A coevolutionary theory of the multinational firm
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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Volume (Year): 12 (2006)
Issue (Month): 1 (March)
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References listed on IDEAS
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- Mudambi, Ram, 2002. "Knowledge management in multinational firms," Journal of International Management, Elsevier, vol. 8(1), pages 1-9.
- 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.
- 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.
- 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.
- 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.
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