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This book refocuses thinking on how multinational enterprises (MNEs) can achieve a sustained contribution to European transition economies as these countries move from the processes of transformation into pursuit of more sustained development. The authors apply key aspects of recent work on the strategic aims and nature of the contemporary MNE to the transition economy context, and find that the generation and application of technology has particular relevance to the success of MNEs in Central and Eastern Europe. The book is based on the results of two new wide-ranging surveys and includes a thorough review of current literature.

Inhaltsverzeichnis

Frontmatter

1. Multinational Strategy and Industrial Transformation

Abstract
That ‘the role of foreign direct investment in aiding the regeneration of the shattered economies of East and Central Europe’ (Buckley, 1996) was an important early perception of the debate following the collapse of authoritarian centrally-planned regimes is well-understood. Indeed documentation and analyses of foreign direct investment (FDI) contributed significantly to the preliminary elaboration of these concerns. We argue here, however, that (mirroring the crucial refocusing of analytical context pioneered by Hymer [1960/1976]) the relevance of FDI flows to the processes at issue can only be fully comprehended through an understanding of the strengths and motivations of the agents responsible for them, that is multinational enterprises (MNEs). The strategic roles played by MNEs’ operations in transition economies are here viewed as central to the nature of their contribution to the industrial restructuring necessary in these countries. The increasingly heterogeneous nature of the globalized activity of MNEs emphasizes the range of these potential roles, and therefore the crucial importance to host countries of the types of operations they can attract.
Julia Manea, Robert Pearce

2. Technology and Strategic Motivations for Investment in Transition Economies

Abstract
This is the first of two chapters that review the ways in which MNEs apply, acquire or generate technology in their CEE operations, positioning this in terms of the broader strategic dimensions of their initial entry to, and subsequent evolution in, these transition economies. The next section discusses MNE HQ survey evidence on the relative prevalence of the four strategic motivations (introduced in the previous chapter) in the original activity of their subsidiaries in CEE, and also provides some indication of how the balance of these may evolve as the host region changes and develops. We then discuss in detail, for the first time, the seven sources of technology that are seen as available to MNEs’ subsidiaries. These can be grouped as of three broad types; those available from the parent MNE group (technology transfer); existing technology available in CEE, either as capabilities of local firms or as tacit knowledge (distinctive skills) embodied in local labour (for example engineers or technicians); and technology that MNEs can generate in these economies through in-house or externally collaborative R&D.
Julia Manea, Robert Pearce

3. Reasons for Investing in CEE, Technology and Strategic Evolution of Subsidiaries

Abstract
This chapter analyses the replies of HQ executives to a question which asked them to evaluate the relative importance of seven reasons for investing in CEE transition economies. These reasons delineate factors that determine the initiation of operations in CEE economies; either in terms of demand-side influences (strategic needs of MNE-group current competitiveness or developmental aims) or supply-side characteristics of host-countries (capacity to support an element of a MNE strategy). Thus it is acknowledged that alongside those dominant motivations that define the initial strategic drivers of entry, other secondary strategic interests may very quickly emerge within the new subsidiaries.
Julia Manea, Robert Pearce

4. Market Orientation and the Strategic Development of MNEs in CEE

Abstract
A key manifestation of appropriate industrial restructuring in phase one of CEE economies’ transition is seen as internationally-competitive standards of productive efficiency. One aspect of this would be the ability to supply the local markets of the group of transition economies internally in a responsive and cost-competitive manner. A more visibly assertive and economically valuable result, however, is perceived to be genuinely competitive exports. The efficiency-seeking (ES) motivation in MNEs’ operations is expected to respond to latent export-supply potentials in CEE economies. The usual view of such export-orientation was that it would be initiated around the well-established capabilities of MNEs and utilize the immediately accessible cost-effective inputs of transition economies. The analysis of earlier chapters does then indicate the possibility and desirability of eventual (phase-two) moves towards exporting capabilities based on products developed in CEE and reflecting more individualizing competences.
Julia Manea, Robert Pearce

5. Strategies of MNEs’ Subsidiaries in Romania

Abstract
This chapter uses information from the survey of MNE operations in Romania to assess subsidiaries’ own perceptions of their roles, motivations and capabilities. The questionnaire (and in some cases associated interviews) addressed a very wide range of issues (of which other elements are investigated in the next two chapters), and a basic aim is to evaluate these disparate aspects of behaviour and competitive evolution in terms of the key strategic motivations of MNEs that are central to our analysis. To facilitate this we sought, firstly, to categorize each case in terms of a dominant strategic status (market-seeking MS; efficiency-seeking ES; knowledge-seeking KS), so that the implications of these imperatives (in terms of competitive scope and behaviour) could be investigated. The procedure for this classification is described in the Appendix and the outcome analysed in the next section.
Julia Manea, Robert Pearce

6. MNEs’ R&D and the Technological Transition in CEE

Abstract
This chapter analyses the potential role of MNEs’ R&D operations in the economic progress of the CEE transition economies. Though the previous chapters have indicated very limited status for the output of MNE laboratories in CEE as an already activated source of technology in subsidiaries, the expectation is that the deepening of R&D commitment will be a central element in the creative transition from phase-one application of established sources of competitiveness to phase-two development driven by new technological capabilities. In the following sections we review the scientific heritage of the CEE countries under central planning, and characterize the inherited national systems of innovation as potentially strong but distorted in terms of ineffectual competitive activation. We then conceptualize ways in which MNEs’ technology strategies, and approaches to globalizing their R&D programmes, may help rebalance and operationalize the scientific competence of the transition economies. Results from the survey of HQs are reviewed to discern the extent of their R&D commitment to the CEE economies and to evaluate the influences recognized by both MNEs with R&D in place (or planned) and those that have so far rejected the possibility of such units. This addresses demand-side decision factors that perceive R&D as an element in MNEs’ attempts to deepen their competitiveness in CEE economies, and supply-side influences deriving from the potential benefits of accessing and applying distinctive science and technology competences available in the region.
Julia Manea, Robert Pearce

7. Input Supply Linkages of MNE Subsidiaries in CEE: Dependence or Development?

Abstract
This chapter addresses the contribution of foreign MNEs to CEE economies via local linkages and spillover effects. In a similar manner to previous chapters, it argues that the potential for increased local market linkages and positive contributions to the upgrading of local industrial competitiveness may depend on a set of characteristics that relate to the nature and behaviour of MNEs’ operations in transition economies.
Julia Manea, Robert Pearce

8. Conclusions

Abstract
The defining result of this study is that the early operations of MNEs in the CEE transition economies saw this region as mainly a distinctively separate and strategically-isolated competitive environment. Indeed there is a clear suggestion that the dominant focus of these initial market-seeking (MS) investments was constrained to their individual host countries. In terms of our articulation of the strategic aims of contemporary networked MNEs, and the opening (as a key component of transition) of CEE economies to internationalized competition, an instructive way of analysing these initial choices is then mainly as a rejection of the alternative of efficiency-seeking (ES).
Julia Manea, Robert Pearce

Backmatter

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