This study empirically examined the relationship between strategic orientation of an organization and the overseas activities it pursues. It is argued that the nature and extent of an organization’s overseas involvement will be a function of its dominant strategic orientation and the distinctive competences associated with such an orientation. Several hypotheses that build on the central notion of the "common thread", first articulated by Ansoff (1965), were developed and tested. Building on a systems typology of multinationals (Cheng & Ramaswamy, 1989), this study utilized many new measurement approaches that help measure level of internationalization in a multidimensional manner.

Set in the drugs and pharmaceutical industry, the empirical effort used objective secondary data to characterize both dependent and independent constructs. Tests of the hypotheses indicated that distinct multinationality profiles were associated with different strategic orientations.

Prospector organizations were found to emphasize their distinctive competences in research and development and marketing in their overseas efforts. They tended to operate a larger number of overseas R&D facilities and overseas sales offices than their Defender counterparts. Further, they also exhibited a marked tendency to spread these activities over a larger number of countries than Defender firms. These findings support the theoretical notion that every organization builds around its distinctive competences to achieve competitive advantage (Ansoff, 1965; Miles & Snow, 1978; Porter, 1980).

It was hypothesized that Defender firms would exhibit higher levels of overseas production activity than Prospector firms in keeping with their competence in manufacturing and cost control. However, this hypothesis was not supported. Consistent with Horst (1972), further analysis revealed that the age of the firm may play a significant role in influencing internationalization of production activity.

This study represents the first effort in applying a typology of strategy to examine multinational corporations. Further, the study provides evidence to show that:

(a) Strategic orientation of a firm plays a central role in influencing its international endeavors, and

(b) Firms with distinct strategic orientations pursue dissimilar combinations of overseas activities even when operating in similar country environments. These differences could be attributed to differences in strategic orientations.

Besides raising concerns about the traditional economic theory of comparative costs, these findings provide several new avenues for organizational research. Building on this study many new research directions such as the performance implications of multinationality that have not been examined as yet could now be explored.