Search results

Purpose – The purpose of this chapter is to develop a more fine-grained model of the relationship between multinational corporation (MNC) external embeddedness and subsidiary contribution to firm-level competitive advantage.

Methodology/approach – We briefly review previous international management literature and show that the conception of MNC embeddedness in external networks is often simplistic. We develop the concept of the HQ–subsidiary dyad being externally embedded and derive propositions on how this more holistic concept of MNC embeddedness influences subsidiary contribution.

Findings – We argue that subsidiary contribution depends not only on the relational embeddedness dimension of the subsidiary but that there is a complex interplay between several embeddedness dimensions on multiple levels. We suggest that the much emphasized effect of subsidiary relational embeddedness might be contingent on the HQ's own relationships, and the structure of the overall network. We also develop propositions which show that subsidiary relational embeddedness mediates the relationship between overall network structure and subsidiary contribution.

Research limitations – For the sake of theoretical stringency, we keep other influencing factors such as MNC strategy and specific subsidiary mandates as constant.

Originality/value of the chapter – Subsidiaries are an important source of firm-level competitive advantage. Subsidiary resources have also been shown to develop to a large extent in relationships with external actors. Despite this importance, we argue that our understanding of how the MNC is embedded in external networks and how this in turn influences subsidiary contribution is limited. This chapter attempts to make a first step into filling this gap.

The chapter presents a theoretical framework that deals with the basic question of how networks and industries coevolve. We draw upon the structural and relational perspectives of networks to theorize about changes occurring in interfirm networks over time and the coevolutionary linkage of these changes to the industry life cycle. We further extend the widely accepted industry life cycle model by claiming that industry-specific evolutionary patterns impact the structure of the network’s relations, which in turn lead to diversification in the sources of innovation and to variation in the patterns of industrial evolution.

This research explores how subsidiary embeddedness in different networks, both internal and external to the firm, contributes to the innovation of the service multinational corporation (MNC). Specifically, the authors analyze the different effects of networks on MNC’s subsidiaries performing competence-creating or competence-exploiting innovation activities, in the context of the service industry. The present study analyzes the data of 178 foreign-owned subsidiaries in the service sector performing innovation in Spain. The results of data analysis at two points in time show that external and internal embeddedness have a positive impact on the subsidiary innovation. Moreover, external embeddedness has a major positive influence on the competence-creating rather than on the competence-exploiting activities, while the internal embeddedness is equally important for both types of innovation. Therefore, this study contributes to further our understanding of how subsidiaries’ linkages affect innovation of the service MNC.

This chapter examines the factors that may influence the total value created in a joint venture (JV) and also the relative value appropriated by each partner in the venture. We look at the effects of both partners’ embeddedness in prior networks of relationships and the asymmetry of business relatedness of two partners with the JV on these two important outcomes. Results of an event study of stock market reaction to JV announcements by the largest U.S. firms during 1987–1996 suggest that both network embeddedness of partners and the asymmetry of business relatedness of two firms with the JV affect the total value creation of all partners but not the relative value appropriation between the partners.

Reflecting on recent questions concerning the meaning and implications of food “re-localization”, in this chapter we utilize the concept of “embeddedness” as an analytical tool to deepen and broaden the investigation of the relationships between food and territory. After pointing to some limitations inherent in the conventional use of the concept of the embeddedness, in the first part of the chapter we suggest a more holistic approach that takes into consideration its implications in the wider political, natural and socio-economic environments in which food networks develop and operate. In the second part of the chapter, we apply this holistic approach to the analysis of three alternative food networks in the South West of England: Cornish clotted cream, Steve Turton meats and West Country Farmhouse Cheddar Cheese. By focusing on the different dimensions of the territorial embeddedness of these networks, we attempt to show that their real distinctiveness comes from their variable ability to reconfigure (“re-localize”) the time-space and the spatial relations around them. Through this actively constructed process of re-localization, we argue, alternative food networks in the South West are signalling the emergence of a new agrarian eco-economy that is vertically (i.e., politically and institutionally) disembedded and horizontally (i.e., spatially and ecologically) embedded. As we discuss in the conclusions, this further complicates the competitive relationships between the alternative and the conventional food sectors, while also providing new insights into the likely sustainability of these networks and their contribution to rural development.

This paper explores the origin of entrepreneurial orientations (EO) from an organizational embeddedness perspective. It examines the impacts of firms’ network embeddedness such as structural, positional and relational on three dimensions of EO, namely, risk-taking, proactiveness and innovativeness. After a brief review of the EO construct and social network theory, we derive a set of testable propositions that relate embeddedness properties such as centrality, structural holes, direct/indirect ties, and network density, to the magnitude of three key EO dimensions. We argue that each dimension may vary independently with each other and has its own formation mechanism, which entails rich implications for entrepreneurial network research.

This chapter aims to explore the means by which rural food business networks can contribute to sustainable rural development.

This chapter explores the role of rural food business networks in sustainable rural development. This is conducted initially through a literature review. This is followed by presentation of case studies of two Irish rural food business networks; a discussion of the evident rural development brought about by the actions and activities of these networks; and an exploration of some of the factors that influence the capacity of the networks to bring about rural development.

This chapter presents evidence that demonstrates the important contribution rural business networks can make to rural development. It also finds that factors such as autonomy, embeddedness and place can influence the effectiveness of a network in bringing about and sustaining rural development.

Despite several interesting findings emerging from this research, the level to which these findings can be generalised is limited. Future research of aspects of network operation such as access to infrastructure and services would assist in ascertaining the importance of place for rural business networks and their ability to bring about rural development.

Given the significant role that networks now play in the rural development strategies of place-based organisations, this chapter has important implications for how those organisations initiate and structure those networks.

This chapter can serve as an encouragement to rural entrepreneurs to engage in networking activities to reduce rural isolation, create stronger links with their consumers and to sustain their businesses.

The focus of this chapter on factors such as embeddedness, autonomy and place and their impact on rural business networks, provides a rare opportunity to the reader to appreciate the influence of these factors on networks and their capacity to bring about and sustain rural development.

Purpose – Structural embeddedness of social networks within and beyond work organizations has shown its association with the innovation at work for employees from literature. Structural embeddedness includes three dimensions: the diversity, density, and trust of accessed networks. This chapter attempts to compare how structural embeddedness mechanizes on innovation at work differently for employees in hi-tech and non-hi-tech sectors.Methodology/approach – We analyzed 1,817 cases of currently employed respondents from the 2005 Taiwan national survey on social capital. All the indicators on structural embeddedness are operationalized from position-generated networks, and we performed regression models for total, hi-tech, and non-hi-tech samples.Findings – Except the universal effects of diversity on innovation at work for employees in both hi-tech and non-hi-tech sectors, density and trust of accessed networks significantly affect innovation at work only for employees in non-hi-tech sectors. There is a slight interaction effect between trust and density on innovation at workplaces. Those individuals with high-degree trust in accessed networks tend to have a lower degree of innovation while their network density is high. It implies that complementary networks seem to be more useful for applying new ideas at the workplace for non-hi-tech workers.Originality/value of chapter – This chapter contributes to the literature by presenting the importance of structural embeddedness of accessed social networks for innovation at work.

This introductory chapter places the contributions in this volume in the larger picture of research on governance in markets and organizations and highlights the structure of the volume. We argue that including embeddedness arguments in a model for purposive behavior is a fruitful way to extend theoretical work on governance that allows for consistent derivation of hypotheses. We hope that this theoretical focus combined with “empirical pluralism” induces a cumulative body of evidence in the new economic sociology.

Purpose – The purpose of this chapter is to analyse the evolution in the local, global and multinational network embeddedness of foreign subsidiaries in China

Methodology – The study focuses on Sino-Belgian subsidiaries in China. Factor analysis was used to determine the local responsiveness, global integration and multinational network embeddedness of firms. Next cluster analysis was carried out to classify groups of subsidiaries, while ANOVA analysis assessed their different characteristics.

Findings – Although most firms remain the same type of subsidiary throughout the period of 1995–2005, the most prevalent trajectory of strategic evolution by multinational subsidiaries in China is by increasing the integration in the multinational network before gaining more local embeddedness towards a more active role within the multinational network.

Research implications – Changes in the strategic setting and operations of MNEs occur over time because of the dynamic patterns and changing interactions of firm- and country-related factors and policies, especially when the host economy is involved in a rapid transformation process, such as China. Further research could focus on the determinants of strategic evolution.

Originality – This is one of the first chapters to analyse the changing roles of subsidiaries, in particular in an emerging economy.