A Dynamic View of Global Integration and Local Responsiveness Framework

Abstract

Abstract-lobal-Integration and Local-Responsiveness (IR) framework with four pairs of external environment and appropriate international strategy types has contributed significantly to international business management. Nevertheless, the framework is still incomplete and lacks dynamic features. To deal with such limitations and enhance the theory, this paper, therefore, brings dynamic features regarding both environment and strategy into the IR grid. Under a dynamic capability angle with three steps of sensing, seizing and transforming [30], the dynamic global integration and local responsiveness framework -a new concept building for international business -would be explicated. Keywords-Dynamics, Global integration and local responsiveness framework, international business, environment forces I. INTRODUCTIONIn the booming era of globalization, international management, a part of international business (IB) field, appeared as a stream of strategic management. Unlike strategic management, international management mainly focuses on managing business operations in many countries. Differences regarding culture, policy, customer preferences, etc. among different markets are highly considered. The global-integration and local-responsiveness (IR) grid [6] -[8],[10],[11] is deemed as a most successful and well-known framework in international management. The framework introduces international strategy types that are relevant to possible types of external environment. There are four strategies including international strategy, multinational (or multi-domestic) strategy, global strategy, and transnational strategy. These strategic implementations perform well as being embedded in their most appropriate business environments.Notwithstanding the significant contribution to strategic management in general and international business in particular, IR theory is still criticized as a static view. Time process, in which environment could change and lead to inappropriacy of the current strategy, is not mentioned in the framework. Moreover, IR framework with its outside-in approach is unable to explain clearly and completely core questions of strategic management, how and why (international) firms' performances are different. It is not always the case that the firm changes due to changes of external environment. Internal factors such as the firm's resources [2] -[4], and capabilities [17], [28], [31] are important considerations in building strategy. The new strategy must be congruent with both outside and inside conditions. Prosperity just comes as a firm's capabilities, structure and external environment are, simultaneously, fit. IR grid, therefore, limits its application in reality. In pursuit of enhancing the original IR framework, we introduce a new concept of dynamic global integration and local responsiveness framework.