Resource dependence and construction, and macro- and micro-politics in transnational enterprises and alliances: the case of jet engine manufacturers in Germany

doi:10.1017/CBO9780511973352.003

2 - Resource dependence and construction, and macro- and micro-politics in transnational enterprises and alliances: the case of jet engine manufacturers in Germany

Published online by Cambridge University Press: 26 April 2011

Arndt Sorge and

Katja Rothe

Edited by

Christoph Dörrenbächer and

Mike Geppert

Show author details

Arndt Sorge: Affiliation:
WZB, Germany
Katja Rothe: Affiliation:
Social Science Research Center Berlin
Christoph Dörrenbächer: Affiliation:
Berlin School of Economics and Law
Mike Geppert: Affiliation:
University of Surrey

Book contents

Get access

Summary

Introductory overview

We are concerned with the relative importance of different factors for the internationalization strategy and localization patterns in a highly globalized industry, with non-routine value creation and vertical integration or strong vertical alliances. To take a prime example for this situation, we investigated the evolution of two different multinational corporations (MNCs) developing and manufacturing jet engines in Germany. This study is embedded in an analysis of the jet engine industry and its worldwide development. Germany afforded a unique chance to study a combination of continuity and radical change in a high-technology industry. The business model of the industry is generally not known or appreciated, and it deviates remarkably from what is usually claimed for high-technology industries and for Anglo-American business systems. Furthermore, whilst the product and its supply are truly global, local influences are strong on the resource side, and a combined balance of resources affects localization decisions within the wider strategy of an enterprise. The strength of globalization, together with the interdependency between sites across borders, leverages the importance of local resource endowments, including socio-economic institutions (see also chapter of Maclean and Hollinshead in this volume).

This situation is poorly considered in the international business literature. Also, resource endowments mainly work differently from what the varieties of capitalism and business systems literature suggest. Such approaches seem to misunderstand high-technology industries to an extent which remains to be researched in greater detail, in view of what we know from the literature on national business systems.

Type: Chapter
Information: Politics and Power in the Multinational Corporation
The Role of Institutions, Interests and Identities
, pp. 41 - 71

DOI: https://doi.org/10.1017/CBO9780511973352.003 [Opens in a new window]

Publisher: Cambridge University Press

Print publication year: 2011

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Book purchase

Temporarily unavailable

References

Aharoni, Y. 1966. The Foreign Investment Decision Process. Boston, MA: Harvard University Graduate School of Business Administration, Division of ResearchGoogle Scholar

Anderson, E. and Gatignon, H. 1986. “Modes of foreign entry: a transaction cost analysis and propositions,” Journal of International Business Studies 17: 1–26CrossRef Google Scholar

Andersson, U., Forsgren, M. and Holm, U. 2007. “Balancing subsidiary influence in the federative MNC: a business network view,” Journal of International Business Studies 38: 802–18CrossRef Google Scholar

Astley, W. G. and P. S. Sachdeva 1984. “Structural sources of intraorganizational power. a theoretical synthesis,” Academy of Management Review 9: 104–13Google Scholar

Barkema, H. G. and F. Vermeulen 1998. “International expansion through start-up or acquisition: a learning perspective,” Academy of Management Journal 41: 7–26Google Scholar

Bartlett, C. A. and S. Ghoshal 1989. Managing Across Borders: The Transnational Solution. London: Century BusinessGoogle Scholar

Bonaccorsi, A. and Giuri, P. 2001. “Network structure and industrial dynamics. The long-term evolution of the aircraft-engine industry,” Structural Change and Economic Dynamics 12: 201–33CrossRef Google Scholar

Cyert, R. M. and J. G. March 1992. A Behavioral Theory of the Firm. Cambridge, MA: BlackwellGoogle Scholar

Dörrenbächer, C. 2007. “The challenges for foreign-owned subsidiaries in FDI-led modernization strategies: the case of Hungary,” Competition and Change 11: 179–97CrossRef Google Scholar

Dörrenbächer, C. and Geppert, M. 2005. “Micropolitical aspects of mandate development and learning in local subsidiaries of multinational corporations.” Discussion Paper SP III 2005–202, Social Science Research Center Berlin

Dunning, J. 1988. “The eclectic paradigm of international production: a re-statement and some possible extensions,” http://aib.msu.edu/awards/19_1_88_1.pdf (last accessed 29 October, 2009)

Ergas, H. 1984. “Why do some countries innovate more than others?,” http://ssrn.com/abstract=1430184 (last accessed 29 October, 2009)

Forsgren, M., Holm, U. and Johanson, J. 2005. Managing the Embedded Multinational: A Business Network View. Cheltenham: Edward ElgarCrossRef Google Scholar

Galland, A. 1993. Die Ersten und die Letzten. Deutsche Jagdflieger im 2. Weltkrieg. Munich: Schneekluth

Gersdorff, K., Grasmann, K. and Schubert, H. (with Prestel, Karl) 1995. Flugmotoren und Strahltriebwerke. Entwicklungsgeschichte der deutschen Luftfahrtantriebe von den Anfängen bis zu den internationalen Gemeinschaftsentwicklungen. Bonn: Bernard & Graefe

Gottschling, D. 2006. “Triebwerke der Region. Die Wachstumsbranche der Luft- und Raumfahrt in der Hauptstadtregion Berlin-Brandenburg kann sich sehen lassen: Millionen-Umsätze, tausende Arbeitskräfte, internationale Anerkennung – und kein Ende,” FORUM – Das Brandenburger Wirtschaftsmagazin 6: 4–5Google Scholar

Hall, P. A. and Soskice, D. (eds.) 2001. Varieties of Capitalism: The Institutional Foundations of Comparative Advantage. Oxford University PressCrossRef

Hayward, K. 1986. International Collaboration in Civil Aerospace. London: Frances PinterGoogle Scholar

Hennart, J.-F. and Reddy, S. 1997. “The impact of culture on the strategy of multinational enterprises: does national origin affect ownership decisions?,” Journal of International Business Studies 29: 515–38CrossRef Google Scholar

Johanson, J. and Vahlne, J. E. 1977. “The internationalization process of the firm – a model of knowledge development and increasing foreign market commitment,” Journal of International Business Studies 8: 23–32CrossRef Google Scholar

Kristensen, P. and Zeitlin, J. 2005. Local Players in Global Games. Oxford University PressGoogle Scholar

Lammers, C. J. 1978. “The comparative sociology of organizations,” Annual Review of Sociology 4: 485–510CrossRef Google Scholar

Lane, C. and Bachmann, R. 1996. “The social constitution of trust: supplier relations in Britain and Germany,” Organization Studies 17: 365–95CrossRef Google Scholar

Lange, K. S. G. 2006. “Deutsche Biotech-Unternehmen und ihre Innovationsfähigkeit im internationalen Vergleich – eine institutionentheoretische Analyse.” Doctoral thesis, Rijksuniversiteit Groningen

Lundvall, B. A. (ed.) 1992. National Systems of Innovation. London: Frances Pinter

Marr, A. 2007. A History of Modern Britain. London: MacmillanGoogle Scholar

Saka, A. 2007. “Unravelling learning within multinational enterprises,” British Journal of Management 18: 294–310CrossRef Google Scholar

Schmid, S. and Schurig, A. 2003. “The development of critical capabilities in foreign subsidiaries: disentangling the role of the subsidiary's business network,” International Business Review 12: 755–82CrossRef Google Scholar

Sorge, A. 2006. “Organizing socially constructed internal and external resources,” Journal of Institutional and Theoretical Economics 162: 172–93CrossRef Google Scholar

Economist, The 2009. “Rolls-Royce. Making things in a post-industrial society,” 8 January

Wernerfelt, B. 1984. “A resource-based view of the firm,” Strategic Management Journal 5: 171–80CrossRef Google Scholar

Whitley, R. 1992. European Business Systems. Firms and Markets in Their National Contexts. London: SageGoogle Scholar

Whitley, R. 1999. Divergent Capitalisms. Oxford University PressGoogle Scholar

Whitley, R. 2006. “Understanding differences: searching for the social processes that construct and reproduce variety in science and economic organization,” Organization Studies 27: 1153–77CrossRef Google Scholar

Wikipedia: Frank Whittle: http://en.wikipedia.org/wiki/Frank_Whittle (last accessed October 29, 2009)

Wikipedia: Jet engine: http://en.wikipedia.org/wiki/Jet engine (last accessed October 29, 2009)