This document provides an agenda and background for a PhD research project analyzing knowledge exchange within a network of subsidiaries from the same country located in an industrial park in China. The research aims to study how the social capital dimensions of the subsidiary network affect knowledge acquisition and sharing. The theoretical framework draws from international business theories on multinational networks and knowledge flows between headquarters and subsidiaries.

1. 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-
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 multinational
1. International Business • The designing multinational
theories • The networking multinational
• The politicizing multinational
2. 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 cooperation
1. International Business • Drivers of cooperation (Ireland et al., 2002, EC, 2004, Ernst, 2003, Hoffman and
theories
Scholsser, 2001, Huxham and Vangen, 2005, Ronson and Peterson, 2008, etc.)
2. Network perspective
 Mitigate LOF  Facilitate information exchange
3. Knowledge perspective  Nurture cultural adaptation  Decrease costs
 Reduce institutional uncertainty  Share risks
Case 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 THEORY
1. International Business
theories
2. Network perspective
3. Knowledge perspective Figure : The business relationship Figure : Cooperation between SMEs the
Source: Forsgren et al., 2005, p.17 network perspective
Source: European Commission, 2004
Case 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 ties
1. International Business - Structural: linkages, networks Network configuration
theories Network stability
- Cognitive: share understanding, Shared goals
2. Network perspective share norms Shared culture
- Relational: trust, relationships Trust
3. Knowledge perspective
Case 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 revisited
1. International Business
theories
2. Network perspective
3. Knowledge perspective
Case study context
Source: Peng and Meyer, 2011,p.12
16

17. THEORETICAL FRAMEWORK
2.3. FROM UPPSALA MODEL TO NETWORK VIEW
Role of learning
1. International Business
theories - Original model: learning takes place incrementally a experience increases
- New model: they acknowledge the argument about the possibility of
2. Network perspective acquiring knowledge from the firm’s network.
3. Knowledge perspective
Case 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
=Institutions
1. International Business
theories
HQ
2. Network perspective
Host context A MNE Host context B
=Resources =Resources
3. Knowledge perspective Subs. A Subs. B
=Institutions =Institutions
Case 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 Business
theories  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 the
2. 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 level
1. International Business
theories 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 Outflow
1. International Business
theories Transfer Screwdriver operations Listening post
Knowledge
Integration Competence Competence
2. Network perspective activity
exploitation creation
Source: Meyer et al. (2011)
3. Knowledge perspective
Case 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 High
theories Black hole Strategic leader
2. Network perspective Strategic importance of
local environment
3. Knowledge perspective Low Implementer Contributor
Case 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 Business
theories Centripetal Centrifugal
forces forces
2. Network perspective
3. Knowledge perspective
• Comparison of industry and country-of-origin FDI agglomeration
Case study context
Source: Tan and Meyer, 2011, p. 507
23

24. THEORETICAL FRAMEWORK
3.1. KNOWLEDGE MANAGEMENT
• Knowledge:
- Declarative/ procedural
1. International Business - Explicit/ Tacit
theories - Component/ Architectural
- Individual/ Organization
2. Network perspective
3.2. THE KNOWLEDGE-BASED THEORY
3. Knowledge perspective
- Organizational capability view
Case 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 process
1. International Business
theories
2. Network perspective
3. Knowledge perspective
Case study context
OUR RESEARCH:
 Socialization?
25

26. THEORETICAL FRAMEWORK
1) Ba
1. International Business
theories
2. Network perspective
3. Knowledge perspective
Case 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 assets
1. International Business
theories
2. Network perspective
3. Knowledge perspective
Case 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 Business
theories “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 improves
3. 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 and
theories
assimilation in MNE that is based on the concepts of communities and networks of
2. Network perspective
practice
3. Knowledge perspective
Case study context
29

30. RESEARCH CONTEXT
 German firms in China
Business type SMEs share and market presence
1. International Business
theories
2. Network perspective
3. Knowledge perspective
Case 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 and
1. International Business mechanical equipment
industry
theories 4% Metallurgy and metal
17%
product manufacture
2. Network perspective 44%
Electric, electronic and
3. Knowledge perspective optical material and
15% equipment manufacture
Transport material
Case 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 world
1. International Business
theories
2. Network perspective
3. Knowledge perspective
Case 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 8
theories
N. Production plants 77 90
2. Network perspective
Overseas purchases (% total) 30% 35%
3. Knowledge perspective Workers abroad 13.443 22.000
Source: derived from Mondragon, 2011
Case 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 approach
Research Design Survey
Cross-sectional
Participants Case Study
- Multiple
Sampling - Embedded
Research site Research strategy
Questionnaires /methodology
Grounded
Data collection Secondary data Theory Realism
Interviews
Data analysis
Observation
Limitations 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 Yes
Participants Single case design Multi case design
CASES
Research site - Mondragon geographical clusters
- Mondragon Kunshan Ind. Park
Data collection - Kunshan German Industrial park
- German companies in TCEDA and
Data analysis members of TRT
- Spanish companies in Ningbo
Limitations 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 Shanghai
Research Design
Mondragon geographical •Founders and historical Basque
13-15
clusters managers Country
Participants
Basque-Spanish •General manager or
China-
Research site companies in Kunshan head of the subsidiary 3
Kunshan
but outside de park
Data collection Mondragon Kunshan China-
16
Business Park Kunshan
Data analysis German projects in •General manager or
head of the subsidiary China-
Kunshan German 10
•General manager or Kunshan
Limitations 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) Jiangsu
Research Design Singapore Suzhou Ind. Park
Participants Spanish companies in China Hangzhou Bay New Zone, Cixi city (180 km Zhejiang
Ningbo European Ind. Park from Kunshan)
Research site
Data collection
Data analysis
Limitations
38

39. RESEARCH METHODOLOGY
- Mainly qualitative
- Documentary data
- Interviews Exploratory Descriptive Explanatory
Structured √√ √
Semi-structured √ √√
Research Design In depth √√
√√= more frequent, √= less frequent
Participants Source: Saunders et al., 2000
Research site
Data collection
Data analysis
Limitations
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, make
Research Design categories, look for patterns and relationships, compare and
relate with the theoretical framework and research questions.
Participants - Other: memos, notes, summaries, etc.
Research site
Data collection - Gaining access: time, interest, value,
Data analysis confidentiality, credibility, etc.
- Reliability: subject, participant and
Limitations 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 SIP
Geographical industrial Position
groups in Mondragon 6% Subsidiary managers
Mondragon Kunshan Park managers
Industrial Park 26% 46% Mondragon corporation
Kunshan German People related to Mondragon Geographic clusters
Industrial Park 14%
8% Others (Head of Department, consultants...)
German companies
in TRT and TCEDA Interview location
China Singapore Suzhou
4% 2% Nationality
Industrial Park 12%
China
30%
China Ningbo European Basque Country Basque and Spanish
Industrial 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 clusters
Participants - First Ularco (1964), second Goilan (1978), rest until middle 80s
Geographical industrial - Since 1977 almost all the cooperatives were grouped
groups in Mondragon
- Early 80s reflection period “ from geographical to sectorial”
Mondragon Kunshan
- 1992: Sectorial structure through “divisions”
Industrial Park
Kunshan German
Industrial Park “The geographical groups were associations of cooperative firms
German companies
located in a specific geographical area, i.e. located within the
in TRT and TCEDA
same social community that aimed a better development of their
China Singapore Suzhou
services for the community”, “a communitarian solution to work
Industrial Park
for the Country” (Perez de Calleja, translated, 1986, p.47).
China Ningbo European
Industrial 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)
Participants
Geographical industrial
Network
groups in Mondragon configuration - Formal organizational structure
- Linked with a multilateral contract
Mondragon Kunshan - Executive power, sovereignty, capacity to compromise
Industrial Park
- Rules and regulations: Labour/ Economic/ Services/
Kunshan German
inter-coop. Mechanisms/ organization
Industrial Park
German companies - Common policies, funds, resources
in TRT and TCEDA
China Singapore Suzhou Network
Industrial Park stability - High
China Ningbo European
Industrial 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 services
Participants
Geographical industrial Shared culture - Strong cooperative culture and Christian influence
groups in Mondragon
Mondragon Kunshan
Industrial Park
SOCIAL CAPITAL DIMENSIONS: Relational
Kunshan German
Industrial Park
German companies
- High: they all studied together, apprentices of Mr.
in TRT and TCEDA
Trust Jose Maria Arizmendiarreta, founder of coop.
China Singapore Suzhou
Industrial Park Movemente in Mondragon
- A friendly culture
China Ningbo European
Industrial 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 euros
Participants - N. workers: 2.500
Geographical industrial 2007 (phase 1): Orbea, Wingroup, Oiarso, Orkli
groups in Mondragon 2008 (phase 2): Batz Sistemas, Fagor Industrial, Fagor Arrasate
2009 (phase 3): Kide (3km), Gestamp (1km), representation office of Orona
Mondragon 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 companies
Industrial Park
German companies  Magnetism power
in TRT and TCEDA  Social cohesion
China Singapore Suzhou  Low cost of land
Industrial Park  Good relations with governments
 Good logistics conditions
China 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 Mondragon
Mondragon Kunshan - No formal structure
Industrial Park - Dependence on HQs
Network
Kunshan German - Institutional support: not in the beginning, now yes
Industrial 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 strategy
China Singapore Suzhou
making,
Industrial Park
- No association contract/ agreement
China Ningbo European - No written formal regulations or rules
Industrial Park - “Anchor” firms
Network
stability - Open membership (priority: Mondragon & country)
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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 strength
Participants
Geographical industrial - Willingness to apply cooperative-humanist
groups in Mondragon
Shared culture approach
Mondragon Kunshan
- No solidarity and values assimilated and
Industrial Park
Kunshan German
implemented yet
Industrial Park
German companies
in TRT and TCEDA SOCIAL CAPITAL DIMENSIONS: Relational
China Singapore Suzhou - A friendly culture
Industrial Park Trust - Strong relatioships among expatriates
China Ningbo European - Not that strong between workers and managers
Industrial Park
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49. PILOT RESEARCH & PRELIMINARY OBSERVATIONS
OTHER PARKS IN CHINA
 Good  Support to SMEs  Flexible, open  Low cost of land
Participants  Focus on SMEs
location, comm  German management
unication Government and style  Powerful business
Geographical industrial inviting
groups in Mondragon  Low cost AHK  Large pool of
 Professional  German Dual skilled workers mechanisms
Mondragon Kunshan team service System  Strong high-  Referral effect
Industrial Park free of charge  Numerous tech industries  Good relation with
Kunshan German  Plan to skilled workers X High labour governments
Industrial Park introduce  Good logistics and land cost  Shared resources
German companies German  Good image X Strong  Convenient and
in TRT and TCEDA Vocational X Shortage of competition pleasant
Training center technical from Shanghai community reduces
China Singapore Suzhou HR cost
Industrial Park employees and Hangzhou
(No interviews) X Costs increasing  Professional
China Ningbo European X Less attractive for management
Industrial Park Japanese, Korean,  Convenient
Taiwanese logistics
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50. PILOT RESEARCH & PRELIMINARY OBSERVATIONS
COUNTRY THEME INDUSTRIAL PARKS
Structural Dynamic
Participants - Usually aim SME -Failure factors: Wrong industry focus,
investors unfortunate relations with the local
Geographical industrial
groups in Mondragon
government, inefficient and unfocused
- Many formed in the promotion activities, weak access to leads
Mondragon Kunshan recent years
Industrial Park
- Many in Jiangsu -Success factors: strong relationship with
Kunshan German
province the government, partner up with foreign
Industrial Park
German companies partners, have a figure head/ leader,
- Promoted by different creative and practical service support,
in TRT and TCEDA bodies: investment referral effect
China Singapore Suzhou companies,
Industrial Park government bodies
China Ningbo European
Industrial Park
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51. THANK YOU FOR YOUR ATTENTION
QUESTIONS AND SUGGESTIONS
51