For many years, multinational corporations could compete successfully by using economies of scale and, or, using the imperfect goods in the world, labor and capital markets. But these methods are competing not so lucrative as it once was. In most industries, multinational corporations do not compete primarily with companies whose boundaries are confined to a single nation. Rather, they go head to head with a handful of other giants. Against such global competitors, it is difficult to maintain the advantage based on the traditional economies of scale and scope. MNCs have to look for new sources of competitive advantage. While multinational corporations in the past realized economies of scale mainly due to the use of tangible assets and the use of the corporate brand, a new scale based on the ability of business units, subsidiaries and functional departments within the company to successfully work through the exchange of knowledge and the development of joint new products and services. Collaboration can be a source of competitive advantage TNCs, because it does not happen automatically - it is not so. Indeed, several barriers hinder cooperation within complex multi-organizations. To overcome these barriers, companies will have to develop different organizations of the opportunities that can not be easily imitated. The authors develop a framework that links the management action, barriers to cooperation between the units and the creation of value in the OLS to help managers understand how collaborative advantage can work. Conceptualizes cooperation as a set of controls that reduce the four specific barriers to cooperation, which in turn leads to several types of value creation. "Hide
by Morten T. Hansen, Nitin Nohria Source: MIT Sloan Management Review 11 pages. Publication Date: 01 Oct 2004. Prod. #: SMR150-PDF-ENG