Multinationals heedless of their host areas and societies. Production bulldozers concentrated on results, out of step with the context. This is the image which often goes with MNEs, i.e. those large companies with locations scattered throughout the world, with globalised production and possibly a strong corporate culture. However they too ultimately become involved in the debate between local and global, which opens up the way to the need for a rethink in strategies and approaches towards economic growth. Territorial focus, in a geographical and cultural sense, becomes an important cultural stance and a positive means of growth also for large groups.
This is the explanation given by Kurt Pedersen, Gunnar Lind Haase Svendsen and Gert Tinggaard Svendsen (from the University of Southern Denmark and University of Aarhus in Denmark respectively) in Multinational Enterprises and Social Capital as Location Factor: A Review, published in August in Business and Management Research, in which they trace a map useful for understanding the paths which link up MNEs to the areas where they are located, via social capital, i.e. that particular combination of culture, technology and sociality which is a feature of every territory.
If MNEs, the authors explain, are often understood to be particularly “volatile” enterprises with respect to the territories where they are located, so-called social capital is a potential tool for reducing the level of volatility. This is a renewable source, within easy reach, the manifestation of the corporate culture of a specific country, a substratum which is invisible yet which undeniably shapes production in economic and social terms. The reference for those large companies, namely MNEs, who wish to go beyond the traditional stereotype which cages them in.
The work by the three Danish scholars contains reasoning on a vast scale over the issue and a careful analysis of what has already been processed. The three academics wrote that their review suggested that social capital can be the missing link and a concept useful also in the area of direct foreign investments and in the management of multinationals.
Multinational Enterprises and Social Capital as Location Factor: A Review
Kurt Pedersen, Gunnar Lind Haase Svendsen, Gert Tinggaard Svendsen
Business and Management Research, Vol. 2, No. 3; 2013