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A coevolutionary theory of the multinational firm

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  • Madhok, Anoop
  • Liu, Carl
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    Abstract

    We examine the multinational firm from the lens of coevolutionary theory. Coevolutionary theory encompasses both macrocoevolution with the external (local) environment and microcoevolution within the internal environment, i.e. among the MNC's parts (subsidiaries) and the whole, and the relations between the two. In making our argument, we distinguish the coevolutionary process (what happens) from coevolutionary capabilities (what is manageable and how), and then resort to the specific motors of causal ambiguity and absorptive capacity to link the two together. In this context, we argue more specifically that coevolution at different levels tends to occur at different speeds. The speed differential creates what we term a dis-synchronization effect in the coevolution of the MNC, which potentially impacts firm performance. In making our argument, we also show how a coevolutionary lens sheds novel light on the functioning of the MNC as an internal knowledge sub-economy and the advantage of hierarchies over markets in this regard. Constructively managing the tension between the macro and micro aspects of coevolution due to respective differences in coevolutionary pressures has direct implications for competitive advantage and is a critical challenge faced by managers.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of International Management.

    Volume (Year): 12 (2006)
    Issue (Month): 1 (March)
    Pages: 1-21

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    Handle: RePEc:eee:intman:v:12:y:2006:i:1:p:1-21

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    Related research

    Keywords: Coevolution Multinational firm Knowledge management Competitive advantage;

    References

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    1. Julian Birkinshaw & Neil Hood, 2000. "Characteristics of Foreign Subsidiaries in Industry Clusters," Journal of International Business Studies, Palgrave Macmillan, vol. 31(1), pages 141-154, March.
    2. Bruce Kogut & Udo Zander, 1993. "Knowledge of the Firm and the Evolutionary Theory of the Multinational Corporation," Journal of International Business Studies, Palgrave Macmillan, vol. 24(4), pages 625-645, December.
    3. S.A. Lippman & R.P. Rumelt, 1982. "Uncertain Imitability: An Analysis of Interfirm Differences in Efficiency under Competition," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 418-438, Autumn.
    4. Susan Bartholomew, 1997. "National Systems of Biotechnology Innovation: Complex Interdependence in the Global System," Journal of International Business Studies, Palgrave Macmillan, vol. 28(2), pages 241-266, June.
    5. Mudambi, Ram, 2002. "Knowledge management in multinational firms," Journal of International Management, Elsevier, vol. 8(1), pages 1-9.
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    Cited by:
    1. Michailova, Snejina & Mustaffa, Zaidah, 2012. "Subsidiary knowledge flows in multinational corporations: Research accomplishments, gaps, and opportunities," Journal of World Business, Elsevier, vol. 47(3), pages 383-396.
    2. Lema, Rasmus & Quadros, Ruy & Schmitz, Hubert, 2012. "Shifts in Innovation Power to Brazil and India: Insights from the Auto and Software Industries," MPRA Paper 49591, University Library of Munich, Germany.
    3. Manning, Stephan & Ricart, Joan E. & Rosatti Rique, Maria Soledad & Lewin, Arie Y., 2010. "From blind spots to hotspots: How knowledge services clusters develop and attract foreign investment," Journal of International Management, Elsevier, vol. 16(4), pages 369-382, December.
    4. Hatani, Faith & McGaughey, Sara L., 2013. "Network cohesion in global expansion: An evolutionary view," Journal of World Business, Elsevier, vol. 48(4), pages 455-465.
    5. Achcaoucaou, Fariza & Miravitlles, Paloma & León-Darder, Fidel, 2014. "Knowledge sharing and subsidiary R&D mandate development: A matter of dual embeddedness," International Business Review, Elsevier, vol. 23(1), pages 76-90.
    6. Patriotta, Gerardo & Castellano, Anna & Wright, Mike, 2013. "Coordinating knowledge transfer: Global managers as higher-level intermediaries," Journal of World Business, Elsevier, vol. 48(4), pages 515-526.
    7. Oskar Villarreal Larrinaga, 2010. "The Dodecagon of Internationalisation: A Theoretical Integration Model," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 3-24.

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