Revisiting International Business Theory: Towards International Entrepreneurship Imperatives

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istribution BIOINFO Business Management ISSN: 2249-1791 & E-ISSN: 2249-1805, Volume 3, Issue 1, 2013, pp.-031-040.

Available online at http://www.bioinfopublication.org/jouarchive.php?opt=&jouid=BPJ0000192

AWANG A.*

Universiti Teknologi MARA, 02600 Arau, Perlis, Malaysia. *Corresponding Author: Email- [email protected]

Received: November 14, 2013; Accepted: December 18, 2013

Introduction

The paper explores the development of International Business Theory (IBT) since 17th century. Calls for this review shall help to clarify important issues in IBT body of knowledge. On the other hand, the review is expected to direct prospective students and scholars towards developing initial platform for more studies in

international business.

The revisiting effort here is executed in three phases. First phase sees the development of literature in IBT focuses on internalization and internationalization published since 1600 until 2013 found in articles, textbooks and reports. Second phase outlines somes qualitative analysis on those publications that segregate them into specific category. And the third stage projects the potentials of inquiries for future studies in qualitative, quantitative or mixed

method.

The scope of the study capitalizes on bibliographic approach that collects the manuscripts from USA, European countries, Australasia and Asia. On the other hand, limitations are reflected on the experience of the writer in the subject matter that deals with the subject at teaching level. Other limitation lies on the availability of

the literature that might hinder their exhaustiveness.

The paper begins with literature survey on IBT followed by the analysis of current IBT that beneficial for further inquiry within Malaysian context and finally the prospects of IBT in creating a new

path or replicate what others have done to their subject.

International Business Theory

Most of international business textbooks capitalized IBT usually in first section of the manuscript. A literature search manages to classify theories related to international business in [Table-1]

outlining the IBT since 17th century.

Charles Hills discusses on early IBT in his text since Adam Smith who proposed absolute advantage as a platform for specialization [1]. Adam Smith improved on earlier theory, i.e. Mercantilism that consequently refuted [2]. Mun in 1630 noted that mercantilism doctrine was proposed when a country favor export than import, thus a country should mantain her resources (if any) to become surplus [3]. After about 100 years Hume detected flaw to mercantilism, he claimed it ended up in a zero sum game where the transaction provided gain to a country and ultimately resulted in a

loss of another.

Adam Smith who was known as an economist who popularized specialization theory noted that a country should specialize in producing goods which it has an absolute advantage, then these goods to be traded with goods from other countries [4]. Absolute advantage theory then refuted previous mercantilism due to positive

-sum advantage gained by trading countries [4].

Subsequently, David Ricardo in 1817 responded with comparative advantage theory extended Smith’s absolute advantage when trade between two countries which have different absolute advantages should focus on producing and selling goods that they have the capability to produce more efficiently, and buy goods they produce less efficiently from other countries [5]. This means a country should produce goods that it has the comparative advantage. Charles Hill pointed out that Ricardian comparative advantage relies only on labor advantages assuming resources between countries are about equivalent [1]. Labor are quite mobile within a country but immobile internationally. Hence those countries with labor munificence shall survive and become more efficient. However, the efficiencies and advantages other countries have could be beneficial for others if they open up their borders allowing unrestricted free trade. According to Samuelson critique unrestricted free allows mobile resources to enhance poorer

BIOINFO Business Management ISSN: 2249-1791 & E-ISSN: 2249-1805, Volume 3, Issue 1, 2013

Abstract- The call for revisiting of international business theory (IBT) seems critical when international business studies now growing and inevitably demand for revitalization of present knowledge and creation of new knowledge. Scholars and students’ idea in this topics of research should progress beyond basic international business issues found in textbooks. Scholars and students now should explore further in uncharted territories beyond present theories and practices. This revisit employs qualitative approach through literature search begins as early as 1600. The paper walks the development of IBT to date. Each IBT is analyzed to ascertain their fit with present uncertainty, dynamicity and landscape that increasingly competitive. Review and discussions about classic and recent models ever published, suggested themes and research questions for future use are presented. The paper ends with recommendations and suggestions for future development in IB

research knowledge base and bibliographic references. Keywords- International business theory, trade theory, absolute advantage, comparative advantage, international entrepreneurship, qualita-

tive study

REVISITING INTERNATIONAL BUSINESS THEORY: TOWARDS INTERNATIONAL ENTREPRE-NEURSHIP IMPERATIVES

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istribution

Table 1- Chronology of IBT and Related Theory

countries economic growth and the trade-off for richer countries that affected with lower wages when mass immigrant enter the country. Small local firms that do not intend for international venture would be most affected and harmful to country’s economic well being due

to increase of unemployment among local workforce.

Hecksher in 1919 and Ohlin in 1933 focused their studies on

comparative advantage with factor endowment [6,7]. Hekscher-

Ohlin (H-O) Theorem contends that countries with resources or

factor abundant should export relative factor which they could

produce intensively or capital intensive goods. The theorem differs

in factor endowments and relative advantage compared to

Ricardian that focus on productivity. Leontif verified H-O model and

is known as Leontif Paradox [8].

Vernon popularized the product life-cycle theory that focused on production of goods in original country finally end up producing in other lower cost country [9]. The exporting country then have to import product she originally produced from country with lower cost advantage. The cost pressure plays major role in the process

especially when the product reaches maturity stage. However, the theory now getting less effective since the theory was ethnocentric in nature, the situation relates to US superiority in the 1960s and 1970s, a country that first produces a unique product. However, today’s world economy is globalized and integrated where product

available in open market globally.

Firms and multinational enterprises (MNEs) became important in the 80s when Upsalla model was first developed at Upsalla University in 1977 which proposes that firms choose, or should choose, the optimal mode for entering a market by analyzing their costs and risks based on market characteristics and consider to use own resources [10]. Subsequently, the eclectic or OLI paradigm was formulated to fill up the void in 1980. The OLI paradigm improved countries’ capability in securing foreign direct investment (FDI) from outside. It suggested that MNEs should develop competitive O (ownership) advantages at home and then transfer these abroad to specific countries (depending on L (location) advantages) through FDI, which means that MNEs utilize the I

advantages (internalize) within their own organization [34].


Awang A. (2013) Revisiting International Business Theory: Towards International Entrepreneurship Imperatives. BIOINFO Business Management, ISSN: 2249-1791 & E-ISSN: 2249-1805, Volume 3, Issue 1, pp.-031-040.

Citation Theory Description

Mun (1630) Mercantilism Country’s best interests to maintain a trade surplus, to export more than it imported

Hume (1752) Flaw in Mercantilism It was a zero-sum game, gain by one country resulted in a loss by another

Smith (1776) Absolute Advantage A country with an absolute advantage on certain product should specialize in producing the product

Ricardo (1817) Comparative Advantage A country should produce product it most efficiently produced and buy goods that it produces inefficiently from other countries

Heckscher (1919) & Ohlin (1933), Samuelson (1962)

Heckscher-Ohlin Theory (HO) Now HOS

The pattern of international trade is determined by differences in factor endowments, rather than differences in productivity. Enabling efficiency in factor endowments free trade should be possible.

Leontief (1953) Leontief Paradox The postulation that US as an exporter of capital- intensive goods and importer of labor-intensive goods was found otherwise. One unit of US labor equivalent to more than one unit labor of the rest of the world.

Vernon (1966) Product Life-Cycle PLC limits US exports to advance countries as product matures whereby global production ultimately switches to developing countries

Johanson & Vahlne (1977) The Upsalla Model of Internationalization

The optimal mode for entering a market by analyzing their costs and risks based on market characteristics and taking into consideration their own resources

Krugman (1985) New Trade Theory Economies of Scale have important implications for international trade based on new roles of demand.

Lieberman & Montgomery (1988) First Mover Advantage Economic and strategic advantages accrue to early entrants into an industry

Porter (1990) Competitive Advantage There are four broad attributes of a nation that shape the environment in which local firms compete, and these attributes help create the competitive advantage

Penrose (1959) Resource-based Theory

RBT is durable principles governing the growth of firms and the rate at which firms can grow efficiently, beyond the phenomenon of the ‘growth’ of firms, alternately provides a theory of effective management of firm’s resources, productive opportunities, and diversification strategy. She maintains that firms can create economic value not due to mere possession of resources, but due to effective and innovative management of resources and provides causal links between resources and the generation of productive opportunities for growth and innovation.

Behrman, 1962, 1970; Robinson, 1964; Fayerweather, 1969

Bargaining Theory The theory of inter-organization bargaining has been used to characterize and analyse business and government negotiation, policy-making and behaviour.

Dunning (1980) Electic or OLI Paradigm There were three advantages in determining internationalization among the MNEs. The ownership advantage, location advantage and internalization advantage.

Rugman (1981) Internalization Theory Referring to Coasian transaction cost theory (Coase, 1937). Firm’s internalization inculcate FDIs as a tool for IB. Rugman relates strategic thinking into IBT.

Wernefelt (1986), Barney (1991) Resource-based View

RBV aspires to explain the internal sources of a firm's sustained competitive advantage (SCA). Its central proposition is that if a firm is to achieve a state of SCA it must acquire and control valuable, rare, inimitable, and non-substitutable (VRIN) resources and capabilities, plus have the organization (O) in place that can absorb and apply them.

Teece et al. (1992, 1997); Eisenhardt & Martin 2000)

Dynamic Capability

A firm’s behavioural orientation to constantly integrate, reconfigure, renew and recreate its resources and capabilities, and most importantly, upgrade and reconstruct its core capabilities in response to the changing environment to attain and sustain competitive advantage.

Morrow(1988); McDougall’s (1989) International Enterpreneurship International entrepreneurship is defined in this study as the development of international new ventures or start-ups that, from their inception, engage in international business, thus viewing their operating domain as international form the initial stages of the firm’s operation.



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istribution However, Dunning eclectic paradigm was found inconsistent with Rugman internalization theory [11], Dunning in 1981, is potentially misleading to scholars in international business. Dunning seems to regard internalization theory as only dealing with the transaction as the unit of analysis (possibly because it is based upon transaction cost economics), whereas several studies subsequent writings have all demonstrated that internalization theory takes the firm as the unit of analysis [11,44,45]. This is why FSAs were defined as the relevant advantages [12]. The FSAs are obviously at firm level and not at transaction level. Indeed, contrary to the firm-level analysis at the core of internalization theory, the eclectic paradigm is core of an industry-level analysis [11].

New trade theory according to Krugman [13] focuses on country’s economy of scale. Economy of scale impacts on availability of variety of products lower than average prices. The reason is due to possibility of trade, a nation which encourages trade restores existing market and create new market, besides capitalizing on specialization. Expanded and larger market tends to stimulate enhanced production to achieve economy of scale. The situation then creates intense competition when more firms enter the market creating surpluses and redundancies. The heated competition in the market shall encourage first mover advantages which develop economic and strategic advantages [14]. These advantages accrue to those firms entering the industry the earliest. The first movers usually gain a scale based cost advantage that later entrants find difficult to match. Nations may benefit from trade even when they do not differ in resource endowments or technology as noted [1], “...country may dominate in the export of a good simply because it was lucky enough to have one or more firms among the first to produce that good...”. Consequently Krugman [13] cited that governments should consider strategic trade policies that nurture and protect firms and industries where first mover advantages and economies of scale are important.

The well known Upsalla model developed in Department of Business Studies at Uppsala University in the mid-1970s made empirical observations that contradicted the established economics and normative, international business literature of that time. According to that literature, firms choose, or should choose, the optimal mode for entering a market by analyzing their costs and risks based on market characteristics and taking into consideration their own resources [46]. The theory suggests that firms utilizes establishment chains as a dimension in their internationalization pattern. The phenomenon begins when a firms sales in overseas’ market increase and the firms decide to replace foreign agents with their own or even develop own manufacturing in foreign market. The model is also aims to consider issue of liability of foreignness. Liability of foreignness increases as the psychic distance increases when the firms decide to venture into foreign market [10,15].

Michael Porter proposes that there are four broad attributes of a nation capable of shaping competitive environment for local firms, alternately the environment helps in creating the competitive advantage. Porter argued that factor endowment of a nation contributed to competitive advantage, the factors comprised of natural resources, climate, location or advanced skilled labor, infrastructure, and technological know-how. Besides costumer’s sophisticated demand at home make firms more competitive and strive in developing capabilities. Other factor is related to absence or presence of internationally competitive firms that help create spillover of contributions to other industries. Firm strategy, structure and rivalry are factors governed how companies are created,

organized, managed and compete. Presence of new different management ideologies affect the development of national competitive advantage, and on the other hand, vigorous domestic rivalry creates pressures to innovate, improve quality, reduce costs,

and to invest in upgrading advanced features [16].

Resource-based theory (RBT) argued that resources claimed in [19] devotes close attention to the competitive forces and potential erosion of competitive advantage [17]. RBT emphasizes on the importance of continuous maintenance of firms’ existing capabilities and knowledge bases in protecting competitive advantage. Indeed, RBT emphasis on the time dimension and protection of a current advantage with continued efforts to innovate to renew economic value parallels core arguments of the dynamic capabilities view of the firm [18]. The RBT study cited that, “In entering any new field, a firm must consider not only the rate of return it might expect on its new investment but also whether or not its resources are likely to be sufficient for the maintenance of the rate of investment that will be required to keep up with competitors’ innovations and expansion in its existing fields as well as in the new one. Even when a firm enters a new field armed with a revolutionary innovation and is able to

ward off competition with patent” [19].

According to Grosse & Behrman [20], primarily in political economy and business fields cited that the theory of inter-organization bargaining has been used to characterize and analyse business and government negotiation, policy-making and behaviour [20]. That theory in broad terms focuses on the relative bargaining resources and the stakes of each participant in a bargaining situation, drawing both political and economic/commercial conclusions from the analysis. The focus is on the constellation of assets, interests and abilities that the bargaining parties bring to the table; thus, economic, political and social goals and issues are involved. Since any enterprise is involved in power relationships with rival firms, bargaining theory would include in transnational corporations (TNCs)/ government negotiations the potential response of other TNCs or even domestic enterprises [47-49]. Important phenomena such as the obsolescing bargain, trade restrictions and performance requirements are illuminated by analysis using the bargaining theory. In principle, bargaining concepts could be used to examine relations between any competitors or negotiators, and several empirical studies, but the theory has not been extended for use in explaining the purposes of government intervention in foreign business activities and TNC responses [20].

Resource based view (RBV) has been the extension of Penrose’s RBT [50]. A study put it as the essence of the RBV that lies in the emphasis of resources and capabilities as the genesis of competitive advantage, resources are heterogeneously distributed across firms that competing with each other, they are imperfectly mobile which, then, makes the heterogeneity persist over time [21]. Fundamentally, it is the V.R.I.N. (valuable, rare, inimitable and nonsubstitutable) resources of the firm that enable or limit the choice of markets it may enter, and the levels of profit it may expect [50]. Yet, resource advantage may not be sufficient - the firm needs to possess distinctive capabilities of making better use of its resources [19]. Entering the 1990s, the highly dynamic business environment challenged the original propositions of the RBV as being static and neglecting the influence of market dynamism [52, 53]. The dynamic capabilities, encapsulating the evolutionary nature of resources and capabilities, emerged to enhance the RBV [18,25, 51,54]. Scholars have since endeavoured to integrate the two





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istribution literature areas [55] in line with what [56] astutely commented, “The leading efficiency approaches to business strategy are the resource-based and the dynamic capabilities approach… It is not obvious to me how these two literatures will play out - either individually or in combination. Plainly, they deal with core issues. Possibly they will

be joined” [21].

Consequently, recent phenomena in IBT also has some bearings on international entrepreneurship as cited in [22-24] reported that early definition of IE focused on the emergent of new venture or born global entities that initial stage of operation based on international domain. Just within few years the theory accumulates in definitions and models [24]. A paper argued that IE as an enterpreneurship behavior of risk taking in international ventures phenomena [25]. Studies in [42,43] noted that IE removed the elements of tenure and size aimed for value creation, firm’s concentrates entrepreneurial behavior in terms of innovative, proactive and risk seeking [25]. This paper exhibits some models for researchers reference and adoption [refer Appendix A]. IE

theory is found verified in a literature that cited, “This paper has described and discussed the phenomenon of international new ventures. In order to obtain a representative picture, twenty studies relating to INVs have been analyzed. It has been shown that single traditional internationalization theories do not explain this type of

firm well. Thus a model integrating static as well as process elements and parts of traditional internationalization theories was proposed. Obtained was an eclectic framework describing and explaining the internationalization of new ventures with the help of traditional internationalization theories. This “4-pillars-model” of INVs combines the empirically verified main factors of explanation in a consistent way. It is suggested that the framework should start with the changing political economy and the advance of technology. Further, the stages model of internationalization provides the concepts of international experience, though transferred to the entrepreneurs, and a gradual, though time compressed, advance of internationalization. The monopolistic advantage theory supports the finding that INVs frequently use a knowledge intensive, innovative product. The internalization theory explains the result that sufficiently funded INVs internalize technological advantages while they externalize marketing advantages. Lastly, the network theory advances rationales why INVs usually work with partners for at least the initial market selections and entries”[26].

Analysis of Prospects in Ibt Research

IBT remains open, vibrant and ready for improvement and injection of new ideas pertaining to fast changing phenomena in the globalized world nowadays. Within this visit there are limitation to include all issues in IBT, hence some allowance for unintended flaws and unavailability of the reference are therefore advised [58].

IBT develops and blooms on economic and trade theories,

arguments and supports keep flowing in filling up gaps in the theory criss crossing boundaries of economic and management domain. In

IBT literature, trade theories always take the leading role shedding

paths for emergent ones. Trade theories are used as the foundation for other novel explorations. Trade theories of Smith’s absolute

advantage, Ricardo’s comparative advantage, HOS, Leontif paradox and product life-cycle. Newer theories such as resource-

based, new trade theory, competitive advantage, internalization, dynamic capabilities and international entrepreneurship furnish

huge platform for exploration.

Approaches in analyzing IBT vary, Sen (2010) walks the journey in IBT through role of demand perspective, resource endowment and free trade [27]. On the other hand, Rugman in his fifty year analysis emphasizing on shift of core unit of analysis in IBT [12], where in the pre-Hymer in 1960s era, international economists dominated the field and focused on national competitiveness at the country level, using national statistics on trade and foreign investment. In the 1970s, the focus shifted to foreign direct investment by the multinational enterprise (MNE) and the transfer across borders of its firm specific advantages (FSAs), both stand-alone competences (such as patented R&D knowledge and brand names) and higher-order capabilities. As of the 1980s, more attention was devoted to the MNE as a differentiated network with the MNE subsidiary as the unit of analysis. In addition, inside the MNE, substantial academic work was performed focusing on entrepreneurial growth in specific cultural, economic and institutional contexts. Finally, a number of studies focused more on clusters and networks of independent companies [28].

Future research for IBT could be approached according to level of

analysis, research questions, and model verification and development. First, early in the 1960s era of IBT country level was

utilized to mark countries competitiveness which emphasis was on

wider perspectives of study. In the 1970s the analysis started to narrow to more specific unit of analysis where FDIs and MNEs

started coming into the picture for analysis. In the 1980s the focus was on finer unit such as the subsidiaries of MNEs and smaller

firms. In 1990s until nowadays due to emergence of entrepreneurial paradigm focus directed towards SMEs and SBUs as the unit of

analysis. Indeed, level of analysis has entered stream of debates and discussions among scholars extensively whereby some new

suggested models inculcate combined level of analysis [29]. Earlier on ET&P 2009 issue benchmarked some studies that utilized

combined levels of analysis with specific adjustments and operationalization [30,31].

Second, approach through development of research questions suggested for further inquiry [32]. Griffith execute an extensive

study utilizing Delphi technique which had proposed research

questions classified into three categories to be tested. First segment outlines potential questions regarding management and

performance of international firms. Second segment highlights international business management research questions regarding

multinational enterprises. Third segment posed research theme and questions for legal aspects in international business that includes

issue in global partnership and intellectual properties security [32].

Third, IBT potentials showed in proposed models ready for verification and in depth scrutiny. One of the early IE model was developed in 1977 known as the Upsalla Model as in [Fig-1a]. Johanson and Vahlne proposed the model in the University of Upsalla project that suggests the less a firm understands a market the greater the psychic distance and the perceived uncertainty are [10]. Thus, firms enter markets they understand and where they can see opportunities and where the perceived uncertainty is low. The model postulates that the best way to minimize the perceived uncertainty and to see opportunities are through experiential knowledge. These are mainly acquired through personal experience in specific market. Hence, this is the reason for utilization of the incremental steps and the sequential engagement in foreign markets. However, due to significant changes in the IB landscape and global paradigm shift in 2009 Johansson and Vahlne modified





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istribution the model as in [Fig-1b]. The revised model add up an entrepreneurship imperative, opportunity together with knowledge. The market commitment variable is replaced with network position that sustain present internationalization process. The current activities is now spelled out explicitly in terms of learning, creating and trust building. And the word relationship is added to commitment decision emphasizing the importance of networking in

the relationship [15].

Fig. 1a- The basic mechanism of internationalization: state and

change aspects (Johanson & Vahlne, [10]).

Fig. 1b- The revised model (Johanson & Vahlne, [15])

A study suggested four models include a model he developed for the study [24]. Model of IE as in [Fig-2] inculcates organizational factors comprised of top management team characteristics, firm resources and firm variables as antecedents of IE, IE then predicts the competitive advantage [25]. The model showed that IE mediates the relationship between organizational factors and competitive advantage. The model also suggests that the environmental and strategic factors moderate on the relationship between organizational factors and IE. The model was

substantiated in a study [41].

A model of Jones & Coviello [33] as in [Fig-3] focuses on internationalization behavior identified due to time (t) comprises of fingerprint patterns and profiles. The behavior is determined by nature of the organizational structure in terms of its organic-mechanistic characteristics. This firm factor is a result of the entrepreneur factors such as innovativeness, risk-taking and managerial competence. Internationalization behavior then explains both financial and non-financial performance. The performance then contribute to enhance the entrepreneur factors. Unfortunately, a recent study in [40] that tested Jones and Caviello’s model among

386 Switzerland new ventures entrepreneur showed contrary results. Moreover, the findings showed performance negatively

related to the entrepreneur factors that raised further questions.

A study suggests an international entrepreneurship model where international opportunity determines international resource mobilization, resource mobilization explains the dynamic capability that finally determine the performance [Fig-4] [35]. The model capitalizes on entrepreneurship theory of opportunity exploitation that supports resouce mobilization, dynamic capability and consequently improves the performance [35].

Fig. 2- An integrated model of international entrepreneurship [25]

Fig. 3- Precise Model for Empirical Examination [33]

Fig. 4- Conceptual Model of International entrepreneurship [35]

The final model reviewed in [24] as in [Fig-5], firm’s factors such as resources and capabilities, knowledge, learning, network, and international entrepreneurial orientation (IEO) are factors explain international performance. However, resources and capabilities relationship with performance is mediated by the environmental uncertainty and institutional factors. In the same vein, IEO relationship with performance is mediated by strategy and competition. Manesh’s thesis that employs meta analysis method and afford to verify only resources variable as the determinant of international performance. Hence the study proves most of the

findings were contrary to the hypothesis [24].





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istribution Fig. 5- International entrepreneurship model of Manesh [24]

Discussion

Revisiting IBT is a journey since early civilization more than 300 years ago raised our concerns that the needs for international relationship never fade, the needs remain and continuously develops wider and deeper than ever. IBT body of knowledge development now becomes a national agenda to most countries in the world. Moreover, the idea of borderless world has been conceptualized into theories and practices where distance has been cut short just at the end of fingertip [57]. The discussions capitalize on the development of IBT towards research method issues that

should help in accumulating more research.

The review capitalizes some elements pertinent for basic inquiry into IB research. The concepts, variables and theory poses fundamental indicator that directs the researcher into the purpose of the inquiry. The motivation could be enhanced when fit between desires and reality are synchronized. Established IB terminologies readily formed into theory such as absolute advantage, comparative advantage, internationalization, internalization, trade, free trade and as such could be good examples of IB classical concepts and variables. Related concepts and variables such as the resource factors, first mover advantage, competitive advantage, dynamic capability, absorptive capability, knowledge, learning and as such

also could help researchers in formulating their research plan.

Other approach that could support research plan is by referring to level and unit of analysis. The source of interest in embarking into IB research could be due to researchers’ knowledge in level or unit of analysis. The most common level of analysis in IB research are the country and region, however more recent studies have shifted to studies at firms’ level such as the MNEs, SMEs and aslo in parts

of those entities i.e. the SBUs [36].

The theme and research questions approach as mentioned suggest another useful option for research inquiry in IBT. A study took 11 years collecting data as presented in [Table-2] is self explanatory for future research reference [32]. The study suggests number of topics or themes and abundants research questions according to categories of IB imperatives from primary category to legal and social perspectives [32]. However, the suggestions should not deter the exploration beyond present circumstances, IB frontiers keep changing at pace with global dynamicity thus more issues come into affect. Among other, imbalance of economic progress among countries in the world, globalization and transnational issues could

recreate present status.

Analysis on models of IB utilizes five available frameworks. The classic Upsalla model of internationalization formulated in [10] and the model went through a review with changes and replacements of the variables due to global changes as reported in [15]. The Upsalla 2009 model has been tested in (39) a thesis that noted Upsalla model is important framework for US apparrel retailer’s international expansion. Similarly, Zahra and George [25] model also well justified fit for IBT. However, other three models remain unjustified and some studies proved the relationships contrary to the propositions. Unproven conjectures and propositions do not end the exploration in knowledge, that is why repetition and replication should be continued as cited in [37] empiricist view, “Three theses have been central to empiricist views of the a priori: (1) All the a priori truths are conceptual truths; (2) Conceptual truths are embodied in analytic propositions; (3) Analytic propositions are our

own creation” [37].



Table 2- Delphi study: future research themes and questions

Themes Research questions

Primary category

Management and performance issues in the international firm

Cross-national market segmentation and foreign market opportunity assessment

How substantial are cross-country market segments?

How can we go about identifying and validating them?

Are they superior to within-country market segments?

Country analysis (e.g., assessment and management of country risk)

Global configuration of value-adding activities

How can we measure the globalization of the company value chains?

What is the extent of the efficiencies achieved by firms through global configuration of value-adding activities?

What is the impact of world-scale coordination of value-added activities on firm performance?

Foreign market entry forms (e.g., exporting, FDI, offshoring, licensing, fran-chising)

What behavioral factors impact on managerial decisions regarding entry mode?

What are the antecedents and outcomes of developing-country FDI in advanced economies?

To what extent is offshore sourcing a new organizational force?

Collaborative ventures/alliances (both equity ventures and project-based alliances)

How should firms measure success of collaborative ventures?

How can learning be facilitated?

What are the performance consequences of trust and commitment in IB partnerships?

What longitudinal evidence do we have for the success of networks and alliances?

Knowledge management and transfer

What impact does knowledge transfer have on performance?

How do MNCs transfer valuable knowledge from one part of the organization to another? From the firm to independent intermediaries or sales representatives?

What is the appropriate ‘‘micro foundation’’ for knowledge transfer?



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istribution Table 2- Continue...




Primary category

Product development and innovation What are the determinants of success in global product development?

What is the role of new products in global markets?

Global brands

How valuable are intangible firm assets such as brands for the international company?

How well do global brands achieve local effectiveness?

How do SMEs manage branding in international markets?

Relational assets in international business

How can researchers best capture the value of intangible assets such as relational capital in cross-border relationships?

How do firms build relational capital with suppliers and customers in IB?

What is the role of trust and commitment? Do strategies for securing trust vary by culture?

Supply chain management and procurement

What is the role of third-party service providers in the supply chain?

What is the impact of standardization/adaptation on firm performance?

How do firms design global supply chains?

Standardization vs adaptation How can firms effectively staff global organizations and measure their performance?

How do firms reconcile global standardization objectives with local customization needs?

Human resource management in international Firms How do firms effectively manage inpatriates/expatriates?

Management, strategy, and structure

What is the relative importance of the manager, strategy, and structure in the success of MNEs?

What is the optimal firm size and structure in the global economy?

How do MNEs build strong core values that can be shared a cross disparate parts?

Company internationalization process

Internationalization of firms and industries

How can we best describe firms’ international evolution?

How does the experience of firms in international expansion differ among various industry sectors?

What contextual factors moderate the internationalization process?

Born-global companies and international and entrepreneurship What factors determine the evolution of a born global firm?

SME experiences in internationalization What unique strategies do small and medium-sized firms employ in going international?

How successful are they?

Managerial orientations of internationalizing firms What effect do factors such as global mindset and global culture have on IB success?

Emergence of intermediary organizations and hybrid organizational forms What will be the coming architecture of global business?

Commoditization of organizational processes Integration of new technologies What impact do new information, communications, and manufacturing technologies have on IB?

Focus on the multinational enterprise

Explaining the existence, strategy, and organization of MNEs How can general theories be applied to explain the role of IB activities?

Multinationality of the firm and performance

What are the returns from international expansion/diversification?

How can they best be measured?

What are the moderating influences on returns from multinationality?

Regional and global MNEs

What are the differences between regional and global MNEs?

What performance outcomes can be detected?

How are value chain activities managed across a variety of geographic regions?

Integrating mechanisms in the MNE

What are the common processes that allow for greater coordination?

What is the role of integrating mechanisms such as global teams, global centers of excellence, global talent pools, and global product development?

Global account management How do firms best manage their relationships with global (key) accounts?

What skills and capabilities are necessary to successfully serve global customers?

Contributions of the internet and information technology to MNEs To what extent do tools such as the internet and intranets serve as a vehicle to provide virtual connectedness within the multinational enterprise?

Globalization of economies

Antecedents, process, and consequences of globalization

Empirical measurement of globalization

Trade, FDI, and offshoring trends

Trade agreements, areas, unions

The influence of non-governmental agencies on international business

Emerging markets (EMs)

Operating in EMs

How does operating in EM markets influence firm success?

To what extent do EMs present a challenge to existing knowledge?

To what extent does global sourcing provide an opportunity for firms to internationalize?

EM firms

What differences are observed in the internationalization of EM firms?

How do the global branding strategies of firms from EMs differ from those of advanced economies?

How does EM firm success impact global industry structure?

To what extent does global sourcing provide an opportunity for EM firms to internationalize?



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istribution Table 2- Continue...




Secondary category

Multinational enterprise: subsidiary issues

Trade-off between centralization and decentralization How do the structure and form of MNEs influence their performance?

Coordination of MNE activities across subsidiaries

Best-practice implementation; common processes

Effectiveness of global teams

How can headquarters effectively address local resistance against global coordination?

How can MNEs integrate their subsidiary skills and competencies into global strategic assets?

What are the factors that moderate the role of subsidiaries in decision- making?

Cultural influences/global consumer/consumption issues

Convergence of customer demand

What evidence do we have on the convergence of global customer preferences?

How does the pace of convergence differ by countries at different levels of economic development?

Values toward materialism Culture and international business Does national culture explain IB phenomena or is it just way to explain residual variance?

Regional variations in consumption How does integration within economic regions influence consumer behavior?

Diffusion of innovations; life cycle of products What patterns can be detected in the cross-national adoption of new products?

Corporate social responsibility/ MNE citizenship Corporate social responsibility/ MNE citizenship

Impact of MNE on society, local stakeholders, technology spillovers, etc. How do MNEs balance the interests of various stakeholders with the business objectives?

Creation of value to multiple stakeholders How do managers trade off ethical values with business objectives?

Ethical issues in international business Ethical issues in international business

Variation in ethical practices How do ethical considerations influence decision-making by managers?

Public policy issues

Unintended consequences of globalization Global poverty Environmental issues (e.g., pollution, climate change)

What role does international business play in creating global insecurity?

Effects of offshoring on wages, employment, and standards of living How do we measure the impact of globalization at a country level?

Effects of offshoring on wages, employment, and standards of living How do we measure the impact of globalization at a country level?

Methodological issues

Better operationalization of key constructs such as global industry, global firm, global strategy, firm performance in international markets Unit of analy-sis in IB research

How can we best capture performance at the network or alliance level, as opposed to the firm level?

International research design (e.g., country selection, sample selection, data sourcing) Rigor of methodologies employed for empirically testing IB theo-ries

How can qualitative research be effectively used in IB research?

How can we increase the reliability of IB research?

How can we account for partial effects of national culture from organizational culture and other variables?

Tertiary category: themes and research questions

Legal aspects of international business Legal aspects of international business

Partnering across borders How do firms trade off contract-based partnering against relational partnering?

What are the performance implications of explicit vs implicit contracts?

Conflict resolution in international partnerships How do firms cope with the absence of formal legal institutions in emerging markets?

Safeguarding intellectual property How do firms effectively safeguard their intellectual property in cross-border relationships?

Security and risk issues in international business Security of employees, information, data, etc. Company responses to risk (e.g., terrorism, country risk)

Estimating detrimental impact of terrorism on global business What should be the responses to long-term supply chain risk?

Emergence of IE added up another sub body of knowledge in IB.

Development of entrepreneurship study in the new millenium seems

phenomenal whereby thesis and articles keep increasing. The

development is parallel with the increase in college and university’s

international business faculties in all corners of the globe. Even

entrepreneurship theory remains unproven studies in the area

rapidly growing, research at all levels and multiple types were fast

replacing classical ones. In as much as in entrepreneurs and

entrepreneurship research the collections of studies and models in

IE keep adding in numbers as well as in getting more focus. For

example, the Upsalla model modification reported in [15] was

reactions towards changing paradigm in the importance of business

network, resources and market seeking, knowledge exploration and

exploitation and moreover, recent models are compatible with

smaller firms in the global landscape [38].

Other remark worth discussion is the present state of IBT research in Malaysia. A brief preview in google scholar.com, only about 200k citations were found related to IBT research in Malaysia. The figure reveals that Malaysia has been lagging behind Singapore with about 300k citations and USA about 2.3 million citations. On the other hand, the scenario reveals that with this rate of research, Malaysia as a developing nation and an active global player at Asean and even in other world organizations, there were wide gap for research in all aspects of the IBT for prompt action, or else Malaysia will remain lagging and continue work on historical data

and unverified knowledge.

This paper utilizes selective analysis, this was due to limitations in getting all the information regarding IBT available in local collections and on the internet. Similarly, the concepts, variables, models and theories were analyze on selective basis that could left few more



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istribution stones left unturned. This review concentrates on specific theories and may leave out others, thus review in other theories were beyond the scope of this paper.

Conclusion

The paper explores the development of specified IBT that moves and sets pace for studies in international business present body of knowledge. Approach of the review utilizes a qualitative technique through literature search and analysis. The revisit reviews IBT from the beginning of economic study until present days’ entrepreneurship emergence. In addition, various models developed for IB studies were elaborated and analysed. The paper adopted 11 years of extensive study using Delphi technique to identify research themes and questions for future studies in IBT. The reviewed model showed inclination towards entrepreneurial imperatives embedded as variables into IB paradigm. The revisit recapitulates the agenda in short discussions of revisiting the IBT elements and finally scope and limitations of the paper was

revealed.

John Maynard Keynes quoted, “The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.” J.M. Keynes, The General Theory,[p 383], Keynes reminded us that world’s order is in the control of the ‘little else’ who might overrules good knowledge. Hence, sustaining the existence of more learned scholars and more effort towards knowledge production, dissemination and applications could deter the ‘little else’ blunders continue to a

greater extent.

Dedication

The paper produced from a motivation from my research method class’s students grappling in their decision to choose a topic in area of IB study. The paper could be a catalyst that ease up the students’ thought process and decision making. First, I dedicate this paper especially to research method student in IB and this also goes to other future students taking or doing research. Second, for

the lecturers, consider the cliché, ‘publish or perish’.

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Documents

Revisiting International Business Theory: Towards International Entrepreneurship Imperatives