Abstract
MNCs have a long history of evolution. A hundred years of internationalization process has transformed MNC greatly due to the evolution of the motives and the way companies integrate and expand their business around the world. Rapid liberalization, globalization and technological change especially in information and communication technology (ICT) sector have again revolutionized the transformation of the MNCs even further. As a consequence, the traditional version of the ownership-specific, localization and internalization advantages O.L.I) paradigm and recent new theories of the MNCs are inadequate to explain the dynamics and the growing of the MNCs from developed and emerging economies. This paper argues that the traditional International Business Theories of MNCs should seek cooperation from an innovation perspective approach such as Rothwell’s five generations of innovation process and open innovation approach proposed by Chesbrough in order to strengthen the theories of MNCs. Since both approaches emphasize the role of external factors such as the role of knowledge, expertise, university and networks which are lacking in the traditional resource-based theory. The combination of O.L.I paradigm and innovation approaches will certainly strengthen the capability of the MNCs theories to generalize about how MNCs from emerging economies are similar and dissimilar to more traditional MNCs from developed countries in the era of rapid globalization.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Explore related subjects
Discover the latest articles, news and stories from top researchers in related subjects.References
Ambos CT, Ambos B, Schlegelmilch BB (2006) Learning from foreign subsidiaries: an empirical investigation of headquarters: benefits from reverse knowledge transfers. Int Bus Rev 15:294–312
Amin A, Cohender P (2004) Architecture of knowledge firm’s, capabilities, and communities. Oxford University Press, Oxford
Best M (1990) The new competition: institution of industrial restructuring. Polity Press, London
Buckley PJ, Casson M (1976) The future of the multinational enterprise. Macmillan, London
Caves RE (1982) Multinational enterprise and economic analysis. Cambridge University Press, Cambridge
Chandler A (1962) Strategy and structure: chapters in the history of the industrial enterprise. MIT Press, Cambridge
Chandler A (1990) Scale and scope. Harvard University Press, Cambridge
Chesbrough H (2003) Open innovation: the new imperative for creating and profiting from technology. Harvard Business School Press, Cambridge
Chesbrough H (2006) Open business models. Harvard Business School Press, Cambridge
Cohen W, Levinthal D (1990) Absorptive capacity: a new perspective on learning and innovation. Adm Sci Q 35:128–152
Contessi S, El-Ghazaly H (2010) Multinationals from emerging economies: growing but little understood. Reg Econ, July: Federal Reserve Bank of ST. Louis
Dodgson M, Gann D, Salter A (2008) The management of technological innovation: strategy and practise. Oxford University Press, Oxford
Dunning JH (1958) American investment in British industry. George Allen & Unwin, London
Ernst D (2006) Innovation Offshoring: Asia’s emerging role in global innovation networks. East-West Center special reports, No. 10 July
Freeman C (1991) Networks of innovators: a synthesis of research issues. Res Policy 20:499–514
Freeman C, Perez C (1988) Structural crises of adjustment: business cycles and investment behavior. In: Dosi G, Freeman C, Nelson R, Silverberg G, Soete L (eds) Technical change and economic theory. Pinter, London
Gupta AK, Govindarajan V (1991) Knowledge flows and the structure of control within multinational corporations. Acad Manag Rev 13(4):768–792
Gupta AK, Govindarajan V (1994) Organizing for knowledge flows within MNCs. Int Bus Rev 43(4):443–457
Gupta AK, Govindarajan V (2000) Knowledge flows within the multinational corporation. Strateg Manag J 21:473–496
Hagerdoorn J, Duysters G (2002) External sources of innovative capabilities: the preference for strategic alliances or mergers and acquisitions. J Manage Stud 39(2):167–188
Hargadon A, Sutton R (1997) Technology brokering and innovation in a product development firm. Adm Sci Q 42(4):716-749
Hymer SH (1976) The international operations of national firms: a study of direct foreign investment. MIT Press, Cambridge
Kline S, Rosenberg N (1986) An overview of innovation. In: Landau R, Rosenberg N (eds) The positive sum strategy. Washington, DC: National Academy Press
Langlois RN (1992) Transaction-cost economics in real time. Ind Corp Change 1(1):99–127
Lundvall B (ed) (1992) National innovation systems: towards a theory of innovation and interactive learning. Pinter, London
Nohria N, Ghoshal S (1997) The differentiated network: organizing multinational corporations for value creation. Jossey-Bass Publishers, San Francisco
Palmisano JS (2006) The globally integrated enterprise. Foreign Aff 85:127–136
Penrose E (1995) The theory of the growth of the firm, 3rd edn. Oxford University Press, Oxford
Peters TJ, Waterman RH (1982) In search of excellence: lessons from America’s best-run companies. Harpaer & Row, New York
Powell W, Brantley P (1992) Competitive cooperation in biotechnology: learning from and action. Harvard Business School Press, Boston, pp 365–394
Powell WW, Grodal S (2005) Networks of Innovators. In: Fegerberg J, Mowery DC, Nelson RR (eds) The Oxford handbook of innovation. Oxford University Press, Oxford, pp 56–85
Powell W, Koput K, Smith-Doerr L (1996) Interorganizational collaboration and the locus of innovation: networks of learning in biotechnology. Adm Sci Q 41(1):116–145
Rothwell R (1992) Successful industrial innovation: critical factors for the 1990s. R&D Manage 22(3):161–170
Rothwell R (1994) Towards the fifth-generation innovation process. Int Mark Rev 11(1):7–31
Rothwell R, Zegveld W (1985) Reindustrialization and technology. Longman, Harlow
Rugman AM (1981) Inside the multinationals: the economics of internal markets. Columbia University Press, New York
Schmitz H, Strambach S (2008) Decomposition of the innovation process: What does it mean for the global distribution of innovation activities? Working paper 304, IDS, Sussex University, Brighton
Schumpeter J (1934) The theory of economic development: An inquiry into profits, capital, credit, interest and business cycle. Cambridge, MA: Harvard University Press
Szulanski G (1996) Exploring internal stickiness: impediments to the transfer of best practice within the firm. Strateg Manag J 17 (Winter Special Issue):27–43
Tidd J, Bessant J, Pavitt K (2005) Managing innovation: integrating technological, market and organizational change, 3rd edn. Wiley, Chichester
Vernon R (1966) International investment and international trade in the product cycle. Quart J Econ 80:190–207
Von Hippel E (1988) The sources of innovation. Oxford University Press, Oxford
Wernerfelt B (1984) A resource-based view of the firm. Strateg Manag J 5:171–180
Acknowledgments
This research was made possible through the Research Grant from The Bromans Foundation at the Institute for Innovation and Entrepreneurship (IIE) and The Center for International Business Studies (CIBs) through The Research Grant from Söderberg Research Foundation at School of Business, Economics and Law, Gothenburg University, Sweden. The author would also like to thank Professor Maureen McKelvey, Director for Research Division at IIE, and Professor Claes G. Alvstam, Research Coordinator at CIBs, for their strong support since I moved from Lund University to Gothenburg University.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Abdulsomad, K. The transformation of multinational corporations (MNCs) from an innovation perspective: some notes on the theories of MNCs. AI & Soc 29, 415–426 (2014). https://doi.org/10.1007/s00146-013-0467-x
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s00146-013-0467-x