Extending the Eclectic Paradigm in International Business

Extending the Eclectic Paradigm in International Business

Essays in Honor of John Dunning

Edited by H. Peter Gray

John Dunning is undoubtedly the world’s leading scholar on the subject of multinational corporations and international business. This collection of original essays is designed to honor this work, particularly his achievements during his association with Rutgers University.

Chapter 15: The OLI Paradigm – An Effective Framework for Assessing Global Strategic Leadership

Lorna H. Wallace and Marguerite Schneider

Subjects: business and management, international business


15. The OLI paradigm – an effective framework for assessing global strategic leadership Lorna H. Wallace and Marguerite Schneider The modern world economy has become increasingly deeply integrated or globalized (Gray and Wallace, 1996; Kobrin, 1995; Wallace, 1998) requiring today’s multinational enterprise (MNE) to be simultaneously globally integrated and locally responsive through its network of operations (Hume, 1993). The high level of both integration and responsiveness reflects that leading global competitors have found new mechanisms for harnessing mobile resources and gaining access to immobile ones, while minimizing the transaction costs of both (Gray, 1996; Hume, 1993; Stopford, 1995; Storper, 1995; Wallace, 1998). These developments have led to the growth of ‘alliance capitalism’ (Gerlach, 1992), characterized by burgeoning interfirm cooperative activity – a hybrid mode of governance. We suggest that changes in the world economy associated with the new age of ‘alliance capitalism’ have presented an increasingly challenging landscape to those who are most influential in determining the direction of MNEs, the strategic leaders that comprise their top management teams. The process of globalization has made leader effectiveness more difficult to achieve. As the importance of MNE transactions grows, so too does the analysis of the effectiveness of strategic leadership with the MNE. There has been a long-standing association in the management literature of leadership with change and adaptation to the environment.1 Our chapter further explores this association, and increases its relevance to international business, by focusing on the relationship between globalization and organizational strategic leadership....

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