Bent Petersen

Copenhagen Business School · Department of Strategy and Innovation

The global sourcing of services offers high returns but is also associated with high risks. The extent to which firms engage in ‘transformational’ global sourcing (i.e., global sourcing implying considerable changes in the home organization) chiefly depends on management's comfort zone which, in turn, is determined by managers' risk perceptions, ri...

This study examines the "termination dilemma" phenomenon of foreign intermediaries operating in export markets of great sales potential to their principals/exporters. Both low and high sales performances evoke risks of termination: either via replacement with another intermediary, or through the establishment of a sales subsidiary. The termination...

We address a long-standing discrepancy between theory and practice regarding how firms choose, use, and modify their modes of operation in foreign markets. Theory typically treats foreign operation modes as choices between well-specified, discrete alternatives. Observation of business practice reveals a “messier” reality. We commonly observe mode p...

This paper outlines the evolution of additive manufacturing technology, culminating in 3D printing, and presents a vision of how this evolution is affecting existing global value chains in production. In particular, we bring up questions about how this new technology can affect the geographic span and density of global value chains. Potentially, wi...

Entering a foreign market entails making the important mode decision of how to operate there. But the initial mode choice is not always forever and may be reassessed as business circumstances change. The mode shifting process — that is, how switches from one mode to another unfold—has scarcely been described, so we lack a systematic outline of this...

Globalization has led to the decentralization of research and development (R&D) activities by multinational enterprises (MNEs). Investment in these activities is affected by both the host-country environment and the investment strategies of the entrant MNEs. Using data on greenfield R&D investment projects for a sample of digital MNEs in the commun...

This explorative study, which complements research on manufacturing, supplier, and governance flexibility, identifies and aims to fill a gap in extant research related to firms’ location flexibility in global supply chains. In an increasingly dynamic and globally integrated economic environment, firms are compelled to develop the capacity to swiftl...

Research summary Negative performance feedback in offshoring service activities entices firms to undertake geographical reconfiguration of their global value chains (GVCs) as a substitute for, or complement to, change of governance modes, decomposition of offshored activities, or shift of local service providers. In this study, we build on performa...

The world is witnessing a growth in economic nationalism, especially in countries like the United States and United Kingdom, where this would scarcely have been predicted a few years ago. These developments threaten the internationalization of services and gains made through various global trading arrangements. Moreover, there are concerns that the...

Firms’ ability to change foreign operation modes appears highly desirable in an increasingly volatile and unpredictable global environment. We propose and discuss mode flexibility as a management capability, with the aim at curbing the potential downsides of flexibility; in particular, the extra costs of coordination and contracting as well as reve...

This study examines the payoff of various initiatives taken by Vietnamese manufacturers to increase their bargaining power relative to global buyers and capture a larger share of the value generated in global value chains. The study focuses on functional upgrade initiatives (i.e., product development, after-sales services, distribution, and promoti...

This chapter takes stock of fifty years of research on mode dynamics—that is, the decisions to switch and add operation modes in a foreign country—as a central international business strategy phenomenon. Numerous studies have advanced knowledge about the various forms of mode dynamics and their underlying drivers, especially regarding mode switches...

Purpose The hallmark of today’s global value chains (GVCs), still dominated by multinationals from advanced economies, is a sophisticated international division of labor based on scale economies and prevailing factor endowment differences between countries. However, GVCs led by multinationals from large emerging economies may be configured on the...

In a research note in this issue, Strange and Humphrey discuss how a global value chain (GVC) approach serves to usefully move internalization theory towards a better understanding of the increasingly important ‘middle ground’ between markets and hierarchies in the contemporary highly globalized international business scene. After a brief recount o...

This paper investigates the impact of within-country religious diversity on the performance of private participation infrastructure projects. Our analysis of 8139 projects in 33 countries (1990–2014) shows that higher levels of within-country religious diversity are associated with a higher risk of project failure. This negative effect is exacerbat...

This paper investigates the impact of within-country religious diversity on the performance of private participation infrastructure projects. Our analysis of 8139 projects in 33 countries (1990–2014) shows that higher levels of within-country religious diversity are associated with a higher risk of project failure. This negative effect is exacerbat...

Purpose In an industrial marketing context of manufacturer-distributor collaboration this law & economics paper aims to contrast two approaches to contracting: conventional and strategic. Design/methodology/approach Based on relational rent theory the paper provides an analytical framework for juxtaposing conventional and strategic contracting....

Purpose A service production system has a structure composed of task execution, agents performing tasks and a resulting service output. This paper aims to understand how such a service production system changes as a consequence of offshoring. Design/methodology/approach Drawing on practice theory the paper investigates how offshoring leads to re...

A service production system has a structure composed of task execution, agents performing tasks and a resulting service output. This paper aims to understand how such a service production system changes as a consequence of offshoring. Drawing on practice theory the paper investigates how offshoring leads to reconfiguration of the service production...

Purpose – While mainstream theories in international business and management are foundedeither explicitly or implicitly on studies of manufacturing firms, prior attempts to develop theoryon the internationalization of service firms are sparse and have yet to establish solid andcomprehensive frameworks. The thrust of this study is that value creatio...

PurposeThe chapter provides an economic explanation and perspectivation of strategic asset seeking of multinational enterprises from emerging economies (EMNEs) as a prominent feature of today’s global economy. ApproachThe authors apply and extend the “springboard perspective.” This perspective submits that EMNEs acquire strategic assets in develope...

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Build-operate-transfer (BOT) contracting has been widely used in the engineering and construction industry and has recently spread into the service industry domains. Notably, service provider firms from emerging markets, India in particular, are now offering BOT outsourcing contracts in which the client firms are allotted call options, i.e. the rig...

The risk associated with offshoring is a recurrent theme in research. However, previous research has mainly given a static picture of offshoring risks even though the strategies of offshoring firms, including their views on risks, may change as they gain experience in the field. In this chapter we investigate the influence of organizational learnin...

International sourcing strategies and operations are usually described distinctively for manufacturing and services. In this paper, the theoretical and strategic relevance of this distinction is questioned. As an alternative, an activity-based theoretical framework for exploring the linkages between the attributes of the globally sourced activities...

Presently, price-competitive manufactures from the emerging economies of Asia are flooding the world market. The welfare gains to the consumers in the mature Western economies are undisputed and the persistently high growth rates of emerging economies, such as those of China, Taiwan and Vietnam, are, to a large extent, driven by the successful expo...

An enduring characteristic of extant literature on foreign operation modes is its discrete choice approach, where companies are assumed to choose one among a small number of distinctive alternatives. In this paper, detailed information about the operations of six Norwegian companies in three key markets (China, UK and USA) is used as the basis for...

While the extant literature on offshore outsourcing at the firm level basically deals with this operation mode in isolation, in this paper we address the issue of outsourcing in the context of the broader question of how companies choose and use outsourcing as part of their operation mode development in foreign markets. Based on a case study of the...

Thinking strategically about foreign operation modes requires moving beyond making a choice for the initial entry into a country. The rethinking about foreign operation modes and how they are used in international business activity has ushered in consideration of the reality of mode combinations as part of mode strategy. We advance theoretical just...

In recent years, the activities of Danish MNCs in India have expanded dramatically. Previously dormant subsidiaries have been transformed into integral components in the global strategies of Danish MNCs, either as crucial cash cows catering to the rapidly growing Indian markets, or as platforms for sourcing of increasingly advanced value chain acti...

This paper expands the entry mode literature by referring to multiple modes exerted simultaneously in different value chain activities within and across host markets, rather than to a single entry mode at the host market level. We apply competing theoretical perspectives—internalization theory and knowledge transfer efficiency considerations on the...

It is an unresolved issue whether insertion of emerging market firms into global value chains (GVCs) is a better way of internationalisation than developing own export products and independent sales channels–as has been the ‘conventional’ internationalisation path of firms from mature market economies. On the basis of unique firm survey data from V...

Drawing on insights from managerially-oriented literature, this article explores the role of management in situations where the market transaction costs of using local, independent operators are negligible at market entry, but grow over time. A key question pertaining to this situation is: What management instruments may ensure persistent concurren...

This paper expands entry mode literature by referring to multiple modes exerted in different value chain activities within and across host markets, rather than to a single entry mode at the host market level. Scale of operations and knowledge intensity are argued to affect firms' entry mode diversity across value chain activities and host markets....

This article takes a critical look at the extant foreign entry mode research and argues that a richer and more and dynamic view is needed in order to provide a realistic presentation of how firms organize their foreign activities. While researchers have typically assumed a very limited range of foreign operation modes, we propose a systemic rather...

In this study we discuss and empirically test the assertion that over the last two decades multinational enterprises' (MNEs') configuration of value-adding activities has shifted from a sparse and simple (host–home) international division of labor among the foreign affiliates to a more specialized and ‘advanced’ global value chain configuration in...

Knowledge and learning are ascribed pivotal roles in firms' internationalization processes: perceived market uncertainties, namely knowledge gaps related to business environments in foreign markets, may curb firms' inclinations to commit resources to these markets. This study explores whether knowledge gaps tend to increase or decrease with time wh...

There is a large body of literature on modes of entry in foreign markets, with a focus on make-or-buy decisions (Melin, 1992; Sarkar and Cavusgil, 1996; Datta et al., 2002; Malhotra et al., 2003). By using different theories and a large number of contextual variables, entry mode researchers have been quite successful in making predictions regarding...

Abstract and Key Results The IB literature informs us of several ways to measure firms’ degree of globalization. In this paper we make the argument that in fact none of the existing indices really measure firms’ degree of “global specialization”, that is, to what extent their allocation of resources is multidomestic or global. In order to remedy th...

The study addresses the implications MNC strategies have for linkage effects in developing countries. Two contrasting MNC strategies, which reflect an integration-responsiveness dichotomy, are scrutinized in terms of their effects on jobs among local linkage partners in developing countries. It is hypothesized that the investments of MNCs pursuing...

A corporation's offshore outsourcing may be seen as the result of a discrete, strategic decision taken in response to an increasing pressure from worldwide competition. However, empirical evidence of a representative cross-sector sample of international Danish firms indicates that offshore sourcing in low-cost countries is best described as a learn...

The study explores how firms close their knowledge gaps in relation to business environments of foreign markets. Potential determinants are derived from traditional internationalization process theory as well as more recent literature on organizational learning processes, including the concept of absorptive capacity. Building on these two literatur...

We investigate the dynamics of export channel arrangements by modelling foreign operation method decisions as the interplay between factors that motivate switches and factors that deter them. Our model extends previous analyses by looking simultaneously at (1) no change of channel arrangement, (2) replacements of foreign intermediaries (within-mode...

This study addresses how managers' perceived familiarity with local markets develops during a period of entry or expansion. The authors derive different predictions of how foreign-market familiarity changes during periods of entry from the internationalization process literature. They then subject the predictions to an empirical examination, using...

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The effective dissemination throughout the MNC organization of valuable knowledge acquired by its local affiliates is seen as an important source of competitive advantage. Knowledge differs in characteristics and so do the available transfer mechanism. As such, it is essential that the MNC employ the mechanism of transfer that suits the specific kn...

Much has been written about how international firms create and sustain firm-specific advantages that offset their liability of foreignness. Less attention has been devoted to the question of how international firms reduce their liability of foreignness. It is the contention of this study that as a consequence of managerial discretion, such as willi...

In this paper we examine a range of effects of the Internet on international business development following the collapse of speculation and hype surrounding the ‘Internet bubble’ in the recent past. Internet effects are considered by focusing on different dimensions of firms’ internationalisation: specifically, internationalisation capacity, as...

The Internet has the potential to improve the efficiency of market transactions. By use of the Internet companies can reduce their search costs significantly and increase their ability to respond flexible to new market opportunities as a result of reduced sunk costs. On the basis of internationalization theory and agency/transaction cost theory...

India's software industry presents the case of an internationally competitive high-tech industry from a developing economy. This paper takes the evolution of the industry in terms of human capital accumulation. The initial stock of human capital leads to entry of transnational corporations (TNC), which triggers a cumulative process of further human...

As firms seek to extend their global activities in the new millennium, an important issue for them is the means by which they enter and penetrate foreign markets. In this article, the role of mode combination is examined. Although several occurrences of mode combinations are reported in the international business (IB) literature, the phenomenon has...

Twenty-five years ago the business theorists at the University of Uppsala in Sweden assigned knowledge a key role in their explanation of firms’ internationalisation. Firms’ learning – or, acquisition of knowledge - about foreign markets was pointed out as being determining not only the speed by which firms expand internationally, but also which...

Much has been written about how international firms create and sustain firm-specific advantages that offset their liability of foreignness. Less attention has been devoted the question of how international firms reduce their liability of foreignness. It is the contention of this study that entrant firms familiarize with foreign markets at different...

By entering foreign markets through the use of local operators or intermediaries, such as licensees and distributors, companies can reduce their risk exposure and the resource demands of internationalisation. However, at a later stage, the entrant firms may want to shift to a higher control mode—perhaps a sales or production subsidiary. A difficult...

In this paper, the shift into international franchising from other forms of operation, rather than the typical home market franchising base, is explored. The focus is international retail franchising, based on a study of the Danish clothing and footwear industry. In this study it was found that Danish companies were moving into international franch...

What factors impel exporters to replace a foreign intermediary (i.e., agents or distributors), and what factors impede such actions? Dissatisfac­ tion with the current intermediary is the explanation typically given for why intermediaries are replaced, but other factors may also influence the likelihood of such a change. Using longitudinal data fro...

The import substitution policies in India, directly and indirectly, were responsible for 'islands of competitiveness' such as the software industry and also the general non-competitiveness of a large number of industries. They created certain supply side conditions that facilitated the birth of software industry as a by-product. Free trade with tec...

In this paper we use longitudinal data from a sample of Danish exporters in order to investigate the dynamics of export organization. Building on previous research, we model such decisions as an interplay between various switch inducing (motivators) as well as switch impeding (costs) factors. We extend previous analyses by looking simultaneously...

A key element of the internationalization process theory of the firm is the incremental accumulation of knowledge and skills regarding foreign markets and international operations in general. However, studies of internationalization patterns have tended to focus on foreign operation mode (or, entry mode) use, which is a relatively broad, even cr...

Although the issue of switching costs does appear in some of the frameworks for choosing modes of foreign operation, the treatment of these costs is fairly cursory. In this article we propose a simple classification of switching costs which distinguishes between "take-down" costs and "set-up" costs. A distinction is also made between measurable and...

Apparently, the pace by which companies commit resources to foreign markets differs significantly. We test six propositions that potentially explain why some companies undertake faster foreign market commitment than others. Suggested factors discriminating between a fast and a slow foreign market commitment are (1) whether the company is producing...

A large number of studies has examined the pattern of firms' internationalization in terms of the sequence by which a firm introduces various operation methods to a foreign market. With few exceptions, the studies seek to establish whether or not the observed patterns of internationalization are 'incremental'. Looking at the internationalization pr...