Transnational firms and the changing organisation of innovative activities

It is suggested that a transition is taking place towards newmodes of organising transnational corporations' innovative activities.First, different units of multinational firms, including foreign-basedsubsidiaries, are increasingly involved in the generation, useand transmission of knowledge. Secondly, multinationals aredeveloping external networks of relationships with local counterparts,through which foreign affiliates gain access to external knowledgesources and application abilities. As a result of this evolutionaryprocess, multinationals' organisation is subject to both centripetaland centrifugal forces. Considerable efforts are then necessaryto innovate coordination procedures and mechanisms, in orderto enhance the generation, circulation and use of knowledge.A number of empirical works are reviewed, providing some evidenceof the evolutionary process discussed in the paper.