German Innovation through Foreign Subsidiaries

American firms are not the only ones seeking competitive advantages using innovative development in emerging markets. German companies, with fingers in a number of different countries, are trying to better understand how innovation and knowledge based strategies impact their competitiveness. Research helps highlight the competitiveness of German companies in international markets and how this impacts their firm’s ability to compete internationally.

Innovation activities in multinational firms do not live within a vacuum and are subject to and influenced by the environmental impact of its host country. Innovative activities of firms abroad depend on the technological abilities and capabilities of the home country (le Bas & Sierra, 2002).  It is difficult to develop innovation through home grown businesses in emerging markets without the support of the home country.

Information and abilities are transferred from the home country to the host country through the subsidiaries. Research and development, as well as innovation activities abroad, are associated with knowledge-seeking efforts by multinational firms (Ambos, 2005). As such, each contributes to the methodologies organizations use to gain knowledge and convert it to innovative development.

For example, CEOs from both Germany and Turkey said that they will be developing closer ties in energy and innovation development. The Turkish Industrialists and Businessmen’s Association (TUSIAD) and the German Industrialists Federation (BDI) announced new partnerships to help both countries succeed on February 25^th, 2013 (Daily News, 2013).  The two nation’s desire increased cooperation in development research, shipping, energy and infrastructure.

Germany being the innovative home country seeks additional opportunities in Turkey which is an emerging economy where costs are relatively low. This partnership helps both countries seek advantages by complementing each other’s strengths. For example, Turkey can gain access to technology and Germany can gain access to cheaper labor. 

Research by Kampik and Dachs (2011) attempted to explore the associations of firm characteristics, host country characteristics, and innovative behavior in German based subsidiaries in Europe. The study administered the communication innovation survey to 2,000 German subsidiaries in 16 countries.  Variables included size, international market orientation, market factors hampering innovation, cost factors hampering innovation and knowledge factors hampering innovation.

Results:

-German firms had more innovative propensity than 15 of 16 countries. The firms contributed to employment and provided new products for market consumption.

-German companies spent more on innovation than other companies in half of the countries studied.

-Company characteristics such as size, research and development, international market orientation, sectoral affiliation are associated with innovation and output intensity.  

-Host countries only mildly contribute to innovation. 

-More innovation is seen in southern and eastern European countries than northern or western countries. This has been interpreted as easier cost of transference of intellectual knowledge to cheaper product outputs in low cost countries. 

-German firms were integrated into their host countries innovative systems and used public funding to further their innovative processes.

Analysis:

German companies are seeking new ways of generating wealth and products. They are looking toward making partnership with cheaper host countries such as Turkey in order to diversify their competitive base and make the implementation of innovation cheaper. German firms are using the host country’s public funding in infrastructure and other sources as catalysts for their own growth and development. The innovative knowledge required to improve products and services will be offered from Germany and used within the host country.

Ambos, B. (2005), Foreign direct investment in industrial research and development: a study of German MNCs. Research Policy, 34(4), 395–410.

Kampik, F. & Dachs, B. (2011). The innovative performance of German multinationals abroad: evidence from the European community innovation survey. Industrial and corporate change, 20 (2). 

le Bas, C. and C. Sierra (2002), Location versus home country advantages in R&D activities: some further results on multinationals’ locational strategies. Research Policy, 31(4), 589–609.

Turkish, German CEOs call for more cooperation on energy and innovation (2013, February 28^th). Daily News. Retrieved February 28^th, 2013 from  http://www.hurriyetdailynews.com/turkish-german-ceos-call-for-more-cooperation-on-energy-and-innovation.aspx?pageID=238&nID=41870&NewsCatID=345

The Metaphysical Nature of The Book Tree

Walking into The Book Tree you would become distinctly aware that you are in a philosopher’s nook. The incense swirls around the room and pictures of the Egyptian “all seeing eye” hang on the wall. Lined along the wall and down the aisles are little treasures in written form ranging in everything from philosophy to history.  The place is simple and small but seems to provide the local community with its philosophical outlet. 

Metaphysical is a branch of philosophy that seeks to explain the nature of life. It focuses on answering two questions 1.) What is there? 2.) What is it like? A Metaphysicist attempts to clarify the how people understand the world. They seek to understand cause and effect, objectives, space, time properties, etc… It is an understanding of all things in the universe and how they relate to each other.

Metaphysics was the science before science. Before the use of the scientific method and empirical data people engaged in what is called natural philosophy. They debated issues in the much the same way as Socrates did by attempting to understand the world around them. With the advent of modern science the metaphysics was separated into the concept of philosophy. 

The store has an online website so visitors can review and see the newest books without having to actually frequent the location. This would defeat the purpose of taking your recently purchased nugget and running across the street to Lastate’s coffee shop.  The website offers information on clubs and other happenings around the book outlet. 

3316 Adams Avenue, Suite A

San Diego, CA 92116

Phone: 1-800-700-Tree

12pm-7:00PM Tuesday-Saturday

http://www.thebooktree.com

Business College Students Seek Opportunities of Self-Ownership

The value of a college education cannot be underestimated in an increasingly complex world. Business education is important in fostering new minds that will go forth and try out their ideas in the international market. Research helps highlight how a simple majority of business college students seek to develop their own business operations but feel as though these opportunities may not be forthcoming.

In 1865 Horace Greely stated, “Go West, young man, go West and grow up with the country.” The commonly used quote is deeply rooted in the psychology of young people who desire to flap their wings and seek their fortunes. The nature of business is about flapping wings and trying to get off the ground. Many do, many more do not, but it is the journey that takes precedence.

One of the reasons why young business students are so eager to start their own entrepreneurial endeavors lays in the uncertainty the recession has created over the past decade. They were reared in an era where corporate shifts, layoffs, and the movement of jobs overseas were common. In their effort to create some level of personal stability they seek the path of self-determination.

According to Summ, et. al. (2001), “Labor market conditions for most demographic groups of U.S. workers have been quite weak in recent years (2008-2010) due to the adverse employment impacts of the Great Recession of 2007-2009 and the anemic job recovery during the first 18 months following the trough of the recession in June 2009.”

As this group of students were attending high school and thinking of long-term opportunities the economy took a “nose dive”. While moving into college this same group of students hoped for business glory but suffered from declining opportunities. Despite the difficulties such students face they still seek to brand their mark on the global world and college continues to be an important learning avenue to allow that happen.

A study conducted by Tomkiewicz, Bass, & Robinson (2012) surveyed a total of 123 students in an AACSB mid-eastern accredited school.  Students were in attendance of the college of business and part of either a Fundamentals of Business course or a Strategic Management course. Participants were asked to consider their current station in life and determine where they would like to work in the future. Each student also completed the Fear of Success and the Fear of Appearing Incompetent instrument as part of the study.

Findings:

-55% of students wanted to have their own business.

-Only 34% of those who wanted a business felt they actually be able to do so.

-45% of students had a preference for working in organizations. 

-100% of those who had a preference for working in organizations stated that they are likely to have an opportunity to do so. 

-Males were more enthusiastic about starting their own business.

-Comparing graduating students with new students found that both had similar preferences for owning their own businesses but fewer graduating students felt they would have an opportunity to do so.

Analysis:

The information from the results indicated that the majority of students had a preference for working within their own business while a far majority felt that they would not have an opportunity to do so. The study helps highlight how business college students have a desire to be independent in their work habits and control the nature of their work. However, as they become more aware of the trials, depth, and financing needed to run their own businesses such expectation declines. 

Sum, A., Khatiwada, I. and Pahna, S. (2011). The continued collapse of the nation's teen summer job market: Who worked in the summer of 2011? Center for Labor Market Studies Northeastern University, August.

Tomkiewicz, J. Bass, K. & Robinson, J. (2012). Student propensity toward business ownership. College Student Journal, 46 (4).

Servant Leadership and Change

“Opportunity dances with those who are already on the dance floor.”

- H. Jackson Brown

 

The ability to adapt and bend is important when addressing change in this fast-paced marketplace.  As H. Jackson Brown, the author who wrote many of those Life's Little Instruction Books, said: "Opportunity dances with those who are already on the dance floor."  For those businesses that are out there in the mix of the chaos, it is easier for them to move to another partner or change the beat...so to speak. 

The role and style of leadership is particularly critical when facilitating change.  A leader shares the “vision of what could be and speaks a new organizational future into existence” (Lloyd & Maguire, 2002). Purposeful dialogue, courage and vision allow for change to manifest and for those changes to remain sustainable (Quy Nguyen & Mintzberg, 2003).  A leader must be virtuous also.  According to Cameron (2006), “when people are exposed to virtuous acts, they are attracted to them and elevated by them."

Servant Leader and Change

The servant leader is compassionate, shows integrity, is trusting, yet, and has a vision.  A servant leader promotes and encourages change by taking the time to understand and serve the needs of others (Cameron, 2006).  As the servant leader puts the subordinate first, change is promoted and encouraged through understanding and encouragement (Pajunen, 2006).  The sustainability of change is dependent on the relationship between leader and follower (Pajunen, 2006).

Stewardship is foremost in the change process as a servant leader wants to impact the lives of those they serve.  By doing so, this impacts the corporation or organization (Blanchard, 2010).  The values of the organization and its stakeholders need to be aligned in order to effectively and efficiently respond to change. It is this authentic, valued and trusted relationship cultivated by the servant leader that allows for stable and effective change.

Author: Andree C. Swanson, EdD

References

Blanchard, K. (2010). Leading at a higher level. Upper Saddle River, NJ. FT Press.

Cameron, K. (2006, May). Leading change. Leadership Excellence. p. 19.

Lloyd, M., & Maguire, S. (2002). The possibility horizon. Journal of Change Management, 3(2), 149.

Munduate, L., & Medina, F.J. (2004). Power, authority and leadership. In Encyclopedia of Applied Psychology. 

Pajunen, K. (2006). Stakeholder Influences in Organizational Survival. Journal of Management Studies, 43(6), 1261-1288. doi:10.1111/j.1467-6486.2006.00624.x

Quy Nguyen, H., & Mintzberg, H. (2003). The Rhythm of Change. MIT Sloan Management Review, 44(4), 79-84.