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Coping with complexity by making trust an important dimension in governance and coordination

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  • Vahlne, Jan-Erik
  • Johanson, Jan

Abstract

Multinational business enterprises (MBEs) have created and/or discovered opportunities to improve on their businesses, by engaging in technological change and establishing presence by ownership or cooperation with local parties on foreign markets. This development has increased the level of complexity to managers dramatically. Accordingly, the MBEs have developed governance and coordination means to cope with that growing complexity, mainly by inventing governing modes in between the market and the hierarchy and delegating coordination to network or value-chain parties. To be able to explain this development, the internalization approach has been modernized with assumptions more similar to those of the Uppsala model. Micro-foundational findings support a process approach to trust building and exploitation, making trust an essential ingredient in research on exchange behavior.

Suggested Citation

  • Vahlne, Jan-Erik & Johanson, Jan, 2021. "Coping with complexity by making trust an important dimension in governance and coordination," International Business Review, Elsevier, vol. 30(2).
    • Handle: RePEc:eee:iburev:v:30:y:2021:i:2:s0969593121000056
    DOI: 10.1016/j.ibusrev.2021.101798
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    Citations

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    Cited by:

    1. Castellões, Bernardo & Silva-Rêgo, Bernardo & Dib, Luís Antônio, 2023. "Understanding divestment from an Uppsala school perspective," Journal of International Management, Elsevier, vol. 29(5).
    2. Mark Casson & Yutong Li, 2022. "Complexity in international business: The implications for theory," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(9), pages 2037-2049, December.
    3. Rong (Ratchel) Zeng & Birgitte Grøgaard & Ingmar Björkman, 2023. "Navigating MNE control and coordination: A critical review and directions for future research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(9), pages 1599-1622, December.
    4. Edwin Ricardo Flores-Hernández & María Luisa Rodero-Cosano & Ana Evelyn Perla-Cartagena, 2022. "Complexity of Family Businesses in El Salvador: A Structural Equation Model," Sustainability, MDPI, vol. 14(11), pages 1-18, June.
    5. Jan-Erik Vahlne & Roger Schweizer, 2022. "Human behavior and judgment: A critical nano-foundation for the Uppsala model and international business studies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(7), pages 1549-1555, September.
    6. Weber, Clarissa E. & Maurer, Indre, 2023. "Knowledge acquisition from host-country partners: The interplay of trust and legal safeguards," Journal of World Business, Elsevier, vol. 58(2).

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