Chapter 4: Regionalization of Multinationals: Implications for Research in International Marketing
M. Krishna Erramilli INTRODUCTION A growing number of researchers are noting that multinationals are adopting a regional orientation in developing and implementing their strategies (e.g. Heenan and Perlmutter 1979; Morrison et al. 1991; Sullivan 1992; Siddiqi 2000; Rugman 2001). The region (e.g. EU, NAFTA) is becoming the focal point for identifying opportunities and exploiting them through region-speciﬁc approaches. Many strategic and operational decisions are increasingly being made at the regional level, inﬂuenced by regional considerations. Few researchers in international marketing (IM), however, have yet taken this trend into consideration. Consequently, most of them continue to make assumptions that may have become outdated. The purpose of this chapter is broadly to describe the trend in multinational companies toward regionalization and to explore its implications for research in international marketing. To this end, the chapter reviews the relevant literature, explains its implications, describes empirical evidence from a recent study on regional headquarters of MNCs, and, ﬁnally, makes some recommendations for IM researchers. In developing this chapter, we primarily focus on research related to the choice of entry modes, although the resulting insights could be easily generalized to other IM decisions. The focus is natural given that we are most familiar with this research stream, and is justiﬁed since entry-mode choice is a very heavily researched issue in international marketing. The scope of the analysis is restricted to multinational companies (MNCs), since regionalization trends appear to be most commonly observed in these organizations. However, the ﬁndings are probably equally relevant,...
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