Chapter 5 Creating Worldwide Innovation and Learning:
Chapter 5 Creating Worldwide Innovation and Learning:
Exploiting Cross-Border Knowledge Management
Focus on one of the most important current challenges facing MNE management-how to develop and diffuse knowledge to support effective worldwide innovation and learning
Central, Local and Transnational Innovation
Two classic processes dominate MNE’s innovative capabilities (traditional) * Centre-for-global innovation model–(International/global) * New opportunity sensed in home country * Centralized resources & capabilities of parent company brought to create new product/process (the main R&D center) * Implement through subsidiaries whose role is to introduce that innovation to their local market
Examples of this model: Pfizer’s develop Viagra; Intel create Pentium processors * Local-for-local innovation model–(multinational strategic) * Subsidiary-based knowledge- sense local opportunities * Subsidiaries use own resources &capabilities to create innovative responses * Subsidiaries then implement that in the local market
Examples of this model:Unilever develop a detergent bar in response to Indian market’s need for a product suitable for stream washing; Philippines-based Jollibee’s strategy of adapting its fast-food products to the local market preferences of each country it entered
Two new transnational innovation processes * Locally leveraged innovation model * Special resources &capabilities of each national subsidiary available not only to local entity but to other MNE units worldwide
Examples : p393 * Globally linked innovation model * Pool resources &capabilities of many different units - both parent company &subsidiaries * Create and manage innovative activity jointly * Allow company to take market intelligence developed in one part of the organization, perhaps linking to specialized expertise in a second entity and a scarce resource in a third, then diffuse the new
Exploiting Cross-Border Knowledge Management
Focus on one of the most important current challenges facing MNE management-how to develop and diffuse knowledge to support effective worldwide innovation and learning
Central, Local and Transnational Innovation
Two classic processes dominate MNE’s innovative capabilities (traditional) * Centre-for-global innovation model–(International/global) * New opportunity sensed in home country * Centralized resources & capabilities of parent company brought to create new product/process (the main R&D center) * Implement through subsidiaries whose role is to introduce that innovation to their local market
Examples of this model: Pfizer’s develop Viagra; Intel create Pentium processors * Local-for-local innovation model–(multinational strategic) * Subsidiary-based knowledge- sense local opportunities * Subsidiaries use own resources &capabilities to create innovative responses * Subsidiaries then implement that in the local market
Examples of this model:Unilever develop a detergent bar in response to Indian market’s need for a product suitable for stream washing; Philippines-based Jollibee’s strategy of adapting its fast-food products to the local market preferences of each country it entered
Two new transnational innovation processes * Locally leveraged innovation model * Special resources &capabilities of each national subsidiary available not only to local entity but to other MNE units worldwide
Examples : p393 * Globally linked innovation model * Pool resources &capabilities of many different units - both parent company &subsidiaries * Create and manage innovative activity jointly * Allow company to take market intelligence developed in one part of the organization, perhaps linking to specialized expertise in a second entity and a scarce resource in a third, then diffuse the new