produto. Por fim, utiliamos essa estrutura para prever como as tecnologias emergentes vão remodelar as opções de configuração internacional disponíveis para as empresas.

Abstract

国际商务文献在很大程度上解释了公司活动的国际分布作为一个基于成本最小化、知识寻求、管理交易成本和维护控制之间权衡的选择。通过吸收运营管理的洞见, 我们提出了一个框架, 明确地考虑约束提供给公司的可行的国际构型选项产品的物理和知识属性。把产品特征与价值网络中的水平和垂直去耦范围联系起来让我们能够重构文献中有关分片活动对照任务的最近讨论, 并开发行业特定的表现 (并也限制) 可行的国际构型独特性方式的一个整体图景。我们展示我们的框架可以用来解释从工业专家收集的数据去耦和分散的范围, 并阐明构型选项和产品特征测量之间的关系。我们然后利用这一框架来预测新兴技术将如何重塑提供给公司的国际构型选项。

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Notes

  1. This category captures the case where the firm has the option to choose what the IB literature, coming from a strategy perspective, has frequently referred to as the “multi-domestic firm” (Prahalad & Doz, 1987).

  2. We refined and validated the questionnaire through three rounds of exploratory interviews with 15 product designers/engineers over a period of 2 months.

  3. To test for potential for misperceptions among our respondents, we compared this with a similar mapping using the OLS estimates for our representative product types that share a value network (i.e., the positioning implied by the product attributes using the regression coefficients as weights). The perceptual values and OLS estimates imply decoupling options in the same quadrant for all but two of the product groups mapped (and even here the majority of survey respondents gave values that would have led to consistent positioning using the two methods).

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Authors and Affiliations

  1. University of Cambridge, Cambridge, UK

    Rasha Rezk, Jagjit Singh Srai & Peter J Williamson

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  1. Rasha Rezk
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  2. Jagjit Singh Srai
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  3. Peter J Williamson
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Correspondence to Rasha Rezk.

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Accepted by Lucia Piscitello, Guest Editor, 23 December 2015. This paper has been with the authors for six revisions.

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Rezk, R., Singh Srai, J. & Williamson, P. The impact of product attributes and emerging technologies on firms’ international configuration. J Int Bus Stud 47, 610–618 (2016). https://doi.org/10.1057/jibs.2016.9

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