MNE Topic 7 Flashcards
global knowledge management
- management of innovation
- under R&D function
innovative companies
tech sectors
e.g. apple e.g. Tesla
ability of innovation to drive performance
- most innovative = outpace broader market in SH returns by significant margin 3.3% av per year
innovation ready company
3 characteristics
- makes innovation priority
- commits inv and talent to it
- ready to transform inv into results
nearly 90% of innovation ready companies plan to increase innovation spending
2 innovation trends
- collab with comp in complementary sectors
- mergers and acquisitions = new tech/process = talent
innovation and sustainability
one of top priorities
2022 - 56% ranks innovation and climate sustainability among top 3 priorities
Global Innovation Index
- Switzerland
china = sole middle income in top 30
3 R&D types
US is e.g.
- Domestic - conducted in US by companies HQ in US
- Imported - conducted by US by companies HQ elsewhere
- Exported - conducted in other countries by companies HQ in US
in-region R&D spending
domestic & imported R&D
- both R&D spending by local companies and R&D spending imported from other regions
4 worldwide R&D innovation trends in MNCs
- biggest innovators = conduct parts of R&D abroad
- where spend R&D money = changed
- regional ranking for corp R&D = Asia, North America and Europe
- Asias rank = driven by China and India
imported R&D china
R&D spending in China by companies HQ in other countries - nearly doubled 2007-2015
india
growth in corp R&D conducted in India rose 115% 2007-2015 = £28billion
growth powered from MNCs - imported R&D
software R&D = largest area
why do MNCs move to Asia
3 reasons
- Close to market -> tech centre - around the clock capability = accelerate dev work (time difference)
- Accessing talent technical talent - in close proximity to regional customers
- low cost labour
hollowing out of manufacturing in advanced economies
developing:
1. increase low skilled jobs
2. boosted skilled labour force -> upgrading strategies & physical co-location of high value added activities with production
advanced:
1. impoverished competencies = skill shortage & skill erosion (low and high skilled jobs)
2. skill mismatch
US
- increased R&D exports -> muted by rise in imports
- bigger gain = imports from European invested heavily in US -> 63% of US R&D total in 2015
Europe
European spend less R&D at home
exported R&D - spending in other countries by companies HQ in EU
models explaining differentiating national subsidiaries roles
- UN model of multinational management
- Headquarters hierarchy syndrome
UN model of multinational management
- allocating roles/responsibilities to national subs in same general terms
- corp HQ treats all subs in uniform manner
headquarters hierarchy syndrome
- subs are merely implementers of MNCs worldwide strategy
tensions = leaders (power), merging = resource freedom
4 consequences of symmetrical treatment between HQ and subsidiaries
- overcompensation for needs of smaller/less crucial mkt
- under-responsiveness to strategically important needs
- underutilisation of company’s worldwide assets & org capabilities
- demotivated country mngers