Please ensure to answer the given questions with a clear reference to the case and the additional literature.
Please use Harvard referencing style as the preferred citation method.
Please answer the following questions in a most comprehensive manner. Each question is worth of 5 marks:
- What change architecture can you identify in the Yukos case study.
- How does theoretical background of combined the RBV and institutional theory to explain organizational success and failure
- Where do you see the differences in the environmental changes of emerging markets compared to established mature markets?
- What could have Yukos done differently in order to succeed?
How does theoretical background of combined the RBV and institutional theory to explain organizational success and failure
A study of both of these lines of research in the context of corporate strategy yielded the institution-based perspective of strategy. It considers strategic decisions to be the outcome of a dynamic interplay between organizations and their formal and informal institutional environments.
Since its beginnings, the discipline of Strategic Management has progressed significantly. The field devoted attention to research that focused on the significance of management abilities throughout the 1960s (Andrews, 1971, Ansoff, 1965, Chandler, 1962).
The importance of industrial structure in influencing variations in company performance was prominent in the 1980s, whereas the 1990s witnessed the emergence of a new dominating paradigm, the resource-based view of the firm (Barney, 1991, Peteraf, 1993, Wernerfelt, 1984). The environment has been resurrected as a major factor in the study of business behavior and performance in the twenty-first century. However, unlike in the 1980s, this study focuses not just on the industry-specific environment, but also on the institutional environment. As a result, a third dominant viewpoint in strategic management has lately developed. The institution-based view is the term given to this viewpoint.
The globalization process, which has impacted most sectors in recent years, may be one of the reasons for the current interest in this new paradigm (Dunning and Lundan, 2008). This has prompted a surge in academic study aimed at determining the sources of competitive advantage in international settings. Although differences in the two components of the institutional environment, formal and informal, may be significant within national settings, it seems obvious that its aspects should show the greatest variance when comparing nations.
It’s critical to emphasize this framework’s inherent capability for answering pertinent corporate strategy issues. Some institutional aspects have been utilized in previous research, but the connection to what is known as the institution-based perspective of strategy has only been implied. However, it is only recently that the institution-based perspective of strategy has been used as an integrated framework for understanding competitive advantage. In practice, this implies that the number of subjects to which it has been used and the depth of the studies conducted are still restricted, indicating that further study is needed. According to Bamberger (2008), the potential for contributions in this area should not only consist of the incorporation of control variables that aid in the ad hoc understanding of some prevailing results in the literature, but should also be an ex ante exercise in which the institutional framework is incorporated into strategic management theories.
Consider the issues that have been considered essential from an institution-based perspective, namely, (1) how do businesses behave? (2) What makes businesses unique? (3) What defines the firm’s scope? (4) What affects the firm’s success or failure in international competition? The quest for the appropriate solutions from the institution-based perspective has already begun. Since Peng’s groundbreaking work in 2002, a number of studies have attempted to examine how institutions influence strategic decisions (such as FDI site and entry mode, innovation adoption, CEO pay, and entrepreneurship) as well as performance (e.g. from family and multinational firms).
Table 1 lists many instances of research topics that have been addressed in prior publications using the institution-based perspective as a theoretical framework, as well as some of their major results. 3 Some of these issues are obviously linked to Rumelt et alfour .’s major categories (1994). Institutions, for example, have been linked to business behavior by looking at how they influence entry method decisions, product diversification decisions, and foreign direct investment site conditions. In the case of the latter, it has been discovered that, in settings where formal institutions are underdeveloped, businesses favor acquisitions and greenfield entrants over joint ventures.
The resource-based view (RBV) is a managerial framework used to determine the strategic resources a firm can exploit to achieve sustainable competitive advantage.
The publication “Firm Resources and Sustained Competitive Advantage,” written by Barney in 1991, is generally regarded as a seminal contribution in the development of the resource-based perspective. Some academics, however, believe that there was evidence for a resource-based hypothesis in the 1930s. According to RBV, businesses are heterogeneous because they have heterogeneous resources, which means that firms with various resource mixes may have diverse strategies.
The RBV directs management’s attention to the company’s internal resources in order to discover assets, skills, and competencies that have the potential to provide superior competitive advantages.
The resource-based perspective of the business (also known as the resource-advantage theory) became the dominant paradigm in strategic planning throughout the 1990s. The positioning school and its rather prescriptive approach, which concentrated management emphasis on external factors, particularly industry structure, may be viewed as a response to RBV. Throughout the 1980s, the so-called positioning school dominated the field. The resource-based perspective, on the other hand, argues that having better skills and resources leads to long-term competitive advantage. The essay “Firm Resources and Sustained Competitive Advantage,” written by Jay Barney in 1991, is credited with helping to establish the resource-based perspective.
A fragmentary resource-based perspective could be seen as early as the 1930s, according to some scholars, who point out that Barney was heavily influenced by Wernerfelt’s earlier work, which introduced the idea of resource position barriers being roughly analogous to entry barriers in the positioning school.
According to some scholars, the resource-based view is a new paradigm, though it has roots in “Ricardian and Penrosian economic theories according to which firms can earn sustainable supranormal returns if, and only if, they have superior resources and those resources are protected by some form of isolating mechanism preventing their diffusion throughout the industry.”
While its precise impact is debatable, two strategy experts believe Edith Penrose’s 1959 book The View of the Growth of the Business stated several ideas that would later inspire the contemporary, resource-based theory of the firm.
The RBV is a multidisciplinary approach that marks a significant paradigm change. The resource-based perspective is multidisciplinary in nature, having emerged from economics, ethics, law, management, marketing, supply chain management, and general business disciplines.
RBV is a method of organizing processes and gaining a competitive advantage that focuses on an organization’s internal resources. According to Barney, resources must be valued, scarce, imperfectly imitable, and non-substitutable in order to serve as sources of long-term competitive advantage (now generally known as VRIN criteria).  According to the resource-based perspective, businesses must create distinct, firm-specific core capabilities that will enable them to beat rivals by doing things differently.
Although there are many different ideas in the literature about the resource-advantage perspective, the central theme is that the firm’s resources are financial, legal, human, organizational, informational, and relational; resources are heterogeneous and imperfectly mobile; and management’s primary task is to understand and organize resources for long-term competitive advantage.
Where do you see the differences in the environmental changes of emerging markets compared to established mature markets?
An established market has more room for growth.
Established markets are found in weak economies.
Emerging markets have had little previous access to products.
Emerging markets are less competitive.