解除管制产业中的全球和政治战略：前垄断者的不对称行为

Strategic Management Journal Strat. Mgmt. J. (in press) Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/smj.367 GLOBAL AND POLITICAL STRATEGIES IN DEREGULATED INDUSTRIES: THE ASYMMETRIC BEHAVIORS OF FORMER MONOPOLIES JEAN-PHILIPPE BONARDI* Richard Ivey School of Business, University of Western Ontario, London, Ontario, Canada In deregulated industries former monopolies often adopt asymmetric behaviors: these firms impede the entry of foreign competitors in their home market, especially using defensive political strategies, and, at the same time, aggressively develop international strategies in foreign markets. To account for this behavior, I develop a game theoretic model involving three players: the former monopoly, its home government, and the host government of the country into which the firm wants to enter. I show first that there are in fact different asymmetric strategies that former monopolies can use in such a setting, and that a global strategy cannot always be implemented by those firms because of cooperation issues between the two governments. I also study the conditions under which these issues can be solved and show that this can happen only when the firm develops a political strategy that integrates both defensive and offensive activities. Overall, this paper therefore argues that asymmetric strategies are not always adopted to maintain monopoly rents but are also dictated by the nature of the international relationships between the governments involved. Copyright  2003 John Wiley & Sons, Ltd. Telecommunication services, electricity, gas, postal services, airlines: in all these industries, deregu- lation has triggered a large wave of international expansion. However, to date this phenomenon has received little specific attention in the man- agement literature (Sarkar, Cavusgil, and Aulakh, 1999).1 Despite this lack of academic insight, two assumptions regarding the strategic behaviors of former monopolies have pervaded observers’ analysis. The first is that global strategies in deregulated sectors are the best way for major Key words: game theory; political strategies; global strategies; deregulation *Correspondence to: Jean-Philippe Bonardi, Richard Ivey School of Business, University of Western Ontario, London, ON, Canada, N6A 3K7. E-mail: jbonardi@ivey.uwo.ca 1 Reger, Duhaime, and Stimpert (1992), Russo (1992), and Smith and Grimm (1987) argue, more generally, that the strategic behaviors of firms in deregulated industries is a field that is largely neglected by the strategy literature. This situation has not significantly changed since those articles were written. actors—i.e., former monopolies from developed countries—to succeed and dominate those sectors, essentially because they draw the most attractive clients: large multinational firms (Hudson, 1997). Many companies in these sectors have therefore launched into so-called global alliances to set up the foundations of global strategies. In the air- line industry, the first major alliance was KLM Royal Dutch and Northwest Airlines (1989), fol- lowed by many others such as British Airways and USAir (1992), or more recently, the Star Alliance in 1997 (Lufthansa, United Airlines, Air Canada), OneWorld in 1998 (British Airways and American Airlines), and Skyteam in 2001 (Air France, Delta Airlines). In telecommunication services, BT allied with MCI creating Concert in 1994; France Tele- com united with Deutsche Telekom and Sprint in Global One (1996), while many others joined the WorldPartner alliance initiated by AT&T (Dowl- ing, Boulton, and Elliott, 1994; Chan-Olmsted and Copyright  2003 John Wiley & Sons, Ltd. Received 8 March 2001 Final revision received 16 July 2003 J.-P. Bonardi Jamison, 2001; Oh, 1996). Similar strategies seem to be currently appearing in sectors that are still in the early phases of deregulation, such as electricity generation and distribution, or postal services.2 The second assumption often made by experts or journalists is that in spite of their willingness to expand abroad, former monopolies generally tend to impede deregulation of their home market, as well as that of markets opening to foreign competitors. Thanks to years of regulation and daily contacts with government officials, former monopolies are often considered perfect examples of companies using defensive political strategies to their advantage. For instance, Electricite´ de France (EDF), the French former monopoly in electricity markets, is viewed as having strongly lobbied its home government to prevent opening of its domestic market to foreign entrants, while going on an acquisition spree around Europe. As reported by the Financial Times, ‘governments and rival electricity generators say that EDF is using the unfair advantages of a protected home base to pursue its acquisitive raids into neighboring countries.’3 Together, these two assumptions would suggest that former monopolies from developed countries tend to adopt ‘asymmetric behaviors’ in their eco- nomic and political strategies. I define asymmetric behaviors as all the behaviors integrating some international expansion on the economic side with some defensive activities on the political side (see the Appendix for a definition of the key constructs developed in this paper.) The term ‘asymmetric’ therefore refers to the fact that the firm, at least implicitly, takes divergent stances on deregulation: it opposes them in its home market, but wishes to profit from them and push them forward in for- eign markets. In the example above, EDF adopts an asymmetric behavior by trying to expand aggres- sively in international markets while lobbying for protectionism in France. Several comments need to be made regarding this definition. Note first that asymmetric strate- gies imply the integration of international activities 2 For example, commenting on the acquisition by the Deutsche Post, the German postal former monopoly, of Switzerland’s Danzas Holding AG, the CEO declared: ‘Danzas will be the centerpiece of our postal service’s global strategy, and will reinforce our strong position in the world marketplace’ (in ‘Deutsche Post enters logistics field with Danzas purchase,’ Logistics Management and Distribution Report, March 1999). 3 ‘State control likely to temper EdF’s international plans,’ Financial Times, May 24, 2001. on the economic side, and of defensive activities on the political side. Any strategy which is either only economic or only political is not considered here; neither is consideration given to strategies that focus only on domestic markets or only on international ones. The firm considers an interna- tional economic strategy but essentially lobbies its home government. Second, note that this defini- tion does not imply that the economic and political behaviors of the firm are incompatible. Firms act this way intentionally, and the goal of this article is precisely to explore this purpose and to derive propositions that could serve as the basis for future empirical work. Similarly, I am not suggesting here that former monopolies are making a mistake by being asymmetric or that they should change this approach. I am using the term ‘asymmetric’ in a positive sense, rather than a normative one, and therefore try here to describe and explain those strategic behaviors. A legitimate question at this point is, why would a specific theoretical treatment be needed? In effect, it seems that these asymmetric behaviors can be explained by a simple ‘monopoly rent- maximizing’ logic: former monopolies try to max- imize their monopoly rent at home, while expand- ing abroad to profit from opportunities created by deregulation. This analysis seems to be supported by recent literature that advocates the importance of the integration of the market and nonmarket strategies of the firm (Baron, 1995, 1997). It is fur- ther supported by the international business litera- ture, which shows that global strategies are likely to be efficient in sectors with large economies of scale and scope, when technological competition is intense (Kobrin, 1991) and when multinational firms are among the most attractive customers (Waverman and Sirel, 1997). This is in fact the case in many deregulated industries (Vietor, 1994). However, I argue here that a specific theoretical treatment is needed because a simple monopoly rent-maximizing logic cannot cover all the dimen- sions of former monopolies’ strategic behaviors. Three observations need to be made. First, the monopoly rent-maximizing explanation neglects the fact that there are in fact several political strate- gies used by former monopolies when they adopt asymmetric behaviors, as observed by case studies (Bonardi, 1999; Derthick and Quirck, 1985; Caw- son et al., 1990; Teske, 1991; Vietor, 1994). These firms admittedly try to protect their home mar- ket (purely defensive strategy) (Campbell, 1994), Copyright  2003 John Wiley & Sons, Ltd. Strat. Mgmt. J. (in press) Global and Political Strategies in Deregulated Industries but they are also frequently reported to combine defensive political strategies with more offensive ones (Hopper, 1994) (combined strategy—see the Appendix). One example of these combined strate- gies occurs when the former monopoly lobbies in favor of the entry of foreign competitors (offen- sive strategy), but also wishes to control this entry in terms of how many competitors are allowed to penetrate the market and what they are supposed to do. This practice is often used in foreign trade negotiations, and it leads to restrictions for foreign competitors regarding the kind of market or the part of the market they are allowed to enter, the quantity they can sell, or even the kind of cus- tomers they can target. In the electricity or the airline industry in Europe, for instance, incumbent firms have agreed on the fact that new competi- tors—including foreign firms—might be able to enter the market, but they have also strictly con- trolled the market segments that these companies would be able to target, at least for a certain time. Several behaviors might therefore be part of what I have defined as asymmetric strategies; the circum- stance in which one political strategy is preferred to another one remains to be explained. This observation leads to my next point. In effect, if one tries to account for the adoption by former monopolies of one political strategy vs. another, one has also to take governmental behav- iors into account. The monopoly rent-maximizing explanation is limited here in the sense that it does not fully take into account the interactions that can occur between the former monopoly and its home government (a), as well as the interactions between the home government and the government of the host country that the firm tries to pene- trate (b). For (a), it is important to acknowledge that the interests of the former monopoly and of its home government are not necessarily aligned. Governments in democratic countries often wish to support a national champion—in that case, the former monopoly—but also wish to move towards market liberalization to increase con- sumers’ welfare. In the case of the 1996 alliance between British Airways and American Airlines, for instance, both governments were trying to move towards the airline market opening to for- eign competition. In that instance, the interests of the governments and of the national carriers were not totally aligned. Situation (b) also represents a crucial aspect since reciprocity issues are likely to occur when governments from developed countries are deregulating their home markets, while for- mer monopolies are trying to implement global strategies (Bagwell and Staiger, 2001; Kashlak, Chandran, and Di Benedetto, 1998).4 In effect, global strategies demand a presence in key mar- kets (Ohmae, 1985). In most deregulated sectors, being able to provide services in major countries in North America, Europe, and Asia is a key con- dition in efficiently implementing a global strat- egy. Hence, if all former monopolies from devel- oped countries successfully use defensive politi- cal strategies, then many acquisitions, alliances, or direct entries into major markets are likely to be blocked by national governments (Milner and Yoffie, 1989). National governments possess many available tools with which to block alliances or acquisitions in retaliation and protect their home market if reciprocity is not assured. Among these are regulatory tools such as the necessity of obtain- ing a license, limits of authorized ownership by foreign actors, or antitrust judgments. Account- ing for former monopolies’ asymmetric behaviors therefore requires taking into account both the interactions between the firm and its home gov- ernment, as well as the interactions between the home and the host government. This aspect is not covered by the monopoly rent-maximizing hypoth- esis. The last aspect of asymmetric strategies that is not directly explained by the monopoly rent- maximizing hypothesis is that former monopolies have at least one alternative to global strategies for their international expansion: multidomestic strate- gies (see Appendix). Yip (1989) defines a contin- uum of strategies, going from the multilocal end to the global end. Porter also states that global strategies tend to appear when ‘a firm’s competi- tive position in one country is significantly affected by its position in other countries,’ and multido- mestic strategies occur when a firm’s competitive position in one country ‘is essentially independent of competition in other countries’ (Porter, 1986: 18). Those are the definitions that I will adopt here because they fit well the case of deregulated industries, which are indeed network industries: telecommunications, airlines, or electricity are all 4 It is interesting to note that reciprocity regarding the dereg- ulated sector is an issue in developed countries, but not in developing countries. Many developing countries have indeed decided to liberalize unilaterally (Ethier, 2001). The framework developed in this paper is therefore mainly relevant for devel- oped countries. Copyright  2003 John Wiley & Sons, Ltd. Strat. Mgmt. J. (in press) J.-P. Bonardi based on operating a network (Henry, Matheu, and Jeunemaıˆtre, 2001). The strategic question for these firms at the international level is to decide whether or not such networks should be strongly interconnected. In the context of a global strategy, these networks would certainly be fairly integrated and therefore very dependent on each other. This is indeed the only way to provide seamless ser- vices to multinational clients. In the context of a multidomestic strategy, on the other hand, each network would be run individually in each coun- try to provide services to local customers. For this reason I will consider here only the global vs. mul- tidomestic alternative, even if there are arguably many other types of strategies that firms develop to expand in international markets.5 Another central aspect on which I will focus will be the consequences of this ‘global–multidomes- tic’ dichotomy in term of market entry. Multido- mestic strategies, even if they might ultimately be inferior to global ones in the case of deregulated industries, have at least one important advantage: they do not necessitate entry into all major inter- national markets. In the telecommunication sec- tor, for example, being denied entry into North American markets still allows benefit from inter- national operations in newly deregulated markets elsewhere, and especially in developing countries within which reciprocal entry is generally not a requirement. Companies that fail in their attempt to develop a global strategy might therefore adopt a multidomestic one. To what extent are multido- mestic strategies parts of the asymmetric behaviors of former monopolies? From the three points discussed above, I draw several conclusions. First, there are potentially multiple asymmetric strategies that former monop- olies can adopt since they have several options on the political side (purely defensive strategies; 5 Other typologies of international strategies focus more on the organizational structures that are associated with those strategies. This is the case with the ‘transnational strategies’ that Bartlett and Ghoshal describe in Managing Across Borders (1989). I do not take this dimension into account here because it is secondary, in the case of network industries, to the interconnection deci- sion. Global strategies require a strong interconnection of the different markets the firm operates in, whereas multidomestic strategies command that networks be run individually. The need for local responsiveness that is central in Bartlett and Ghoshal’s definition of transnational strategies is less important, in my opinion, in the case of deregulated industries. I do not claim that the ‘global–multidomestic’ is the best dichotomy whatever the context, but only that this dichotomy seems to be the most meaningful in the case studied here. purely offensive strategies; combined strategies) as well as on the economic side (global and multido- mestic strategies) (see Appendix for definitions). Therefore, the question remains: Among the poten- tial combinations, what are the main forms of asymmetric behaviors adopted by former monop- olies? Why and when do they select one form of asymmetric behavior over another? Second, I also derive from the former discussion that the explanatory framework built to answer these questions will have to take into account two key dimensions: (a) the interactions between the former monopoly and its home government, know- ing that their interests can be (but are not nec- essarily) aligned during the deregulation process; (b) the interactions between the home government and the host government of the country in which the former monopoly wishes to enter in the con- text of its international strategy. For this reason I use game theory to study this question. Game theory is a particularly useful method for studying interactions when players’ decisions are based on selecting optimal strategies according to the inter- dependency of the pay-offs to the various players (Camerer, 1991; Chen and MacMillan, 1992; Ghe- mawat and McGahan, 1998).6 There is a long tra- dition of using game theory to analyze trade issues between governments (Brander and Spencer, 1985; Dixit, 1984; Krugman, 1986). However, despite rare exceptions, such as Baron (1997), this practice has not translated into the study of firms’ strate- gies.7 6 Game theory has been used to account for the strategies of firms in cases where well-identified players’ pay-offs depend on one another’s choices, and interdependence is crucial when trying to maximize their respective pay-offs (Ghemawat, 1997: 76; Rasmusen, 1990). Game theory has also been used to explain firms’ strategic responses to their competitors’ actions (Chen and MacMillan, 1992; Ghemawat and McGahan, 1998; Porter and Spence, 1982), to account for the development of entrepreneurial behaviors (Arend, 1999), for reputation building (Weigelt and Camerer, 1988), or for the stability of alliances (Parkhe, 1993). In the international business literature, game theory has been used to explain the decision for firms to become multinational (Graham, 1998; Veugelers, 1995) and even to show how political and legal strategies could be integrated with international strategies, as in the case of Kodak vs. Fuji (Baron, 1997). 7 Game theory has actually been widely used in the field of international economics to study questions such as ‘Should a government control access of foreign firms to domestic mar- kets?’ or ‘Should a government promote the activities of domes- tic firms in global markets?’ (Krugman, 1986). Whereas these questions are important to understand the nature of the external en