Innovation and Institutional Embeddedness of Multinational Companies
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Innovation and Institutional Embeddedness of Multinational Companies

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.
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Chapter 14: Conclusion: Corporate Embeddedness as a Strategic and Dynamic Process of Skilled Actors

Jannika Mattes and Martin Heidenreich


Jannika Mattes and Martin Heidenreich The chapters of this book have illustrated multiple aspects of corporate embeddedness. We have focused on how the relationship between MNCs and their regional and national surroundings can be shaped in order to increase corporate capabilities for generating and absorbing knowledge as well as strengthening the contribution of the regional and national context towards higher corporate innovativeness. On the basis of existing studies on national and regional innovation, business systems and various forms of corporate embeddedness, we outlined a concept of corporate embeddedness based on selected results of these debates: (a) institutions, cultures and policies as well as inter-organizational networks shape the regional and national environment of MNCs and their subsidiaries, and thus the opportunities and resources on which companies rely in order to solve the manifold coordination problems linked to the uncertainties of innovation processes; (b) these institutions are often based on a common logic and the different dimensions of the corporate environment reinforce themselves (‘institutional complementarities’); (c) MNCs in particular can choose where, in what dimensions and to what extent they want to rely on the multiple institutional, political, cultural and inter-organizational contexts of the countries and regions in which they are present. They can actively, strategically and selectively use different opportunities of ‘multiple embeddedness’; (d) given the risks of embeddedness (especially lock-in effects) and the advantages of not being embedded (e.g. the opportunity of using the most advanced knowledge resources in a global context), companies are faced with the dilemma between embeddedness...

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