The Scenario:Institutional theory suggests that while institutions can influence a firm's strategic decisions and actions, the entry and strategic behavior of a firm, such as a well-resourced multinationalcompany(MNC),intoanemergingeconomycanshapeandinfluencethehostcountry's institutional environment.

Drawingonthetopicsthatwehavecoveredinthisunit,includingyourknowledgeofParisBaguette (PB),thefirmthatweusedasademocaseinthisunit,writeandpresentabriefreportaddressedto thetopmanagementofPBasitplanstoventureintoanewmarketinahypothetical,newlyformed country, classified as an emerging economy - South Zetland (SZ). The top management of PB is requesting your strategic insights and recommendation on the critical considerations that the firm needs to address as it ventures into a new, international market given its unique institutional environment.

PB will be the first MNC to do business in SZ since SZ declared independence from a larger Asian country in 2005. SZ is an agricultural-based economy and a leading producer of wheat (accounting for 5% of the total world wheat production in 2022) and premium quality coffee beans globally (accounting for 5% of the total world coffee production in 2022).

You can assume that:

1. PB has been planning to gain more control or bargaining power over the supply chain of relevant raw materials essential to its global business operations.
2. SZisafast-growingemergingeconomydubbedbyTimeMagazinein2022asthenextgolden hub of agricultural and food production business opportunities in modern Asia.
3. The World Bank noted that SZ, a new democratic country, is a highly adaptable country that iscommittedtoundertakingradicalsocial,political,andeconomicreformstoalignitselfwith the leading economies in the world and actively engage with and participate in world socio- economic affairs.
4. SZ is predicted to become one of the top countries in Asia in terms of ease of doing business in the next five years, according to the World Bank.

Thereportthatyouwillwriteshouldpresentyouranalysis,insights,andrecommendationstoPBon the following:

• Your critical analysis and insights on how the strategic decision of PB to enter the host country,SouthZetland(SZ),viaforeigndirectinvestment(FDI)-greenfieldinvestmentwill enable the firm to influence or shape the local formal and informal institutional environment. Draw on institutional and industry-based considerations of firm strategy in your analysis.
• YourrecommendationsonhowPBcanleveragethestrategyofFDI-greenfieldinvestment to its advantage to address its 'liability of foreignness' as it enters a foreign market in SZ. Draw on the global mindset topic that we have covered in this unit.