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An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park
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An experience for inter-cooperation and knowledge exchange within country-of-origin multi-sectorial co-located subsidiary network in China - The case of Mondragon Kunshan Industrial Park

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  • 1. An experience for inter-cooperation andknowledge exchange within country-of-originmulti-sectorial co-located subsidiary network in China -The case of Mondragon Kunshan Industrial Park- PhD candidate: Berrbizne Urzelai MIK & Mondragon University Date: 18th July 2012
  • 2. AGENDA RESEARCH RATIONALE RESEARCH PURPOSE THEORETICAL FRAMEWORK METHODOLOGY PRELIMINARY OBSERVATIONS 2
  • 3. RESEARCH RATIONALE  Increasingly firms are investing abroad to enhance and augment their knowledge  MNCs need foreign created knowledge assets. They aim to increase their core competencies by incorporating the knowledge of their subsidiaries.  Subsidiaries are knowledge sources: “enhancers” & “centers of excellence”  The subsidiary need to understand the nexus where local knowledge resides and tap into this local millieu to generate knowledge access and “capture” local knowledge 3
  • 4. RESEARCH PURPOSE
  • 5. RESEARCH PURPOSE OBJECTIVE Analyse the external embeddedness of the country-of-origin co-located subsidiaries in Mondragon Kunshan Industrial Park To study how the social capital dimensions of that subsidiary network affect the knowledge (acquisition and sharing) of these firms.  OUTCOME This will allow this firms to identify the strengths and weaknesses of those elements of the network that affect knowledge so that they can put resources on improving them. This acquisition of foreign market knowledge at the subsidiary level is the first step for the firms in Kunshan to internally transfer and assimilate that knowledge created in the subsidiaries: 1) at the level of each company and 2) at the level of the business group 5
  • 6. RESEARCH PURPOSE  INITIAL RESEARCH PROPOSITION We can develop a model of indicators on which to focus so as to analyze how the social capital dimensions of that subsidiary network affect the knowledge (acquisition and sharing) of these firms. This model will help the network develop to its full potential and acquire the competence, legitimacy and influence that gives value to the community of subsidiaries and its members. For Mondragon to move forward towards a transnational strategy that tries to establish more corporate industrial poles worldwide, the subunits should be empowered to adopt a more creative role that fosters trust building and the development of a culture of knowledge sharing within the social network created between the co-located subsidiaries. 6
  • 7. RESEARCH PURPOSE  CONTRIBUTION Chang and Park (2005) Inkpen and Tsang (2005) Tan and Meyer (2011) Unclear how country-of-origin foreign subsidiaries co-located within an industrial park are able to realize collective learning, opportunity creation, and trust building in the course of internationalization in an emerging economy. The previous research has not explored how social capital contributes in the internationalization and foreign market knowledge acquisition of multinational corporations within country-of-origin industrial park in emerging economies Practical implications: it’s the first Spanish business park in China and the first case of corporate parks for Mondragon. It contributes towards developing and international expansion strategy based on business parks abroad 7
  • 8. RESEARCH PURPOSE  RESEARCH QUESTIONS RQ1- Why and how do firms from one country adopt the “geographical grouping” as their strategy to establish their business in China? What advantages do the firms find in locating near other subsidiaries from their same country of origin? RQ2- How are the social capital dimensions of the subsidiary network configured in Mondragon Kunshan Industrial Park? RQ3- Which roles do the subsidiaries in the park have within each of their “MNE” structure (scope of activity, global integration, autonomy, product-market positioning strategy, resource/capability development strategy, etc)? How is this affecting the knowledge sharing and transfer within the members in the park? 8
  • 9. RESEARCH PURPOSE  RESEARCH QUESTIONS RQ4- ¿Which are the existing and potential clustering and cooperation characteristics (common interest and expectations, communication flows, advantages, synergies, organization model and park management team, motivation, trust level between members, difficulties, common policies etc.) of the group of subsidiaries located in Kunshan?, ¿How are they put into practice? RQ5- What kind of knowledge sharing potential is there in the park? To what extent are they sharing knowledge? How? 9
  • 10. CONCEPTUAL FRAMEWORK Network: Knowledge source Subsidiaries, SMEs Mainly from Mondragon Group Different sectors Shame country of origin China 10
  • 11. CASE STUDY CONCEPTUAL FRAMEWORK 11
  • 12. THEORETICAL FRAMEWORK 1.1. THEORIES OF THE MULTINATIONAL FIRM (Forsgren, 2008) • The dominating multinational • The coordinating multinational • The knowing multinational1. International Business • The designing multinationaltheories • The networking multinational • The politicizing multinational2. Network perspective 1.2. RESEARCH ON MNE SUBSIDIARIES (Birkinshaw and Pedersen, 2008)3. Knowledge perspective • Streams before 90s: strategy-structure, HQ-subsidiary relationship, MNE process,Case study context subsidiary role • New empirical streams: specialized roles of the subsidiaries, evolution of subsidiary roles, flows of information between subsidiary and its network, HQ-sub relationship • New theoretical streams: transaction-cost theory of international production, network conceptualization of the MNE, Resource based view of the firm, Institutional theory, MNE as an internal market system, social psychology OUR RESEARCH:  The knowing MNE & the networking MNE  Flows of information between the subsidiary and its network  Network conceptualization of the MNE  Resource-based view of the firm  Knowledge-based view of the firms 12
  • 13. THEORETICAL FRAMEWORK 2.1. NETWORKS AND CO-OPERATION • What is co-operation • What is a network • What is inter-firm cooperation1. International Business • Drivers of cooperation (Ireland et al., 2002, EC, 2004, Ernst, 2003, Hoffman andtheories Scholsser, 2001, Huxham and Vangen, 2005, Ronson and Peterson, 2008, etc.)2. Network perspective  Mitigate LOF  Facilitate information exchange3. Knowledge perspective  Nurture cultural adaptation  Decrease costs  Reduce institutional uncertainty  Share risksCase study context  Access to resources  Broad supply of products  Learning  Create a common inter-group  Foster strategic flexibility identity OUR RESEARCH:  From an economic perspective of coop. strategies: linked to the resource-based theory (Child et al., 2005)  From a managerial and organizational perspective of coop. strategies: social network theory (Child et al., 2005) 13
  • 14. THEORETICAL FRAMEWORK 2.2. BUSINESS NETWORK THEORY1. International Businesstheories2. Network perspective3. Knowledge perspective Figure : The business relationship Figure : Cooperation between SMEs the Source: Forsgren et al., 2005, p.17 network perspective Source: European Commission, 2004Case study context Figure: A typology of network types Source: Inkpen and Tsang, 2005, 14
  • 15. THEORETICAL FRAMEWORK 2.2. BUSINESS NETWORK THEORY • Social Capital dimensions of networks: SOCIAL CAPITAL DIMENSIONS Network ties1. International Business - Structural: linkages, networks Network configurationtheories Network stability - Cognitive: share understanding, Shared goals2. Network perspective share norms Shared culture - Relational: trust, relationships Trust3. Knowledge perspectiveCase study context Kogut and Zander (1993): conceptualize MNCs as ‘social communities’ and emphasize the importance of the ‘cognitive properties of individuals’, ‘shared identities’, and ‘established routines of cooperation’ within MNCs Social capital affects the knowledge acquisition and knowledge transfer of multinational corporations (Inkpen and Tsang, 2005; Lindstrand et al., 2011; Maurer & Ebers, 2006, Gooderham et al., 2011) OUR RESEARCH:  Check the compatibility with different types of network: intracorporate network, industrial district, etc.  we could describe the characteristics of those dimensions and the conditions facilitating knowledge transfer in the network 15
  • 16. THEORETICAL FRAMEWORK 2.3. FROM UPPSALA MODEL TO NETWORK VIEW 1977 Uppsala model revisited1. International Businesstheories2. Network perspective3. Knowledge perspectiveCase study context Source: Peng and Meyer, 2011,p.12 16
  • 17. THEORETICAL FRAMEWORK 2.3. FROM UPPSALA MODEL TO NETWORK VIEW Role of learning1. International Businesstheories - Original model: learning takes place incrementally a experience increases - New model: they acknowledge the argument about the possibility of2. Network perspective acquiring knowledge from the firm’s network.3. Knowledge perspectiveCase study context OUR RESEARCH:  From the business network perspective that we take in our research the lack of market knowledge is the driver that fosters the emergence of multinational firms (investment in foreign countries).  We look at the network structure as the resource that can be used by firms to access that local knowledge.  The network could be seen as a way to mitigate liability of foreignness(LOF) and liability of outsidership (LOO). As Tan and Meyer (2009) argue, new investors have a greater need for local knowledge, which drives them to locate in country-of- origin agglomeration. 17
  • 18. THEORETICAL FRAMEWORK 2.4. THE EMBEDDED MULTINATIONAL Subsidiary’s dual role, Home context =Resources dual embeddedness =Institutions1. International Businesstheories HQ2. Network perspective Host context A MNE Host context B =Resources =Resources3. Knowledge perspective Subs. A Subs. B =Institutions =InstitutionsCase study context Figure: Multinational enterprise and local context Source: Peng and Meyer, 2011, p. 467 HQ Sub B Sub C Sub A Figure X: The multinational firm in business network theory Source: Forsgren (2008, p.109) 18
  • 19. THEORETICAL FRAMEWORK 2.4. THE EMBEDDED MULTINATIONAL OUR RESEARCH:1. International Businesstheories  The subsidiaries in the park could be considered as the external local context so external embeddedness will be related to the acquisition of knowledge from the2. Network perspective subsidiaries and other institutions within this local context.3. Knowledge perspective  Our research will try to relate the literature on MNE embeddedness on the case of Mondragon Kunshan, which implies applying this theory not in a context of a MNE but a network of subsidiaries part of a business group of a federative nature.Case study context  Internal embeddedness would in that case refer to the assimilation and leverage of that knowledge through each of the companies in the park (at the company level) but also throughout the structure of the Business Group (at the Mondragon Corporation level- central department and other representative offices around the world). 19
  • 20. THEORETICAL FRAMEWORK 2.5. SUBSIDIARY STRATEGY AND ROLES Table : Examples of resources and capabilities at two levels of analysis Subsidiary level Firm level1. International Businesstheories Physical resources such as plant, Financial resources such as firm’s equipment, and locally sourced raw borrowing capacity;2. Network perspective materials; Access to suppliers that is controlled Resources Human resources employed in the centrally;3. Knowledge perspective subsidiary; Organizational resources such as the Reputation with local customers and formal reporting system;Case study context suppliers Technological resources such as patents or trademarks; Rapid product innovation; Firm-specific capabilities such as an Lean production system; organizational culture supporting Capabi- Effective distribution; innovation, quality, etc.; lities Customer focused marketing; Ability to leverage capabilities from the Data processing skills; left-hand column on a firm-wide basis. Etc. Source: Adapted from Grant (1997) in Birkinshaw and Pedersen (2008), p. 379 This framework can help us define which resources and capabilities are held by subsidiaries and HQs. 20
  • 21. THEORETICAL FRAMEWORK 2.5. SUBSIDIARY STRATEGY AND ROLES Figure : MNE subsidiary level knowledge taxonomy Knowledge directional flow Inflow Outflow1. International Businesstheories Transfer Screwdriver operations Listening post Knowledge Integration Competence Competence2. Network perspective activity exploitation creation Source: Meyer et al. (2011)3. Knowledge perspectiveCase study context Figure: Variations in subsidiary strategic contexts: a knowledge flows- based framework High Global innovator Integrated player Outflow of knowledge from the focal subsidiary to the rest of the corporation Low Local innovator Implementator Low High Inflow of knowledge from rest of the corporation to the focal subsidiary Source: Gupta and Govindarajan (2000) , p.774 21
  • 22. THEORETICAL FRAMEWORK 2.5. SUBSIDIARY STRATEGY AND ROLES Figure: The generic roles of foreign subsidiaries in Bartlett and Ghoshal (1986)1. International Business Hightheories Black hole Strategic leader2. Network perspective Strategic importance of local environment3. Knowledge perspective Low Implementer ContributorCase study context Low High Competence of local organization Figure x: The generic roles of foreign subsidiaries in Bartlett and Ghosha ( 1986) OUR RESEARCH:  A creative, integrated player and strategic leader role of the subsidiaries located in Mondragon Kunshan Industrial Park could have a positive influence on the acquisition and transfer of local knowledge as the subsidiary is seen as a key partner in the network that could help in developing and implementing its own strategy 22
  • 23. THEORETICAL FRAMEWORK 2.6. CO-LOCATION • Forces affecting geographical concentration (Krugman, 1998)1. International Businesstheories Centripetal Centrifugal forces forces2. Network perspective3. Knowledge perspective • Comparison of industry and country-of-origin FDI agglomerationCase study context Source: Tan and Meyer, 2011, p. 507 23
  • 24. THEORETICAL FRAMEWORK 3.1. KNOWLEDGE MANAGEMENT • Knowledge: - Declarative/ procedural1. International Business - Explicit/ Tacittheories - Component/ Architectural - Individual/ Organization2. Network perspective 3.2. THE KNOWLEDGE-BASED THEORY3. Knowledge perspective - Organizational capability viewCase study context - Resource-based view 3.3. THE KNOWLEDGE-CREATING COMPANY (Nonaka and Takeuchi, 1995) 1)The SECI process 2)Ba 3)Knowledge assets Is knowledge CREATION relevant for my research? 24
  • 25. THEORETICAL FRAMEWORK 1) The SECI process1. International Businesstheories2. Network perspective3. Knowledge perspectiveCase study context OUR RESEARCH:  Socialization? 25
  • 26. THEORETICAL FRAMEWORK 1) Ba1. International Businesstheories2. Network perspective3. Knowledge perspectiveCase study context OUR RESEARCH  Ba seems to be a very relevant concept on our research as it is about the share context for knowledge creation  Our research could be related with the originating ba as it focuses on the face-to- face interaction of the subsidiary managers and people working in the park within an inter-organizational context. Dialoguing?  It has similarities with the concept of communities of practice 26
  • 27. THEORETICAL FRAMEWORK 1) Knowledge assets1. International Businesstheories2. Network perspective3. Knowledge perspectiveCase study context OUR RESEARCH  It seems that experiential knowledge is more relevant 27
  • 28. THEORETICAL FRAMEWORK 3.4. BUILDING AN ORGANIZATIONAL LEARNING COMMUNITY • Communities of practice Lesser and Storck (2001: 832)1. International Businesstheories “appear to be an effective way for organizations to handle unstructured problems and to share knowledge outside of the traditional structural boundaries”2. Network perspective “CoPs create social capital (connections, relationships, common context) that improves3. Knowledge perspective organizational performance”Case study context - Small/ Big - Co-located/ Distributed - Homogeneous/ Heterogeneous - Inside/ Across boundaries - Unrecognized/ Bootlegged/ legitimized/ supported/ Institutionalized - Stages: potential, coalescing, maturing, stewardship, transformation OUR RESEARCH:  Finding CoPs particularly useful to build a global organization that shares knowledge horizontally (possible organizational learning tool)  Small, co-located, heterogeneous, across firms, unrecognized. Potential stage 28
  • 29. THEORETICAL FRAMEWORK 3.4. BUILDING AN ORGANIZATIONAL LEARNING COMMUNITY Tallman and Chacar’s (2011) framework suggests a practice-based mechanism for knowledge development and acquisition by the subsidiaries of MNEs.1. International Business It’s a network for decentralized knowledge development, acquisition andtheories assimilation in MNE that is based on the concepts of communities and networks of2. Network perspective practice3. Knowledge perspectiveCase study context 29
  • 30. RESEARCH CONTEXT  German firms in China Business type SMEs share and market presence1. International Businesstheories2. Network perspective3. Knowledge perspectiveCase study context Source: Heininger and Gehnen, 2010 Source: Heininger and Gehnen, 2010 Geographic Distribution -47% Greater Shanghai Area -Then Beijing, Guangdong, Jiangsu and Zhejiang Source: Heininger and Gehnen, 2010 30
  • 31. RESEARCH CONTEXT  Basque firms in China Business type Manufacturing Machinery construction and1. International Business mechanical equipment industrytheories 4% Metallurgy and metal 17% product manufacture2. Network perspective 44% Electric, electronic and3. Knowledge perspective optical material and 15% equipment manufacture Transport materialCase study context Source: Azua et al., 2009 production 19% Diverse manufacturing industries Source: Azua et al., 2009 Geographic Distribution 32% Shanghai 22% Jiangsu 17% Beijing Source: Azua et al., 2009 31
  • 32. RESEARCH CONTEXT  Mondragon in the world1. International Businesstheories2. Network perspective3. Knowledge perspectiveCase study context Source: derived from Mondragon, 2011 32
  • 33. RESEARCH CONTEXT FUTURE (Ind. Division) 2010 2012 International sales (% total sales) 3.474 (63,4%) 7.195 (65,4%) Overseas production 27% 32,7%1. International Business N. Corporate offices 9 8theories N. Production plants 77 902. Network perspective Overseas purchases (% total) 30% 35%3. Knowledge perspective Workers abroad 13.443 22.000 Source: derived from Mondragon, 2011Case study context Concentration - MECI 2004-2008 : “the concentration of activities in territories corporate poles or areas where other cooperatives were already established” (Tulankide, 2004). Objective: take advantage of the synergies (business and personal) - 2010-2013 Agreement with Basque Government: “… creation of business parks in key countries…” (Irekia, 2010) - 4 international clusters: Kunshan in China, Wroclaw in Poland, Olomouc in the Czech Republic and Queretaro in Mexico (Luzarraga, 2008) 33
  • 34. RESEARCH METHODOLOGY 1 Research Design 2 Participants 3 Research site 4 Data collection 5 Data analysis 6 Limitations
  • 35. RESEARCH METHODOLOGY - Exploratory and descriptive nature - Research process “onion” Research Positivism philosophy Experiment Deductive Research approachResearch Design Survey Cross-sectionalParticipants Case Study - Multiple Sampling - EmbeddedResearch site Research strategy Questionnaires /methodology GroundedData collection Secondary data Theory Realism InterviewsData analysis ObservationLimitations Ethnography Longitudinal Time horizons Inductive Action Research Data collection Interpretivism methods Source: Saunders et al., 2003 35
  • 36. RESEARCH METHODOLOGY  Research strategy STRATEGY/ (1) Form of research (2) ¿Requires control of (3) ¿Focuses on METHOD question behavioural events? contemporary events? Experiment How, why? Yes Yes Who, what, where, how Survey No Yes many, how much? Who, what, where, how Archival analysis No Yes/no many, how much?Research Design History How, why? No No Case study How, why? No YesParticipants Single case design Multi case design CASESResearch site - Mondragon geographical clusters - Mondragon Kunshan Ind. ParkData collection - Kunshan German Industrial park - German companies in TCEDA andData analysis members of TRT - Spanish companies in NingboLimitations European Industrial Park - Spanish companies in SIP (multiple units) Embedded Source: Yin, 2009 36
  • 37. RESEARCH METHODOLOGY Sampling: non probability- snowball and purposive N. N. PARTICIPANTS PLACE people firms Mondragon International •Head of Department Basque 2 Operations Department •Head of Asia-Pacific Country •Head of Representative China- Mondragon China 3 office in Shanghai ShanghaiResearch Design Mondragon geographical •Founders and historical Basque 13-15 clusters managers CountryParticipants Basque-Spanish •General manager or China-Research site companies in Kunshan head of the subsidiary 3 Kunshan but outside de parkData collection Mondragon Kunshan China- 16 Business Park KunshanData analysis German projects in •General manager or head of the subsidiary China- Kunshan German 10 •General manager or KunshanLimitations Industrial park (KGIP) German companies in head of the headquarter China- (in the Basque Country) 29 TCEDA members of TRT Taicang •2 blue collar workers Spanish companies in •2 white collar workers Ningbo European •Promoter/ park director China- Cixi 25 Industrial Park China- Spanish companies in SIP 7 Suzhou 37
  • 38. RESEARCH METHODOLOGY CASES PLACE PROVINCE Mondragon geographical clusters Basque Country Mondragon Kunshan Ind. Park Qiangden township (24 km from Kunshan) Jiangsu Kunshan German Ind. Park Zhangpu Township (20 km from Kunshan) Jiangsu German companies in TRT and Taicang city (20 km from Kunshan) Jiangsu TCEDA Spanish companies in China Suzhou city (27 km from Kunshan) JiangsuResearch Design Singapore Suzhou Ind. ParkParticipants Spanish companies in China Hangzhou Bay New Zone, Cixi city (180 km Zhejiang Ningbo European Ind. Park from Kunshan)Research siteData collectionData analysisLimitations 38
  • 39. RESEARCH METHODOLOGY - Mainly qualitative - Documentary data - Interviews Exploratory Descriptive Explanatory Structured √√ √ Semi-structured √ √√Research Design In depth √√ √√= more frequent, √= less frequentParticipants Source: Saunders et al., 2000Research siteData collectionData analysisLimitations Source: Saunders et al., 2000 -Introductory letter - Language -Audio or video recorded - Confidentiality and - Different levels for measuring responses anonymity - Control time - Consent forms 39
  • 40. RESEARCH METHODOLOGY - Order the evidence - Mixed analytic strategy: pattern-matching and explanation building - Transcriptions: similar format, code the raw data, makeResearch Design categories, look for patterns and relationships, compare and relate with the theoretical framework and research questions.Participants - Other: memos, notes, summaries, etc.Research siteData collection - Gaining access: time, interest, value,Data analysis confidentiality, credibility, etc. - Reliability: subject, participant andLimitations observer error and bias - Validity: causal relationships, generalisability, etc. 40
  • 41. PILOT RESEARCH & PRELIMINARY OBSERVATIONS Participants Geographical industrial groups in Mondragon Mondragon Kunshan Industrial Park Kunshan German Industrial Park German companies in TRT and TCEDA China Singapore Suzhou Industrial Park China Ningbo European Industrial Park
  • 42. PILOT RESEARCH & PRELIMINARY OBSERVATIONS N= 50 Case studies Mondragon International Operations Department Not from the Mondragon China group, 25% Mondragon geographical clusters 32% Mondragon Kunshan Business Park 6% Basque-spanish companies in Kunshan but outside de park From Mondragon 26% 2% Kunshan German industrial park (KGIP) Group, 75% 6% German companies in TCEDA 10% Spanish companies in Ningbo European Industrial Park 4%Participants 4% 10% Spanish companies in SIPGeographical industrial Positiongroups in Mondragon 6% Subsidiary managersMondragon Kunshan Park managersIndustrial Park 26% 46% Mondragon corporationKunshan German People related to Mondragon Geographic clustersIndustrial Park 14% 8% Others (Head of Department, consultants...)German companiesin TRT and TCEDA Interview locationChina Singapore Suzhou 4% 2% NationalityIndustrial Park 12% China 30%China Ningbo European Basque Country Basque and SpanishIndustrial Park Chinese 70% 82% German Others 42 Source: ex novo
  • 43. PILOT RESEARCH & PRELIMINARY OBSERVATIONS GEOGRAPHICAL INDUSTRIAL GROUPS IN MONDRAGON • Firms “associated” to CLP through a Contract of Association • Geographic clustersParticipants - First Ularco (1964), second Goilan (1978), rest until middle 80sGeographical industrial - Since 1977 almost all the cooperatives were groupedgroups in Mondragon - Early 80s reflection period “ from geographical to sectorial”Mondragon Kunshan - 1992: Sectorial structure through “divisions”Industrial ParkKunshan GermanIndustrial Park “The geographical groups were associations of cooperative firmsGerman companies located in a specific geographical area, i.e. located within thein TRT and TCEDA same social community that aimed a better development of theirChina Singapore Suzhou services for the community”, “a communitarian solution to workIndustrial Park for the Country” (Perez de Calleja, translated, 1986, p.47).China Ningbo EuropeanIndustrial Park 43
  • 44. PILOT RESEARCH & PRELIMINARY OBSERVATIONS SOCIAL CAPITAL DIMENSIONS: Structural Network ties - No market-based (exchange of products or services) - Non-competitive - Horizontal - Movement of workers among firms (relocation)ParticipantsGeographical industrial Networkgroups in Mondragon configuration - Formal organizational structure - Linked with a multilateral contractMondragon Kunshan - Executive power, sovereignty, capacity to compromiseIndustrial Park - Rules and regulations: Labour/ Economic/ Services/Kunshan German inter-coop. Mechanisms/ organizationIndustrial ParkGerman companies - Common policies, funds, resourcesin TRT and TCEDAChina Singapore Suzhou NetworkIndustrial Park stability - HighChina Ningbo EuropeanIndustrial Park 44
  • 45. PILOT RESEARCH & PRELIMINARY OBSERVATIONS SOCIAL CAPITAL DIMENSIONS: Cognitive - Socio-economic development of the area Shared goals (ideological and social) - To consolidate the industrial coops, - To avoid duplicity of servicesParticipantsGeographical industrial Shared culture - Strong cooperative culture and Christian influencegroups in MondragonMondragon KunshanIndustrial Park SOCIAL CAPITAL DIMENSIONS: RelationalKunshan GermanIndustrial ParkGerman companies - High: they all studied together, apprentices of Mr.in TRT and TCEDA Trust Jose Maria Arizmendiarreta, founder of coop.China Singapore SuzhouIndustrial Park Movemente in Mondragon - A friendly cultureChina Ningbo EuropeanIndustrial Park 45
  • 46. PILOT RESEARCH & PRELIMINARY OBSERVATIONS MONDRAGON KUNSHAN INDUSTRIAL PARK - Inaugurated in 2007 - Location: Qiandeng (24 km from Kunshan city) - Estimations by 2014: - Total land: 535.000 sqm - Total investment: 32 million eurosParticipants - N. workers: 2.500Geographical industrial 2007 (phase 1): Orbea, Wingroup, Oiarso, Orkligroups in Mondragon 2008 (phase 2): Batz Sistemas, Fagor Industrial, Fagor Arrasate 2009 (phase 3): Kide (3km), Gestamp (1km), representation office of OronaMondragon Kunshan (rented to Oiarso), workshop for Agui (rented to Orkli)Industrial Park 2010 on (phase 4): future developments (F. Ederlan, Cikautxo, G. Ormazabal)Kunshan German By end of 2014: 18 companiesIndustrial ParkGerman companies  Magnetism powerin TRT and TCEDA  Social cohesionChina Singapore Suzhou  Low cost of landIndustrial Park  Good relations with governments  Good logistics conditionsChina Ningbo European X Limited talent pool (area)Industrial Park X High staff rotation X Investment required further services X High appreciation 46
  • 47. PILOT RESEARCH & PRELIMINARY OBSERVATIONS SOCIAL CAPITAL DIMENSIONS: Structural Network ties - No market-based (exchange of products or services) - Non-competitive - Partial sectorial complementarities - Mainly Horizontal - Potential: HHRR (training, recruitment, standard conditions), legal and fiscal, representation and lobby,Participants organizational and managerial knowledge, adaptation of a cooperative business model, etc. (not much in R&D,Geographical industrial suppliers)groups in MondragonMondragon Kunshan - No formal structureIndustrial Park - Dependence on HQs NetworkKunshan German - Institutional support: not in the beginning, now yesIndustrial Park configuration - Linked to Anaitasuna General Services Co. Ltd.German companies - No authority, representative role (not executive)in TRT and TCEDA - Subsidiaries: competence exploiting role, no strategyChina Singapore Suzhou making,Industrial Park - No association contract/ agreementChina Ningbo European - No written formal regulations or rulesIndustrial Park - “Anchor” firms Network stability - Open membership (priority: Mondragon & country) 47
  • 48. PILOT RESEARCH & PRELIMINARY OBSERVATIONS SOCIAL CAPITAL DIMENSIONS: Cognitive - No clear collective targets, aims Shared goals - Platform for SMEs landing in China - Search for synergies, create a common image, expand their size and develop lobby strengthParticipantsGeographical industrial - Willingness to apply cooperative-humanistgroups in Mondragon Shared culture approachMondragon Kunshan - No solidarity and values assimilated andIndustrial ParkKunshan German implemented yetIndustrial ParkGerman companiesin TRT and TCEDA SOCIAL CAPITAL DIMENSIONS: RelationalChina Singapore Suzhou - A friendly cultureIndustrial Park Trust - Strong relatioships among expatriatesChina Ningbo European - Not that strong between workers and managersIndustrial Park 48
  • 49. PILOT RESEARCH & PRELIMINARY OBSERVATIONS OTHER PARKS IN CHINA  Good  Support to SMEs  Flexible, open  Low cost of landParticipants  Focus on SMEs location, comm  German management unication Government and style  Powerful businessGeographical industrial invitinggroups in Mondragon  Low cost AHK  Large pool of  Professional  German Dual skilled workers mechanismsMondragon Kunshan team service System  Strong high-  Referral effectIndustrial Park free of charge  Numerous tech industries  Good relation withKunshan German  Plan to skilled workers X High labour governmentsIndustrial Park introduce  Good logistics and land cost  Shared resourcesGerman companies German  Good image X Strong  Convenient and in TRT and TCEDA Vocational X Shortage of competition pleasant Training center technical from Shanghai community reducesChina Singapore Suzhou HR costIndustrial Park employees and Hangzhou (No interviews) X Costs increasing  ProfessionalChina Ningbo European X Less attractive for managementIndustrial Park Japanese, Korean,  Convenient Taiwanese logistics 49
  • 50. PILOT RESEARCH & PRELIMINARY OBSERVATIONS COUNTRY THEME INDUSTRIAL PARKS Structural DynamicParticipants - Usually aim SME -Failure factors: Wrong industry focus, investors unfortunate relations with the localGeographical industrialgroups in Mondragon government, inefficient and unfocused - Many formed in the promotion activities, weak access to leadsMondragon Kunshan recent yearsIndustrial Park - Many in Jiangsu -Success factors: strong relationship withKunshan German province the government, partner up with foreignIndustrial ParkGerman companies partners, have a figure head/ leader, - Promoted by different creative and practical service support, in TRT and TCEDA bodies: investment referral effectChina Singapore Suzhou companies,Industrial Park government bodiesChina Ningbo EuropeanIndustrial Park 50
  • 51. THANK YOU FOR YOUR ATTENTIONQUESTIONS AND SUGGESTIONS 51

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