Table of Contents

Innovation and Institutional Embeddedness of Multinational Companies

Innovation and Institutional Embeddedness of Multinational Companies

New Horizons in International Business series

Edited by Martin Heidenreich

Multinational companies are crucial actors in a global knowledge-based economy, combining the advantages of global and locally coordinated production and innovation strategies with specific regional and national factors. This book questions how MNCs can best exploit institutionally embedded knowledge, explores the utilization of external institutionally embedded knowledge in corporate innovation processes, and addresses the challenges of embeddedness.

Chapter 5: MNCs, Clusters and Varieties of Innovative Impulse

Philip Cooke

Subjects: business and management, international business, organisational innovation, economics and finance, international business, innovation and technology, organisational innovation


Philip Cooke 5.1 INTRODUCTION The aim of this chapter is to examine the interaction between MNCs and smaller enterprises, notably those in clusters that in a supposed regime of ‘open innovation’ become more, not less, important to corporate fortunes. By reference to exemplary cases the analysis proceeds to show that without clusters MNCs can no longer survive since their attenuated knowledge dynamics mean that they are now largely dependent upon laboratory or enterprise research of an extra-mural nature or on other external competences and experiences. This presentation will analyse rationales for continued MNC involvement in home or host bases in advanced economies. More specifically, the chapter deals with three important relationships. The first is that between the implications of a hydrocarbon and a posthydrocarbon global economic paradigm and associated shifts in organizational focus and interactions. The second concerns the manner in which innovation regimes and styles among large and smaller firms will change. The third concerns varieties of relations between multinationals and clusters, which often house knowledgeable small and medium-sized enterprises (SMEs), and how these change under these important macroeconomic shifts. Utilizing empirical case material and also touching somewhat on the ‘open innovation’ literature and critique, the presentation will offer three models for consideration and comparison by which MNC domestic and developed host-country implanting is currently understandable. The first of these, termed the integrated supply chain (ISC) model, is evidenced from the comparison cases of automotive parts clusters in south Ontario, Canada and Konya, Turkey. In these somewhat traditional exemplars,...

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