Increasing cross-border flows of goods, services, capital, and knowledge have rendered a worldwide presence indispensable for all multinational corporations (i.e., MNCs). In particular, MNCs are recognizing the growing importance of pursuing growth in emerging markets (Garten, 1997; Novicevic & Harvey, 2004a,). These emerging markets are characterized by both an underdeveloped infrastructure and an economic growth rate that is double that of the developed economies (Arnold & Quelch, 1998).
As the positions of an MNC in the developed countries become increasingly dependent upon its positions in emerging countries, the process of executing global expansion becomes very complex. Specifically, the transplantation and embedding of the firm's core business model into the institutional context of emerging countries requires exploration of competencies underlying its model in terms of which practices and processes need to be preserved and which ones should be adapted or reinvented (Gupta & Govindarajan, 2001; Novicevic et al., 2002).