ABSTRACT
Firm heterogeneity is a controversial question. In the main, economists have downplayed discretionary firm differences given their concerns with broader aggregates such as the industry and the economy (Nelson 1991). A notable exception is the work of the evolutionary economists (Schumpeter 1934; Nelson and Winter 1982), who adopt a view of economic change based on the diverse innovative activities of firms in an uncertain environment. Sociologists have been concerned with the persistence of heterogeneity, particularly in situations where organisational recipes for success are relatively well known (Carroll 1993). Barriers to imitating successful moves include, for example, structural inertia in the organisation and expectations concerning future environmental changes (Hannan and Freeman 1984; Carroll 1993). Firm heterogeneity is central to the study of strategic management which, by its nature and its audience, is firmly grounded in practice (Rumelt, Schendel and Teece 1991). Strategy, structure, process and performance differences between firms are widely documented in its extensive case-based research. In a global environment, where the geographic scope of business is increasing, where markets in different countries are converging and where cross-national interdependencies are increasing, firm heterogeneity is an important question. Firms competing in the same industry and for the same customers are likely to have diverse national origins and to have originated in very different cultural and institutional environments. We saw in Chapter 4 that country of origin affects a firm’s resource configuration and the stock of firm-specific and countryspecific resources that it deploys in its product markets. Empirical analysis has also demonstrated that firms from different countries may have different organisational arrangements and may play the competitive game by different rules. For example, it is noted in Chapter 5 that the supply chain of Japanese firms in the automotive components industry was initially very different from that which was popular in Western countries and also in Chapter 1 we saw how dramatically successful
Japanese automotive OEMs have been compared to their counterparts in the United States.
