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Lookup NU author(s): Dr Saurabh BhattacharyaORCiD
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Entry modes have impact on firms' performance in international markets. Using an organizational structural contingency perspective, we assert that firms with mechanistic structure can enhance their performance in international markets if they choose acquisitions as an entry mode. Mechanistic structure limits organizations' learning capability, which can be managed through acquisitions but not through other entry modes such as joint ventures. For managing limitations associated with the poor knowledge absorption capability of mechanistically structured organizations, firms should not follow the standard integration procedures associated with acquisitions aiming to achieve economies of scale or scope. Rather, they should provide corporate parenting advantage to the newly acquired unit by (a) granting complete autonomy and (b) contributing required resources for future growth, thus treating the acquired business as a strategic business unit. Since mechanistic structures are more common in emerging markets, we explain our perspective using illustrative caselets from these markets.
Author(s): Agnihotri A, Bhattacharya S
Publication type: Article
Publication status: Published
Journal: Thunderbird International Business Review
Year: 2018
Volume: 60
Issue: 4
Pages: 691-698
Print publication date: 01/07/2018
Online publication date: 17/09/2017
Acceptance date: 17/08/2017
Date deposited: 21/08/2018
ISSN (print): 1096-4762
ISSN (electronic): 1520-6874
Publisher: John Wiley & Sons, Inc
URL: https://doi.org/10.1002/tie.21946
DOI: 10.1002/tie.21946
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