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Key issues in the future of international business research

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This document discusses key issues in the future of international business research. It examines the domain and level of analysis of international business. It briefly reviews past major topics in international business research from the post-WWII era to globalization. It suggests focusing research on a "big question" and issues around international business retaining its vibrancy. It also discusses the relationship between theory and observation in international business research.

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Key issues in the future of international business research Peter J Buckley
Future Research Directions in International Business Abstract This paper examines the domain of international business – discussing its disciplinary basis and the level of analysis involved and it examines the relationship between theory and observation. It briefly reviews past topics in international business research and argues that focus on a “big question” has been a feature of the past success of research in this area. It suggests that there are problems in international business retaining its vibrancy because of the trend towards other discipline based theories focusing directly on the issues that have been the traditional domain of international business.
The Domain of International Business Level of Manager Analysis Firm Industry Vast heterogeneity in each category Macro Environment Discipline  Economics, Sociology, Social Psychology, etc. From Buckley & Lessard (2005) 
A recursive view of research in International Business “ THEORETICAL ROCKS” CONSTRUCTS MAPS “ Concept Push” Generalisation Observation Hypotheses Testing “ Problem/ Observation Pull” Note: This applies to both individual researcher and research community levels From Buckley & Lessard (2005)
Past Major Topics in International Business Research Research Agenda Approximate Dates Topics Country Focus 1 Explaining Flows of FDI Post WWII – to 1970s US FDI in Europe Managerial Issues of Investing Abroad Europe [US  Europe] (Latin America) (Canada) Explanation of Existence, Strategy and Organization of MNEs 1970’s – 1990 Theories of MNE Strategies of MNE Organization of MNE Foreign Market Servicing Strategies Smaller firms in IB International Economic Integration LDCS Japan (MNEs from LDCS) 4 Little Dragons Internationalization to Globalisation “ New forms” of International Business Mid 1980’s – 2000 Joint Ventures Alliances (M & A?) Competitiveness Meaning(s) of globalization ‘ Born globals’ Eastern Europe ‘ Asian Crisis’ China
Current research agenda in International Business Research Agenda Approximate Dates Topics Country Focus The Big Question? [Legacy Issues only?] 2000 onwards M&A? Knowledge Management? Geography and Location? Globalization? Fragmentation? New Institutions (NGOS)? Cultural Difference and International Business? China India?
Early international business issue - theory interaction 1970s 2000 1950s 1960s 1990s 1980s Finance Theory Location Theory Organisation Theory Virtual Firms Issue Driven International Business Theory Development Discipline Based Theory Development Trade and FDI Trade Theory Industrial Organisation Theory Theories of FDI Coasean theory of the Firm Transaction Cost Economics Resource Based Theories of the Firm Emerging Economies Transnational Firm and Variants International Management International Joint Ventures Internalisation/ Eclectic Theory Product Cycle Hypothesis Dominance of MNE Monopoly Power of MNCs
The Missing Middle Transaction Cost Economics Geographical Location Theory Relationship Marketing and Branding Internalisation Theory of MNE Discipline Based Theory Issues Outsourcing/Offshoring Emerging Markets Emerging Locations (China/India) Virtual Firm Global Branding and Distribution Resource Based View International Business Theory
IB as a ‘melting pot’ IB as a ‘melting pot’ [often projection of trends on single issues – connections often ignored]. Connectivity – seeing the big picture as comparative advantage of IB scholars. Wide methodology and wide scope e.g. beyond the firm – impact of MNEs outside the firm. NGOs etc. Ethical issues in IB and globalisation.
… ..IB as a ‘melting pot’ Is this enough? New factors – demography and migration. Areas of long run neglect – e.g. finance.
The Big Picture Globalisation and Development MNE – globally integrated production and distribution. Mass media control. The Renaissance of Geography in Business Internet Geography .
New IB strategy Flexibility Real Options Globally integrated production and distribution systems Knowledge management Reappearance of (international) finance
Key elements of the global factory Flexibility – the ability to reallocate resources quickly and smoothly in response to change. Response to: increasing volatility arising from globalisation; opposition to monopoly including internal monopoly. Resilience Systems are resilient if they can absorb shocks. Firms can survive downturns, crises and panics.
Globally Distributed Operations Engineering Contractor Design Engineering Branding Marketing BRAND OWNER R&D Contractor Core Functions Outsourced Parts Supplier Contract Assembler Parts Supplier Contract Assembler Parts Supplier Parts Supplier Distributed Manufacturing Warehousing, Distribution and Adaptation Local market Adaptation Parts Supplier Parts Supplier Design Contractor
Emerging countries: Three strategies to build up global factories Gradualist – build up elements on a step-by-step basis. Acquire existing global factories (Sovereign Wealth Funds) Build analogue of global factory within country, then internationalise it (large countries only).
New Management Skills - “Fine-slicing” - Control of Information - Interface Competence = A new, more subtle, management style “ You don’t have to own something to control it”
Role of Headquarters Controlling Intelligence “ Orchestration”
Fundamentals Institutions (and new institutions) Culture Resource Endowments Geography
Original Sources Buckley, Peter J. (2002) “Is the international business research agenda running out of steam?” Journal of International Business Studies , Vol. 33, No. 2, pp 365-373. Buckley, Peter J. (ed) (2004) What is International Business?, Palgrave, Basingstoke Buckley, Peter J. (2004) “The role of China in the global strategy of multinational enterprises” Journal of Chinese Economic and Business Studies , Vol. 2, No. 1, pp 1-25. Buckley, Peter J. (2004b) “Asian network firms: An analytical framework” Asia Pacific Business Review 10 (3/4), Spring/ Summer: 254-271 Buckley, Peter J. (2007) “The Strategy of Multinational Enterprises in the Light of the Rise of China”. Scandinavian Journal of Management , Vol. 23, No. 2, pp 107 - 126. Buckley, Peter J. (forthcoming) “The impact of the global factory on economic development” Journal of World Business Buckley, Peter J. and Mark C. Casson, (1976) The Future of the Multinational Enterprise. London: Macmillan. Buckley, Peter J. and Mark C. Casson (1998) “Models of the Multinational Enterprise”. Journal of International Business Studies. Vol. 29, No. 1, pp 21-44. Buckley, Peter J. and Filip De Beule (2005) “The research agenda in international business: past, present and future” in Ludo Cuyvers and Filip De Beule (eds) Transnational Corporations and Economic Development: from Internationalisation to Globalisation. Palgrave, London. Buckley, Peter J. and Pervez N. Ghauri. (2004) “Globalisation, Economic Geography and the Strategy of Multinational Enterprises”. Journal of International Business Studies . Vol. 35, No. 2, pp 81-98. Buckley, Peter J. and Donald R. Lessard (2005) “Regaining the edge for International Business Research” Journal of International Business Studies , Vol. 36, No. 6, pp 595-599.

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Key issues in the future of international business research

  • 1. Key issues in the future of international business research Peter J Buckley
  • 2. Future Research Directions in International Business Abstract This paper examines the domain of international business – discussing its disciplinary basis and the level of analysis involved and it examines the relationship between theory and observation. It briefly reviews past topics in international business research and argues that focus on a “big question” has been a feature of the past success of research in this area. It suggests that there are problems in international business retaining its vibrancy because of the trend towards other discipline based theories focusing directly on the issues that have been the traditional domain of international business.
  • 3. The Domain of International Business Level of Manager Analysis Firm Industry Vast heterogeneity in each category Macro Environment Discipline  Economics, Sociology, Social Psychology, etc. From Buckley & Lessard (2005) 
  • 4. A recursive view of research in International Business “ THEORETICAL ROCKS” CONSTRUCTS MAPS “ Concept Push” Generalisation Observation Hypotheses Testing “ Problem/ Observation Pull” Note: This applies to both individual researcher and research community levels From Buckley & Lessard (2005)
  • 5. Past Major Topics in International Business Research Research Agenda Approximate Dates Topics Country Focus 1 Explaining Flows of FDI Post WWII – to 1970s US FDI in Europe Managerial Issues of Investing Abroad Europe [US  Europe] (Latin America) (Canada) Explanation of Existence, Strategy and Organization of MNEs 1970’s – 1990 Theories of MNE Strategies of MNE Organization of MNE Foreign Market Servicing Strategies Smaller firms in IB International Economic Integration LDCS Japan (MNEs from LDCS) 4 Little Dragons Internationalization to Globalisation “ New forms” of International Business Mid 1980’s – 2000 Joint Ventures Alliances (M & A?) Competitiveness Meaning(s) of globalization ‘ Born globals’ Eastern Europe ‘ Asian Crisis’ China
  • 6. Current research agenda in International Business Research Agenda Approximate Dates Topics Country Focus The Big Question? [Legacy Issues only?] 2000 onwards M&A? Knowledge Management? Geography and Location? Globalization? Fragmentation? New Institutions (NGOS)? Cultural Difference and International Business? China India?
  • 7. Early international business issue - theory interaction 1970s 2000 1950s 1960s 1990s 1980s Finance Theory Location Theory Organisation Theory Virtual Firms Issue Driven International Business Theory Development Discipline Based Theory Development Trade and FDI Trade Theory Industrial Organisation Theory Theories of FDI Coasean theory of the Firm Transaction Cost Economics Resource Based Theories of the Firm Emerging Economies Transnational Firm and Variants International Management International Joint Ventures Internalisation/ Eclectic Theory Product Cycle Hypothesis Dominance of MNE Monopoly Power of MNCs
  • 8. The Missing Middle Transaction Cost Economics Geographical Location Theory Relationship Marketing and Branding Internalisation Theory of MNE Discipline Based Theory Issues Outsourcing/Offshoring Emerging Markets Emerging Locations (China/India) Virtual Firm Global Branding and Distribution Resource Based View International Business Theory
  • 9. IB as a ‘melting pot’ IB as a ‘melting pot’ [often projection of trends on single issues – connections often ignored]. Connectivity – seeing the big picture as comparative advantage of IB scholars. Wide methodology and wide scope e.g. beyond the firm – impact of MNEs outside the firm. NGOs etc. Ethical issues in IB and globalisation.
  • 10. … ..IB as a ‘melting pot’ Is this enough? New factors – demography and migration. Areas of long run neglect – e.g. finance.
  • 11. The Big Picture Globalisation and Development MNE – globally integrated production and distribution. Mass media control. The Renaissance of Geography in Business Internet Geography .
  • 12. New IB strategy Flexibility Real Options Globally integrated production and distribution systems Knowledge management Reappearance of (international) finance
  • 13. Key elements of the global factory Flexibility – the ability to reallocate resources quickly and smoothly in response to change. Response to: increasing volatility arising from globalisation; opposition to monopoly including internal monopoly. Resilience Systems are resilient if they can absorb shocks. Firms can survive downturns, crises and panics.
  • 14. Globally Distributed Operations Engineering Contractor Design Engineering Branding Marketing BRAND OWNER R&D Contractor Core Functions Outsourced Parts Supplier Contract Assembler Parts Supplier Contract Assembler Parts Supplier Parts Supplier Distributed Manufacturing Warehousing, Distribution and Adaptation Local market Adaptation Parts Supplier Parts Supplier Design Contractor
  • 15. Emerging countries: Three strategies to build up global factories Gradualist – build up elements on a step-by-step basis. Acquire existing global factories (Sovereign Wealth Funds) Build analogue of global factory within country, then internationalise it (large countries only).
  • 16. New Management Skills - “Fine-slicing” - Control of Information - Interface Competence = A new, more subtle, management style “ You don’t have to own something to control it”
  • 17. Role of Headquarters Controlling Intelligence “ Orchestration”
  • 18. Fundamentals Institutions (and new institutions) Culture Resource Endowments Geography
  • 19. Original Sources Buckley, Peter J. (2002) “Is the international business research agenda running out of steam?” Journal of International Business Studies , Vol. 33, No. 2, pp 365-373. Buckley, Peter J. (ed) (2004) What is International Business?, Palgrave, Basingstoke Buckley, Peter J. (2004) “The role of China in the global strategy of multinational enterprises” Journal of Chinese Economic and Business Studies , Vol. 2, No. 1, pp 1-25. Buckley, Peter J. (2004b) “Asian network firms: An analytical framework” Asia Pacific Business Review 10 (3/4), Spring/ Summer: 254-271 Buckley, Peter J. (2007) “The Strategy of Multinational Enterprises in the Light of the Rise of China”. Scandinavian Journal of Management , Vol. 23, No. 2, pp 107 - 126. Buckley, Peter J. (forthcoming) “The impact of the global factory on economic development” Journal of World Business Buckley, Peter J. and Mark C. Casson, (1976) The Future of the Multinational Enterprise. London: Macmillan. Buckley, Peter J. and Mark C. Casson (1998) “Models of the Multinational Enterprise”. Journal of International Business Studies. Vol. 29, No. 1, pp 21-44. Buckley, Peter J. and Filip De Beule (2005) “The research agenda in international business: past, present and future” in Ludo Cuyvers and Filip De Beule (eds) Transnational Corporations and Economic Development: from Internationalisation to Globalisation. Palgrave, London. Buckley, Peter J. and Pervez N. Ghauri. (2004) “Globalisation, Economic Geography and the Strategy of Multinational Enterprises”. Journal of International Business Studies . Vol. 35, No. 2, pp 81-98. Buckley, Peter J. and Donald R. Lessard (2005) “Regaining the edge for International Business Research” Journal of International Business Studies , Vol. 36, No. 6, pp 595-599.