Guest editorial

Citation

Pillania, R.K. (2009), "Guest editorial", Management Research News, Vol. 32 No. 2. https://doi.org/10.1108/mrn.2009.02132baa.001

Guest editorial

Article Type: Guest editorial From: Management Research News, Volume 32, Issue 2.

The concept of strategy is centuries old. However, business strategy is mainly a recent phenomenon having come into existence in only the last century. During this time the overwhelming focus of business strategy research has been primarily on the USA, Western Europe and Japan and or within their context. This result is understandable because firstly, Europe has taken lead in the Industrial Revolution and the USA became the dominant economic power post-World War II followed by Western Europe and later joined by Japan. Secondly, these developed countries have taken the lead in business education and research and the concept of strategy has found its origin in business context primarily within USA and developed country contexts. The interest in strategy in emerging market context has gained currency in only in the previous decade or so.

The role and significance of emerging markets in the global economy is continuously increasing. The term “emerging market” was originally coined by the International Finance Corporation to describe a fairly narrow list of middle-to-higher income economies among the developing countries, with stock markets in which foreigners could buy securities. The term's meaning has since been expanded to include more or less all developing countries. With a high growth rate and still significant untapped potential, emerging markets are the growth engine of the world economy. These markets offer enormous opportunities to both individuals and organizations. At the same time these environments also provide numerous challenges. How to face those challenges and successfully serve the markets requires substantial strategic thought, guidance and implementation. Varying academic debates and views exist for exploring strategy in emerging markets. For example, Khanna et al. (2005) have proposed the concept of institutional void within the context of emerging markets, whereas Gupta and Wang (2007) have proposed a joint India–China strategy for multinational corporations. The purpose of this special issue was to provide a forum that will allow researchers to present more insights related to various aspects of strategy in emerging markets.

This special issue on strategy within emerging markets has seven papers dealing with various aspects of strategy in emerging markets. The first paper “Organizational culture and performance – a Brazilian case” by Professors Adriana Garibaldi de Hilal, Ursula Wetzel and Vicente Ferreira studies the acquisition of a Brazilian state owned energy distribution company by a Spanish conglomerate during the privatization process. Research results indicate the existence of substantial organizational culture differences, as perceived by managers and by the bulk of employees, as shown by the existence of two organizational culture clusters. Moreover, results also suggest the need of improving the coherence between performance indicators and the organizational culture dimensions.

The second paper “Effect of product category on promotional choice – comparative study of discounts and freebies” by Professor Subhojit Banerjee empirically studies the dilemma related with the better promotion using discounts and freebies for sales promotion strategy. It finds promotion type influences the rate of increase in market demand and is product category dependent. Promotional offerings which can be readily converted into monetary terms are more preferred to freebies but in the long-run they can affect the overall value of the product.

The third paper “The development of mutual fund market in Russia” by professors Lukashin Yu P. and Lukashin I. Yu describes The Russian mutual fund market, investigate management quality, evaluates profitability and risks of this market, analyse correlations between profitability of mutual funds and stock indices, and constructs ratings on the basis of Sharpe ratio and investigate their stability. It suggests management companies will have to learn to make money not just from market growth but also in a highly volatile market with sideways trend and to preserve the assets to the maximum in a declining market.

The fourth paper “Post-merger corporate performance: an Indian perspective” by Professor Raj Kumar examines the post-merger operating performance of acquiring companies involved in merger activities during period 1999-2002 in India. It finds that the post-merger profitability, assets turnover and solvency of the acquiring companies, on average, show no improvement when compared with pre-merger values.

The fifth paper is a case study on “Internationalization of Essel Propack Limited” (EPL) by Professor Rajesh K Pillania. Starting from a developing country, EPL today has 24 state-of-the-art manufacturing facilities in 13 countries, has an estimated 32 per cent global market share and has emerged as the leading specialty packaging company in the world.

Two additional papers, that went through a regular review process have also been added to the special issue to help the readership with a larger source of focused material on this topic. The sixth paper “Board characteristics and involvement in strategic decision making – the Nigerian perspective” is by Chris Ogbechie, Dimitrios Koufopoulos and Maria Argyropoulou that investigates how corporate governance is institutionalised in Nigeria and examines the relationship between board size, CEO's duality, board composition and the board's involvement in strategy. Findings extend the understanding about the strategic functions of the board in Nigeria, which is Africa's most populous nation, and the world's sixth larger producer of oil, and is poised to become Africa's next emerging market.

The final paper links up the corporate governance and financial investment strategy topics within Poland. The paper “Does good corporate governance matter? Best practice in Poland” by Maria Aluchna investigates the relationship between compliance with corporate governance best practice and corporate performance within Poland. A major finding is that implementing corporate governance standards is a complex process in terms of costs, investor activism and companies awareness, especially in emergent economies. Its importance increases along with the development of the institutional regime (policies of the government and market) as well as market participants' skills and experience.

These seven papers have dealt with various aspects of strategy namely, organizational culture and performance; sales promotion strategy; mutual fund, financial and investment strategy; mergers and acquisitions and its impact on performance; international business strategy; and governance. We believe this special issue will help in increasing our understanding of strategy in the emerging market context and provide a catalyst for additional research in this field.

Rajesh K. PillaniaGuest Editor

References

Gupta, A.K. and Wang, H. (2007), “How to get China and India right”, The Wall Street Journal, 28 April, p. 4.Khanna, T., Palepu, K.G. and Sinha, J. (2005), “Strategies that fit emerging markets”, Harvard Business Review, June, pp. 63-74.