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Edith Penrose and the future of the multinational enterprise: New research directions

Author

Listed:
  • Christos Pitelis

    (University of Cambridge)

  • Alain Verbeke

    (University of Calgary
    University of Oxford
    Vrije Universiteit Brussel (VUB))

Abstract

and Key Results This paper demonstrates the continued relevance of Penrose’s Theory of the Growth of the Firm (1959) (TGF) to explain MNE expansion patterns. Explaining MNE growth requires explicit attention to three elements not addressed fully by Penrose: (1) technology-based firm-specific advantages, (2) dynamic capabilities and (3) melding location-bound and internationally transferable knowledge, especially through astute human resources management. TGF includes foundational insights on the dynamic capabilities approach in strategy and contributes to assessing normative models in international strategy. Penrose did not appreciate fully the unique knowledge recombination challenges prevailing in international business, especially in the context of the large MNE. This uniqueness of knowledge recombination is the raison d’être of international business as a separate field of inquiry.

Suggested Citation

  • Christos Pitelis & Alain Verbeke, 2007. "Edith Penrose and the future of the multinational enterprise: New research directions," Management International Review, Springer, vol. 47(2), pages 139-149, March.
  • Handle: RePEc:spr:manint:v:47:y:2007:i:2:d:10.1007_s11575-007-0008-2
    DOI: 10.1007/s11575-007-0008-2
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    References listed on IDEAS

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    1. Danchi Tan & Joseph T. Mahoney, 2007. "The dynamics of Japanese firm growth in U.S. Industries: The Penrose effect," Management International Review, Springer, vol. 47(2), pages 259-279, March.
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    5. Stewart Johnston & Angela Paladino, 2007. "Knowledge management and involvement in innovations in MNC subsidiaries," Management International Review, Springer, vol. 47(2), pages 281-302, March.
    6. Peter J. Buckley & Mark Casson, 2010. "Edith Penrose’s Theory of the Growth of the Firm and the Strategic Management of Multinational Enterprises," Palgrave Macmillan Books, in: The Multinational Enterprise Revisited, chapter 11, pages 277-300, Palgrave Macmillan.
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    9. Penrose, Edith T., 1960. "The Growth of the Firm—A Case Study: The Hercules Powder Company," Business History Review, Cambridge University Press, vol. 34(1), pages 1-23, April.
    10. Pitelis, Christos N., 2004. "Edith Penrose and the resource-based view of (international) business strategy," International Business Review, Elsevier, vol. 13(4), pages 523-532, August.
    11. Anthony Goerzen & Paul W. Beamish, 2007. "The Penrose effect: “Excess” expatriates in multinational enterprises," Management International Review, Springer, vol. 47(2), pages 221-239, March.
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