Open strategy and the multinational firm

Abstract

Purpose Distance has been a core concept and issue in international business and management research. While scholars argue that distance through internationalization is increasing costs, distance is also associated with positive implications such as the integration of more diverse knowledge. Still, many firms struggle to manage distance effectively and efficiently in their multinational contexts. The purpose of this study therefore is to propose Open Strategy – increasing transparency and inclusion in the strategy process – as an attractive concept for managing distance. Design/methodology/approach This is a conceptual paper where the authors introduce Open Strategy to the IB community. Findings The authors argue that opening the strategy of multinational enterprises, enables firms to leverage diversity by re-combining the firms diverse and distant knowledge. It also reduces distance by moving beyond formal mechanisms of control and coordination to improve joint understanding, cooperative commitment and strategy implementation. The framework shows how firms can move beyond established dogmas in international business research by rendering their strategy processes more open. Originality/value Leveraging the Open Strategy literature, the authors are able to find a way to respond to the challenge of increasing distance, in fact even arguing that distance can be beneficial if framed as diversity.