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Handbook of Research on Asian Business

Edited by Henry Wai-chung Yeung

The rise of Asia as an important region for global business has been widely recognized as one of the most significant economic phenomena in the new millennium. This accessible and comprehensive Handbook brings together state-of-the-art reviews of Asian business in an expansive range of areas including: business organizations; strategic management; marketing; state–business relations; business and development; and business policy issues.
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Chapter 3: Towards an Institution-based View of Business Strategy in Asia

Mike W. Peng


Mike W. Peng This chapter focuses on a key research question: why do strategies of firms from different countries and regions differ?1 This is the very first question among the five most fundamental questions in strategic management raised by Rumelt et al. (1994: 564).2 Since the diversity of firm strategies around the world can arise as the result of many possible forces internal or external to the organization, this question engenders a wide variety of disparate answers from economists (Nelson, 1991) and sociologists (Carroll, 1993). Thus far, strategy researchers have primarily focused on industry conditions (Porter, 1980) and firm resources (Barney, 1991) as drivers of firm differences, leading to competitionand resource-based perspectives respectively. Drawing from recent research on Asian business organizations, I argue that, in addition to these existing theories, a new, institution-based view has emerged to account for differences in business strategy. A number of scholars have already suggested that, in addition to industry and firm-level conditions, a firm also needs to take into account wider influences from sources such as the state and society when crafting and implementing its strategies (DiMaggio and Powell, 1991; Oliver, 1997; see also Chapters 6 and 15 in this volume). These influences are broadly considered as institutional frameworks (North, 1990; Scott, 1995). When applied to strategy research, this new perspective can consequently be called an institution-based view of business strategy (Peng, 2000a, 2002, 2003, 2006; Peng and Heath, 1996). Since no firm can be immune...

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