INTERNATIONAL BUSINESS

LUU TIEN DUNG (PH.D)

 CONTEXTS AND
INTERNATIONAL BUSINESS
LEARNING OBJECTIVES

Understand what is meant by the term contexts in

IB

The effect of contexts in IB

Contexts and internationalization of SMEs in Vietnam

CONTEXTS AND IB
OPERATIONS AND INFLUENCES MODEL
4–7
CONTEXTS IN IB

¡ Context is multidimensional, comprising diverse sub-contexts –

ecological, economic, cultural, institutional, political, social, and
technological – that are interlaced with one another.
¡ SME internationalization is influenced by its context – both of
targeted foreign countries and its home economy – as well as
by characteristics of the firm itself.
¡ Many internationalizing SMEs are likely to require external
support, particularly from domestic institutions.
¡ SMEs undertaking internationalization typically rely on
networking with external resource providers.
¡ SMEs may have to accept institutional and cultural conditions in
foreign markets as contextual givens insofar as they have little
power or understanding of how to negotiate them
CONTEXTS IN IB
¡ Contextualizing IB research focuses on the big question,
‘How do we identify and integrate context into our IB
research?' and a corollary, ‘Why should we identify and
integrate context into our IB research?'
¡ The macro level reflects the environment in which a firm is
located, particularly its home and host countries, and its
industry.
¡ The meso level refers to the immediate organizational
context in terms of factors such as a firm's ownership and
technology.
¡ Entrepreneurs’ personality traits and formative backgrounds
can be significant antecedents for decisions and policies on
internationalization.
MARCRO-LEVEL CONTEXTS
¡ In economies such as China and Russia, large, state-owned
firms continue to dominate ‘strategic sectors’ even as
large private or quasi-private firms emerge.
¡ Most studies have taken the nation as the unit of analysis for macro
context.
¡ Nation states establish institutions, enact trade regulations, and
socialize the citizenry, all of which are IB relevant.
¡ A focus on industries is likely to yield valuable insights on how firms
pursue international opportunities.
¡ The industry in which an SME is located identifies its knowledge
domain and signifies attributes such as market(s), regulatory
environment, relevant external networks, and identity
MESO-LEVEL CONTEXTS

¡ Organizational factors impact how an SME conducts its

international business.
¡ For example, there is a large body of research on family firm
internationalization, and how it might differ from that of firms
with other ownership types.
MICRO-LEVEL CONTEXTS

¡ Organizational environmental factors, national culture impact

the performance of individuals in the organization and
organizational performance in IB.
¡ Examples of adaptive culture, business orientation, CSR impact
on organizational performance.
 THE BUSINESS
ENVIRONMENT FOR SMES IN
VIET NAM
Macroeconomic conditions
Institutional conditions: Viet Nam’s WGI
Viet Nam’s International Competitiveness, 2019
Viet Nam’s Provincial Competitiveness Index 2021
Industry’s policy
Industry’s policy
Tools

https://globalization.stern.nyu.edu/cage?country=VNM
&indicator=mx
https://www.infoplease.com/atlas/calculate-distance
https://www.trademap.org/Index.aspx
https://www.hofstede-insights.com/country-
comparison-tool?countries=argentina%2Cvietnam
https://trungtamwto.vn/market
https://data.worldbank.org/
https://www.heritage.org/index/
https://globaledge.msu.edu/mpi
Choose a Vietnamese IB enterprise (based on your previous
work). GROUP WORK
1/ Explain the success/failure in international markets using
theories of international trade and investment.
2/ Investigate the attributes of the international environment,
based on:
- CAGE Distance Framework - Cultural, Administrative
(political/institutions), Geographic and Economic
- Psychic distance
3/ Which mechanism that these environmental factors affect on
internationalization decisions (in term of timing, location, and entry
modes)