Multinational Enterprises and Local Contexts: The Opportunities and Challenges of Multiple Embeddedness

18 Pages Posted: 17 Feb 2011

See all articles by Klaus E. Meyer

Klaus E. Meyer

China Europe International Business School (CEIBS); Copenhagen Business School - Center for East European Studies (CEES)

Ram Mudambi

Temple University - Department of Strategic Management

Rajneesh Narula

International Business and Strategy, Henley Business School

Abstract

Some scholars have argued that globalization will reduce the importance of local contexts. We argue instead that despite the increased frequency and intensity of interactions across local contexts, they continue to retain their distinctive differences. MNEs face growing challenges in managing the complexity of these interactions, because they must manage multiple embeddedness across heterogeneous contexts at two levels. First, at the MNE level, they must organize their networks to exploit effectively both the differences and similarities of their multiple host locations. Second, at the subsidiary level, they must balance internal embeddedness within the MNE network, with their external embeddedness in the host milieu. Balancing the subsidiary's strategic role within the MNE with its local identity and its domestic linkages can sometimes represent a trade-off. Multiple embeddedness thus creates both business opportunities and operational challenges, which are explored in this special issue.

Suggested Citation

Meyer, Klaus E. and Mudambi, Ram and Narula, Rajneesh, Multinational Enterprises and Local Contexts: The Opportunities and Challenges of Multiple Embeddedness. Journal of Management Studies, Vol. 48, No. 2, pp. 235-252, 2011. Available at SSRN: https://ssrn.com/abstract=1763048 or http://dx.doi.org/10.1111/j.1467-6486.2010.00968.x

Klaus E. Meyer (Contact Author)

China Europe International Business School (CEIBS) ( email )

Shanghai-Hongfeng Road
Shanghai 201206
Shanghai 201206
China

HOME PAGE: http://www.ceibs.edu/faculty/facultylist/09/100132.shtml

Copenhagen Business School - Center for East European Studies (CEES) ( email )

Porcelanshaven 24
2000 Frederiksberg
Denmark

HOME PAGE: http://www.klausmeyer.co.uk

Ram Mudambi

Temple University - Department of Strategic Management ( email )

Fox School of Business and Management
Philadelphia, PA 19122
United States
215-204-2099 (Phone)
215-204-8029 (Fax)

HOME PAGE: http://sbm.temple.edu/~rmudambi/index.html

Rajneesh Narula

International Business and Strategy, Henley Business School ( email )

University of Reading
Reading, UT Berkshire RG6 6UD
United Kingdom
+44 (0)118 378 5247 (Phone)

HOME PAGE: http://https://www.henley.ac.uk/people/person/professor-rajneesh-narula/

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