6th SIEM research group meeting

Thanks to Prof. Andrew Jones and Prof. Patrik Ström the message of Management Geography was successfully transmitted to the 2010 spring meeting of the Association of Japanese Geographers.

Andrew Jones (University of London) gave a lecture about New Geographies of Global Managerial Practice: The Case of Business Services. He emphasized that globalization is radically transforming the ways in which firms in all sectors organize themselves and operate in the global economy, not only in terms of the physical locations of offices and employees, but also with respect to organizational form, corporate strategy and the way in which work itself is undertaken. Managerial professionals are thus at the forefront of a major transformation of the way in which key wealth generating activity is now taking place in the global economy. He argued that the management literature has been relatively slow to engage with these transformations, tending to remain focused on conventional concepts of the geographic space occupied by firms and their employees. In order to develop this proposition, he provided a critical overview of the key transformations of global managerial practice that are developing in the contemporary global economy. He examines how the working practices of international managerial professionals have responded and adapted to increasingly interconnected global markets for their services, which has been accompanied by a radical transformation and internationalisation of their working practices.

Patrik Ström (University of Gothenburg) introduced a new concept entitled Space Oddity – On Managerial Decision Making and Space. He argued that complexity in decision-making has hitherto not been adequately mirrored in the prevailing research streams dealing with various aspects related to a firm’s international expansion in space. The reason for this lack of passable framework capturing this intricacy is that until now very few attempts have been made to combine the variety of existing explanatory frameworks. Conceptualizations discussed in the literature have often lived as neighbors for ages, however rarely visited each other.

The financial crisis shows that free trade is constantly under threat by protectionist measures. The economic approach to the internationalization process puts much emphasis on explaining why internationalization takes place. This approach has its base in mainstream economics; examples are Internalization theory (INT) (Buckley & Casson, 1976), Transaction-cost theory (TC) (Hennart, 1982) and the eclectic paradigm (Dunning, 1988). The concern of researchers within the behavioral approach has been to understand the forces underlying the internationalization process of firms. In other words, they emphasized on what forms and/or how internationalization takes place. Within the behavioral approach internationalization can be defined as “the process of increasing involvement in international operations” (Welch & Luostarinen, 1988: 36). The above all most important behavioral approach to internationalization is the Uppsala model by Johanson and Vahlne (1977). Johanson and Vahlne proposed a view on the internationalization of firms by anticipating that a firm’s accumulated knowledge influences its possibility to recognize foreign business opportunities. This implies that a firm’s lack of market knowledge hampers its possibility to detect foreign market opportunities. Therefore, the firm tends to adopt an incremental internationalization process where it chooses to enter countries displaying similar characteristics.

Patrik encouraged us to see internationalization not merely as the action of crossing borders, but rather as an outcome of the efforts undertaken by entrepreneurs, or managers performing entrepreneurial activities, to improve their companies’ operations and investments (Schweizer, Vahlne and Johanson, forthcoming). Also Johanson and Vahlne (2009) claim that internationalization is best understood as a by-product of efforts taken to improve a company’s position in its network(s). Research in economic geography gives a solid understanding regarding where and why investments are made at certain locations. This approach connects with much of the research made within internationalization theory, but broadens the scope through discussions about clusters, embeddedness, organization within space and national or regional competitiveness.

Using anecdotal empirical evidence of Japanese and Swedish firms’ decision-making related to their internationalization, the purpose of this study is to confront examples of reality with the various streams of research in international business and economic geography. Introducing interesting empirical data within his conceptual discussion of managerial embeddedness, he indicated how individuals might influence internationalization processes in organizations, development of knowledge intensive clusters and the connection to regional innovations systems.

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