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Network cohesion in global expansion: An evolutionary view

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  • Hatani, Faith
  • McGaughey, Sara L.

Abstract

Increasingly, competitive advantage does not reside in a single firm's capabilities or resources, but in interfirm networks that compete with other networks. Recognizing that deployment of the network as a cohesive and coordinated organization is critical when it operates globally, we ask: How does global expansion, in particular entry into emerging markets, affect the cohesion of a large interfirm network and with what consequences? We examine this question through an evolutionary perspective, conceptualizing the process of variation–selection–replication–retention as one cycle of a network-level routine of global expansion. Movement through the cycle accelerates with high levels of network cohesion such that market entry and foreign establishment may become more rapid. We present a longitudinal analysis of the Toyota Group from founding through to its more recent entry into emerging markets, and identify the dangers of a diversion in any stage of this network routine. Our findings highlight the role uncertainty in the emerging market context and speed-based competition plays in the loss of network cohesion, and point to the ongoing, and possibly increased, importance of the core firm's role in maintaining network cohesion and global competitive advantage.

Suggested Citation

  • Hatani, Faith & McGaughey, Sara L., 2013. "Network cohesion in global expansion: An evolutionary view," Journal of World Business, Elsevier, vol. 48(4), pages 455-465.
  • Handle: RePEc:eee:worbus:v:48:y:2013:i:4:p:455-465
    DOI: 10.1016/j.jwb.2012.09.002
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    Cited by:

    1. Ma, Xufei & Ding, Zhujun & Yuan, Lin, 2016. "Subnational institutions, political capital, and the internationalization of entrepreneurial firms in emerging economies," Journal of World Business, Elsevier, vol. 51(5), pages 843-854.
    2. Hatani, Faith, 2016. "Institutional plasticity in public-private interactions: Why Japan’s port reform failed," Journal of World Business, Elsevier, vol. 51(6), pages 923-936.
    3. Khalid, Saba & Bhatti, Khalid, 2015. "Entrepreneurial competence in managing partnerships and partnership knowledge exchange: Impact on performance differences in export expansion stages," Journal of World Business, Elsevier, vol. 50(3), pages 598-608.

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