Chapter 4 BPS4305

chapte r Chapter
4
4
Emphasizing
Institutions,
Cultures, and
Ethics

Global Strategy
Strategy
Global
Mike W. Peng
Mike W. Peng

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© 2014
2014 Cengage
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• Understanding institutions
• An institution-based view of strategy
• The strategic role of cultures
• The strategic role of ethics
• A strategic response framework
• Debates and extensions
• Implications for strategists
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Dimensions of Institutions
DEGREE OF FORMALITY

EXAMPLES

SUPPORTIVE PILLARS

Formal Institutions

 Laws

 Regulatory (coercive)

 Regulations
 Rules
Informal institutions

 Norms

 Normative

 Cultures

 Cognitive

 Ethics

• Institutions: Definitions

Table 4.1

 “Humanly devised constraints that structure human interaction” (North)
 “Regulatory, normative, and cognitive structures and activities that provide stability and meaning to social behavior” (Scott)
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Understanding Institutions
(cont’d)

Institutional framework - formal and informal institutions governing individual and firm behavior - supported by three pillars
Formal institutions - laws, regulations, rules
- supported by the regulatory pillar (the coercive power of governments)
Informal institutions - norms, cultures and ethics - supported by the normative and cognitive pillars
Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a