Institution-Based View in International Business Strategy

Management

Table of Contents
Answer 1..........................................................................................................................................3
Answer 2..........................................................................................................................................4
References........................................................................................................................................5
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Answer 1
Institution-based view complements industry-based view and resource based view in order to
sustain a strategy tripod collectively. In today's environment, there are so many factors that are
considered for organizational strategy formulation and performance. These factors include:
position of industry, capability, resources, institutions etc. If all the three approaches are
followed together, it may help organizations in providing new perspectives of international
business such as organizational strategy in international business and international success and
failure of organizations (Peng, Wang, & Jiang, 2008). Hence, it can be inferred that institutional
based view complements industry and resource based view, when firms operate in international
market, because at that time, institution based view help the firms to know the rule of game and
improve their competitiveness in emerging markets (Garrido, Gomez, Maicas, & Orcos, 2014).
The approach of dealing in the business environment differs for all the three views as, institution
based view approach suggests organizations to have deep knowledge of rules of business while
entering into a new market while the industry based view approach is more focused on degree of
competitiveness possessed by an organization. Resource based view identifies the potential key
resources of a firm and product differentiation (Truyens, De Bosscher, Heyndels, & Westerbeek,
2014).
The institution-based view is the third leg of the strategy tripod because it is more concentrated
on the ever-changing relations of institutions. This approach takes strategic choices to be the
result of such integration (Peng, Sun, Pinkham, & Chen, 2009). Under industry- based and
resource-based view, strategic choices are determined by industry situation & company’s
competences, but under institution based view strategic choices are determined by the formal and
informal constraints of an institution. That's why International business strategy cannot just relay
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