Title: Managing an emerging region – A study of how MNCs manage uncertainty in a Southern African context Authors: Markus Axelsson & Andreas Olofsson Supervisor: Cecilia Pahlberg Research question: How are Swedish business-to-business MNCs reducing perceived uncertainty when operating in the Southern African Development Community? Purpose: Provide a deeper understanding of how Swedish MNCs from diverse industrial backgrounds are managing uncertainty when operating in the Southern African Development Community (SADC). This study further aims to add to an acknowledged theoretical gap in international business research by providing a contextual contribution towards the Southern African region to the field of internationalization management. Method: A qualitative research method including semi-structured interviews was used to gain in- depth understanding of how Swedish B2B MNCs manages uncertainty within SADC markets. For the analysis, a theoretical framework based on uncertainty management, knowledge and network theory was developed into a conceptual model, carried out when gathering empirical data. Conclusions: The findings suggest that gaining experiential knowledge was vital to reduce perceived uncertainty among Swedish B2B MNCs operating in SADC markets. Experiential knowledge was obtained through operations within the markets, which over time resulted in enhanced market commitments and thereafter increased experiential knowledge. Knowledge was further exclusively shared within networks, where gaining network insidership was essential. To gain network insidership in SADC markets, findings suggest that becoming localized in the market to gain legitimacy is beneficial and achieved over a longer period of time. Finally, findings indicate that South Africa could be used as a gateway into Southern Africa, where firms’ can gain valuable experiences, relationships and an understanding of business practices, which can reduce the perceived uncertainty towards other SADC markets.

China’s status as the world’s top destination for foreign direct investment and the largest trading nation is likely to attract more international firms seeking market entrance, and increase the speed of expansion by those already present in the market. Its progress in reaching this point has been accompanied by significant changes in laws and regulations. This study sets out to understand the events of foreign market entry to emerging markets experiencing recurring changes in laws and regulations, and asks the research question: How may institutional change in the host market influence the market entry behaviour of the firm over time? Based on retrospective longitudinal case studies of DeLaval, Elekta and Höganäs from 1980 to 2010, the findings show that institutional change taking place in the host market plays a signal role that enables firms to recognise the availability and accessibility of market opportunity. Firms also make market commitment accordingly to capture the market opportunity recognised. Additionally, institutional change comes in different forms (transitional change and turbulent change), and plays out differently in various industries and at various points in time. They also have varying influences on market opportunity in terms of the source through which it is recognised (structural opportunity and relational opportunity), and the direction in which market commitment is made (commitment toward the host market, relationships, and organisational integration). Furthermore, depending on the point in time, the relations among institutional change, market opportunity, and market commitment may change. While a consistent level of institutional change encourages firms to recognise structural opportunity, the escalation of institutional change over time seems to influence firms to form stronger relationship commitment with local actors and leads to stronger recognition of relational opportunity. This study’s findings imply that recurring institutional changes in emerging markets have an overarching impact on foreign market entry of the firm, and needs to be understood from a long-term perspective. Foreign firms that have acquired experience in emerging markets over time face less of a threat from ongoing institutional changes. Actively engaging in the host market and remaining alert to information from various sources will enable firms to recognise market opportunity in emerging markets.

The global marketplace has become highly integrated, and global competition is increasingly intense and dynamic. To be successful in this competitive and hostile environment, international firms must be able to foster and maintain successful cross-border inter-firm relationships. At the same time, service exports have remarkably emerged as a crucial component of international trade, underpinning the future growth and prosperity of national economies worldwide. Yet scholars and business practitioners alike have recognised the significant paucity of research on the performance of service exporters. Similarly, despite the recent growth in research interests in international relationship marketing, theoretical development in this area has failed to keep pace with the increase in both volume and magnitude of inter-organisational transactions across national borders. This study addressed the key research question of “What are the key factors driving the export performance of service firms?”, based on an integrated theoretical foundation comprising the resource-based view of the firm, transaction cost economics, and the relational exchange theory. The study took into account the potential role of: (1) organisational characteristics, (2) market characteristics, and (3) the governance mechanisms deployed by service firms in their management of cross-border relationships with their business clients. A multi-method research design was utilised for this research, including two main studies. An exploratory study was first conducted, involving 10 in-depth interviews with service exporters in South Australia. Drawing from the outcomes of the exploratory study and a review of the international services marketing and international relationship marketing literature, the researcher proposed a conceptual framework and a set of testable hypotheses. These hypotheses were then tested in the second research phase, in which the researcher conducted a self-administered mail survey, utilising both postal and online means. An effective response rate of 32.77%, or 254 usable responses, allowed the researcher to further analyse the data using the principles of structural equation modelling in AMOS. Thereby, the researcher identified 17 pairs of significant relationships between the variables. The research findings show that the performance of an export venture of a service firm is directly influenced by the size of the firm, their export experience, their managerial commitment, and the performance of the relationship with a major overseas client. Such relationship performance is determined by both contractual-based governance, including contractual complexity and contractual explicitness, and relational-based governance, a higher-order factor incorporating relationship trust, relationship commitment, information exchange, relationship flexibility and relationship harmony. In turn, these governance mechanisms are determined by various organisational and market characteristics. Whilst firm size, resource commitment, and assistance programs by home government influence the level of contractual complexity, contractual explicitness is determined by management commitment, competitive intensity, and the favourability of host government policies. Furthermore, relational-based governance is driven by the export experience of the firms, their managerial commitment, and the favourability of host government policies. The study contributes to advancing the scant international services marketing literature and draws further research attention to the international relationship marketing paradigm. With regards to international business practice, the study provides service exporters with an understanding on the potential role of organisational characteristics and market characteristics in their exporting success. Finally, a successful management of cross-border relationship management and governance mechanisms will also lead them to superior export performance. / http://proxy.library.adelaide.edu.au/login?url= http://library.adelaide.edu.au/cgi-bin/Pwebrecon.cgi?BBID=1379910 / Thesis (Ph.D.) -- University of Adelaide, Business School, 2010

The global marketplace has become highly integrated, and global competition is increasingly intense and dynamic. To be successful in this competitive and hostile environment, international firms must be able to foster and maintain successful cross-border inter-firm relationships. At the same time, service exports have remarkably emerged as a crucial component of international trade, underpinning the future growth and prosperity of national economies worldwide. Yet scholars and business practitioners alike have recognised the significant paucity of research on the performance of service exporters. Similarly, despite the recent growth in research interests in international relationship marketing, theoretical development in this area has failed to keep pace with the increase in both volume and magnitude of inter-organisational transactions across national borders. This study addressed the key research question of “What are the key factors driving the export performance of service firms?”, based on an integrated theoretical foundation comprising the resource-based view of the firm, transaction cost economics, and the relational exchange theory. The study took into account the potential role of: (1) organisational characteristics, (2) market characteristics, and (3) the governance mechanisms deployed by service firms in their management of cross-border relationships with their business clients. A multi-method research design was utilised for this research, including two main studies. An exploratory study was first conducted, involving 10 in-depth interviews with service exporters in South Australia. Drawing from the outcomes of the exploratory study and a review of the international services marketing and international relationship marketing literature, the researcher proposed a conceptual framework and a set of testable hypotheses. These hypotheses were then tested in the second research phase, in which the researcher conducted a self-administered mail survey, utilising both postal and online means. An effective response rate of 32.77%, or 254 usable responses, allowed the researcher to further analyse the data using the principles of structural equation modelling in AMOS. Thereby, the researcher identified 17 pairs of significant relationships between the variables. The research findings show that the performance of an export venture of a service firm is directly influenced by the size of the firm, their export experience, their managerial commitment, and the performance of the relationship with a major overseas client. Such relationship performance is determined by both contractual-based governance, including contractual complexity and contractual explicitness, and relational-based governance, a higher-order factor incorporating relationship trust, relationship commitment, information exchange, relationship flexibility and relationship harmony. In turn, these governance mechanisms are determined by various organisational and market characteristics. Whilst firm size, resource commitment, and assistance programs by home government influence the level of contractual complexity, contractual explicitness is determined by management commitment, competitive intensity, and the favourability of host government policies. Furthermore, relational-based governance is driven by the export experience of the firms, their managerial commitment, and the favourability of host government policies. The study contributes to advancing the scant international services marketing literature and draws further research attention to the international relationship marketing paradigm. With regards to international business practice, the study provides service exporters with an understanding on the potential role of organisational characteristics and market characteristics in their exporting success. Finally, a successful management of cross-border relationship management and governance mechanisms will also lead them to superior export performance. / http://proxy.library.adelaide.edu.au/login?url= http://library.adelaide.edu.au/cgi-bin/Pwebrecon.cgi?BBID=1379910 / Thesis (Ph.D.) -- University of Adelaide, Business School, 2010

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Due to the moderately small market of Sweden, firms expand and conducts business on an international level in order to find new opportunities and increase the profits. Many Swedish multinationals expand to the Russian market, due to its size regarding customer base and landmass. Thus, the aim of this study is to provide a greater understanding of how informal institutions in Russia are influencing Swedish multinationals’ establishment and development in the Russian market. Appropriate aspects of informal institutions have been acknowledged and identified with a further analysis in relation to internationalization, culture, and network. A qualitative research method was implemented in this study with the aim to obtain a greater understanding of informal institutions and the way it affects the Swedish firms in Russia. Furthermore, this study used abduction as a research approach, since the authors of this thesis switched between theory and empirical data to make adjustments during the process that enabled the authors to be flexible while gathering the data. The literature review that is presented in this study has a link to internationalization, culture, network and lastly informal institutions. Through combining the presented literature review, the authors developed a conceptual framework that further was used when analyzing the empirical data, collected from multi-case studies of Swedish multinationals. The analysis section discusses both similarities and dissimilarities between the theory and the empirical findings. These analyses are designed in relation to the conceptual framework. The final chapter of this thesis will contain conclusions that were derived from the material in the analysis chapter. Furthermore, the theoretical implications and a revised theoretical model will be presented. Additionally, the managerial implications will be presented along with limitations of the study and the study will be concluded with suggestions for further research. The main theoretical implications that have been developed during this thesis, contains reducing the research gap and continuing with a demonstration of how Russian informal institutions influence Swedish multinational’s establishment and development in the Russian market. The main practical implication of this study is to aid the business procedures of Swedish companies in the Russian market. Moreover, this study can be of practical use to Swedish firms that are in the process of or planning to internationalize to the Russian market.