Question

What are the effects of formal and informal institutions on a company entry mode strategy in a foreign market?

Answer 1

The business global entry strategy is difficult in many of the companies regarding both formal and informal institutional frameworks. Generally, different countries have different structures. The formal institutions include legal frameworks, investment laws, property right laws, etc. and in the informal frameworks includes cultures, ethics and also norms and conditions. The effects of-of this framework includes the problem for high competition, lack of uniform policy across the countries, an adaptation of new entry strategies of the companies, weak institutional frameworks of the companies, etc.