Governing Entrepreneurial Opportunity Recognition in MNEs: Aligning Interests and Cognition Under Uncertainty*

Abstract

Entrepreneurial activities contribute to the innovativeness and performance of subsidiaries and their parent multinational enterprises (MNEs). Though a strong multinational presence can spur the discovery and exploitation of entrepreneurial opportunities, it also creates uncertainty that complicates the alignment of cognition and interest in the governance of MNEs' multi-level entrepreneurial activities. We integrate economic and behavioural approaches to identify communicative, behavioural, and value uncertainties encountered in the MNEs' opportunity recognition phase. In addition, we discuss key contingencies that influence solutions to these uncertainties through delegation of authority, provision of incentives, promotion rules, and use of clan structures. Copyright Blackwell Publishing Ltd 2007.

MNE Entrepreneurial Capabilities at Intermediate Levels: The Roles of External Embeddedness and Heterogeneous Environments

“…In this respect, they reduce corporate HQs to a role of pure exploitation, which runs counter to the literature highlighting that opportunity recognition might also be important at the corporate level (Mahnke et al, 2007;Rugman & Verbeke, 2001). …”

“…While there is a growing amount of research on RHQs, most of it focuses on issues of control and coordination rather than on entrepreneurship and innovation (e.g., Enright, 2005aEnright, , 2005bLehrer & Asakawa, 1999;Morrison et al, 1991;Nell et al, 2011b;Piekkari et al, 2010). organizational entities that are distinct from subsidiaries and HQs units, although they share some of the same characteristics. Furthermore, building on previous research, we argue that external embeddedness (e.g., Meyer et al, 2011;Andersson et al, 2002;Birkinshaw, 1997;Birkinshaw & Hood, 1998), and exposure to heterogeneous information and knowledge (Kogut & Zander, 1992;Kogut & Zander, 1993;Mahnke et al, 2007;Zahra & Garvis, 2000) Second, we present an exploratory empirical analysis of data on European RHQs to illustrate some of our arguments. We explore if and how the entrepreneurial capabilities of RHQs are related to the external relationships that those units form in their regions (regional embeddedness) and the extent to which those regions encompass dissimilar markets (intraregional dissimilarity).…”

“…Figure 1 illustrates our main idea, which extends the relay concept presented by Asakawa and Lehrer (2003). Profiting from exposure to dissimilar environments (e.g., Mahnke et al, 2007;Zahra & Garvis, 2000) Profiting from embeddedness in local networks (e.g., Andersson et al, 2002;Birkinshaw & Hood, 1998) …”

“…Despite these advancements, a compelling explanation of why and how MNEs differ in their ability to continuously identify and exploit opportunities is lacking (Mahnke et al, 2007).…”

A tale of two levels: the diversification of business groups

“…As the need to consider various diversification options decreases because of the presence of other member firms within the business group, a substantial amount of managerial cognitive resources of the member firm may be freed up (Aghion & Tirole, 1995;Mahnke, Venzin, & Zahra, 2007;Schwenk, 1984). Specializing in certain activities while giving up others may result in significant cost savings for each member firm (Gupta, Smith, & Shalley, 2006;Miller, Zhao, & Calantone, 2006).…”