The internationalization of Japanese business groups (JBG) have been subject to intense scrutiny since JBG shot to world stage in the 1980's. Studies on the internationalization of JBG have been fragmented in scope and have mainly focused on specific behaviors e.g. mode of market entry, knowledge creation, knowledge flows between headquarters and overseas subsidiaries, overseas market development and sales strategies, to name a few. Little attention has been paid, however, to explaining the reasons behind these behaviors. This literature review aims to contribute to filling this gap by recognizing the internationalization's embeddedness in the country's institutional environment, thus providing a more nuanced understanding of the drivers behind these behaviors as well as the intrinsic obstacles that may hinder the outcomes of these internationalization efforts. This study also hopes to answer the theoretical question called for by (Zaheer, Gözübüyük and Milanov, 2010) in their excellent work "It's the connections: The network perspective in interorganizational research: "How do organizations balance the benefits of trust and embeddedness with the costs of lock-in and inflexibility with the same set of partners?" The holistic perspective of this review has wide ranging managerial implications in terms of effective intra-organizational dialogue, stakeholder management, organizational knowledge management, among others.
This is an exploratory study, it seeks to understand internationalization of a business group as a process of sense-making on the individual level. The focus of the enquiry is a Japanese shipping group, bulk cargo segment and seeks to answer the question how a network’s administrative heritage enables and/or inhibits the performance of relationship management processes in the context of multiple embeddedness and internationalization. The study finds, that the industry at large and the Japanese Business Group (JBG) as institutions act as enablers for the effective management of existing relationships worldwide by delegating action to the field through standardized processes and shared understandings. As for identifying and developing new relational opportunities, JBG as an institution inhibits coordination and sensemaking capabilities by its strict vertical power hierarchy and a concentration of authority and resources in headquarters.
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