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Scholars have examined, in various ways, the complexity of knowledge in innovation. Recently, research has begun to focus on the role of a continuous process of knowledge recombination in our understanding of a changing structure of knowledge complexity and knowledge accumulation. Furthermore, we also claim that this process may reflect changes in the underlying innovation paradigm, or in other words the arrival of the information age. Yet, little is known about how knowledge complexity is increasing in the broader context of globalization, in which the influence of a rising diversity of locational sources may feature more prominently. We consider how knowledge recombination that relies upon the global spread of innovation activities will affect our theory of the relationship through which earlier contributions to knowledge become inputs to subsequent knowledge building that generates more (or less) complex knowledge artifacts. We propose that knowledge complexity rises when recombined elements are sourced across two dimensions of distance simultaneously, namely when sources which are derived from (i) disparate knowledge fields and (ii) distinct geographic locations are combined. We thereby develop an international business perspective on knowledge complexity through recombination by better appreciating the processes that may be necessary when knowledge is combined along global value chains. We also suggest some implications for changing organizational forms by highlighting the value of connecting previously unconnected geographically distant elements, which suggests a greater potential for more informal and indirectly diffused knowledge-based connections.

Strategy scholars have long argued that breakthrough innovation is generated by recombining knowledge from distant domains. Even if firms have the ability to access and absorb knowledge from distant domains, however, they may fail to pay attention to such knowledge because it is seemingly irrelevant to their tasks. We draw attention to this problem of knowledge relevance and develop a theoretical model to illuminate how ideas from seemingly irrelevant (i.e., peripheral) domains can generate breakthrough innovation through the cognitive process of analogical reasoning, as well as the conditions under which this is more likely to occur. We situate our theoretical model in the context of teams in order to develop insight into the microfoundations of knowledge recombination within firms. Our model reveals paradoxical requirements for teams that help to explain why breakthrough innovation is so difficult.

This chapter provides an overview of various new streams in international business (IB) research that will have an important impact on IB studies in the years to come, both from a conceptual and a methodological perspective.

The authors discuss a set of 18 chapters, all included in this research volume, and highlight both the key intellectual contributions and the challenges identified that will need to be taken into account in future research.

The findings of the studies discussed are manifold and profound. Some of the main findings include the following: (1) multinational enterprise (MNE)-centric empirical research studies should be avoided. Resource recombination typically requires taking into account the resource base and the strategies of at least two economic actors. (2) IB studies, almost by definition, need to take into account “distance,” but most prior empirical research has not done a particularly good job in including relevant distance parameters in a methodologically sound way to assess their impact on MNE strategy, operational functioning or performance. (3) Nonbusiness institutions can be very helpful in promoting MNE expansion but include “dark side” institutions that sometimes appear very effective in particular situational contexts. (4) Institutional diversity matters: it can make international knowledge transfers difficult, it can lead to discrimination against firms from specific nationalities, it certainly suggests that there is no generalizable multinationality–performance relationship, and it raises the question whether new theory is needed to accommodate previously neglected institutional contexts.

This overview of several recent IB studies confirms that managing the international innovation chain in its entirety is fraught with difficulties. MNE senior management must economize on bounded rationality (meaning: improving information quality and information processing) and bounded reliability (meaning: making sure that economic actors make good on open-ended promises, whether implicit or explicit). Any IB transaction by definition entails new resource recombination. Doing so effectively requires correct information, reliable partners and a recombination outcome that supports value creation for the MNE. Multiple, practice-driven puzzles in the IB context are proposed to the reader, and the outcomes are often unexpected.

A variety of new concepts and methodological approaches are proposed to improve the quality of future IB research.

Purpose – In this chapter, we address the lack of sufficient entrepreneurship in multinational enterprises (MNEs) that seek to improve their ability to achieve national responsiveness. The main reason for this deficiency appears to be the transfer of proven routines from the home country, even when it is clear from the outset that these routines will simply not work and will require much more than a quasi-mechanistic ‘adaptation’ to the new environment.

Methodology/approach – Conceptual

Practical implication – This chapter suggests that MNEs need to close their entrepreneurial deficits in host countries, by allowing novel resource recombinations. These resource recombinations should lead to accessing fully the coveted host country location advantages that triggered entry in these countries and to success in the market place.

Originality/value of the chapter – Most of the contemporary international business literature has studied subsidiary entrepreneurship in the context of established affiliates abroad. Here, we argue that entrepreneurship is equally important in the setting of new foreign market entry. We identify entrepreneurial deficits as the main source of MNEs' failure when trying to achieve national responsiveness.

Empirical research demonstrates that category specialism is aligned with competitive success and that social actors indulging in perceptual violations of social codes are subjected to devaluations. Through category generalism, however, social actors may obtain access to diverse set of audience segments. This chapter investigates such a trade-off in the context of political ideologies – conceived here as composed of social codes and exposed to a discipline similar to that of market categories. A successful instance of repositioned identity is introduced and discussed: the case of the British Liberal Democrats Party during the post-WWII period. Particular attention is dedicated to the process of recombination of own and oppositional social codes. This strategy contributed to increase the audience attention received on each of the issues traditionally “owned” by the Liberal Democrats Party. Party level analyses suggest that the borrowed issues improved audience attention when they contributed to extend and clarify the ideological roots of the Liberal Party. The implications of this case study for current research on market categories are further discussed.

Managers of corporations that are facing fading product-market domains are often inertial in their response to such decline or engage in endgame strategies within these markets. For managers operating in dynamic markets, however, such responses are often ineffective. Rather, such markets often demand a corporate entrepreneurship response whereby managers move their businesses into new market opportunities as the value of current market domains inevitably begins to fade. The emphasis is on exiting from declining markets while simultaneously capturing and exploiting opportunities in more promising markets. In this chapter, we describe the recombinative organizational form (i.e. structure and process) by which this can occur. We focus on the modular organizational structure (i.e. modularity, relatedness, and loose-coupling) and corporate dynamic capabilities (i.e. probing, patching, and recoupling processes) by which managers can cope with the inevitable decline that is the nature of dynamic industries. An example from recent empirical research provides an illustration of such corporate entrepreneurship.

Organizational fields are shaped by both the relations that organizations forge and the language they express. The structure and discourse of organizational fields have been studied before, but seldom in combination. We offer a methodological approach that integrates relations and expressions into a comprehensive visualization.

By mapping networks and discourse as co-constitutive, the method illuminates the mechanisms active in organizational fields. We utilize social impact evaluation as an issue field shaped by the presence of an interstitial community, and compare this structure with simulated alternative field configurations.

The simulations reveal that variation in organizations’ openness to adopting concepts from adjacent meaning systems alters field configurations: differentiation manifests under conditions of low overall openness, whereas moderate receptivity produces hybridizations of discourses and sometimes the emergence of an interstitial community that bridges domains. If certain organizations are open while others remain focused on their original discourse, then we observe integration in the discursive domain of the invariant organizations.

The observations from the simulations are represented by visualizing organizational fields as topographies of meaning, onto which interorganizational relations are layered. This representation localizes organizations and their interactions in a cultural space while emphasizing how meanings of relationships and organizational expressions vary with different field configurations. By adding meaning to network data, the resulting maps open new perspectives for institutional research on the adaptation, translation, and diffusion of concepts.

The objective of this chapter is to understand innovative processes of resource redeployment taking place during consumption. We label this as consumer entrepreneurship. We define consumer entrepreneurship as the process of sharing and recombining resources innovatively to seek opportunities for self-creating user value. Through the illustration of heterogeneous forms of consumer peer-to-peer sharing, we argue that consumer entrepreneurship: (1) differs ontologically from a view of entrepreneurship as creation of exchange value; (2) bridges the notion, established in marketing studies, of consumers as value creators with the field of entrepreneurship; (3) develops mostly when the process of sharing is regulated informally, based on trust relationships; and (4) thrives as groups of sharing consumers discover and enact their values through the experimentation of multiple forms of product and service procurement. On the basis of these points, consumer entrepreneurship contributes to provide a novel perspective on hybrid organizations, that is, a view of hybrid organizations as everyday spaces where consumers create heterogeneous forms of (utilitarian, social, or environmental) value that they personally use as opposed to reward exchanges. Relative to the current definition of hybrid organizations (Pache & Santos, 2013) and organizing (Battilana & Lee, 2014), we argue that consumer entrepreneurship helps better explain “why, when, and how” consumers increasingly engage in peer-to-peer sharing organizations – a fledging and still underexplored way of organizing consumption worldwide.

Adopting a knowledge-based view of the firm, this chapter explores how different contents of firm-level entrepreneurship may influence performance of SMEs in moderately dynamic industries, which represent the bulk of economic activity in several countries. More specifically, this study aims, first, at identifying what types of entrepreneurial behavior – new-market entry, new-product development, diversification – are more suitable in order to survive and prosper in industries characterized by moderate growth and dynamism. Second, the analysis aims at assessing whether knowledge sharing is to be promoted in order to successfully compete in these industries. Third, the study aims at identifying which type of knowledge – market knowledge or technology knowledge – is most needed to develop entrepreneurial behavior and performance in low-growth industrial contexts. Following a knowledge-driven approach, we propose a view on corporate renewal that may complement current streams of research focused on large firms in high-velocity settings. Emerging results contribute to advancing the literature on entrepreneurial renewal by providing both an investigation of such behaviors within an industrial setting different from the high-growth, high-technology industries in which investigations have been conducted so far, and by suggesting that rich insights may be gained by investigating entrepreneurial recombinations within smaller firms that operate in less-dynamic contexts.

The purpose of this chapter is to demonstrate that sound, mainstream international business (IB) thinking should be applied when assessing the economic opportunities available to multinational enterprises (MNEs) in Bottom of the Pyramid (BOP) markets.

We describe and evaluate critically the key points made in the BOP literature about the alleged attractiveness of BOP markets, and the alleged strengths of MNEs to penetrate these markets successfully. We revisit the managerial implications from the BOP literature using an internalization theory lens.

We demonstrate the weak conceptual grounding of conventional BOP thinking, which suggests that MNEs from developed economies should be very entrepreneurial and should systematically serve BOP markets with new products and business models. We also show the fallacy of the idea that a “success template” in one BOP market would be easily replicable in other BOP markets and would allow the MNE to earn economies of scale and scope.

IB researchers should start conducting serious studies on the attractiveness of BOP markets for MNEs. They should also analyze seriously the micro-foundations of successful knowledge recombination in BOP markets and the limits to the transferability of success templates. Mainstream IB theory, namely internalization theory, is particularly well equipped to analyze the costs and benefits of entering BOP markets, building upon a comparative institutional logic.

Senior MNE managers should not allow themselves to be blinded by BOP gurus, advocating the alleged great benefits of penetrating BOP markets. BOP markets may be especially challenging international expansion targets for MNEs because of large institutional voids, high uncertainty, high “distance” vis-à-vis the home country market and the difficulties of transferring relevant knowledge from one BOP market to another.

This chapter is the first to show that mainstream IB research can be usefully applied to analyze the “real” attractiveness of BOP markets for MNEs. Comparative institutional analysis is proven to provide substantially more insight to make BOP market penetration work than past guru-talk on BOP markets.