Unbundling dynamic capabilities for inter-organizational collaboration

Purpose The purpose of this paper is to explore two distinct subsets of dynamic capabilities that need to be deployed when pursuing innovation through inter-organizational activities, respectively, in the contexts of broad networks and specific alliances. The authors draw distinctions and explore potential interdependencies between these two dynamic capability reservoirs, by integrating concepts from the theoretical perspectives they are derived from, but which have until now largely ignored each other – the social network perspective and the dynamic capabilities view. Design/methodology/approach The authors investigate nanotechnology-driven R&D activities in the 1995–2005 period for 76 publicly traded firms in the electronics and electrical equipment industry and in the chemicals and pharmaceuticals industry, that applied for 580 nanotechnology-related patents and engaged in 2,459 alliances during the observation period. The authors used zero-truncated Poisson regression as the estimation method. Findings The findings support conceptualizing dynamic capabilities as four distinct subsets, deployed for sensing or seizing purposes, and across the two different inter-organizational contexts. The findings also suggest potential synergies between these subsets of dynamic capabilities, with two subsets being more macro-oriented (i.e. sensing and seizing opportunities within networks) and the two other ones more micro-oriented (i.e. sensing and seizing opportunities within specific alliances). Practical implications The authors show that firms differ in their subsets of dynamic capabilities for pursuing different types of inter-organizational, boundary-spanning relationships (such as alliances vs broader network relationships), which ultimately affects their innovation performance. Originality/value The authors contribute to the growing body of work on dynamic capabilities and firm-specific advantages by unbundling the dynamic capability subsets, and investigating their complex interdependencies for managing different types of inter-organizational linkages. The main new insight is that the “linear model” of generating more innovations through higher inter-firm collaboration in an emerging field paints an erroneous picture of how high innovation performance is actually achieved

Persistent Nonviolent Conflict With No Reconciliation: The Flemish and Walloons in Belgium

Mnookin and Verbeke describe the nonviolent but very serious conflict in Belgium between the Flemish (Dutch) of the North and the Walloons (French) of the South. The Flemish economy is more prosperous than the Walloon economy, and the Flemish constitute a majority of the Belgian population. Nevertheless, the Walloons enjoy a financial subsidy from the Flemish and share equally in the political power of the nation due to antimajoritarian restrictions built into the government structure. Even though significant and persistent, this conflict remains nonviolent due to several factors, including largely separate geography, language and social structure; a low-stakes conflict; relatively small wealth disparities; a federal system largely enabling separate political systems; and a pragmatic tradition. Mnookin and Verbeke argue that the disputants can continue to coexist with a civilized separation short of divorce. They further point out that the very factors that help keep this conflict nonviolent also serve to provide little incentive to work toward a more cooperative relationship

Liabilities of Regional Foreignness and the Use of Firm Level and Country Level Data

We are pleased that Dunning et al. (2006) have provided macro (country) level data demonstrating the increased internationalization of many nations over the past decade. We also appreciate their findings lending support to our perspective on the regional nature of world business. Our work was based solely on micro (firm) level data, see Rugman and Verbeke (2004a). Both country level data and firm level data have methodological problems which we attempt to reconcile in this comment. We also address the broader conceptual issues of how to interpret country level versus firm level data.Regional strategy, home region bound firm-specific advantages, liability of regional foreignness, methodology

A Perspective on Regional and Global Strategies of Multinational Enterprises

It is widely accepted that multinational enterprises (MNEs) are the key drivers of globalization. The ultimate test to assess the level of globalization is the actual penetration of markets across the globe, especially in the broad ‘triad’ markets of NAFTA, the European Union and Asia. Yet, data on the activities of the 500 largest MNEs reveal that very few actually operate globally. For 320 of the 380 for which geographic sales data are available, an average of 80.3% of their total sales are in their home region of the triad. This means that the world’s largest firms are not global, but regionally based in terms of breadth and depth of market coverage. Globalization thus reflects a special, and rather unusual, outcome of doing international business, and regional strategies are more relevant than global ones. This has important implications for various strands of mainstream international business research, as well as for the broader managerial debate on the design of optimal strategies and governance structures for MNEs.Semi-globalization, regional strategy triad, value chain, firm specific advantages, localization, global strategy

Towards a Theory of Regional Multinationals: A Transaction Cost Economics Approach

This paper develops new theory to help explain the recent empirical work that demonstrates the profound lack of global sales, with 320 of the 380 largest firms in the world averaging 80% of their sales within their home region. Transaction cost economics (TCE) concepts are used to explain why large firms adopt regional, rather than global, strategies. A new theory of international management built to explain regional-level strategy and structure is developed. In this, a firm's geographic scope of sales is limited by the predominant regional reach of its firm level capabilities, due to TCE reasons.

Regional Transnationals and Triad Strategy

In this paper, we address the geographic distribution of sales of some of the world’s largest multinational enterprises (MNEs), with a focus on the share of each leg of the ‘Triad’ (the North-American Free Trade Agreement or NAFTA-zone, the European Union - E.U., and Asia) in these firms’ overall sales. Our view is that a firm has achieved global corporate success only if it is able to earn a balanced regional distribution of sales. Only high actual sales across the globe, especially in the wealthy and technologically advanced triad regions, demonstrate both strong firm-level capabilities at the supply side to market products and services worldwide, and a high willingness of sophisticated consumers at the demand side, to pay for the firm’s output. With respect to the supply side, we develop a new conceptual framework, which distinguishes among the global, regional and national loci of MNE decision-making, as well as the global, regional and national levels of product standardization. Our main point is that the regional dimension is important for many firms, because it is a geographic level where many important decisions are made, and where product standardization may be appropriate. We then identify the twenty MNEs with the highest foreign-to-total (F/T) sales ratios in the UNCTAD list of most internationalized companies in terms of foreign asset base that are also Fortune 500 firms. For this set of large, highly internationalized companies, we measure the distribution of their sales across triad regions. We find that only three of these firms actually have a substantial portion of their sales across all three legs of the triad. The other MNEs are either bi-regional, host-region oriented or home-triad region oriented. In other words, the empirical evidence reveals that even these highly internationalized MNEs do not have a balanced global distribution of sales. We further elaborate on this empirical finding by investigating whether a regional component can be identified in twelve specific cases of MNE strategy, building upon our new framework.globalization, regionalization, triad, transnational enterprises, triad home-base, regional, global, bi-regional, Wal-Mart

Proactive stakeholder management in the port planning process: empirical evidence from the Port of Brussels.

Port planning and port management are increasingly influenced by a variety of external stakeholders, each pursuing specific strategic objectives with regard to port activities and port development. A greater focus on external stakeholders may increase the port activities’ legitimacy at the city and regional levels, and may also contribute to sustainable development. In this paper, a new port planning methodology is designed within the context of the development of the Port of Brussels (Belgium) Master plan, time horizon 2015. This new planning methodology describes the port planning process, building upon the decomposition of the total port area in several distinct port objectives were taken into account in this planning process, and how this multi-zone, multi-stakeholder approach can be generalized to improve upon conventional strategic port planning processes. Keywords: Port planning, stakeholder management, evaluation methods

The bribery paradox in transition economies and the enactment of ‘new normal’ business environments

We develop a novel, sensemaking perspective on corruption in transition economies. Prior research has focused on understanding why some entrepreneurs are more likely to pay bribes than others. It typically assumes that paying bribes will lead to an intended – albeit unfair – competitive advantage. We challenge this assumption and uncover a bribery paradox: drawing upon sensemaking logic, we argue that beyond gaining an immediate benefit from bribing, entrepreneurs who frequently pay bribes may in the longer run be enacting a ‘new normal’ business environment perceived as high in obstacles, especially in transition countries. As sensemaking is grounded in identity construction and one’s social context, we argue that owners of family firms will be especially vulnerable to the dangers of perceiving greater obstacles over time and enacting an obstacle‐ridden ‘new normal’ business environment. We find empirical support for our framework on a sample of 310 privately‐held small and medium‐sized enterprises (SMEs) from 22 transition economies

The three faces of bounded reliability: Alfred Chandler and the micro-foundations of management theory

Alfred Chandler, the celebrated business historian, provided detailed descriptions of the reasons for failed human commitments and the managerial tools needed to prevent/remediate such failings in the context of large business firms. Chandler's historical narrative identifies three distinct “faces” of bounded reliability—opportunism, benevolent preference reversal, and identity-based discordance—as the main drivers of commitment failure. Adopting bounded reliability (BRel) as a micro-foundation in management studies will raise the quality and relevance of scholarly recommendations to improve managerial decision making and action, because analysis of BRel challenges closely mirrors the real-world problems facing practicing managers