Amit Karna

Evolution of Innovation Networks across Geographical and Organizational Boundaries: A Study of R&D Subsidiaries in the Bangalore IT Cluster

In this paper, we investigate the evolution of multinational corporation (MNC) research and development (R&D) subsidiaries through evolution of innovation networks. Their evolution within and outside MNC R&D subsidiaries has not been investigated in the context of MNCs that source innovation from emerging economies. We do so, using two dimensions: geographical and organizational boundaries. In order to identify a pattern, we chose the information technology (IT) cluster in Bangalore, India, as the context for a qualitative study; for there are MNC subsidiaries that operate and innovate within and outside organizational boundaries, and have strong links with firms within and outside of Bangalore cluster. The globalized nature of the cluster helps us infer the evolution of innovation networks by taking a knowledge flow perspective. We identify four distinct phases based on where and how knowledge flows. We find that the innovation networks of these MNC subsidiaries in emerging economies first develop as hierarchical networks and then extend to the local markets. Within the first part, the networks start with a non�?local nature (phase A) and get embedded into local networks (phase B and phase C), finally developing into non�?local (phase D) market ties that enable MNC headquarters to source innovation from the host country. In an emerging economy context, clusters can serve as a springboard by providing a local environment that can help overcome institutional voids.

Doing social good on a sustainable basis: competitive advantage of social businesses

Purpose – The purpose of this paper is to investigate the capabilities of social entrepreneurship (SE) firms and how they achieve competitive advantage while engaging in social value creation. The authors employ a business model perspective to understand the (self-) sustaining mechanism for social good. Design/methodology/approach – The authors carry out an in-depth investigation of three SE ventures. The authors analyse the history of these ventures to determine how they achieved competitive advantage. The cases are analysed based on the internal development in the context of environmental support. Findings – The authors find that SE ventures, like all other organisations, achieve competitive advantage based on available resources such as reputation and network of the founder, managerial experience and other corporate resources within the firm. The authors also find that the competitive advantage often comes from innovate usage – a practice that is reinforced by the support from institutional environment...

Why do Firms Locate Across Multiple Clusters? Cluster Density, Capabilities and Ethnic Ties

It is well-accepted that firms locate in clusters to benefit from spillover effects from similar firms in the location. However, some firms choose to locate in multiple clusters. In this paper, we focus on the phenomenon of multi-cluster presence. Through an empirical investigation of 95 firms from the information technology enabled service industry within India, we analyze the drivers of membership across multiple clusters. Our findings indicate first that firms that are located in lower density clusters show a tendency to locate in a larger number of clusters. Second, firms that are looking for people-based creative capabilities also tend to locate in a larger number of clusters. Finally, the firms that are not founded at the location of ethnic origin of the founder CEO also tend to locate in a larger number of clusters.

Strategic Archetypes of Emerging Market Multinationals: Analysis of Outward FDI of Indian Firms

Abstract Emerging Market Multinationals (EMNCs) are often seen as firms with singular identity. While they may share certain characteristics, EMNCs are seldom orchestrated and managed in the same manner. Through a cluster analysis of outward foreign direct investment data of EMNCs from India, we propose taxonomy of EMNCs based on their mode of operation, industry in which they operate, region where they invest and the amount invested. We use a dataset spread over 2007–2013, constituting investment data of 4,824 Indian firms into 7,238 foreign entities. Based on a two-step clustering approach, we propose three strategic archetypes of EMNCs: Global Service Providers, Integrated Manufacturers, and Established Internationalizers. The Global Service Providers mainly consists of firms operating in developed markets with an intention to serve their client needs through wholly owned subsidiaries. Integrated Manufacturers are firms that are primarily operating in other developing markets to sell their products through joint ventures and also present in developed markets through wholly owned subsidiaries – to acquire technology and other resources. The Established Internationalizers are large EMNCs with highest levels of investments, and relatively similar to the Western multinationals. We analyze the characteristics of these three groups of EMNCs based on their strategy and investment behavior, to derive insights into the heterogeneity across EMNCs. We discuss our findings and lay out future directions for research in the area.

Design leaps: business model adaptation in emerging economies

Purpose Firms take design leaps when they imitate an established business model developed either by another firm or in another market to create business opportunities. While recent research has suggested the use of contextual intelligence for imitation, the exact process of adaptation of a business model is not fully understood. The purpose of this paper is to outline the process through which an emerging market firm adapts a developed market business model for creating business opportunities in the local market. Design/methodology/approach This paper investigates the journey of Air Deccan, the pioneer low-cost airline in India, from its founding until its successful adaptation of a (Western) business model and eventual failure. The authors use a qualitative case-based approach to study business model adaptation. Findings The authors find that adaptation involves the incorporation of following design features: novelty to overcome problem of institutional voids, elasticity to exploit unexpected increase in demand and efficiency to serve large volumes. Based on the evidence, the authors suggest the introduction of global efficiency measures as the boundary conditions of business model adaptation in emerging markets. Research limitations/implications The paper contributes to the literature on business models by suggesting elasticity as a unique design feature relevant for emerging markets. This paper provides granular understanding of business model toxicity. Practical implications Entrepreneurs and managers – looking to enter emerging markets through opportunity creation – should focus on providing contextually novel design features in the adapted business model. The authors also caution practitioners against the perils of toxicity arising out of combining contextual novelty with efficiency. Originality/value Recent literature suggests that multinationals need contextual intelligence to successfully monetize their investment in emerging economies. This paper provides rich description of the challenges faced by entrepreneurs in emerging markets, local innovations used to overcome them and boundary conditions.

Strategic breakthroughs as flagpoles of innovation process

This paper empirically investigates the innovation process, from ideation to market leadership. The focus is on the nature of innovation process, action-outcome linkage, and learning from the environment. Our conceptualisation of the innovation process being a series of strategic breakthroughs is built on the experiences of Samsung Electronics in creating two world-class products: microwave ovens and semiconductors. Our findings demonstrate that the process of innovation progresses through the occurrence of four types of strategic breakthroughs: entry, platform, springboard, and leadership. Based on our analysis, we infer that the process of innovation is more predictable and controllable in its early stages, but turns random in the later stages. Our explanation for such behaviour adds to the current understanding of innovation process. We also describe the role played by the external (environmental) and internal (organisational) factors in facilitating the emergence of strategic breakthroughs.

The Service Offshoring Code: Location Efficiencies for German Firms

Due to unique task characteristics, different location requirements exist, which ultimately lead to unique location considerations. Based on our research, five decision factors are identified for service offshoring: wages, education, infrastructure, cultural distance, and corruption. Considering these decision factors, efficiencies for the offshoring locations are computed with a data envelopment analysis from a German point of view. The research concludes that the most efficient service offshoring countries, with an average efficiency of 97 %, are the Netherlands, Switzerland, the United Kingdom, and the United States.

Strategic Alignment: Learning as an Instrument of Implementation

Evolution of strategic management has been like a swinging pendulum. Theoretically it has oscillated between perspective external to the firm and internal firm characteristics and methodologically between quantitative and qualitative methods. The rise of resource based view and associated knowledge based view has highlighted the critical need for firms to manage organizational knowledge to achieve competitive success. Strategic management’s singular concern has been the explanation of performance of a firm. Yet its preoccupation with formulation and content of strategies and neglect of implementation has resulted in its inability to satisfactorily explain why certain firms consistently achieve good performance. The knowledge based view offered a promising avenue to address this issue. Yet, even today the role knowledge plays in determining the performance of a firm is not clear. This paper attempts to bridge these gaps. It aims to show that learning is the instrument which firms use to achieve strategic alignment representing strategic change necessitated by changing environment and business opportunities. Firms which manage successfully the learning process, maintain a consistent attention towards identification of strategic capabilities needed and show a consistent allocation of resources towards the processes which generate and maintain them. These include mechanisms of exchange of knowledge across and within firms and a proactive involvement of customers in determining needs. Using a case study that documents practices followed by a state public health system to achieve public health goals in advance of other states, the paper maps the cognitive architecture and its linkages to strategy process in the firm.

New environmental stimuli, challenges of entrepreneurial firms and growth leaps: evidences from multisector case studies

This paper conceptualises and delineates five challenges faced by entrepreneurial firms in responding to the stimuli for growth provided by the new environment of globalisation, deregulation and liberalisation. It identifies key managerial actions that lead to growth leaps in the context of these challenges. It provides evidences from case studies in three different sectors – software, aviation and energy – in support of its contention. It also articulates how entrepreneurial firms miss the growth leap opportunity. Though the literature is replete with studies on enterprise growth, the knowledge about challenges in responding to growth stimuli provided by the new environment is limited. This paper is a contribution in this direction.

Revisiting New Institutional Economics as a Meta-Paradigm

This paper is aimed at looking at New Institutional Economics (NIE) as a meta-paradigm i.e. group of paradigms that has common roots and has evolved over a period of time as an integrative theory. In the last two decades, the field underwent considerable development, and an attempt is made here to collate it on a framework and find out the way ahead. NIE has developed as a movement within the social sciences, especially economics and political science, which unite theoretical and empirical research examining the role of institutions in furthering or preventing economic growth. The essential idea of NIE is that the success of a market system is dependent upon the institutions that facilitate efficient private transactions. Simply put, NIE tackles social, economic, and political institutions that govern everyday life. It takes a wider view and approach to issues that are considered under categories of law and economics, applied industrial organization, public policy, and other specialties. NIE is seen by many as an extension to neo-classical economic theory by incorporation of property rights and transactions costs into the orthodox frameworks for analysis so as to better explain economic behavior. The paper looks at the field right from the evolution of the field, discusses the analytical perspective, differentiates it from the traditional institutional economics, discusses criticism versus the defense and finally looks at the future prospects for the field.