Alliance Capitalism for the New American Economy

Alliance Capitalism for the New American Economy

New Horizons in International Business series

Edited by Alan M. Rugman and Gavin Boyd

Alliance Capitalism for the New American Economy advocates engagement with the USA’s macromanagement problems in a spirit of alliance capitalism, for the development of a more integrated, dynamic economy. Whereas most studies of the USA emphasise the efficiency effects of intense competition between firms, this book stresses that as the new economy becomes more knowledge based, its development necessitates active intercorporate cooperation, especially in high technology sectors.

Chapter 8: American alliance capitalism: flagship-led clusters

Alan M. Rugman and Alain Verbeke

Subjects: business and management, international business


Alan M. Rugman and Alain Verbeke This chapter focuses on industrial clusters and business networks organized around ‘flagship’ multinational enterprises (MNEs). We develop a microlevel, firm-driven analysis after initial contextual observations relating to the structure of the US political economy and the macro as well as micro policy trends and issues affecting its evolution. The potential for cooperative rather than competitive corporate strategies is emphasized. Until the 1990s US corporate strategies were driven by intensely competitive individual entrepreneurship, but the increasing pressure of global competition has led to collaborative clusters, guided by flagship enterprises (Rugman and D’Cruz 2000). In these clusters, a variety of strategic alliances, network linkages and public–private sector interactions have been enhancing productivity and international competitiveness. According to Hall and Soskice (2001), the context of a liberal US market economy and the related institutional environment has powerfully influenced the orientations and operations of national firms. In the past, it has allowed US MNEs to focus on competitive rather than cooperative strategy (Porter 1980), with less responsiveness to a variety of stakeholders such as representative business associations, organized labour etc. than typically develops in a coordinated market economy, such as Germany. The greater freedom of firms in the US liberal market economy has permitted superior entrepreneurial dynamism, but a number of coordination problems have resulted. The formation of flagship-led industrial clusters can be interpreted as a response to these problems, in terms of both corporate and business strategy. At the corporate strategy level, it represents an extension...

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