From OLI to OLMA: Incorporating Higher Levels of Environmental and Structural Complexity into the Eclectic Paradigm

Theorists using the eclectic paradigm have drastically restricted their analytic scope to the firm and its subsidiaries, rarely exploring more finely grained firm structures, such as business processes. By contrast, organisational theorists examining multinational firm behaviour have employed a richly differentiated array of firm structural forms though without developing a precise delineation of the international business environment. Eclectic researchers are adept at handling environmental, but not structural, complexity, while the reverse seems true for organisational theorists. This study extends the eclectic paradigm by incorporating higher levels of environmental and structural complexity through two methods: (1) a deconstruction of the multinational firm into business processes; and (2) a more complete definition of the international business environment, called geovalent elements. The paper argues that an enhanced eclectic paradigm called OLMA (for Ownership, Location, Mode of entry, and Adjustment) provides the complete set of concepts needed for studying the modern multinational firm.