Network cohesion in global expansion: An evolutionary view

Increasingly, competitive advantage does not reside in a single firm's capabilities or resources, but in interfirm networks that compete with other networks. Recognizing that deployment of the network as a cohesive and coordinated organization is critical when it operates globally, we ask: How...

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Bibliographic Details
Published in:Journal of world business : JWB 2013-10, Vol.48 (4), p.455-465
Main Authors: Hatani, Faith, McGaughey, Sara L.
Format: Article
Language:English
Subjects:
Competition
Competitive advantage
Emerging markets
Evolutionary view
Expansion
Foreign enterprises
Foreign expansion
Globalization
Management theory
Market entry
MNEs
Network cohesion
Organizational behaviour
Social networks
Studies
Supply networks
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Summary:Increasingly, competitive advantage does not reside in a single firm's capabilities or resources, but in interfirm networks that compete with other networks. Recognizing that deployment of the network as a cohesive and coordinated organization is critical when it operates globally, we ask: How does global expansion, in particular entry into emerging markets, affect the cohesion of a large interfirm network and with what consequences? We examine this question through an evolutionary perspective, conceptualizing the process of variation–selection–replication–retention as one cycle of a network-level routine of global expansion. Movement through the cycle accelerates with high levels of network cohesion such that market entry and foreign establishment may become more rapid. We present a longitudinal analysis of the Toyota Group from founding through to its more recent entry into emerging markets, and identify the dangers of a diversion in any stage of this network routine. Our findings highlight the role uncertainty in the emerging market context and speed-based competition plays in the loss of network cohesion, and point to the ongoing, and possibly increased, importance of the core firm's role in maintaining network cohesion and global competitive advantage.
ISSN:1090-9516
1878-5573
DOI:10.1016/j.jwb.2012.09.002