Subsidiaries within a High-Tech MNC. A reappraisal of the Role of Functions

The recent management literature on multinational corporations (MNCs) has mainly focused on the new role played by subsidiaries within the international firms. Many scholars have underlined that MNCs tend to organise themselves along a differentiated network approach, where subsidiaries play a very different role according to their internal resources and the significance of the local environment. This strategic and organisational model dates back to the pioneering work of Bartlett and Goshal, who called this new international strategy “Transnational” so as to differentiate it from the classical Multidomestic and Global strategies. Along with the different roles played by the subsidiaries, this model is characterised by the simultaneous existence of cooperation and competition within the multinational corporations. The present work focuses on the role of the Italian subsidiary of AgilentTechnologies, a multinational firm with around 36,000 employees that is active in more than 40 countries in high-tech sectors such as electronics, telecommunications and life science. The case study brought new light to the usual distinction that is commonly made with regard to the role of a subsidiary. When we try to apply the Transnational model to Agilent we realise that neither this model nor the traditional typologies (Multidomestic, Global) apply to the case we have studied. The role of the subsidiary changes significantly according to the function being considered. Therefore, we conclude that the role of function should be re-evaluated when the strategy and the structure of an MNC is defined. Not only does the classification of subsidiaries change according to the function in question, but the strategic posture and the organisational structure of MNCs should also be re-evaluated in light of the function under consideration. Our study shows how activities such as R&D, where coopetition represents a strategic source of advantage, seem to follow the Transnational scheme, while others such as sales are mainly globally managed

Management consulting : structure and growth of a knowledge intensive business service market in Europe

The globalisation of contemporary capitalism is bringing about at least two important implications for the emergence and significance of business services. First, the social division of labour steadily increases (ILLERIS 1996). Within the complex organisation of production and trade new intermediate actors emerge either from the externalisation of existing functions in the course of corporate restructuring policies or from the fragmentation of the production chain into newly defined functions. Second, competitive advantages of firms increasingly rest on their ability to innovate and learn. As global communication erodes knowledge advantages more quickly, product life cycles shorten and permanent organisational learning results to be crucial for the creation and maintenance of competitiveness. Intra- and interorganisational relations of firms now are the key assets for learning and reflexivity (STORPER 1997). These two aspects of globalisation help understand why management consulting - as only one among other knowledge intensive business services (KIBS) - has been experiencing such a boost throughout the last two decades. Throughout the last ten years, the business has grown annually by 10% on average in Europe. Management consulting can be seen first, as a new organisational intermediate and second, as an agent of change and reflexivity to business organisations. Although the KIBS industry may not take a great share of the national GDP its impact on national economies should not be underestimated. Estimations show that today up to 80% of the value added to industrial products stem from business services (ILLERIS 1996). Economic geographers have been paying more attention to KIBS since the late 1970s and focus on the transformation of the spatial economy through the emerging business services. This market survey is conceived as a first step of a research programme on the internationalisation of management consulting and as a contribution to the lively debate in economic geography. The management consulting industry is unlimited in many ways: There are only scarce institutional boundaries, low barriers to entry, a very heterogeneous supply structure and multiple forms of transaction. Official statistics have not yet provided devices of grasping this market and it may be therefore, that research and literature on this business are rather poor. The following survey is an attempt to selectively compile existing material, empirical studies and statistics in order to draw a sketchy picture of the European market, its institutional constraints, agents and dynamics. German examples will be employed to pursue arguments in more depth

The links between international production and innovation: a double network approach

This paper examines the changing role of multinationals in the global generation, adoption and transfer of innovation. It is argued that the combination of traditional asset exploiting objectives with increasing asset seeking activities entails a transition of multinationals towards a double network structure. On the one hand multinationals are more and more characterised by the interconnection of a large number of internal units that are deeply involved in the company’s use, generation and absorption of knowledge. On the other hand, units belonging to the internal network tend to develop external networks with other firms and institutions that are located outside the boundaries of the multinational firm, in order to increase the potential for use, generation and absorption of knowledge. Extending the analysis to a more general level, it is suggested that each of the external actors with which multinationals are interconnected across countries are themselves involved in extensive webs of relationships with other firms and institutions. By becoming embedded in different local contexts, multinational firms act as bridging institutions connecting a number of geographically dispersed economic and innovation systems. As a result, they are conditioned by, and contribute to, the evolution of different contexts in which they operate.innovation, multinational firms, networks.

The role of research and development in New Zealand's industrial growth : a thesis presented in partial fulfilment of the requirements for the degree of Master of Arts in Geography at Massey University.

The conceptual background to this thesis involves an examination of the interrelationships between technological change, innovation and research and development, and the impact that they can have upon national economic growth and development. Research and development investigations can be translated into product and process innovations and these can cause short and long term structural changes. Such impacts are differentiated temporally and spatially because of the selectivity of the innovation diffusion-adoption process. These relationships can be examined in a more concentrated way by looking at the role of research and development upon New Zealand's industrial growth. Research and development has already contributed significantly to agriculture and, if manufacturing industry is to become a major component of New Zealand's growth, the potential implicit in the greater application of industrial research and development must be considered. The analysis of research and development involved looking at two groups of organisations; individual manufacturing firms and research associations. It was hypothesised that manufacturing firms in New Zealand are essentially concerned with adopting and adapting overseas technology, and that research associations are primarily concerned with improving the efficiency of their industry. Research and development in manufacturing firms was firstly examined generally, with a look at staffing and expenditure figures and the variation in programme emphasis among firms. The sectoral perspective of research and development activity looks at interindustry variations and the influence of firm size upon the type of work undertaken. A four-fold classification of firm organisation was proposed and it is possible to see how the programme emphasis and the criteria for project selection and research and development expenditure varies accordingly. The linkage impacts generated by research and development are also examined. Examples of growth impacts generated by technological and capital goods linkages and the phenomenon of spin-off firms are also discussed. At all times the spatial dimension of these processes is presented so that some idea of the diffusion of the impacts associated with research and development can be gained. The analysis of research and development activity in the research associations proceeded in a similar manner. The particular emphases of the research and development programme were examined, along with the sources of project ideas and the criteria considered in their selection. Any locational and linkage impacts that may be generated were also examined. Emphasis was given to the nature of the interaction that occurs between member firms and the research associations, and to the accountability that the associations have to the industry they serve. Once again the spatial dimensions of the processes examined have been presented. In conclusion, it was determined that the industrial research and development activity carried out in individual manufacturing firms and in the research associations does make a positive contribution to New Zealand's industrial growth. Product ranges can be diversified, production techniques can become more efficient, new firms may be created and general industrial growth ensues. Research and development, as part of the more general phenomenon of technological change, can certainly contribute to New Zealand's industrial and economic growth and development

From the Theory of the Firm to FDI and Internalisation: A Survey

This paper surveys recent contributions on the Internalisation issue, based on different theories of the firm, to show how the make-or-buy decision, at an international level, has been assessed through the opening up of the “black box” - traditionally explored by the theorists of the firm – and the simultaneous endogenization of the market environment – as in the International Economics tradition. In particular, we consider three Archetypes – Grossman-Hart-Moore treatment of hold-up and contractual incompleteness, Holmstrom-Milgrom view of the firm as an incentive system, Aghion-Tirole conceptualisation of formal and real authority in organisations – and show how they have been embedded in industry and general equilibrium models of FDI to explain the boundaries of global firms.FDI, Internalisation, International Economics, Incomplete contracts

Proactive compliance? Repercussions of national product regulation in standards of transnational business networks

This paper ('Sfb-Arbeitspapier') illustrates the links between the self-regulation of transnational business networks and the law by analysing the management of chemical substance risks in the electric and electronic equipment industry. National product regulation (and to some extent regulation of production processes) can influence standards employed globally by leading corporations within their network of suppliers and contract manufacturers. However, it is also shown that the diffusion of regulatory standards within transnational production networks is not a linear process: corporate actors to some extent selectively appropriate standards and proactively self-regulate substances of concern that are not yet regulated by state-based law. Similarly, the suppliers may also influence the contents of the standards used in the network. -- Dieses Sfb-Arbeitspapier veranschaulicht den Zusammenhang zwischen der Selbstregulierung von transnationalen Unternehmensnetzwerken und dem Recht anhand des Beispiels der Bewältigung von Stoffrisiken im Elektro- und Elektroniksektor. Nationale Produktregulierung (und zum Teil auch die Regulierung von Produktionsprozessen) kann Standards beeinflussen, mit denen führende Unternehmen weltweit auf ihre Zulieferer und Vertragshersteller Einfluss nehmen. Dabei zeigt sich jedoch auch, dass die Diffusion von Standards in transnationalen Produktnetzwerken kein linearer Prozess ist: die Unternehmen können sich bis zu einem gewissen Grade nationale Standards selektiv aneignen und vorausschauend eigene Standards für Problemstoffe entwickeln, für die im staatlichen Recht bisher keine Regeln existieren. Ebenso nehmen auch die Zulieferer Einfluss auf den Inhalt der Standards im Produktnetzwerk.

Governance for sustainability: learning from VSM practice

Purpose – While there is some agreement on the usefulness of systems and complexity approaches to tackle the sustainability challenges facing the organisations and governments in the twenty-first century, less is clear regarding the way such approaches can inspire new ways of governance for sustainability. The purpose of this paper is to progress ongoing research using the Viable System Model (VSM) as a meta-language to facilitate long-term sustainability in business, communities and societies, using the “Methodology to support self-transformation”, by focusing on ways of learning about governance for sustainability. Design/methodology/approach – It summarises core self-governance challenges for long-term sustainability, and the organisational capabilities required to face them, at the “Framework for Assessing Sustainable Governance”. This tool is then used to analyse capabilities for governance for sustainability at three real situations where the mentioned Methodology inspired bottom up processes of self-organisation. It analyses the transformations decided from each organisation, in terms of capabilities for sustainable governance, using the suggested Framework. Findings – Core technical lessons learned from using the framework are discussed, include the usefulness of using a unified language and tool when studying governance for sustainability in differing types and scales of case study organisations. Research limitations/implications – As with other exploratory research, it reckons the convenience for further development and testing of the proposed tools to improve their reliability and robustness. Practical implications – A final conclusion suggests that the suggested tools offer a useful heuristic path to learn about governance for sustainability, from a VSM perspective; the learning from each organisational self-transformation regarding governance for sustainability is insightful for policy and strategy design and evaluation; in particular the possibility of comparing situations from different scales and types of organisations. Originality/value – There is very little coherence in the governance literature and the field of governance for sustainability is an emerging field. This piece of exploratory research is valuable as it presents an effective tool to learn about governance for sustainability, based in the “Methodology for Self-Transformation”; and offers reflexions on applications of the methodology and the tool, that contribute to clarify the meaning of governance for sustainability in practice, in organisations from different scales and types

Surveillant assemblages of governance in massively multiplayer online games:a comparative analysis

This paper explores governance in Massively Multiplayer Online Games (MMOGs), one sub-sector of the digital games industry. Informed by media governance studies, Surveillance Studies, and game studies, this paper identifies five elements which form part of the system of governance in MMOGs. These elements are: game code and rules; game policies; company community management practices; player participatory practices; and paratexts. Together these governance elements function as a surveillant assemblage, which relies to varying degrees on lateral and hierarchical forms of surveillance, and the assembly of human and nonhuman elements.Using qualitative mixed methods we examine and compare how these elements operate in three commercial MMOGs: Eve Online, World of Warcraft and Tibia. While peer and participatory surveillance elements are important, we identified two major trends in the governance of disruptive behaviours by the game companies in our case studies. Firstly, an increasing reliance on automated forms of dataveillance to control and punish game players, and secondly, increasing recourse to contract law and diminishing user privacy rights. Game players found it difficult to appeal the changing terms and conditions and they turned to creating paratexts outside of the game in an attempt to negotiate the boundaries of the surveillant assemblage. In the wider context of self-regulated governance systems these trends highlight the relevance of consumer rights, privacy, and data protection legislation to online games and the usefulness of bringing game studies and Surveillance Studies into dialogue

Undermining conflict: Multinational miners, conflict and participation in Indonesia

Since the 1990s, participation has become the dominant method for multinational mining corporations to contain conflict with people affected by mining. Yet conflict, including violent confrontation, remains prevalent. The literature documents a wide range of outcomes of participatory mechanisms – they may produce compromise, exacerbate conflict or even create new opportunities for conflict – yet there is little literature explaining such variance. This thesis explains this diversity in terms of (a) factors involved in the design and implementation of participatory mechanisms by multinational miners and (b) factors determining how, when and why people affected by mining participate or not. I use the ‘modes of participation’ framework to analyse how institutional and ideological foundations for participation shape who can participate, on what issues and when. I argue that participatory mechanisms including corporate social responsibility (CSR) and community development are neither simple outcomes of corporate ethics nor merely greenwashing strategies, as they are often presented. Rather, participation is a mechanism of rule to both contain manifestations of conflict risky to corporate profitability and create social relations amenable to extractive accumulation. Qualitative data are drawn from fieldwork across three case studies in Indonesia – the proposed coastal Kulon Progo sand iron mine in Yogyakarta, Newcrest’s Gosowong gold mine in North Maluku and Rio Tinto’s ex-Kelian gold mine in East Kalimantan. These cases are placed within an analysis of global corporate self-governance that has arisen in response to broader crises of legitimacy. Findings highlight the importance of historically constituted social relations and contestation across local and global scales in shaping participation. Particularly important for how people affected by mining participate are their control of land, histories of organisation, alliance structures and ideologies. These factors shape the desire and capacity of people affected by mining to resist or secure benefits from participation in mining developments