Specificities of Low-Income Markets in Southeast Asia

Abstract

Several scholars have suggested that the concept of embeddedness is an important factor when studying the behaviour of organisations that acknowledge the influential role of social relations in business (Zukin and DiMaggio 1990; Granovetter 1992; Grabher 1993; Gulati 1998; McEvily and Marcus 2005). To what extent and for which purpose social relations can be significant is mostly determined by the specific circumstances of the respective market. Therefore, in this chapter I outline the idiosyncrasies of low-income markets in Southeast Asia in order to reveal the challenges that MNCs face in these markets (3.1) and to disclose why social relations to local partners can assist in overcoming possible difficulties inherent in the market (3.2). Yet beforehand, it is important to clarify what the term MNC implies in the sense in which it is used throughout this study.