An institution-based view of issues facing New Zealand firms in South Africa

Institutions are structures which provide rules and regulations that govern or influence behaviour. Because of this, institutions such as the government or regulators are an extremely important consideration for firms. The institution-based view focuses on this interaction and the resulting strategy decisions made by firms. One of the key considerations firms must be aware of is the differences between institutions in different countries. The aim of this research is to provide a qualitative understanding of the formal institutional differences between South Africa and New Zealand, the impact these differences have on New Zealand firms, how they plan for these differences and what institutional changes they believe will happen in the future. To answer the research objectives, eight qualitative, in-depth interviews were conducted with senior managers of New Zealand firms that have an interaction with South Africa. The results found that differences especially in regulatory institutions have had an impact on New Zealand firms, however, differences in judicial and constitutional institutions have had little impact. New Zealand firms have employed a large range of strategies to plan and respond to these differences. Finally, New Zealand firms are cautiously optimistic about South Africa and its institutions in the future. This research has implications for both academia and industry