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1. To explain the reasons for the trend towards R&D decentralization and to describe the difference between ‘home-base-exploiting’ and ‘home-base-augmenting’ innovation sites inside the MNE.
2. To highlight the key stages in the development of foreign R&D units.
3. To explain the role of subsidiary initiatives in the innovation sphere and the functioning of the ‘corporate immune system’, geared towards destroying such initiatives.
4. To foster understanding on how clusters of innovation (COIs) contribute to MNEs’ new upstream FSA development, and function as cross-border ecosystems.
5. To examine the potential conflicts between host country research sites and the corporate office.
1. To describe the four characteristics of core competencies, which are the higher-order firm-specific advantages (FSAs) of the firm.
2. To explain the importance of the corporation’s ‘strategic architecture’ in the context of core competencies.
3. To develop an understanding of MNEs’ business model diversification, whereby the FSAs deployed in each business model, though at least different in part, should also mutually reinforce one another to drive growth and profitability.
4. To identify the bounded rationality and bounded reliability problems associated with MNEs outsourcing their R&D, if they want to maintain or build core competencies in innovation.
5. Based on the conceptual framework in Chapter 1, to analyze the managerial implications of an ill-conceived, sole focus on core competencies.