|By:||Geoffrey Jones (Harvard Business School, Entrepreneurial Management Unit)|
This working paper offers a longitudinal and descriptive analysis of the strategies of multinationals from developed countries in developing countries. The central argument is that strategies were shaped by the trade-off between opportunity and risk. Three broad environmental factors determined the trade-off. The first was the prevailing political economy, including the policies of both host and home governments, and the international legal framework. The second was the market and resources of the host country. The third factor was competition from local firms. The impact of these factors on corporate strategies is explored, as shown in Fig. 1, during the three eras in the modern history of globalization from the nineteenth century until the present day. The performance of specific multinationals depended on the extent to which their internal capabilities enabled them to respond to these external opportunities and threats.
International Business and the study of Multinational Corporations is perceived as one of the areas where business historians have made significant contributions. Indeed, the late John Dunning, one of the major contributors to the area, was supportive of using longitudinal and multi-sourced approach to better understand the motivations to pursue foreign owned, value adding activities by firms (or groups of firms). Geoff Jones has also made important contributions to the area as well as documenting the role of entrepreneurs in Latin America. This piece is interesting and welcomed as a way to bring both strands together, although more could be done to portray the issue from the view point of host economies.