Managing the Embedded Multinational

Managing the Embedded Multinational

A Business Network View

Mats Forsgren, Ulf Holm and Jan Johanson

This book expands the business network view on managerial issues in multinational corporations. Specifically, it scrutinises the importance of a subsidiary’s external and internal business network for its strategic and organizational role within the corporation.

Chapter 5: Internationalization of the Business Firm

Mats Forsgren, Ulf Holm and Jan Johanson

Subjects: business and management, international business


The preceding chapters have focused on business relationships, and a number of important features of such relationships have been discussed. In particular we have examined the role of business relationships in the development of the individual firm. The present chapter builds on this material by turning to the role of business relationships in the internationalization of the firm. It will be shown how the firm becomes increasingly embedded in foreign markets. It will also be demonstrated that network embeddedness has a strong impact on the pattern and pace of the internationalization process of the firm. Illustrative examples will be taken from the Danke case discussed above, so readers will again be meeting not only Danke itself but also Aspi, Bitte, Clean and others. LEARNING AND COMMITMENT IN THE INTERNATIONALIZATION PROCESS OF THE BUSINESS FIRM Two issues are repeatedly discussed and analysed in the literature on international business strategy, namely foreign market entry and foreign market expansion. The underlying basic assumption is that foreign country markets are distinct entities in which operations are, or are not, conducted. A related assumption is that since they are distinct entities, country markets require specific modes of operation or forms of organization. Consequently, a great deal of the international business literature is devoted to discussing the appropriate entry modes or governance modes in different foreign countries. Although the two issues are often analysed separately it is generally recognized that they are interrelated, and in the literature on the internationalization of the firm they are treated...

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