Geography Reference
In-Depth Information
Interestingly, in the regions which have experienced a rein-
forcement of their technological profiles over time, a greater
contribution to this pattern of strengthening is due to non-EU
MNEs, which are more prone than their EU-owned counterparts
to tap into local fields of innovative expertise, hence being rela-
tively more oriented towards asset-seeking, local competence-
acquiring strategies. MNEs from other EU partner countries seem
instead to have a relatively higher propensity to expand their own
lines of technological specialization, assuming a more sectorally-
oriented perspective in the process of rationalization of their inno-
vative operations within the integrated area.
Source:
Adapted from Cantwell and Iammarino 2001, 2003.
complex needs may imply a decision-making structure of the type repre-
sented by Figure 3.24 in Chapter 3, which allows for the possibility of a
high degree of local autonomy on the part of the subsidiary located at L
C2
,
in order to take advantage of the knowledge sourced by participating in
the regional social networks. At the same time, in the modern global eco-
nomic environment knowledge is developing rapidly, and many aspects of
knowledge are localized in particular competitive regions. Therefore, in
order to rapidly respond to and best learn from local knowledge capabili-
ties, firms may employ heterarchical organizational structures, as depicted
in Figure 3.25 in Chapter 3. Such structures, however, are not necessarily
the ultimate response to the current global economic environment, as
they also imply very flat autonomous decision-making systems, which
can themselves lead to tensions in parent-subsidiary relations (Asakawa
2001a, b). These tensions arise because of the conflicts associated with
the fact that the parent firm and headquarters operations will often wish
to retain the scale advantages of a hierarchical organization, while at the
same time also reaping the benefits from the local knowledge gained via
the relatively more autonomous subsidiaries. Following the arguments
reported in Chapter 3,
8
under such conditions of conflicting goals and
organizational stresses (Simon 1952a, 1959) MNEs may adopt satisficing
(Cyert and March 1963) strategies, even though these may be sub-optimal
from the point of view of the MNE as a whole. In other words, while on
the one hand subsidiaries embedded in leading technological centres of
competence (Cantwell and Janne 1999) may be sources of potential com-
petitive advantage for the MNE, many of these advantages may actually
remain unrealized due to the internal political structure of the MNE. As
