Study On The Influence Of Institutional Environment On Enterprise Strategy

With the development of economic globalization and technological innovation, theexternal environment of the enterprise is becoming more and more dynamic and complex. Onthe one hand, more and more enterprises embark on the road of internationalization, theenvironment differences between different countries especially the difference of institutionalenvironment has increasingly become a major problem for business management anddevelopment. Due to the requirements of institutional environment on the behavior ofenterprise and interference are obviously different in different countries, even in differentregions, forcing entrepreneurs and researchers have to consider the institutional environmentin the process of strategic management in Enterprise. On the other hand, with therapid development of emerging economies, institutional transition brings more opportunitiesand challenges. The change of institutional environment forces enterprises to give up theoriginal mode of strategic thinking, and adopt more dynamic perspective to analyze theinstitutional environment of business. Institutional transition changed the rules, but alsochanged the encouraging or constraint effect on the enterprise strategy, the enterprise mustadapt to the new institutional environment, and strive to seek the new opportunities ofdevelopment. The differences between the different organizations in propertyright, distribution of interests, values and the cognitive existence, also has brought the hugechallenge for the strategic behavior of enterprises.Firstly, based on the previous theoretical studies, the institution is divided intothree dimensions: regulation, standardize and cognition. This paper exploresthe institution-based view and its theoretical basis, depth study of the institutionalenvironment of enterprises in transitional economy and summarizes the characteristicsof institutional environment of countries with economies in transition. Secondly, thispaper discussed the influence factors and mechanism of institutional environment influenceon three strategic directions, namely, institutional environment influence on diversificationstrategy, the impact of institutional environment on internationalization strategy, the impact of institutional environment on integration strategy. Finally, this paper discussed theinfluence factors and mechanism of institutional environment influence on the three kinds ofstrategy implementation, including the impact of institutional environment on enterprisemerger, the impact of institutional environment on enterprise alliance, the impact ofinstitutional environment on greenfield investment. In the process of formulating andimplementing enterprise strategy, the enterprise must consider the effect of institutionalenvironment on the behavior of enterprise, to choose the better way to achieve the businessgoal.