Final answer:
The institution-based view complements the industry-based and resource-based views by considering the influence of institutions on firm behavior and performance. It has become important in understanding why firms from different countries adopt different strategies. Examples of institutional transitions from developed and emerging economies illustrate the similarities and differences in the shift towards market orientation.
Step-by-step explanation:
The institution-based view complements and differs from the industry-based and resource-based views in the field of strategic management. While the industry-based view focuses on the external environment and industry structure, the resource-based view emphasizes firm-specific resources and capabilities. The institution-based view, on the other hand, takes into account the influence of formal and informal institutions on firm behavior and performance.
The institution-based view has become a third leg in the strategy tripod because institutions shape the rules of the game, influence firm behavior, and impact competitive advantage. It helps explain why firms from different countries may adopt different strategies and face varying levels of success.
An example of institutional transition from a developed economy is the transition of Russia from a command economy to a market-oriented one after the collapse of the Soviet Union. This transition involved significant changes in economic institutions, such as the introduction of private property rights and market competition.
An example of institutional transition from an emerging economy is the transition of China from a planned economy to a mixed market-oriented one. This transition involved reforms in economic institutions, including the establishment of special economic zones and the liberalization of foreign trade.
The similarities between these institutional transitions include the shift towards market orientation and the introduction of elements of private property rights. The differences include the pace of transition, the specific reforms implemented, and the role of the state in influencing economic institutions.