Entrepreneurship in the Global Firm

Citation

Boocock, G. (2000), "Entrepreneurship in the Global Firm", Journal of Management Development, Vol. 19 No. 10, pp. 888-889. https://doi.org/10.1108/jmd.2000.19.10.888.1

Julian Birkinshaw teaches and researches in international business and strategy at London Business School. This concise text (154 pages in all) is a very clear exposition of the role of managers in multinational corporations (MNCs).

The book has two principal objectives. First, the author integrates the main findings of a programme of research spanning the years 1992‐99, including his doctoral studies. Some specific aspects of the research programme have already been published in academic journals. This book draws together the general themes of his work. The writing style is accessible and the technical aspects of the research are placed in a short Appendix. Examples and research findings from other scholars in this field are included, and “major” contributions are expertly discussed. Second, the book tries to make sense of the role of the subsidiary manager in an MNC, from the perspective of that manager. Do these managers simply follow orders from Head Office? The book explores the factors that shape his or her behaviour on a day‐to‐day basis – a complex and ambiguous picture emerges.

The book is split into three sections. The first section provides a detailed description of the subsidiary initiative phenomenon within MNCs, principally based on the author’s empirical work. The second section deals with theoretical perspectives, and explains how the concept of subsidiary initiative can shed new light on theories of entrepreneurship, subsidiary evolution and various aspects of the operation of MNCs. The third, and shortest, section considers the implications of the ideas for managers.

In an introductory chapter that is a model of clarity, the author opens by stating that: “the world of business is becoming ever more global in scope, and consequently that large global firms (MNCs) are emerging as some of the most influential and powerful institutions in the global economy, transcending and possibly even displacing nation states in their ability to drive economic development”. The focus is on internally driven changes to the strategy and structure of the MNC. In particular, what does the concept of strategy mean for such large and geographically dispersed corporations and how can they be structured in such a way that they reap the benefits of size without sacrificing the benefits of local presence?

Chapters 2‐4 cover “Types of subsidiary initiative”, “Fighting the corporate immune system” (i.e. how initiatives are implemented despite the structure of a typical MNC) and “The consequences of the initiative” respectively. These chapters contain many relevant examples, demonstrating that local initiatives can play a critical role in adding value to MNCs, and enabling the author to identify areas where theories might fall short of reality. The theories are appraised in Chapters 5‐8.

Chapter 5, “Perspectives on the theory of entrepreneurship”, should be compulsory reading for all those with an interest in entrepreneurship. The approaches of Schumpeter and Kirzner are compared and contrasted. Critically, Birkinshaw notes (p. 68) that: “Kirzner sees entrepreneurship as pushing the economic system towards an ever‐receding equilibrium, whereas Schumpeter sees entrepreneurship as the force that pushes the system out of equilibrium”. Other areas of agreement and dispute between these two seminal figures are also discussed, and the point is made that: “Both forms of entrepreneur clearly exist, and both have their role to play in economic development”. The market dynamics that Schumpeter and Kirzner describe are then applied to the MNC, as the author suggests that the MNC can usefully be modelled as an “internal market system”. I found the analysis convincing and compelling.

This internal market model is developed in Chapters 6‐8: “Mapping the process of subsidiary evolution”; “Perspectives on the theory of the MNC”; and “An internal market perspective on the MNC”.

The final section comprises Chapter 9 only, “Implications for management practice”. The author makes some specific recommendations stemming from his own research and other sources (for example: Bartlett and Ghosal, 1989). The main thrust is to argue for a change in HQ‐subsidiary relationship from dependence to interdependence, allowing for greater entrepreneurial effort from below.

To sum up, I thought this book might have held limited appeal. I was wrong. The author himself thinks the book is aimed at individuals embarking on doctoral studies. It would certainly be useful to those students, but it deserves a wider audience – I would recommend this book to academics, students, practitioners and policy‐makers.