Table Of ContentTitle Pages
Multinationals as Flagship Firms: Regional
Business Networks
Alan M. Rugman and Joseph R. D'Cruz
Print publication date: 2003
Print ISBN-13: 9780199258185
Published to Oxford Scholarship Online: October 2011
DOI: 10.1093/acprof:oso/9780199258185.001.0001
Title Pages
Regional Business Networks
(p.i) Multinationals as Flagship Firms
(p.ii) (p.iii) Multinationals as Flagship Firms
(p.iv) This book has been printed digitally and produced in a standard
specification in order to ensure its continuing availability
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Title Pages
in the UK and in certain other countries
Published in the United States
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© Alan Rugman and Joseph D’Cruz 2000
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Reprinted 2008
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ISBN 978-0-19-925818-5
Page 2 of 2
Preface
Multinationals as Flagship Firms: Regional
Business Networks
Alan M. Rugman and Joseph R. D'Cruz
Print publication date: 2003
Print ISBN-13: 9780199258185
Published to Oxford Scholarship Online: October 2011
DOI: 10.1093/acprof:oso/9780199258185.001.0001
(p.v) Preface
The international dimension of business networks has remained relatively
unexplored, mainly because international business writers focus on
multinational enterprises and network writers ignore international issues. Here
we attempt to bridge the literature on networks and multinationals by
introducing the new concept of the flagship firm. In each business network
strategic leadership is provided by the flagship firm, which is defined as a
multinational enterprise. It has other partners: key suppliers; key customers; key
competitors; and key partners in the non-business infrastructure.
We developed the concept of the flagship firm in the best traditions of ‘action-
based’ research. We were asked by the chief executive officer of Kodak Canada,
Mr Ron Morrison, to help put the issue of international competitiveness on to the
national policy agenda in Canada. Over the period 1989–1992 we produced
three original research reports on the topic of Canadian competitiveness. In the
1992 report we first published the flagship concept. We are indebted to Mr
Morrison and Kodak Canada for their support of our independent academic
research.
Subsequently we broadened our work to consider applications of the flagship
concept to the telecommunications, chemicals, automotive, and electronics
sectors, amongst others, and the book reports on both empirical studies of and
field research on the international competitiveness of these sectors. We are
indebted to many executives in these sectors for their time and their support of
our research.
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Preface
We are also grateful to the Social Sciences and Humanities Research Council of
Canada, which funded research over the period 1992–5 with a strategic research
grant in the area of management for global competitiveness. For helpful
assistance throughout the project we thank Ms Hilary Buttrick of the Rotman
School of Management, University of Toronto and Mrs Denise Edwards of
Templeton College, Oxford University.
We are very pleased to acknowledge the excellent research assistance of Anne
Anderson on Chapter 11 and Michael Gestrin on Chapter 9, in particular their
assistance with executive interviews. We recognize Professor Alain Verbeke as
co-author of Chapter 4. Professors Neil Hood and Stephen Young provided
valuable help and comments on Chapter 10. Professor John Stopford helped with
comments on Chapter 5. We have also received numerous helpful comments
from other colleagues and referees of the papers on which these chapters are
based, as indicated in the notes.
Alan M. Rugman, Oxford
Joseph R. D’Cruz, Toronto
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Acknowledgements
Multinationals as Flagship Firms: Regional
Business Networks
Alan M. Rugman and Joseph R. D'Cruz
Print publication date: 2003
Print ISBN-13: 9780199258185
Published to Oxford Scholarship Online: October 2011
DOI: 10.1093/acprof:oso/9780199258185.001.0001
(p.vi) Acknowledgements
Chapter 2 Joseph D’Cruz and Alan M. Rugman, ‘Business Networks for
International Competitiveness’, Business Quarterly 56(4) (Spring 1992): 101–7.
Reprinted with permission.
Chapter 3 Joseph D’Cruz and Alan M. Rugman, ‘Developing International
Competitiveness: The Five Partners Model’, Business Quarterly 58(2) (Winter
1993): 60–72. Reprinted with permission.
Chapter 4 Alan M. Rugman, Alain Verbeke and Joseph D’Cruz, ‘Internalization
and de-Internalization: will business networks replace multinationals?’, chap. 4
in Gavin Boyd (ed.), Competitive and Cooperative Macromanagement: The
Challenges of Structural Interdependence (Aldershot and Brookfield: Edward
Elgar, 1995): 107–28. Reprinted with permission of Edward Elgar.
Chapter 5 Alan M. Rugman and Joseph D’Cruz, ‘Partners Across Borders: The
Five Partners Business Network Model’, International Management 1(1) (Fall
1996): 15–26. Reprinted with permission.
Chapter 6 Alan M. Rugman and Joseph D’Cruz, ‘The Theory of the Flagship
Firm’. Reprinted from European Management Journal 15(4) (August 1997): 403–
12, with permission from Elsevier Science.
Chapter 7 Joseph D’Cruz and Alan M. Rugman, ‘Business Network Theory and
the Canadian Telecommunications Industry’. Reprinted from International
Business Review 3 (3) (1994): 275–88, with permission from Elsevier Science.
Chapter 8 Joseph D’Cruz and Alan M. Rugman, ‘The Five Partners Model: France
Telecom, Alcatel, and the Global Telecommunications Industry’. Reprinted from
European Management Journal 12(1) (March 1994): 59–66, with permission from
Elsevier Science.
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Acknowledgements
Chapter 10 ‘The Five Partners/Flagship Model and the Scottish Electronics
Cluster’, pp. 165–84 in Louis Mucchielli (ed.), Research in Global Strategic
Management Volume 6: Multinational Location Strategy (Greenwich, Conn.: JAI
Press, 1998).
Chapter 12 Part of this in Joseph D’Cruz, ‘Business Networks for Global
Competitiveness’, Business Quarterly (1993). Reprinted with permission.
Page 2 of 2
List of Figures
Multinationals as Flagship Firms: Regional
Business Networks
Alan M. Rugman and Joseph R. D'Cruz
Print publication date: 2003
Print ISBN-13: 9780199258185
Published to Oxford Scholarship Online: October 2011
DOI: 10.1093/acprof:oso/9780199258185.001.0001
(p.viii) List of Figures
1.1 Porter’s five competitive forces 5
1.2 The flagship model 9
2.1 Major multinationals are making fundamental changes to their
supplier systems 19
2.2 Network linkages are changing the shape of international distribution
systems 21
2.3 Network linkages with competitors take a variety of forms in
international business 22
2.4 Flagship firms must be leaders in developing network linkages with
institutions in the non-business infrastructure 24
2.5 The flagship/five partners business network 26
3.1 The flagship firm and the five partners business system 31
3.2 The Benetton global network of co-operative relationships 34
3.3 The redesigned IKEA business system 35
4.1 Strategic decision processes and opportunism 53
4.2 The five partners business network 56
4.3 Multinational enterprise deinternalization in a business network 61
5.1 Elements of a business network 64
5.2 Governance costs and integration of organizations 73
6.1 The flagship firm and its business network 84
7.1 The five partners business network model 100
7.2 The emerging business network of the Canadian telecommunications
system 108
7.3 A tiered network at Nortel 115
8.1 The flagship firm provides strategic leadership for its partners in the
business system 119
8.2 The DGT’s business network during the 1970s 123
8.3 The business network of France Telecom 125
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List of Figures
8.4 Alcatel is structured as a multinational corporation 126
9.1 The five partners network model 132
9.2 The business system of the Canadian paint industry 136
9.3 The Canadian soap and detergent business system 140
9.4 The Canadian adhesives business system 142
9.5 The Canadian agrochemicals business system 146
11.1 The Canadian-United States integrated automotive industry 163
11.2 Canadian car production and market share by company, 1994 165
11.3 Flagship relationships in the Canadian-North American automotive
cluster 166
(p.ix) 12.1 Paths to competitiveness 191
12.2 A tiered flagship model for automobiles 195
12.3 Magna’s tiered networks in automotive parts 196
12.4 Flagship relationships in pharmaceuticals 197
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List of Tables
Multinationals as Flagship Firms: Regional
Business Networks
Alan M. Rugman and Joseph R. D'Cruz
Print publication date: 2003
Print ISBN-13: 9780199258185
Published to Oxford Scholarship Online: October 2011
DOI: 10.1093/acprof:oso/9780199258185.001.0001
(p.x) List of Tables
1.1 Porter’s entry and exit barriers 6
3.1 Ford’s supplier relationships 38
7.1 Flagship linkages in the telecommunications sector 114
11.1 Light vehicle assemblers and selected automotive parts
manufacturers in Canada, by total revenues and total assets, 1995 ($Cdn
million) 164
12.1 Partners in the Aberdeen alliance 193
12.2 World’s largest pharmaceutical companies ranked by revenues, 1997
($US million) 199
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Abbreviations
Multinationals as Flagship Firms: Regional
Business Networks
Alan M. Rugman and Joseph R. D'Cruz
Print publication date: 2003
Print ISBN-13: 9780199258185
Published to Oxford Scholarship Online: October 2011
DOI: 10.1093/acprof:oso/9780199258185.001.0001
(p.xi) Abbreviations
AAB
Asea Brown Boveri
ASAB
Avesta Sheffield AB
AutoSTEP
Automotive Standard for the Exchange of Product model data
BCE
Bell Canada Enterprises
CAW
Canadian Auto Workers (union)
CCITT
Comité consultatif international télégraphique et téléphonique
CEO
Chief executive officer
CGE
Compagnie Générale d’Eléctricité
CLOSE
Chrysler Lean Operating Supplier Enterprise (programme)
CNES
Centre National d’Etudes Spatiales
CNET
Centre National d’Etudes des Télécommunications
CRTC
Canadian Radio and Telecommunications Commission
CSGINT
Cadre Supérieur de Gestion de l’Institut National des
Télécommunications
CVT
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