Global Strategy and the Acquisition of Local Knowledge How MNCs Enter Regional Knowledge Clusters

The paper addresses two recent interrelated phenomena: High- tech regional knowledge clusters, and globalization of R&D activities by multinational corporations (MNCs). Combining MNC literature; regional development literature; and literature on social networks, the paper discusses determinants of entry modes used by MNCs that localize R&D units in regional knowledge clusters. The paper states that the entry mode used by a MNC depends upon the type of agglomeration economies the latter seeks to appropriate: Those related to network relations; to local labor market specialization; or to institutional specialization. The paper adds theoretical insight into advantages and disadvantages of different entry modes with respect to appropriation of agglomeration economies, and special attention is dedicated to discussing acquisition. Through the use of an empirical case ¾ the entry of five MNCs into the Danish telecommunications cluster in Aalborg, the paper exemplifies its theoretical observations, but also points to how the evolution of a knowledge cluster may be severely affected by MNCs that enter through acquisition.MNCs; entry mode; acquisition; explorative R&D; regional clusters; localized learning; networks; telecommunications industry; North Jutland; Denmark.

Ethics and taxation : a cross-national comparison of UK and Turkish firms

This paper investigates responses to tax related ethical issues facing busines

New Industries in Southeast Asia’s Late Industrialization: Evolution versus Creation - The Automation Industry in Penang (Malaysia) considered

Discourse on industry development and policy practice in late industrialization countries in East and Southeast Asia has predominantly tended to relate the emergence of new industries to ‘creation’ by the state and thereby to the role of state intervention or involvement in industrial growth and restructuring. On the other hand the role and position of (local) entrepreneurship in the genesis of new industries has been rather neglected, as little room was perceived for ‘autonomous’ development. Southeast Asian late industrialization is currently being confronted with the limits of development and expansion of specific (FDI-driven) export industries and thus with the necessity to devise new growth paths in industry (on the basis of high tech industries). This compels a reconsideration of policy practice and perceptions of modes of industry development on which it is based. In this paper we argue that a state-orchestrated ‘creation’ of priority industries is not the only possible route to new high tech industries in Southeast Asian late industrialization. This emanates from an analysis - based on field research - of the emergence and development of a recent growth industry in Malaysia, i.e. the manufacturing of automated equipment (or, automation industry) and its constituent firms in the Penang region. The analysis demonstrates that the mode of development of this industry conforms rather well to a number of notions from evolutionary economics on firm genesis and development in new industries. This suggests that successful industrial policies can be based on supporting an evolutionary ‘birth and development’ path, i.e. industry genesis and evolution as a more or less autonomous incremental process of the development of firms and their capabilities.industrial policy, late industrialization, automation industry, Malaysia, co-evolution, spin-out, diversification

How do digital information good characteristics influence pace and modalities of international market entry?

The paper develops theory to propose how considering digital information good characteristics modify and extends existing explanations with regard to entry mode choices (in single markets) and internationalization paths (across countries). Explanations offered relate to network and lock-in effects, complementary infrastructure investments, branding, and customer learning – factors that are particular important for understanding international market entry of digital information good providers.MNCs; entry mode; learning; digital information goods

On the adaptation of the firm to the International Business Environment

This paper advances on the importance of the adaptation of the firm to the International Business Environment (IBE). The IBE is a distinguishing factor in international business studies and the firm?s adaptation to the environment has been presented as a basic survival strategy. We argue that adaptation is indeed a dynamic and largely internally driven process that leads the firm to co-evolve with the external environment. The ability to adapt to different international business environments is developed over time through the firm?s experiences and built into its routines. Adaptation is both suggested to incorporate the elements of a planned strategy and of random variation in search for local peaks given bounded rationality, imperfect information and the current pool of resources and capabilities. The ability to adapt to the environment may be conceptualized as a knowledge-based capability and a potential source of competitive advantage for the multinational corporation.Adaptation, International Business Environment, MNC, capabilities, evolution, environmental stability

From M-form to N-form: The Structure of Multinational Corporations

The purpose of this study is to map, illuminate and explain the recent development of the strategies, structure and control of multinational corporations. The aim is to identify crucial problems in managing and organizing multinational corporations and describe what sort of approaches are used and proposed to solve these problems. This is a literature study where an inventory and critical examination of the recent research on the strategies, structure and control of multinational corporations. The emphasis in the study is on research carried out in the last ten years. It starts out with a summary of the early research on multinational corporations, proceeds to an analysis of the process school, and ends up with a discussion about organizing international operations from a network perspective.MNC; multinational structure; international; strategy; transnational; subsidiary; global

Acquirer : target coordination : how IB literature could inform M&A scholars

Fusões e aquisições são uma estratégia chave de expansão internacional, usada por muitas empresas. No entanto, apesar da sua popularidade e importância estratégica, as aquisições geralmente levam a resultados dececionantes para os adquirentes, devido principalmente a dificuldades na coordenação e integração da empresa adquirida. Assim, a criação de sinergias e, em última instância, o sucesso da aquisição, dependem da efetividade da integração e coordenação. A taxa de insucesso em fusões e aquisições pode significar que acadêmicos e profissionais não detêm um completo entendimento acerca do mecanismo de criação de valor. No geral, a literatura de fusões e aquisições oferece importantes conhecimentos, mas amplamente dispersos, sobre este fenómeno. Gestão internacional é uma área de pesquisa valiosa para complementar a literatura em fusões e aquisições, uma vez que a coordenação por parte da sede de suas subsidiárias (interação entre sede e subsidiárias) é um tópico central de estudo. Assim, este estudo combina a literatura sobre coordenação e integração em fusões e aquisições com o conhecimento de gestão internacional. O conhecimento de gestão internacional é usado para entender a coordenação das aquisições, as sobreposições de tópicos em ambos os campos são realçados, assim como áreas para pesquisas futuras. Uma das principais conclusões deste estudo é a importância do papel contributivo da subsidiária e da teoria da integração global versus responsividade local de gestão internacional, para entender a integração e coordenação em fusões e aquisições.Cross-border mergers and acquisitions are a key strategy of international expansion used for many companies. However, despite their popularity and strategic importance, acquisitions often lead to disappointing results for the acquirers, mainly due to difficulties in the coordination and integration of the acquired firm. So, the creation of synergies and ultimately, the acquisition success, depends on the effectiveness of the integration and coordination. The enormous failure rate in M&As might suggest that academics and practitioners do not have a thorough understanding about value creation mechanism. In sum, the M&A literature offers rich but widely dispersed insights into this phenomenon. The IB field of research is a valuable complement for the M&A literature since the headquarters’ coordination of their foreign subsidiaries (headquarters-subsidiary interaction) is a central topic of study in this field. Hence, the present study combines the literature on coordination and integration in M&As with the knowledge from IB. The IB knowledge is used to understand the M&A coordination and overlaps in the knowledge of both fields are highlighted, as well as areas for further research. A key finding of this study is the importance of the contributory role of the subsidiary and of the global integration and local responsiveness theory of the IB research to understand the integration and coordination in M&As

The electronics industry in central and eastern Europe: an emerging production location in the alignment of networks perspective

This paper analyses the emergence of central Europe as a new location for the production of electronics. The main factors that drive integration in the region into global production networks are also analysed, as well as prospects for upgrading the industry by using network alignment perspectives. Foreign investment is the primary vehicle of integration of CEE electronics firms into global production networks, and Hungary has moved furthest along this path, positioning itself as a major low-cost supply base in the region. Czech and Polish electronics industries are connected, in smaller, but increasing, degrees to international electronics production networks. Networks that are being built in CEE in electronics are usually confined to subsidiaries with still limited local subcontracting; they are export-oriented and are expanding. Local subsidiaries have mastered production capabilities and several subsidiaries in Hungary are European mandate suppliers in their respective lines of business. EU demand is the main pull factor, which gives cohesion to the actions of MNCs as well as to the action of local and national governments in CEE. The layer of local firms is still very weak with very limited capabilities in core technologies. This is the key weakness which prevents further alignment of networks in CEE electronics. Local governments play an important role in working jointly with foreign investors in establishing industrial parks and new capacities