Network Knowledge in International Business

Network Knowledge in International Business

New Horizons in International Business series

Edited by Sarianna M. Lundan

This book focuses on current cutting-edge research concerning the increasing strategic importance of subsidiary networks to the multinational firm. It combines contributions from three major related areas of inquiry: the changing theoretical conception of networks and the structure of the multinational firm, the importance of spillovers and agglomeration economies related to multinational investments, and the management of the flow of information and knowledge from headquarters to subsidiaries and vice versa.

Chapter 2: From value chain to value networks: towards a new strategic model

Xavier Lecocq and Saïd Yami

Subjects: business and management, international business


Chapter 2 21/6/02 11:22 AM Page 1 2. From value chain to value networks: towards a new strategic model Xavier Lecocq and Saïd Yami INTRODUCTION As far as an organization’s strategy is concerned, the question of interactions between firms is central for researchers. In fact, on one hand, strategy is overall a matter of relationship with competition, since ‘firms, if not all organizations, are in competition, competition for factor inputs, competition for customers, and ultimately, competition for revenues that cover costs of their chosen manner of surviving’ (Rumelt et al., 1991, p. 6). Thus, strategy is aimed at creating or maintaining competitive advantages. However, on the other hand, the development of inter-organizational networks has led authors increasingly to study cooperative processes as well. The recent development of studies on inter-organizational networks has led strategic reflection to be rather limited to questions about a firms’ choice between cooperative or noncooperative behaviour. Several authors who wondered about the necessity of renewing the strategic paradigms adopted a cooperative logic, by proposing the dyad or the network level as most relevant in understanding the process of wealth creation by firms (Dyer and Singh, 1998). In spite of the undeniable interest of these works, highlighting the need to form partnerships in order to obtain resources (Afuah, 2000) or to create ‘relational capital’, and thus pass from competitive to cooperative logic, we argue that they shut away firms into a model which limits the strategic analysis field. In this chapter, we want to question...

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