External Embeddedness of Subsidiaries

In the research fields of International Business and International Management it is stated that product innovations are not only developed by headquarters (HQs) but also by foreign subsidiaries. Subsidiaries thereby apply the knowledge they obtain in inter-organizational business relationships with stakeholders like customers, suppliers, competitors, research institutions or governmental organizations. After being finished, product innovations are either exclusively employed by the creative subsidiaries or they are also transferred in intra-organizational business relationships to other units of the MNC, i. e. HQs or other subsidiaries.

This book deals with both the product innovation process in foreign subsidiaries and the innovation transfer process to other units of the MNC. Using the example of the pharmaceutical industry it demonstrates which stakeholders affect the development of a product innovation. For the first time, stakeholders, business relationships and knowledge flows are analyzed at each stage of the product innovation process. The study proves that during the innovation process different stakeholders ¿ other than the often analyzed customers and suppliers ¿ play a crucial role for the foreign subsidiary. Above that, the book depicts the sophisticated structures and processes that MNCs in the pharmaceutical industry have established to transfer the newly created product innovations within their companies.

The book addresses researchers and students in the fields of International, Strategic or Innovation Management that are interested in inter-organizational and intra-organizational embeddedness and knowledge flows of MNCs. It is also helpful for managers to control product innovation and transfer processes and the related business relationships and knowledge flows.