Publications
Publications
- April 2002
- HBS Case Collection
Local Institutions and Global Strategy
By: Tarun Khanna
Abstract
Explores how location affects a firm's strategy and identifies the different ways location affects industry structure, choice of a firm's position, and the sustainability of that position. The intellectual foundations lie in an appreciation of institutional economics. Specifically, the starting premise is that specialized intermediaries resolve transaction costs between potential buyers and sellers and help make mutually advantageous deals occur. The absence of such specialized intermediaries gives rise to the institutional voids. Specifies how such voids constrain companies' choices. Specific questions addressed are (1) What are global industries? (2) What constitutes a global strategy? (3) When and how should strategy be tailored to particular locations? and, (4) How sustainable are strategies predicated on the existence of institutional voids?
Keywords
Global Range; Global Strategy; Product Positioning; Market Transactions; Industry Structures; Negotiation Deal; Organizational Design; Outcome or Result; Strategic Planning
Citation
Khanna, Tarun. "Local Institutions and Global Strategy." Harvard Business School Background Note 702-475, April 2002.