Strategy, environment, resources and institutional context as determinants of firm performance in emerging markets: empirical evidence from multinational corporations in china

This research examines the convergence of strategic choice, institutionalism and firm-institution interaction of multinational corporations (MNCs) in emerging markets. It focuses on the relationship between strategic orientation, industry-based competitive environment, firm resources configurations, institutional context and differential performance outcomes. While it agrees with the general notion that the appropriate strategy will be a function of industry factors and firm-specific factors, there may be varying performance implications depending on key elements of the institutional context as well as the firm-institution interaction. This research applies Miles and Snow’s (1978) enduring strategic typology and assumes that distinctive clusters of strategic types exist among MNCs in China resulting in differentiated performance outcomes in conjunction with the strategic responses to institutions they adopt. Snow and Ketchen (2014) suggested in an Academy of Management Review (AMR) call-for-action to empirically evaluate typologies for their current relevance, pointing to Miles and Snow (1978). However, Miles and Snow’s (1978) typology does not reflect any institutional underpinnings. This research complements Miles and Snow’s (1978) firm-environment adaptive cycle by instilling the institutional theory. In order to add the institutional perspective, the research draws on Oliver’s (1991) strategic responses to institutional processes. As Oliver (1991) does not address the co-evolutional perspective, an additional novel response ‘Assert’ based on Child et al. (2012) is brought in by this research. The study advances the notion of institution-oriented strategic choice in international business (IB) strategy and provides a theoretical contribution by disentangling the relationship between generic strategy and institutional strategy. It offers a parsimonious model for the complex concepts of generic strategy and institutional strategy including co-evolution. It helps to close a serious gap of empirical research and provides advice of practical relevance to business managers on how to develop proper strategic configurations to thrive in China’s institutional environment. Based on a bilingual self-report questionnaire, the field research in China has generated 212 quantitative cases and has been presented at the 2016 Strategic Management Society Special Conference in Hong Kong (Bosch, 2016).