Applicability of management theories to developing countries: a synthesis.
* In 1983, Kiggundu/Jorgensen/Hafsi published in ASQ a synthesis on issues related to the applicability of management theories to developing countries. They found that theory was applicable only where the organization could behave as a closed system.
* We argue that isomorphic trends and new theoretical developments support the hypothesis that their findings should not hold anymore. This article reviews 170 articles published in the 1983-2002 period to replicate their study and tests the hypothesis.
* We found that there is widespread applicability of western-based concepts of general management and organizational theories to developing countries, which supports our hypothesis. We explain further the credibility of such findings and propose some implications for research and practice.
Applicability of management theories and practices has historically been a major concern of scholars dealing with developing country situations (Hoskisson et al. 2000). Researchers have been debating this issue from divergence, universality, convergence, and situational perspectives. According to the divergence, mostly comparative management literature western management theories stop at the cultural border of each nation. According to this view culture is indeed the main source of management differences between developed and developing countries (Hofstede 1980). Cross-cultural researchers believe that there is no such thing as a universal theory of management (Hofstede 1993, Jaeger 1990). In contrast, those with universal view (Simon 1997) argue that culture does not limit the applicability of management theories and believe that there are similar management practices within organizations all around the world. For example, Mintzberg (1973, 1975) suggested certain universal hypotheses that have been replicated in other studies (Ndiaye et al. 1996). Those with convergence perspective consider the degree of industrialization as the main determinant for applicability of management theories (Lauter 1969). According to convergence view western management theories may not be applicable in developing countries as a result of the technical and economic difficulties in these countries rather than cultural constraints. Situational or contingency theorists, as opposed to universalists, consider different situational factors such as manager's personality, firms' ownership and sector (i.e. private or public), and their hierarchy as the main determinants for the applicability of management theories.
A more detailed analysis of all these perspectives reveals the fact that there has always been ambiguity about whether the primary concern was practice or theory. This is not a trivial issue. Practice is usually situational, affected by the specific conditions and circumstances in which it takes place, which is now a common finding of most of the research in strategy and organization theory, particularly of contingency theory research (Lawrence/Lorsch 1967, Thompson 1967). Applicability of practices is therefore almost a non-issue, the answer being straight-forward. Generations of researchers in cross-cultural management have reported the differences that exist across different cultural settings, while researchers in strategic management and organization theory have regularly reported the various constraints and contingencies that come to bend practices and give them their unique shapes (see in particular Andrews 1987, Oliver 1997, and Roethlisberger 1977).
Applicability of theory is another matter, more relevant to inquiry and only incidentally dealt with in the literature (Farashahi/Hafsi/Molz 2005). It is also a very important matter as dominant theories shape cognitive orientations and, although taken for granted, end up shaping practice (Dacin/Goodstein/Scott 2002). Economic development of countries has traditionally been a challenge to theory. It has often been argued that managing in developing countries presents unique challenges. The slip to considering that behaviour in these countries follows different laws and theories is easy and has plagued debate. In this paper we present a synthesis of research findings, which suggest that although management practices in developing countries are necessarily different, the same theories do apply.
Keeping this in mind, in this paper we start with the 1983, Kiggundu, Jorgensen and Hafsi published synthesis of the literature on the topic of administration theory and developing countries. Their objective was to assess whether, according to research conducted on issues dealing with management in developing countries, theories developed in a western developed country setting were seen as applicable to these countries. Their conclusion was conceptualized using Thompson's framework of organizational rationality (1967). In particular, they proposed that, where the theories discussed concerned only the core technology of an organization without reference to its environment, they tended to be applicable with conditions and results similar to those of organizations in developed countries. Where the theories discussed were applied to situations involving the environment, such an application mobilized forces that countered the theories effects, thus making them inapplicable. Kiggundu et al.'s paper suffered from several weaknesses. First, they often mixed the concern for practice with the concern for theory. In particular, their explanation of no fit is revealing. They mix theory and practices in their discussion and leave the reader unsure about whether they are talking about applicability of theory or applicability of practice. Also their methodology suffered from some obvious flaws. But still, although the focus, the wording and the methodology were not altogether clean, it was one of the few attempts to squarely face the issue of applicability of management theories to developing countries.
Since 1983, the world has changed considerably, and we wondered whether Kiggundu et al.'s findings would still hold. We decided therefore to replicate their work for the following twenty years. This paper starts therefore with the same basic question: How applicable are western-based theories to developing country situations? And add another: Do Kiggundu et al.'s findings still hold today given the important changes that have affected the world's economic situation? In the first part of the paper, we justify the need for a replication by confronting Kiggundu et al.'s synthesis to the changes that have taken place since 1983. In so doing, we look again at the pre-1980 literature on the applicability of management theory to developing countries and discuss its present validity. In the second part, we present the data and methods of the present research and provide an overview of the articles reviewed. In the third part, we report the results and discuss them in terms of several dimensions critical to applicability. In the fourth part, we undertake to explain results and differences found with the Kiggundu et al.'s study, using an institutional organization theory perspective. Finally, we conclude with some implications of our findings for research and practice of management in developing countries.
Questioning Kiggundu et al.'s Findings: A New Hypothesis
Kiggundu et al.'s synthesis of the literature is a good proxy for the dominant literature trends up to 1980. The articles surveyed covered a wide spectrum of topics, most of which related to organizational behaviour and organizational theory, and dealt with administration in a wide variety of geographical locations. Interpreting suggestions by the authors of the theories mentioned, Kiggundu et al.'s survey highlighted in particular the theories' "degree of fit" to the situation of developing countries. They found that the "more technical the theory" and the less it was concerned about environment, the stronger the fit regardless of the nature--empirical (qualitative or quantitative) or non-empirical--of the study.
More specifically, the authors stated that: "The reasons advanced to explain why conventional theory works ... can be aggregated into three major clusters: (1) the subset of theory involved is technical in nature ... (2), the domain of application is the technical core of the organization ... (3) and the environment is benign or favourable to the implementation of the theory." (Kiggundu et al. 1983, p. 74). In other words, whenever the organization can behave as a closed system, conventional theory does apply.
Since the publication of the Kiggundu et al.'s article, two concomitant institutional trends suggest that their findings cannot be expected to hold to day. First, major environmental changes have taken place which push toward increased isomorphism in organizational practice (DiMaggio/Powell 1983) and in scholars' studies (Farashahi/Hafsi/Molz 2005). Second, organization theory has been extended to cover an increasing variety of circumstances and organizations (Farashahi/Hafsi/ Molz 2005, Scott 1998).
Among environment changes, five events may have affected developing countries most. First, the World Bank and the IMF have been able to impose the structural adjustment framework on most emerging economies, with real process success, even if they achieved limited results in economic growth (Kamarck 1996, Knoop/ Lodge 1996, Rich 1994, Wapenhans 1995). Second, markets, industries and companies have globalized significantly, thanks to a generalized decline in tariff and non-tariff barriers; the emergence of large free trade areas, such as the European union, the North American Free Trade Agreement, the ASEAN agreement; and the creation of the World Trade Organization (WTO) (Doz 1986, Porter 1990). Third, major technological breakthroughs have made communications easier and affordable across the world, leading to a widespread uniformity in perceptions and understandings about financial and economic matters (Eisenmann 2003, Henderson/ Yoffie 2004). Fourth, privatization has become a normal process all over the world, and uniform privatization practices are now in use in most countries (World Development Reports 1999-2003). Finally, management training under the powerful influence of the AACSB, AMBA, EQUIS and others (see for example mbaworld.com) is more uniform than ever (Venezia 2005). The growth in management programs has continued unabated, particularly in developing countries.
As a result of these changes, there is a shared language among managers, governments' ability to intervene directly in the local economy has been considerably weakened; and international firms have now wider and freer access to markets, labour, capital, and technology (Arnold 2005, Doz 1986, Marnet 2005). Consequently, the effect of the general local environment is now constrained by more potent international norms and practices; and one can expect that local government behaviours and environmental conditions are converging and even becoming similar all over the world, which suggests that management practices also may be converging. Does that mean that theories are now widely applicable and, in particular, that theories developed in the western developed countries apply equally to organizations in developing countries? Our study's goal is to respond to this question. From the theory development perspective, major advances have been made in management and organizational sciences, which take into account the variety of organizations and situations that managers have to deal with (Scott 1998). Let us mention in particular three related streams of research contributions which suggest that Kiggundu et al.'s findings cannot be expected to hold today: (1) the general management resource-based theory (Barney 1991), (2) constructivist views and theories (Crozier/Friedberg 1977, Giddens 1984), and most importantly (3) the institutional theory of organizations, especially its new expressions and developments (Meyer 1977, Powell/DiMaggio 1991, Scott 2001).
From a resource-based perspective, sustainable competitive advantage is the outcome of discretionary rational managerial choices, selective resource accumulation and deployment, strategic industrial factors, and factor market imperfections (Oliver 1997). In particular, the nature of its resources constrains the ability of an organization to adapt or succeed in a specific environment. And indeed, developing countries' managers faced with uncertainty would be inclined to develop a strategy based on soft social skill, social capital (Oliver 1997), and critical dynamic capabilities (Dosi/Nelson/Winter 2000), which tended to be dismissed as non-rational or culture-bound at the time of Kiggundu et al.'s article. Today, such behaviour would seem perfectly legitimate and rational (Peng/Luo 2000).
Developing countries' actors are often seen as reacting in a simple-minded way to simple interests. They approve whatever does not obviously affect their interests and reject whatever threatens the existing status quo. Therefore, as the conventional Kiggundu et al.'s interpretation goes, when the environment is affected, forces react and nullify the effects. To the proponents of the structuration theory (Barley/ Tolbert 1997) reality should not be simplified to such an extreme. When a theory's effects modify the status quo, they attract the attention of actors who work at understanding what is happening and assessing, debating, and deciding amongst themselves what is appropriate and what is not. The interacting forces do not all have negative reactions to the theories concerned. Some may support them, while others may reject them. The ensuing debate results in a de facto choice which here again is probably more suited to the local situation than is generally assumed (Mathews 2000, Peng/Heath 1996, Shin/Ho 1997).
Finally, developing countries are marginal emerging economic partners (Hoskisson et al. 2000). They are dominated economically and politically. The international institutional game is thus designed with the dominant actors in mind and isomorphic behaviour from developing countries is simply expected (Stiglitz 1998, Scott 2001). The institutional theory provides us with a better understanding of how the search for legitimacy and support on the part of these countries leads them to mimic western thoughts and behaviours (Hafsi 2003).
These trends suggest therefore that first the isomorphic tendencies in the developing country practices and second recent theoretical developments; all would lead western-based theory to describe reasonably well administrative practice in developing countries, which should question Kiggundu et al.'s findings.
It is important to come back to the opening statements of this paper. We are here talking about the applicability of theory to developing countries. In other words we are wondering if available western-based theory describes the administrative practice observed in developing countries (1) by researchers. Kiggundu et al.'s have responded with a response contingent on the nature of theory and on its effect on the environment. The changes that have taken place since 1980 in administrative practice and theory development lead us to another hypothesis: The existing western-based theory describes well administrative behaviour in developing countries. To test this hypothesis, we decided to conduct a research similar to Kiggundu et al.'s, to check whether the more recent research about developing countries agrees with such a statement. Our findings suggest that there is indeed a major shift in the literature, and that scholars writing about developing countries since 1980 report generalized applicability of western-based theories to developing country settings.
Data and Methods
In this research, we made a structured survey of articles published in the last twenty years (i.e., 1981-2001). We used the ABI/Inform Global and the ABI/Inform Trade and Industry databases through ProQuest. These two major databases cover around 1700 periodical publications including most of the social science publications. Using key words Administration, Organization Theory, Institutions, Cross-cultural, and Management along with Developing Countries enabled us to generate a list of more than 2600 printed articles. Independently, the authors of this article reviewed all the issues of AMJ, AMR, ASQ, SMJ, JIBS, MIR, and JWB (2) for the last twenty years to make sure that articles published in general management and international major journals were not overlooked. Finding many new articles through this last procedure proved the fact that searching through ProQuest has certain limitations that need to be overcome by other more ad hoc methods. Our initial observation is that the number of articles about managerial issues in developing countries has been on the rise. In fact, more than 75% of the articles surveyed have been published during the last decade (1990s), and 60% of these articles were published in the last six years (i.e., 1995-2000). This is similar to the trend Werner and Brouthers (2002) found in their research in international management.
We followed a two-stage procedure to come up with a relevant sample. In the first stage, we eliminated those publications that were clearly unrelated to our subject matter, such as Business America, Business Time, Businessline, Businessworld, Fortune, Newsweek, New York Times, and Wall Street Journal. Second, we eliminated journals focused on unrelated special fields and industries such as Aviation Week & Space Technology, Bioscience, British Medical Journal, Chemical Market Reporter, and Oil & Gas Journal. Finally, we eliminated those specialized journals focusing on economy, finance, law, politics, and accounting, such as The American Economic Review, Journal of Development Economics, The Economic Journal, Euromoney, Finance & Development, Journal of World Trade Law, Foreign Affairs, Political Studies, and Government Accountants Journal. After the completion of these three steps, more than 75% of the articles were eliminated and the remaining ones were further screened in a second stage.
In the second stage we focused on the topics covered by the articles. First, we eliminated all articles that dealt with subjects other than management or organizational studies by examining their titles, their abstracts and the nature of the publishing journals. The excluded articles dealt with topics such as education (i.e., Chapman 2000), environment (i.e., El-Fadel et. al. 2001, Sandewall/Nilsson 2001, Seeland 2000), foreign investment (i.e., Luo 2001, Tsang 1998), medicine (i.e., Terra de Souza et al. 2000), agriculture (i.e., Maler 2000), politics (i.e., Blackman 2000), and debt and finance (i.e., Brownbridge/Kirkpatrick 2000, Dooley 2000). Second, we eliminated those articles dealing with management activities of multinational firms in different countries (i.e., Pananond/Zeithaml 1998). Looking at the abstracts of these articles, we came to the opinion that they dealt with issues related to multinationals' internal dynamics without much reference to local realities. After these two steps of the second round of sample selection, each of us made a separate review of the remaining 271 articles to assess whether they were relevant to the objectives of our research.
In this last refinement attempt, we looked more precisely at journal and article contents, and judged whether they were relevant to the research. We further eliminated a few other less relevant journals and articles dealing with subjects such as economy, environment, training, and agriculture (i.e., Erden 1988, Reisen 1995, Thomas and Philip 1994). Finally, we agreed to keep a total of 170 articles in the final sample, including those found after reviewing every issue of the last twenty years of the three journals suggested by one of the reviewers (3).
Measurement of Fit
To deal with the issue of the applicability of theories to developing countries, the dependent variable,fit, was defined as the extent to which organizations and management activities in developing countries are described by management theories from developed countries. There is a fit when theories explain situations in developing countries. There is a mixed fit when adjustments need to be made to existing theories for understanding situations in developing countries. There is a no fit when theories cannot explain and specific new theories need to be developed. To measure fit, we needed to make an assessment of what an author was saying in his/her article about fit. Since the authors were not necessarily intent on making a statement about fit, we needed to make a systematic and in-depth review of each article. To increase the reliability of the assessment, we used two methods.
First, each author was assigned to make a review of the articles in the sample. Various aspects of each article were systematically analyzed (4). These included in particular: the nature of research (i.e., empirical or non-empirical); type of research (cross sectional or longitudinal or historical); focus of the study (core, task environment or general environment); authors' origins and institutional affiliations; geographical distribution of the regions and countries covered by the study; organization sector (public or private), and finally fit. Because of its importance in the article and because authors were not set on making a clear assessment, fit assessment is an essential part of the research. Interpretation was often necessary to determine whether what was being described was seen as fit or not. The authors made separate assessments and compared them. The summary forms were then randomly crosschecked for inter-rater reliability, and found that there were common interpretations on more than 80% of the items across the studies reviewed. Where there was a disagreement, it was between a high level of fit and a mixed level of fit, or between no fit and a mixed level of fit. Most of the disagreements were between high and mixed levels of fit, and we ended up classifying them as mixed.
Among the examples that were debated was the study by Ali, Khaleque, and Hossain (1992). The authors studied participative management in a developing country. They interrogated 306 managers at different levels to assess their attitudes toward participation. Their findings showed that "Workers expressed more positive attitudes than managers and supervisors. Supervisors expressed more favourable attitudes than managers. Managers expressed a lukewarm support to participation". They concluded, "A participative management system is likely to meet with resistance from managers, while workers and supervisors will support it" (p. 11). This has been interpreted as being an indication of strong fit, because their descriptions showed that in the Bangladeshi banks, that they were studying, historical practices and managers' values would lead them to resist participative management practices. This, we saw as normal behaviour that could be also observed in a Western setting. Actually, it has been widely described as common practice in the traditional participation literature (McGregor 1966, Roethlisberger 1977).
Another example, which required judgement, was Neelankavil, Mathur, and Zhang (2000). They studied the effect of cultural dimensions on managerial performance. Interrogating a large number of managers in China, India, the Philippines and the United States of America, they concluded: "First of all, this study supports the notion that culture has a significant impact on managerial practices particularly between vastly different countries such as China and the United States. Secondly ... many differences exist among countries and managers of international business enterprises should take note. Asian countries are not necessarily similar to one another in their managerial orientations, despite cultural relatedness" (p. 136). We decided that this meant both fit and no fit. Their literature discussion shows that culture influences local behaviour, which is a clear indication of fit. The no fit comes from their statement that still Western practices may differ from Asian practices. Although our belief is that such a statement applies more to practice than theory, we thought that the authors were ambiguous enough in their assessment as to make us uncertain about their opinion. We coded this as a mixed fit.
Finally, an example of weak fit is provided by Easterby-Smith and Malina (1999). The authors looked at reflexivity as a way to combine insider and outsider perspectives in cross-cultural research. Here again, it is difficult to make a confident judgement. What comes out of the article, however, is the authors' belief that realities in different cultures are so different as to make it impossible for outsider to understand them. They state, for example, "The problem for researchers from one culture or context wishing to conduct research on another culture is that the outsiders' past experiences will not have equipped them to make sense of events in the same way that insiders would" (p. 84). Furthermore, as Teagarden and colleagues commented, "No one researcher can be an insider in multiple cultures" (1995, p. 1283).
The second method was designed to increase the reliability of the assessment of fit. Ten research oriented graduate students were selected and asked to each review 11 or 12 articles, following a specific protocol. The protocol included a careful reading then answering specific questions of a summary form (5). The form defined with as much precision as possible the idea of fit and guided the independent reviewers through the assessment of fit. In addition, the authors held special meetings with PhD students to explain the details of the interpretation process and to transfer their experience on systematic review studies. The reviewers could decide that there was a fit if the author(s) discussed directly or indirectly whether the theory explains the situations studied, and if it does not explain, it is because of different circumstances requiring different interpretations from the same theory. There was a mixed fit when the theory did not explain and in the reviewer's opinion the author concluded or suggested that there was a need for adjusting the existing theory. There was to be no fit when the theory did not explain and, in the reviewer's opinion, the author concluded or suggested that there was a need for a theory specific to developing countries. These independent reviewers claimed that 83% of the articles showed strong fit. Comparing the results of these two methods for the fit dimension and performing a reliability test ([alpha]=0.69) indicate reliable results for such a highly interpretive dimension.
The final tally of both methods indicates that most articles show a strong fit. Very few articles (10%) were assessed as showing a weak or no fit. This contrasts clearly with the findings of Kiggundu, Jorgensen, and Hafsi (1983). We are thus faced either with a major shift in the literature or with a major shift in interpretation. We believe our fit assessment procedure to be more rigorous than Kiggundu et al.'s, but these results still beg the question of why? In the next sections we intend to describe the findings in more details and explain why there is such a shift.
Table 1 shows that the strong fit dominates across most of the dimensions chosen for this study. Whether empirical or not, dealing with the technical core, the task or the general environments; in most of the domains of management studies (crosscultural management theoretical papers being the clear exception), in most of the regions of the world; in any of the legal ownership forms (public, private or third sector), Whether the research is conducted by individuals connected to the countries studied or not, the fit reported is generally strong. Very few articles show a weak fit. We shall now look at the results by degree of fit.
Concentrating on the articles showing strong fit, we can describe them in greater detail. First, there is a tendency for empirical articles showing a strong fit to concentrate on the technical core and on the task environment: twice as many as the non-empirical. For example, among the empirical articles, Darley/Johnson (1993) used a sample of 305 students from four countries (Singapore, Kenya, Nigeria and India) to explore the behaviour of consumers in these countries. They conclude that although consumerism remains a Western phenomenon, the consumer movement has worldwide dimensions. More specifically, their sample shows that consumers' attitudes toward consumerism are the same as those in developed countries. In another interesting work, Filatotchev/Buck/Zhukov (2000) studied downsizing strategies in a sample of 103 privately-owned manufacturing firms in Russia, Ukraine and Belarus. They first found a clear relationship between the degree of downsizing and the industrial decline in the preceding period, a feature that they suggest is quite common in developed countries. Also, the effect of institutional ownership on the degree of downsizing is insignificant, which corresponds to "previous research in the West that has indicated limited effectiveness of institutional monitoring of incumbent managers" (p. 300). Among non-empirical articles, Goldsmith (1992) insists on the need to use strategic thinking in developing countries.
Second, empirical research is mostly cross-sectional and only occasionally longitudinal (as shown in Table 2). Hastings and Msimangira's (1992) survey of 50 executives in several government-owned Tanzanian textile corporations, a typical cross-sectional study, checks the use of modern manufacturing management techniques. They identified at least nine commercial and managerial problems, including lack of training and inadequate manufacturing systems in need of upgrading before applying any kind of sophisticated techniques. Among the longitudinal studies identified, White (2000) studied 112 (make, buy or ally) decisions of 87 Chinese firms to test the impact of environment and capabilities on the decision outcomes.
Third, there is an overwhelming number of articles (67%) in which at least one author has a direct connection with the countries involved in the study (Table 2). Most of these articles are empirical, almost three times as many as non-empirical, which suggests that authors from developing countries are increasingly involved in empirical research and are moving away from traditional armchair theorizing. For example, Bae and Lawler (2000) explored the applicability of Western conventional strategic human resource management framework in Korea and came out with the findings that although in their sample only 40 out of 138 firms were really Korean-owned, the firms that used high-involvement HRM strategies had better performance. It is interesting to note that authors with no connection to the countries studied have a tendency to write theoretical articles, probably because of the perceived and actual difficulties faced in conducting empirical research.
Fourth, Asia is the focus of most of the articles reviewed (Table 1), most of them being empirical. It is however interesting to observe that for empirical articles the level of strong fit is similar across continents (6), while the Asia-centered non empirical articles show a lower level of strong fit. Africa is the focus of 17% of the articles, of which two-thirds are empirical. Latin America is represented in 15% of the articles and here again about two-thirds of them are empirical. It is interesting to note that 35% of the articles deal with several countries or with none in particular. For example, Sim and Teoh (1997) studied the relationships between strategy, environment and control in three different contexts. Using responses from a sample of 242 executives, they apply stepwise multiple discriminant analyses and analyses of variance to find that "there were significant relationships between strategy types (using the Miles/Snow typology) and environmental characteristics and control system attributes" (p. 60).
Fifth, the public sector is the focus of 24% of all the articles showing strong fit. Another 25% deal with both public sector and private sector organisations in which the public sector is dominant. Private sector organisations appear clearly only in 31 studies (27%) of the 113 showing a strong fit. This is an indication of how ubiquitous the public sector remains in developing countries. A good example of a public sector-based study among the works surveyed is Wallis and Dollery's (2001) theoretical study, which suggests, "the contractualist approach to public management reform in New Zealand should be complemented by a social capital approach to fit with developing country situations" (p. 258). Among the private sector studies, there is Hadjimanolis and Dickson's study (2000) of innovation strategies of SMEs in Cyprus. Their two broad hypotheses (classification of cases into three ideal types related to Miles/Snow's (1978) typologies and differences of innovation practices among the cases) have been confirmed. However, they also found several odd side-findings. In particular, "the networking intensity of the proactive innovators was not higher than that of reactive ones, while the importance of networking in Cyprus is not as high as the literature suggests it would be."(p. 75)
To summarize, a strong fit permeates the whole sample. The typical article is empirical and deals with the technical core or the task environment. It is focused on the Asia region, uses a cross-sectional sample to conduct a quantitative research. Generally the research is conducted by people who have a direct connection with the countries in which the research was conducted. Finally, public sector organizations still dominate.
As shown in Table 2, there are only 17 articles showing weak fit in our sample of 170 articles. Eight of these are theoretical, and nine are empirical. Hofstede's article (1994) is typical of the non-empirical group. He uses findings from his previous research to argue that management theories developed in Western countries stop at national borders because of cultural differences. Actually, since 1980 he has been claiming that management theories are culturally bound and theories developed in industrialized countries are not applicable in developing countries. Among the empirical articles, Seddon (1987) uses a case study to argue that management practices such as appraisal systems, imported from countries like Britain or the USA, do not operate effectively in developing countries. He emphasizes the importance of local conditions and needs in designing appraisal systems in developing countries. Many of the theoretical articles focus on the general environment and therefore deal with values and the general institutional environment. Even articles dealing with the technical core address issues that are normative or cultural-cognitive in nature.
Thirty-six articles or 21% of the sample were seen as showing a mixed fit. 24 of these articles (58%) are empirical, a proportion slightly lower than that of articles showing a strong fit. For example, Tata and Prasad, and Motwani (2000) compared quality management practices in Costa Rica to those in the USA. Questioning 45 managers in Costa Rica and comparing their data to Ross and Georgoff's (1993) study of a sample of 355 US managers, they came up with the conclusion that "neither US companies nor Costa Rican operations have a clear competitive advantage on all TQM domains. The Costa Rican companies scored higher on quality and operational results, but lower on human resource development and customer focus and satisfaction" (p. 41). Another example is Elenkov's (1998) study on the applicability of American management concepts and values in Russia. These concepts encompass leadership styles, motivation approaches, performance appraisal systems, systems for strategic planning, and organizational configurations. Based on 147 responses from US managers and 178 responses from Russian managers he concluded: "certain American management concepts can, and should be put into practice in Russia. Differences in managerial values between the United States and Russia, however, require that the application of American management approaches in the context of the Russian culture be carried out patiently and systematically" (p. 151). The set of mixed fit articles deals almost equally with the core business and with the general environment of the organizations studied. The two examples above deal with both core and environment.
As was the case for the strong fit articles, most of the research reported here is based on cross-sectional samples. The proportion of authors connected to the countries studied, 67%, is about the same as that for strong fit articles. Klingner (1996) is typical of non-empirical mixed fit articles focusing on public sector management. He discussed the relationship between democratization and public personnel management in Honduras, Panama and Costa Rica. He concludes that these countries show significant differences in historical, social, political and economic characteristics. Each of the countries has evolved toward democratization and modernization differently.
Discussion: Developing Countries and the Institutional Perspective
The results of this research are both startlingly different and similar to those of Kiggundu et al.'s. The situations described in most of the research surveyed here are not that much different from those surveyed in Kiggundu, Jorgensen, and Hafsi et al. (1983). Researchers are still dealing with countries with "differing cultures, differing economies and differing institutions and political practices" (p. 78-79). The regions of the World are similarly represented in our study. In terms of differences, the topics studied are not as neatly clustered as they appeared in Kiggundu et al.'s synthesis. They are more widespread and more diversified in this research, which is similar to what we have observed in recent studies with data from industrialized countries. Also, here there is no time lag between industrialized and developing countries as far as research is concerned although the Kiggundu et al.'s statement that "there is a time lag between industrialized and developing countries in the utilization (7) of administrative science" (p. 70) may still hold. An interesting difference also is that there are now more local authors who are conducting and publishing research, notably more empirical research. Finally, and more importantly, the perception in the literature of western-based theory fit to developing countries' settings is dramatically different. This is consistent with our expectations. But can we go further in explaining such a dramatic change? In this section we come back to some of the issues mentioned in the introductory section to provide leads and implications for research about developing countries.
We have argued that there are two trends that have affected both the practice of administration and its conceptualization. First, important changes have affected managers in developing countries leading to their adoption of ways and practices common in western developed countries. Second, theory developed in the West is more encompassing, thus better able to take into account and explain practices observed in developing countries. Let us look at these in sequence.
The Trend toward Common Practices All Over the World
The last two decades have brought major changes. Globalization of markets, industries, and firms have pushed aside local institutions and pressed the application of global ones (Hafsi/Seguin/Toulouse 2000, Inda/Rosaldo, 2002). As argued earlier, the push was powerful and sustained by the actions of powerful authorities, such as the World Bank, the IMF, and a United Nations network, in which the Western world holds an increasingly dominant position. As a result, domain boundaries of legitimate practices have become hazier, and westernized organizational practices are increasingly seen as acceptable (Lubatkin/Ndiaye/Vengroff 1997). As mentioned earlier, the three vectors of institutional diffusion--regulatory, normative and cultural-cognitive--have all contributed to the legitimization of Western ways, although these may be accepted only through a complex process of internalization (Guler/Guillen/Macpherson 2002; Kanter 2003, Miroshnik 2002).
To restate the obvious, we claim that an important process of institutional diffusion (Scott 2001) has taken place in the last decades. It has been pushed by international agencies' regulatory processes (Cole 1989, Tolbert/Zucker 1983); by powerful normative processes (DiMaggio 1991, Ruef/Scott 1998, Somers 1969) that have defined good economic practices, and determined the behaviour of economists and managers all over the world; and by dominant cultural-cognitive processes whereby western civilization mostly economic values take over traditional values (Guillen 2000, Guler/Guillen/Macpherson 2002).
For example, in their research, Carney and Farashahi (2005) have studied how the interaction between local institutions and global ones has influenced the Iranian airlines. They have in particular shown that technical departments were technology driven and hence had to follow global rules and norms. More specifically, the airlines had to follow the ICAO, IATA and aircraft manufacturers technical and security norms to remain in business. ICAO and IATA determine even the training content required of pilots and other technical and commercial personnel. These strong global regulatory and normative pressures dominated local institutions and left no choice but to conform, leading to a generalized isomorphic behaviour. The Iranian engineer working on an aircraft obeys the same norms as his counterpart in Europe or elsewhere. In contrast, the difficulties that Iran Air has met in the last decade are directly related to their inability to follow global rules because of the American-led international sanctions. This unusual situation, with its effect on Iran Air perception of its own standing in world aviation circles, shows more than any other the power of international institutions. Therefore we can say that: Similar technologies lead to managerial behaviour that is similar all over the world and may help explain developing countries isomorphic tendencies in management practices.
This global institutional push toward isomorphism is clear in situations where intensive technology and mutual dependence drive rules, norms and cognitive orientations. The same can be demonstrated in most industries that have a global drive, and are dominated by multinational corporations, such as the Banking or the automobile industries (Doz 1986, Leroux 1998). Arguably, it is the case of an increasingly large chunk of the world economy. The areas where there is still a debate between global and local institutions are the industries where local beliefs and experiences are heavily involved, such as the food industry and some cultural industries (Naguib 2004). But even there, norms of good practice seem to take over, even while allowing content to differ. As a result, bankers everywhere follow the same norms, rules and regulations and receive the same training. Automobiles are now built by the same companies everywhere. Volkswagen has the larger part of its car production in developing countries, mostly Brazil and China, and uses the same standards to manage production and train managers and workers. In food distribution, a presumably culturally-bound industry, the same administrative techniques are used in Malaysia and elsewhere, even though some local constraints, as required by the respect of religious practices, may introduce marginal changes8 (Naguib 2004). As a result, we conclude that: Industry global characteristics drive the observed isomorphic behaviour of developing country managers and organizations
In general, the key driving force for this homogenizing of practices is the drive of multinational corporations all over the world. With their presence and their drive to best practice, multinational corporations are a key factor of isomorphism (Lee/Roehl/Choe 2000). The much cited examples of McDonald's or Coke hide the fact that most multinational corporations, even when they adapt their products to local tastes, introduce management practices that are the same all over the world. More importantly, because they are the dominant players, they are models generally emulated by most firms in developing countries. The large number of joint ventures and alliances is also an added vector of isomorphic behaviour (Lee/Roehl/Choe 2000). Therefore: The multinational corporations' managerial practices drive isomorphic behaviour among developing country managers and organizations.
Finally, the last important factor that pushes further mimetic behaviour is the convergence of management training methods and contents (Venezia 2005). As the status of management evolves toward a regular science, so its effect on training globalizes. Another supporting factor has been the development of MBA programs all over the world and the strong homogenizing effect of certification associations and agencies (Wright/Geroy 2003). To take the case of China as the most obvious example, there are now thousands of very similar MBA programs, both regular and executive, which have been set up with the help of western-based business schools and consulting firms. Their content and the training techniques all mimic practices in western, mostly US business schools (Goodall/Warner/Lang 2004). The managers trained today in China share with western managers their techniques, their norms of behaviour and sometimes their values. As a consequence: The convergence of management training drives isomorphic behaviour among developing country managers and organizations.
Everywhere the drive toward isomorphic behaviour is the same, and is regularly reported in the popular literature, and in academic reports. This discussion leads to the following general proposition.
Proposition 1. Researchers working on organizations in developing countries will find a managerial behaviour that is similar to what may be seen in the developed countries.
The Trend toward Broader Theories that Explain Better Softer Issues
The pre-1980 theories reported in Kiggundu et al.'s article were probably oversimplifying the problems observed in developing countries and somewhat misinterpreting their meaning. Developing countries are complex sets of organizations and communities. What has kept these countries together is the development over time of a unique set of social skills. In the past, these have helped manage the relationships between groups and individuals, facilitating cooperation to achieve common goals and resolving conflicts, peacefully, efficiently and equitably (Braudel 1980, 1984, Chang 2002). Developing countries are also changing very fast. Most observers and researchers have concentrated their attention on economic change, leaving aside the important institutional changes. The IMF and the World Bank themselves, after more than twenty years of single-minded implementation of a simple recipe, better known as "the Washington consensus" (Stiglitz 2002), are now recognizing this important fact and putting more emphasis on the difficulties of transforming such complex societies. To deal with such a complexity, theory has evolved as we shall describe taking the example of the contributions brought by the institutional theory of organizations.
What comes across when dealing with developing countries is the importance of history, values, and unwritten and unseen rules, norms and related practices (Hoskisson et al. 2000; Kiggundu/Jorgensen/Hafsi 1983). Understanding the situations of these countries requires theory that takes into account their differences. In particular, institutional differences may explain a large portion of the observed variance (Scott 2001). Going through a very dynamic process of adjustment, developing countries have both adopted western values and created new ones. Early institutionalists propositions (Selznick 1957) are very helpful to deal with these transitional issues. As organizations become infused with values, they become institutions. Institutions can thus be seen as a melange of formal and informal rules, procedures, norms and practices. The longer the history and the deeper the values, the harder it is to deal with fundamental change. Neo-institutional theoretical contributions looking at the interaction between organizations and their institutional environment highlighted first conformity, isomorphism, and thus a tendency to be similar rather than different (DiMaggio/Powell 1983). But isomorphism can be also an impetus for change. Globalization for example is generating a field in which isomorphism is paradoxically the source of change. Countries such as Korea, Malaysia, Tunisia, Turkey or more recently China are changing and adopting willingly some Western ways and practices to seize opportunities offered by a globalizing world (Cheng/ Haggard/Kang 1998, Huntington 1996). In summary: Institutional theory has proposed isomorphism as the mechanism by which developing country organizations adapt to the globalization of the world
But then how do developing countries reconcile their deep values with the economically driven change? The more recent institutional theory contributions (Dacin/Goodstein/Scott 2002, Oliver 1997, Palmer/Devereaux/Xueguang 1993, Roberts/Greenwood 1997, Scott 2001) suggest that there is a way to reconcile the need to be efficient (more a Western dominant value) with traditional ways. Oliver proposes that a resource-based view can be reconciled with institutional perspectives by accepting that the attempt to create a unique set of resources and to generate a competitive advantage has to take place within a context that is more or less constraining. Even in the western world, an individual's rationality is not so much economic as it is normative. Individuals' decision processes are often habitual, unreflective, and concerned about justification or rationalization rather than economic performance. At the organizational level, there is an increasing body of evidence (Oliver 1997, Scott 2001) that shows how institutional isolating mechanisms act as blinkers to direct attention toward some strategic alternatives while making others unattractive or leaving them unseen. This, therefore, would make resource use and procurement less than optimal. At the inter-organizational level, pressures for conformity and isomorphism lead to more socially acceptable economic behaviour and are both stronger and more common than usually hypothesized.
In developing countries, where the emphasis is traditionally on the development and maintenance of social capital, the institutional context is often overwhelming. Economic concerns are usually superseded by legitimacy and acceptability concerns. Economic behaviour should be socially acceptable. For example, Islamic banks are an apparent aberration. According to traditional banking norms, they should not exist. Yet they flourish in many countries and even the large international banks have decided to create their own Islamic windows or their Islamicsubsidiaries (Siagh 2001). We can therefore say that: For all of individuals, organizations and organizational fields, Institutional rationality mediates economic rationality in developing countries, and thus can help explain observed behaviour.
Following Oliver (1997) and Scott's (2001) leads, we could argue that the institutional setting in developing countries has its effects at various levels. First, at the individual level, the dominant norms are only partially economic (see Table 3 as a guide for understanding individual rationality in developing countries). Second, at the organizational level, the ability to adapt and change a course of strategic choice is usually constrained by the ability of the firm to shift resource and cognitive commitments and obtain access to resources that are scarce and hard to imitate or to substitute. Those are strategic "isolating factors" (Oliver 1997). In developing countries, many of these factors could be at work especially where local firms compete with international firms. But in addition, important institutional isolating factors intervene to either improve or reduce the ability to adapt strategically. Table 4 describes these factors and some of their effects. We can conclude that: In developing countries, institutional isolating factors determine organizations' ability to adapt and their competitive performance, and thus can help explain observed behaviour.
Third, at the organizational field level (Scott 2001); firms are powerful when they conform to the norms and values of the dominant coalition within the country. Political and social conformity patterns are developed over time and become protocols for all firms. Larger and older firms are the repository of these traditions and younger firms are supposed to learn from them. Larger and older firms are also able to take relatively more risks than smaller ones. The stories of successful companies such as Li & Fung (Magretta 1998), or Legend (Rukstad et al. 2001) in China are telling. As a consequence, risk taking is often the terrain of an elite firm's experimentation in shedding an existing set of norms and values and emerging with new ones (Sherer/Lee 2002).
This relatively dynamic institutional terrain is one of the important differences between developing and developed countries. The latter are institutionally more stable, while the former are in a state of flux. Theories mobilized by Kiggundu et al., did not take into account these soft and dynamic issues and were bound to generate conclusions of non-fit (e.g. Mathews 2000; Zutshi/Gibbons 1998). First, as we said earlier, it is more that these theories were too simplified or unsophisticated than the situation in developing countries that is completely different from the situation in developed countries. Second, most theories applied to developing countries were hard theories that dismissed cultural and institutional dimensions and factors which were more significant in the strong institutional settings and intense environments of developing countries (Lowe 1998, Siagh 2001, Venezia 2005).
Fit is more likely to be generalized where the theory is more technical and applicable to precisely specified conditions. Theories with a dominant technical content in such areas as accounting, information technology or operations research are more likely to generate the same behaviour everywhere. These were the conditions of strong fit expressed in the Kiggundu et al.'s article. Their article suggests that in all situations where the environment was disturbed, it generated a reaction that nullified the theory's applicability. If the findings of institutional theory are taken into consideration, then differing behaviours can be easily explained. As suggested earlier and highlighted in Tables 3 and 4, a normative rationality is at work at both the individual and organizational levels; strategic behaviour is severely constrained to conform to the institutions at work. Coercion is common as non-conformity may generate punishment for non-conformists, which may be mistakenly seen by some observers as an indication of "non fit."
Norms, values, beliefs, and cultural dimensions are both local and global. Local aspects take into account local history and interactions between local communities and the broader context. In the 1970s, which were the focus of Kiggundu et al, the world was dominated by the idea of nation. National integrity was seen as a condition for peace and was the basis upon which the United Nations Organization was built. Differences were seen as more important than similarities. The interactions among nations were controlled by the principles of mutual respect of differences. In the institutional theory vernacular, one could say that different nations had or were different institutions. Thus, theory developed in one institutional setting was clearly not applicable to another. Kiggundu et al. judiciously highlighted what was subject to local institutions and what was out of their grips. In fact, they were expressing the idea that, in the interaction among institutions, only where the institutions of "others" were not considered a threat was their "technology" seen as acceptable.
Theories of organizations, building on Barnard (1938), Simon (1997), Selznick (1957) and many others, have finally gone beyond Lawrence/Lorsch's (1967) and Thompson's (1967) contingency theory-related insights to give an increasing weight to institutions and their effects (Scott 2001). The papers reviewed in this research give added weight to the environment and to its specific effects to explain both the success and failure of organizations in developing countries. This, in our opinion, explains the high level of fit reported. Even though the papers reviewed don't always mention the institutional environment or its effects explicitly, they are compatible with propositions which emphasize institutional determinants of behaviour. In other words, institutional theory developments among others make it possible to accept institution-based reasons as explanations of the differences between developing and developed countries that are described in such research. This leads to the following proposition:
Proposition 2. Where institutional factors are taken into account, western-based theory explains individual and organizational behaviour in developing countries
Concluding Comments and Implications
Twenty years ago, Kiggundu and Jorgensen, and Hafsi (1983) published an important article on the applicability of Western-based theory to developing countries. They surveyed the general management literature dealing with situations in these countries. They found that Western-based theories reported in the literature were applicable to developing countries only where the organization's core was concerned or where technical issues were addressed. Where the environment was involved and its balance affected by the theory, it generated forces that appeared to counteract the theoretical teachings and reduce their relevance and applicability. Most of the articles dealing with the relationship between the organization and its environment showed a poor fit of the theory when describing the situation in developing countries.
Twenty years later, our article describes a research similar to Kiggundu et al.'s and finds that there is widespread applicability of western-based general management concepts and organizational theories to developing countries. Most of the articles surveyed report findings supporting the idea that--regardless of the nature of research undertaken (empirical or theoretical), type of study (cross-sectional, longitudinal or historical), topic addressed, sector concerned (public or private), or geographical distribution of the regions covered by the studies--the degree of fit is very high.
We have argued that this can be explained by changing times in both research and practice of management. Globalization of markets, industries and firms, an increasing influence of World organizations, and a similarity among management training standards have generated isomorphic behaviour both among nations and among public sector organizations. Increasingly the attention of scholars has been attracted to the importance of values, beliefs and taken-for-granted behaviour and influences. This has led to major developments in theory, in particular to theoretical developments that explain well the behaviour observed in developing countries.
We therefore propose that the question, whether Western-based theoretical development is applicable to developing countries, may have become irrelevant. If so, developing countries are now to be considered part of "normal" scientific development. They may present differing contexts and sometimes new circumstances, but they should be considered part of the same broad field of research. What is discovered in organizations in Texas, France or Saudi Arabia may or may not apply to organizations in Bangladesh, California or the UK; but we can at least relate the reasons to well-known concepts and theories, in particular to developments that recognize the importance of perceptions, values, beliefs and other soft influences on decision-makers' behaviour.
Without succumbing to the temptations of uniformity, our findings could mean that it may be healthier to look for theoretical frameworks that have wider applicability, whose validity does not stop at each and every organizational boundary. The strong distinction that has traditionally been observed in the studies concerning developing countries may even have prompted the temptation to look down on practices in these countries, foregoing important learning and discounting the value of their organizational and individual experiences. For scholars of management, this means that universal scientific knowledge may come from all sites, including developing countries. The discoveries made in developing countries could be invoked to discuss issues that are salient in developed countries. For example, in keeping with the field of the institutional theory of organizations, the institutional instability that is being witnessed in many developing countries may be the harbinger of what could come in developed countries as a result of democracy in the work place, more concern about the environment or the effects of globalization. So, tomorrow's lessons about how to deal with such instability may come from today's research in developing countries. Scholars may even see what is happening in developing countries as being a fast-forward of organizational processes in other parts of the world.
Although still tentative, our research suggest that, if organizational processes are really faster (with for example faster changing and unstable environments, faster moving organizational reactions, and more sophisticated responses than what appears at first sight), then there should be much more research done in developing countries or in countries going through major transitions.
For practitioners, the lessons may be even more significant. Western-based theories and practices have an irresistible appeal for managers in developing countries. That is normal. What is less normal is that, often, management practices in developing countries are seen as a degraded form of management, an expression of poor management. This concept should be revisited. We propose that managers confronted with the situations of developing countries are inventing important ways to deal with those situations. At the very least, there is a lot to be learned from their experiences. These lessons add to universal knowledge. They should not be left in the dark nor devalued if developing country managers and, more generally, those concerned about the difficulties of under-development want to deal effectively with development managerial issues.
We would like to thank Profs Jorgensen, Kiggundu and Molz for their encouragements, three MIR reviewers for their thoughtful comments, mention the help of twelve graduate students and recognize the support of Canada's SSHRC.
Manuscript received September 2004, revised April 2005.
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(1) One of the reviewers suggested that we define what we mean by developing countries, adding that there may be differences in applicability also among western developed countries. For example, he/she argued, the applicability of a US-based theory may be questioned in a French or Greek setting. Although we agree with the comment, we have mostly relied on traditional definitions of developing countries, which are generally countries that have a low per capita income compared to the Western developed countries. The World Bank has even a test to assess which country can be said to be a developing country. Also, when a country is included among the OECD countries it is said de be part of the developed world. Otherwise it is developing. Most importantly, in our research, in accord with a long tradition of research (Hoskisson et al. 2000) we relied on the authors to say whether the country was developing. They made the assessment and we just recorded the fact.
(2) Academy of Management Journal (AMJ), Academy of Management Review (AMR), Administrative Science Quarterly (ASQ), Strategic Management Journal (SMJ), Journal of International Business Studies (JIBS), Management International Review (MIR), Journal of World Business (JWB). The last three journals which have a clear focus on international topics were included to take into account suggestions made by one of the reviewers.
(3) The list is available upon request.
(4) The instrument used is available upon request
(5) The form is available upon request.
(6) One of the reviewers suggested that the dominant positivistic empirical research techniques push toward isomorphism and may lead researchers to overstate the level of fit. Although interesting the hypothesis is hard to assess in this work.
(7) Emphasis added.
(8) In Malaysia, for example, McDonald's follows the same procedure of food making, yet guarantees that the meat used is halal to conform to religious beliefs of his local customers.
Professor Taieb Hafsi, The Walter J. Somers Chair of International strategic management; Director of Strategos, HEC Montreal, Quebec, Canada.
Mehdi Farashahi, Assistant Professor of Strategic Management, Department of Management, Concordia University, Montreal, Quebec, Canada.
Table 1. Distribution of strong fit across various dimensions No. of % of No. of Strong Strong Non-empirical Empirical Article fit fit 11 8 72.7 Task Environment 8 7 87.5 Gen Environment 29 21 72.4 Combination 22 11 50.0 None 0 0 0.0 Cross-cultural management 11 2 18.2 Functional strategy, decision 21 15 71.4 making, structure/environment Organizations, institutions/ 36 24 66.7 environment Government policy and public 25 17 68.0 Administration Management, Strategy 28 16 57.1 and environment Managing Development 26 19 73.1 Direct connection 29 19 65.5 No connection 27 15 55.6 Asia 15 9 60.0 Africa 9 8 88.9 Latin America 7 6 85.7 Others 7 3 42.9 None 30 18 60.0 Public 20 14 70.0 Private 7 6 85.7 Both 11 6 54.5 Third Sector 1 1 100.0 None 20 9 45.0 No. of % of No. of Strong Strong Non-empirical Empirical Article fit fit 36 21 58.3 Task Environment 27 23 85.2 Gen Environment 37 23 62.2 Combination 19 15 78.9 None 2 2 100.0 Cross-cultural management 36 26 72.2 Functional strategy, decision 40 30 75.0 making, structure/environment Organizations, institutions/ 45 30 66.7 environment Government policy and public 16 10 62.5 Administration Management, Strategy 51 30 58.8 and environment Managing Development 15 9 60.0 Direct connection 84 57 67.9 No connection 17 14 82.4 Asia 50 35 70.0 Africa 20 15 75.0 Latin America 17 13 76.5 Others 21 13 61.9 None 2 2 100.0 Public 24 13 54.2 Private 30 25 83.3 Both 32 20 62.5 Third Sector 3 2 66.7 None 16 12 75.0 Table 2. Description of the sample of articles Non- Empirical empirical N * (% N * (% Factor Dimensions of total) of total) Total * Total Sample* 104 (61.2) 66 (38.8) 170 (100) Strong 72 (42.4) 41 (24.1) 113 (66.5) Fit Mixed 22 (12.9) 14 (8.2) 36 (21.2) Weak 9 (5.3) 8 (4.7) 17 (10.0) Technical Core 37 (21.8) 11 (6.5) 48 (28.2) Task Environment 27 (15.9) 8 (4.7) 35 (20.6) Focus General Environment 37 (21.8) 29 (17.1) 67 (39.4) Combination 21 (12.4) 22 (12.9) 43 (25.3) None 2 (l.2) 0 (0.0) 2 (l.2) Author Direct connection 84 (49.4) 29 (17.1) 114 (67.1) No connection 17 (10.0) 27 (15.9) 44 (25.9) Cross Sectional 73 (42.9) 6 (3.5) 79 (46.5) Type Longitudinal 16 (9.4) 4 (2.4) 20 (11.8) Combination 6 (3.5) 1 (0.6) 8 (4.7) None 9 (5.3) 53 (31.2) 62 (36.5) Asia 51 (30.0) 15 (8.8) 66 (38.8) Region Africa 20 (11.8) 9 (5.3) 29 (17.1) Latin America 17 (10.0) 7 (4.1) 25 (14.7) Other 21 (12.4) 7 (4.1) 28 (16.5) None 2 (1.2) 30 (17.6) 32 (18.8) Public 24 (14.1) 20 (11.8) 44 (25.9) Private 30 (17.6) 7 (4.1) 37 (21.8) Sector Both 33 (19.4) 11 (6.5) 45 (26.5) Third Sector 3 (1.8) 1 (0.6) 4 (2.4) None 16 (9.4) 19 (11.2) 35 (20.6) * Differences between the total numbers and the sum of the numbers in each row or column are re-lated to missing data. Table 3. Comparison of decision-making process Characteristics of Developing countries Decision-making Economic rationality Normative rationality Nature of decision Systematic, deliberate Social, Centralized process and oriented toward and embedded in norms economic goals and traditions Key decision Information uncertainty History and fear of constraints and cognitive biases newness Reference to Central guidance Resource allocation Value-maximizing Maximizing goodwill process Subjective avoiding conflict Decision objective Optimization of Stability of the resource choices community is the key outcome Nature of sunk costs Economic Cognitive, social and emotional Key resource Efficiency and Longevity and attributes inimitability legitimacy Decision outcomes Systemic assessment Sub optimal resource and choice of optimal allocation and resources resistance to resource changes Source: Adapted from Oliver (1997) Table 4. Comparison of strategic and institutional isolating factors Strategic isolating Institutional Key dimensions factors isolating factors Isolating mechanisms Firms unable to Values or historical obtain or deploy events may reduce resource willingness to acquire or deploy resource Resource mobility Resource availability Resources may be barrier rejected if contrary to ideology, national interest, religion or clan or tribal norms Cause of low mobility Rarity, inimitability Lack of political or tacit ness of cultural support for resource resource. Perceived threat to stability Value of resource Defined externally by Defined internally by factors and product firm's and local markets culture and dominant coalition values Resource examples Resources that are Resources that violate scarce, non tradable cultural norms or and non-substitutable dominant coalition values Sources of Ability to obtain Ability to mobilize competitive advantage valuable resources social and political for the firm support for acquisition and deployment of valuable resources Source: Adapted from Oliver (1997)
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|Title Annotation:||applicability of management theories to developing countries|
|Author:||Hafsi, Taieb; Farashahi, Mehdi|
|Publication:||Management International Review|
|Date:||Oct 1, 2005|
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