Network cohesion in global expansion: An evolutionary view

Faith Hatani, Sara L. McGaughey

Research output: Contribution to journalArticlepeer-review

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. © 2012 Elsevier Inc.
Original languageEnglish
Pages (from-to)455-465
Number of pages10
JournalJournal of World Business
Volume48
Issue number4
DOIs
Publication statusPublished - Oct 2013

Keywords

  • Evolutionary view
  • Foreign expansion
  • MNEs
  • Network cohesion
  • Supply networks

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