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Over the last three decades, the prevailing view of information technology strategy has been that it is a functional-level strategy that must be aligned with the firm's chosen business strategy. Even within this socalled alignment view, business strategy directed IT strategy. During the last decade, the business infrastructure has become digital with increased interconnections among products, processes, and services. Across many firms spanning different industries and sectors, digital technologies (viewed as combinations of information, computing, communication, and connectivity technologies) are fundamentally transforming business strategies, business processes, firm capabilities, products and services, and key interfirm relationships in extended business networks. Accordingly, we argue that the time is right to rethink the role of IT strategy, from that of a functional-level strategy—aligned but essentially always subordinate to business strategy—to one that reflects a fusion between IT strategy and business strategy. This fusion is herein termed digital business strategy. We identify four key themes to guide our thinking on digital business strategy and help provide a framework to define the next generation of insights. The four themes are (1) the scope of digital business strategy, (2) the scale of digital business strategy, (3) the speed of digital business strategy, and (4) the sources of business value creation and capture in digital business strategy. After elaborating on each of these four themes, we discuss the success metrics and potential performance implications from pursuing a digital business strategy. We also show how the papers in the special issue shed light on digital strategies and offer directions to advance insights and shape future research.

Leveraging the recent research interest in emerging economies, this Perspective paper argues that an institution-based view of international business (IB) strategy has emerged. It is positioned as one leg that helps sustain the \"strategy tripod\" (the other two legs consisting of the industry- and resource-based views). We then review four diverse areas of substantive research: (1) antidumping as entry barriers; (2) competing in and out of India; (3) growing the firm in China; and (4) governing the corporation in emerging economies. Overall, we argue that an institution-based view of IB strategy, in combination with industry- and resource-based views, will not only help sustain a strategy tripod, but also shed significant light on the most fundamental questions confronting IB, such as \"What drives firm strategy and performance in IB?\"

The Uppsala internationalization process model is revisited in the light of changes in business practices and theoretical advances that have been made since 1977. Now the business environment is viewed as a web of relationships, a network, rather than as a neoclassical market with many independent suppliers and customers. Outsidership, in relation to the relevant network, more than psychic distance, is the root of uncertainty. The change mechanisms in the revised model are essentially the same as those in the original version, although we add trust-building and knowledge creation, the latter to recognize the fact that new knowledge is developed in relationships.

The internationalization process model suggests that firms internationalize by building positions in foreign markets and networks, following iterative cycles of learning and changes in commitment. However, as subsidiaries evolve, commitments may be decreased as well as increased, a phenomenon that has rarely been studied. Moreover, it remains an open question why strategic intentions at the outset of an investment project differ from the actual operations established. We address these questions by extending the model and combining it with Mintzberg and Waters' framework of strategy formation. Specifically, we suggest that commitment decisions correspond to statements of intended strategy, while network positions correspond to realized strategies. The processes of learning, opportunity creation and trust building triggered by commitment decisions are, however, moderated by institutional influences that lead to divergences between realized and intended strategies. We test propositions derived from this framework on a survey data set of subsidiaries of multinational enterprises in Hungary, Lithuania and Poland, and find that institutional voids and institutional uncertainty affect subsidiary strategy implementation, but in opposing directions. Under high institutional uncertainty, investors prefer low commitment but flexible modes that enable later commitment increases, whereas institutional voids increase up-front information search and adaptation costs that reduce the likelihood of early post-entry adjustments. Our analysis reinforces the need for more differentiated theoretical analyses of how institutions affect business strategies over time.

The field of international business (IB) was founded on a rich qualitative research legacyQualitative research methods are particularly well suited to rigorous theory development, which means both framing the study in terms of existing debates in the literature, as well as being explicit about what body of theory(ies) it is building upon, and why.

Qualitative research in international business has been rare, the main research streams of the field relying more on quantitative methods. This paper first outlines why qualitative research has been scant. It then presents areas, such as theory building, where qualitative research could make a substantial contribution. Third, it reviews approaches to high standards of qualitative research and criteria for evaluating qualitative research. Finally, some possible research areas where qualitative research might prove fruitful are suggested.

Cross-national distance is a key concept in the field of management. Previous research has conceptualized and measured cross-national differences mostly in terms of dyadic cultural distance, and has used the Euclidean approach to measuring it. In contrast, our goal is to disaggregate the construct of distance by proposing a set of multidimensional measures, including economic, financial, political, administrative, cultural, demographic, knowledge, and global connectedness as well as geographic distance. We ground our analysis and choice of empirical dimensions on institutional theories of national business, governance, and innovation systems. In order to overcome the methodological limitations of the Euclidean approach, we calculate dyadic distances using the Mahalanobis method, which is scaleinvariant and takes into consideration the variance-covariance matrix. We empirically analyze four different foreign expansion choices of US companies to illustrate the importance of disaggregating the distance construct and the usefulness of our distance calculations, which we make freely available to managers and scholars.

In this paper, we advance and test the idea that innovation and export are complementary strategies for SMEs' growth. We argue that innovation and export positively reinforce each other in a dynamic virtuous circle, and we identify and describe the process through which this complementarity relationship takes place. Participating in export markets can promote firms' learning, and thus enhance innovation performance. At the same time, through innovation, firms can enter new geographical markets with novel and better products, therefore making exports more successful, and, by the same token, they can also improve the quality - and consequently increase the sales - of the products sold domestically. We test our theory using an unbalanced panel of Spanish manufacturing firms over the period 1990-1999. We find robust empirical support for our hypothesis: consistent with the presence of complementarity, we show that the positive effect of innovation activity on firms' growth rate is higher for firms that also engage in exports, and vice versa. Furthermore, we show that, Ceteris paribus, firms' adoption of one growth strategy (e.g., entering export markets) positively influences the adoption of the other (e.g., innovation).

This paper develops a dynamic capabilities-based theory of the multinational enterprise (MNE). It first reviews scholarship on the MNE, with a focus on what has come to be known as \"internalization\" theory. One prong of this theory develops contractual/transaction cost-informed governance perspectives; and another develops technology transfer and capabilities perspectives. In this paper, it is suggested that the latter has been somewhat neglected. However, if fully integrated as part of a more complete approach, it can buttress transaction cost/governance issues and expand the range of phenomena that can be explained. In this more integrated framework, dynamic capabilities coupled with good strategy are seen as necessary to sustain superior enterprise performance, especially in fast-moving global environments.Entrepreneurial management and transformational leadership are incorporated into a capabilities theory of the MNE. The framework is then used to explain how strategy and dynamic capabilities together determine firm-level sustained competitive advantage in global environments. It is suggested that this framework complements contract-based perspectives on the MNE and can help integrate international management and international business perspectives.

How do the senior decision-makers within a multinational enterprise (MNE) think through and determine an internationalization decision? Despite the cognitive foundations of several key constructs, standard internationalization models do not explicitly incorporate managerial cognition. We argue that the boundedly rational decision-maker is underspecified in international business models and this oversight contributes to weak empirical findings on experience, learning, internationalization strategy and MNE performance. Drawing on these extant models, we identify seven knowledge domains and interdependences that may make up decision-makers' mental models. Granted rare access to senior executives and board members engaged in a foreign direct investment decision, we find substantial heterogeneity in the mental models these individuals used to make sense of the opportunity. This variance aligns with differences in individuals' experience along four dimensions: international breadth, depth, diversity and prior strategic decision-making. We argue these cognitive processes - how individuals exercise judgment about information search parameters, assessment and decision integration, and how decision teams coalesce in their thinking - are crucial microfoundations for modeling heterogeneity in firm-level internationalization strategies and performance.