Internalization Theory and the Governance of the Global Factory

Organizational innovation in the multinational enterprise: Internalization theory and business history

“…On the one hand, it has discussed the role of the entrepreneur in the sourcing of knowledge and the accessing of complementary assets (Richardson 1972;Rugman, 1981;Teece, 1986;Verbeke et al, 2014;Verbeke and Kano, 2015). On the other hand, it has studied the design and functions of the headquarters (Hedlund, 1986(Hedlund, , 1994Bartlett and Ghoshal, 1989;Ghoshal and Bartlett, 1990;Young and Goold, 1999;Sölvell and Zander, 1995;Foss, 1997;Collis et al, 2007;Andersson and, 2010;Hilleman and Verbeke, 2014;Kunisch et al, 2015;Coeurderoy and Verbeke, 2016;Meyer and Benito, 2016). The historical evidence presented here challenges us to assess whether analysis of entrepreneurial roles and headquarters role distribution can be combined with internalization theory to explain unconventional or innovative organizational forms of MNEs.…”

Determinants of Corporate International Expansion Beyond the Home Region: An Empirical Examination of U.S. Multinational Enterprises Expansion to Europe and Asia‐Pacific

“…Given that MNEs are usually comprised of multiple operations across countries, their international expansion requires commitment and energy as integration across value chain activities to ensure FSA mobility depends on highly orchestrated cross-border flows of information, human capital, financial resources, and goods. This coordinative MNE system is captured in the term "global factory" (Buckley, 2009a(Buckley, , 2009bBuckley & Ghauri, 2004;Buckley & Strange, 2015;Hillemann & Verbeke, 2014;Kano, Verbeke, & Drake, 2015). The concept of global factory means that organizational activities have been dispersed geographically and, at the same time, integrated organizationally in a way that maximizes the aggregate efficiency of the MNE productive system (Buckley, 2011;Buckley & Ghauri, 2004).…”

“…This coordinative MNE system is captured in the term “global factory” (Buckley, , ; Buckley & Ghauri, ; Buckley & Strange, ; Hillemann & Verbeke, ; Kano, Verbeke, & Drake, ). The concept of global factory means that organizational activities have been dispersed geographically and, at the same time, integrated organizationally in a way that maximizes the aggregate efficiency of the MNE productive system (Buckley, ; Buckley & Ghauri, ).…”

The Unbalanced Geography of the World's Largest MNES: Institutional Quality and Head Office Distribution Across Countries

“…Whether through a conventional, hierarchical 'M-form' (Chandler, 1962;Williamson, 1985) or a 'global factory' organizational approach (Buckley, 2009(Buckley, , 2011(Buckley, , 2012, the corporate head office plays an important role in MNE governance. The head office typically acts as supposed 'intelligence controller' or, at least, 'resource orchestrator' for a large number of internal and external contracts (Birkinshaw et al, 2006;Hillemann and Verbeke, 2014).…”

“…Third , in line with internalization theory thinking, most of the world's largest firms now operate as ‘global factories,’ wherein both the ownership status and the location of fine‐sliced value chain activities are reassessed on a continuous basis. Especially within the population of the largest and most successful firms, both the ownership status and location of specific value chain activities are typically contestable/moveable so that the observed governance of each activity can reasonably be interpreted as being efficient from a comparative institutional perspective (Hillemann and Verbeke, ; Narula and Verbeke, ).…”