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  • April 2002
  • Background Note
  • HBS Case Collection

Local Institutions and Global Strategy

By: Tarun Khanna
  • Format:Print
  • | Pages:16
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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.
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About The Author

Tarun Khanna

Strategy
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  • Biocon Biologics, 2023 By: Tarun Khanna and Radhika Kak
  • Tata Group in 2021: Pursuing Profits through Purpose By: Tarun Khanna, Krishna G. Palepu and Vidhya Muthuram
  • Judging Foreign Startups By: Nataliya Langburd Wright, Rembrand Koning and Tarun Khanna
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