International managers’ participation in local buzz inside Dutch industrial clusters

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International Managers’ Participation in Local Buzz

inside Dutch Industrial Clusters

Master Thesis

MSc. Business Administration – International Management Supervisor: Dr. Johan Lindeque

Second reader: Ms. Francesca Ciulli Student: Eline Eggermont Student ID: 10283331

Date: 25.03.2016

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Abstract

The premise of this thesis is founded on the movement towards a globalized world economy that is increasingly dependent on intellectual capital as the key wealth-creating asset in industrial economies and alliance (Dunning, 1998). The growing need to collaborate is reflected in the trend towards industrial clusters near leading universities and research institutes (OECD, 1996). Local buzz is the is described as something which makes these industrial clusters especially attractive to firms operating in knowledge intensive industries (Bathelt & Turi, 2011). The aim of this research was to explore the mechanisms that underlie the degree to which international managers are able to benefit from and contribute to local buzz inside industrial clusters. This exploratory study is focused on the differences between foreign and local managers and new and established managers inside industrial clusters. A qualitative single case study design was used, whereby extensive information on the experiences of thirteen international managers operating within varying Dutch industrial clusters was acquired through semi-structured interviews. The findings indicate that the participation in buzz can be affected by a number of factors including bounded rationality based on lack of local knowledge, a lack of social ties within the cluster and (perceived) bounded reliability. In contrast to what was expected, a difference in national culture does not seem to affect the participation in buzz, this is usually professionalism and internationality that prevails within these clusters.

Keywords: Industrial clusters, buzz, liability of newness, liability of origin, bounded rationality, bounded reliability…

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Statement of Originality

This document is written by student Eline Eggermont who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating

it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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Acknowledgements

First of all, I would like to sincerely thank my supervisor, Johan Lindeque for his great support and extraordinary dedication in guiding me during the process of writing my thesis. I would also like to thank my second assessor Ms. Francesca Ciulli. Finally, I would like to thank all the managers who took the time to participate in the interviews and giving me great detailed information that was of utmost importance for this research.

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Index of Tables and Figures

Tabel 1. Sample characteristics………...29

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1. Introduction

Today’s business environment is characterized by the movement towards a globalized world economy that is increasingly dependent on intellectual capital as the key wealth-creating asset in industrial economies and alliance capitalism i.e. the growing extent to which multinationals need to collaborate in order to achieve their goals (Dunning, 1998). The need for multinational enterprises to collaborate with other firms from all over the world becomes evident when we look at the trend towards the creation of specialized ‘industrial clusters’, near leading universities and research institutions (OECD, 1996). However, even though collaborating with firms that have different countries of origin might be able to broaden insights and ideas, something which can be very fruitful in innovative processes, difficulties are likely to arise (OECD, 1996).

According to Kogut (1989) the integration of knowledge on a worldwide basis is what enables MNEs to obtain the incremental value from being a multinational and this must certainly include an explicit and suitable locational strategy (Dunning, 2004). For many strategic decisions are likely to be taken at subsidiary level, Birkinshaw and Pederson (2009) moved the focus from the MNE to the subsidiary manager. Therefore, for the benefit of this thesis, the unit of analysis will be individual managers.

Moreover, it has been argued that what makes industrial clusters appealing when working in a knowledge intensive industry, is the idea of ‘buzz’ (Storper & Venables, 2002; Bathelt & Turi, 2011). Buzz is the idea that a certain environment can be vibrant in the sense that multiple processes take place simultaneously, which sparks inspiration and makes information available to local actors (Bathelt & Turi, 2011). However, the diffusion of buzz within a cluster can be uneven or even blocked, depending on the structure of social relations between the local actors and firms and the history of interactions between them (Bathelt & Turi, 2011). The concept of buzz has been discussed in relation to industrial clusters in the literature, but even though it has already been argued that cognitive and behavioral factors play a role in the processes of participating in buzz (Gupta & Govindarajan, 1991; Nelson & Winter, 1982), there have not been any conclusive insights on the matter. This research gap will be addressed through a single case analysis involving international managers operating in knowledge intensive industries inside Dutch clusters. More explicitly, this study explores how international managers’ country of origin and the time they have spent inside a specific industrial cluster influences their ability participate in and benefit from this local buzz. The research question is:

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7 To what degree do international managers of firms based in industrial clusters experience a liability of origin and/or a liability of newness when participating in buzz, based on bounded rationality and (perceived) bounded reliability?

The remainder of this thesis structured as follows. First, the literature review discusses the existing body of literature relevant to this thesis, by elaborating on the evolving perception of both international business theorists and psychology theorists. Subsequently, the conceptual foundations that are discussed provide the basis for the working propositions presented in the latter part of the literature review. After the literature review the methodology of the qualitative single case study that was conducted through semi-structured interviews will be discussed. Subsequently, the in results- and discussion section will deal attention be paid to describing and analyzing the findings that were obtained through the study. The study concludes with a summary of the most important findings and contributions to the literature, the limitations of the study and some suggestions for future research.

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2. Literature review

This chapter builds on the understanding of the knowledge economy and in particular knowledge clusters. The cognitive bounds that managers working inside these clusters experience are also discussed in this section. It elaborates on the evolving perception of both international business (IB) theorists and subsequently psychology theorists. After this, the concepts of both fields will be integrated, leading to propositions for this research.

2.1. The knowledge economy

The theory on the “knowledge economy” covers a wide variety of research strands (Powell & Snellman, 2004). It includes literature on knowledge networks, which argues that knowledge is rarely possessed by a single firm and resides within networks of firms and institutions in a particular environment (Dicken, 1999). Additionally, it covers theories on knowledge spillovers, which focuses on the effects of inter-firm, intra-industry knowledge spillovers and innovation (Cohen & Levinthal, 1990). Wolf, Dunemann, and Egelhoff (2012) combine arguments regarding knowledge networks and knowledge spillover to hypothesize a strong link between low geographic distance and various types of effective knowledge transfer. Dunning (1998) already emphasized the importance of location in international business almost two decades ago. He indicated that there had been a gradual movement towards a world economy that was characterized by three features; the emergence of intellectual capital as the key wealth-creating asset in industrial economies, the increase in global economic activity and alliance capitalism i.e. the growing extent to which multinationals need to collaborate in order to achieve their goals. The distribution of knowledge through formal and informal networks is crucial to innovation and with that to economic performance (OECD, 1996). Today knowledge is also increasingly being codified and transmitted through computer and communications networks in the contemporary “information society” (OECD, 1996). Tacit knowledge, which resides inside individuals, firms, networks or local contexts (Polanyi, 1997; Lundvall, Johnson, Andersen & Dalum, 2002) is also an important dimension and includes the skills to use and adapt codified knowledge, which underlines the importance of continuous learning by individuals and firms (OECD, 1996). This makes the presence of face-to-face communication and buzz a necessity for knowledge transfer to sufficiently take place according to Asheim, Coenen and Vang (2007). According to Dunning

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9 (2004), the unique role of MNEs in affecting the location of economic activity in relation to these processes need to be considered. The next section will shed some light on this topic.

2.2. The MNE as a knowledge network

A multinational enterprise (MNE), is an institution which owns or controls value creating activities in at least two countries (Dunning, 2004). Adopting a knowledge network perspective, Almeida, Song and Grant (2002: 148) define an MNE as “an international network that creates, accesses, integrates and applies knowledge in multiple locations”. Many of the larger MNEs own or control value-adding activities in a large number of countries, and do so via both foreign direct investment (FDI) and cross-border alliances (Dunning, 2004). One of the unique competitive advantages of the large MNE in a knowledge-based, globalizing economy is its ability to identify, access, control, and effectively coordinate and deploy resources and capabilities from throughout the world (Dunning, 2004). According to Kogut (1989) the integration of knowledge on a worldwide basis is what enables MNEs to obtain the incremental value from being a multinational and this must certainly include an explicit and suitable locational strategy (Dunning, 2004). In order to effectively analyze the strategies MNEs adopt, Birkinshaw and Pedersen (2009) moved the focus from the MNE as a whole to the subsidiary manager and the subsidiary initiatives. They argue that many strategic decisions that are crucial in terms of innovation are likely to be taken at subsidiary level and could lead to the generation of new firm-specific advantages (Nguyen & Rugman, 2014). According to Almeida, Song and Grant (2002), in order to deal effectively with the environmental heterogeneity it faces, the MNE must differentiate the activities of its subsidiaries, but it must also integrate them. With this shifted focus, the subsidiary has become the key building block of the MNE, which is now viewed as a differentiated network instead of a monolithic hierarchy (Rugman, Verbeke & Nguyen, 2011). It is for this reason that this study will focus on subsidiary managers as unit of analysis, instead of the MNE as a whole.

However, research breakthroughs today are so broadly distributed, that no single firm or subsidiary possesses all the internal capabilities and skills necessary for success (Powell, Koput & Smith-Doerr, 1996). According to Dunning (2004) the aforementioned growth of knowledge capitalism has led to an explosion of interfirm alliances. Moreover, data on mergers and acquisitions and collaborative non-equity coalitions suggest that, by a variety of inter organizational cooperative agreements, alliances have occurred most, and increased the most, in

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10 knowledge-intensive sectors (UNCTAD, 1998). The next section will discuss the concept of interfirm knowledge creation.

2.3. Interfirm knowledge creation

Bathelt, Malmberg and Maskell (2004) argue that innovation, knowledge creation and learning are all best understood if seen as the result of interactive processes between actors, who possess different kinds of knowledge and capabilities, and come together and exchange information in order to solve problems. Here actors could be understood as both firms and as individual managers. For this study the focus will be on the latter, concentrating on both local and foreign managers.

The idea that radical knowledge creation is usually an interactive process across several firms emanates from recent studies on innovation, but has been recognized since the early 1980s (Rosenberg, 1982; Freeman, 1982; Kline & Rosenberg, 1986; Lundvall, 1988; Håkansson, 1989; Hagedoorn & Schakenraad, 1992). The National Innovation Systems approach uses this insight as its key foundation (Lundvall & Maskell, 2000), but the idea that the division of labour is a device for developing knowledge is, of course, much older and forms the building block of Adam Smith’s theory of economic growth (Smith, 1776). Smith (1776) describes how knowledge becomes more specialized as it develops, resulting in the identification of deviations that could have easily gone unnoticed. Even when specializing in the most basic activities, people find solutions and notice anomalies that otherwise would have been overlooked (Bathelt et al., 2004). According to Nooteboom (2000), this happens because when people with different knowledge and views collaborate, they push and help each other to stretch their knowledge, so that they can bring that knowledge together. By creating appropriate divisions, a group of firms can therefore develop knowledge that is far more advanced and beyond the reach of any single member of that group (Bathelt et al., 2004).

2.3.1 Knowledge bases

According to Young (1928) the division of labour among firms has a direct impact on the level of learning that can be reached within a nation’s economy. Because the growth of the nation’s body of knowledge is stimulated by this division, new economic opportunities arise and the economy flourishes (Young, 1928). The resulting extended market will make this a self-reinforcing process (Young, 1928). However, although the ‘knowledge bases’ firms specialize in

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11 must be sufficiently different to allow learning to take place, at the same time they can’t be too distinct, or learning will not take place at all (Nooteboom, 2000). A knowledge base refers to a certain area of knowledge and the techniques and organizations it embodies (Asheim, Coenen & Vang, 2007). Despite the trend towards increased diversity and interdependence in the knowledge process, Pavitt (1984) and others (Asheim & Gertler, 2005) have argued that the innovation process of firms differs substantially by virtue of their specific knowledge base, which generally varies systematically by industrial sector. For the purposes of this thesis, a distinction will be made between two types of knowledge base: “synthetic” and “analytical” (Laestadius, 1998). These types contain different mixes of tacit and codified knowledge, capabilities and skills required by firms and institutions involved, and contrasting innovation pressures (Asheim & Gertler, 2005). The synthetic knowledge base refers to the (predominantly engineering) knowledge involved in the design and construction of solutions to human problems arising in the interaction with clients and suppliers, which is often instrumental, context specific and practice related (Asheim et al., 2007). Research and development (R&D) is in general less important in companies working with synthetic knowledge than in other sectors of the economy (Asheim & Gertler, 2005). In contrast, an analytical knowledge base dominates economic activities where scientific knowledge predominates, and where knowledge creation is frequently based on cognitive and rational processes (e.g. formal models) (Asheim & Gertler, 2005). For the benefit of this research the focus will be on this analytical type of knowledge base. Typical examples include biotechnology and information technology (Asheim et. al, 2007). R&D is central to this form of knowledge production (Asheim & Gertler, 2005), so for firms involved it is important to have direct access to the research results of universities and other research organizations, to complement their own research activities (OECD, 1997; Coenen, Moodysson & Asheim, 2004). University–industry links and networks are thus important and relatively frequently observed (Asheim et al., 2007). According to Inkpen and Tsang (2005) networks provide firms with access to knowledge, resources, markets, or technologies that are needed in these types of innovation processes. Moreover, Bathelt et al. (2004) argue it is only possible to exchange these more subtle forms of information by being in the same local environment, and by meeting in person on a regular basis. They also argue that the ‘clustering’ of related economic activities or industries could be the answer for striking balance that is profitable (Bathelt et al., 2004). In the next section the concept of ‘industrial clusters’ will be elaborated upon.

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2.4. Industrial clusters

There is a trend towards the creation of specialized knowledge centers near major universities and oriented towards R&D on particular technologies that are typically knowledge intensive (OECD, 1997; Inkpen & Tsang, 2005). At the same time, R&D collaborations between firms and strategic alliances are also becoming increasingly popular, especially in fields where development costs are particularly high (OECD, 1997; Asheim et al., 2007). The universities train skilled people and provide technical and research support to firms in these centers (Inkpen & Tsang, 2005). Marshall (1920) already argued that geographic proximity facilitates knowledge flows and technical exchanges among firms and institutions. Being close to each other makes it easier for firms to join forces and achieve scale economies, pool resources and gain synergies from complementary technical and human assets (OECD, 1997). Research institutes and high-tech companies tend to gather in these geographic locations by forming industrial clusters in order to gain access to formal and informal networks (OECD, 1997). The classic example, which reflects the geographic concentration of industry-related scientific institutions and firms for the benefit of knowledge diffusion is that of Silicon Valley, a technology innovation hub in California in the US which is all concentrated on the electronics industry (Saxenian, 1994). In the Netherlands, examples include high technology clusters in Utrecht and Eindhoven, and a biotechnology cluster in Leiden, which are all located near the cities’ universities (Holland Trade, 2009).

This literature has emerged as a combination of the output on ‘clusters’, plus the economic geography literature on ‘industrial districts’. Porter (1990) introduced this idea of centers of collaborating firms and institutions that he called ‘clusters’. More specifically, he defined them as “geographic concentrations of interconnected companies, specialized suppliers, service providers, firms in related industries, and associated institutions (e.g., universities, standards agencies, trade associations) in a particular field that compete but also cooperate” (Porter, 2000c: 15). However, Brown and Hendry (1998) defined roughly the same concept as an ‘industrial district’. They stated that an industrial district is “a network comprising independent firms operating in the same or relocated market segment and a shared geographic locality, benefiting from external economies of scale and scope agglomeration” (Brown & Hendry, 1998: 133). Although the origins of these two sets of literatures are quite different, in that the clusters literature emerged from management science (Porter, 1990) whereas the new industrial district literature emerged from economic geography (Brown & Hendry, 1998), they have subsequently

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13 overlapped enormously, to the point that in many people's writings they have largely merged (McCann & Mudambi, 2005). As such, terminology from both strands are nowadays often used interchangeably, and especially in discussions about the relationship between innovation and regional development (McCann & Mudambi, 2005). Therefore, in the remainder of this thesis for expositional simplicity the term ‘industrial cluster’ (hereafter ‘cluster’) will be applied referring to this general body of clusters literature which has emerged as a fusion of these two originally distinct strands of literature.

According to Ellison, Glaeser and Kerr (2010), especially knowledge spillovers have a crucial impact on the formation of clusters as firms co-locate in order to learn and to “speed the flow of ideas”. Networks provide firms with access to knowledge, resources, markets, or technologies (Inkpen & Tsang, 2005). Literature on network relationships recognizes the knowledge dimension of networks and its link with competitive success (Baum, Calabrese & Silverman, 2000; Dyer & Nobeoka, 2000; Gupta & Govidarajan, 2000; Nishihuchi, 1994). McCann and Mudambi (2005) argue that a firm’s perception of the benefits spillovers can lead to is what determines a firm’s location choice. Knowledge spillovers and the MNE’s perception are dependent on the competitive position of MNEs towards local competitors and on the rate of expected knowledge inflow versus outflow (McCann & Mudambi, 2005). Moreover, according to Porter and Stern (2002) presence within industrial clusters offers various opportunities that can accelerate innovative processes, for the complementary relationships involved in innovating are more easily achieved among actors that are nearby. Several scholars have found evidence suggesting that knowledge is easier transferred when there are intensive social interactions between individuals within organizations, e.g. between managers (Lane & Lubatkin, 1988; Zahra, Ireland & Hitt, 2000). The next section will elaborate on this observation.

2.5. Social capital

Powell et al. (1996: 120) argue that collaborations in high-tech industries typically reflect more than just a formal contractual exchange, so that “beneath most formal ties, then, lies a sea of informal relations”. The focus in the literature on interfirm knowledge creation is increasingly on the crucial role of informal interpersonal relations between a diverse set of organizational actors (Inkpen & Tsang, 2005). The concept of social capital has been gaining popularity as a foundation for describing and characterizing a firm’s set of relationships (Inkpen & Tsang, 2005). However, despite the widespread acceptance the concept has found over the years,

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14 questions remain regarding its meaning and effects (Koka & Prescott, 2002). Bourdieu (1988: 248) defined social capital as “the aggregate of the actual or potential resources which are linked to possession of a durable network of more or less institutionalized relationships of mutual acquaintance or recognition”. Other scholars including Coleman (1988) and Burt (1992) developed the concept and reached consensus that social capital secures certain benefits to members in social networks (Porter, 1988). On an organizational level, these benefits include privileged access to knowledge and information, preferential opportunities for new business, reputation, influence, and enhanced understanding of network norms (Inkpen & Tsang, 2005). Inkpen and Tsang (2005: 151) define social capital as “the aggregate of resources embedded within, available through, and derived from the network of relationships possessed by an individual or organization”. The central proposition in this view of social capital is that networks of relationships are a valuable resource on an individual as well as organizational level. These two levels are often interrelated: a manager can, for instance, help the company he or she works for set up a joint venture with another company, by leveraging his or her social relationships and personal connections (Inkpen & Tsang, 2007). It is important to incorporate individual social capital, for the interplay between the two levels affects knowledge transfer between network members (Inkpen & Tsang, 2007). According to Adler and Kwon (2012) the fundamental aspect of social capital are relational ties. According to them, an actor’s network of social ties creates the opportunities needed for social capital transactions. An important characteristic of network ties between members in an industrial cluster is that they are mostly established as a result of interpersonal relationships developed from informal social gatherings and meetings (Brown & Hendry, 1998; Paniccia, 1998). When operating inside a cluster, these planned or accidental social gatherings and meetings between organizational actors are likely to occur on a relatively frequent basis (Bathelt et al., 2004). Two particularly important aspects, which make industrial clusters appealing when working in a knowledge intensive industry, are face-to-face communications and the idea of ‘buzz’ (Storper & Venables, 2002; Bathelt et al., 2004). The next section will touch on these two issues in further detail.

2.6. Face-to-face and buzz

Innovation nowadays increasingly depends on tacit knowledge, which rests inside individuals, and therefore in firms, networks or local contexts (Polanyi, 1997; Lundvall et al., 2002). Tacit knowledge is typically difficult to articulate or codify -for it is generally expressed through practical skills- making it challenging to store and transmit in ICT technologies (Nonaka, 1994;

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15 Nonaka & Takeuchi, 1995). This difficulty makes the presence of face-to-face communication and buzz a necessity for knowledge transfer to sufficiently take place (Asheim et al., 2007). According to Asheim et al. (2007) this necessity is anchored in the new understanding of innovation as ‘interactive learning’ (first promoted by Lundvall, 1992), which puts emphasis on the importance of co-operation, which can be improved by building social capital. The literature on face-to-face communication and the literature on buzz both focus on the importance of interaction, networking, co-operation, social-capital and spatial proximity as key elements for collective learning processes stimulating the innovativeness and competitiveness of firms, regions and nations (Asheim et al., 2007).

According to Asheim et al. (2007) face-to-face means that two or more people are physically co-present in a way that allows for mutual visual and physical contact. Therefore, it refers to more than firms co-locating in the same city or cluster (Asheim et al., 2007). When it comes to the literature on tacit knowledge transfer, the most common position according to Asheim et. al (2007) is that of the physical proximity-argument. It contends that the easiest way to transfer tacit knowledge is through face-to-face contact, for this allows for multi-dimensional communication; meaning being able to be interruptive and non-sequential (Storper & Venable, 2004; Maskell et al., 2004; Bathelt et al., 2004). However, Asheim et al. (2007) argue that face-to-face is not always a necessity when it comes to tacit knowledge transfer, but that its relative importance lies within the particular knowledge base that an industry draws on.

Buzz, in turn, is created by face-to-face contacts, co-presence and co-location of individuals and firms within the same industry and place or region (Bathelt et al., 2004). The concept of buzz has received increasing attention in the field of economic geography over the past few years (Asheim et al., 2007). Buzz is the idea that a certain environment can be vibrant in the sense that multiple processes take place simultaneously, which sparks inspiration and makes information available to local actors (Bathelt et al., 2004; Maillat, 1998). It consists of specific information which is continuously updated, learning processes that can be intended or not and which arise out of meetings that are organized or accidental (Bathelt et al., 2004). In these meetings the same interpretative schemes are applied, as well as shared cultural traditions and habits within a particular field of technology (Bathelt et al., 2004). It is an ongoing diffusion of information, gossip and news, which local actors continuously contribute to and benefit from, simply by ‘being there’ (Gertler, 1995). However, the diffusion of buzz within an industrial cluster does not always go smoothly (Bathelt et al., 2004). Depending on the structure of social relations and history of interactions between actors within the cluster, buzz can also be somewhat blocked (Bathelt & Glücker, 2002). Especially when distrust and malfeasance exist, it is not very

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16 likely to have high-quality local buzz (Bathelt et al., 2004). According to Granovetter (1985) and Uzzi (1997) it takes time to build trust and reciprocity and with that the necessary social relations needed for fine-grained transfer of information and joint problem solving. Managers will eventually develop similar language, technology attitudes and interpretative schemes, that allow for effective cooperation’s within the cluster (Lawson & Lorenz, 1999).

According to Asheim et al. (2007), face-to-face communication and buzz are important explanatory factors for the geography of innovative activity. They argue that the importance of face-to-face communication and buzz depends on the type of knowledge a certain industry draws on. The knowledge inputs and outputs that flow within science-based industries are often codified. However, tacit knowledge is not irrelevant in these industries, for both types of knowledge are always involved and needed in knowledge creation and innovation processes (Nonaka, Toyama & Konno, 2000; Johnson & Whang, 2002). There are several reasons why codification is frequent: knowledge inputs are often based on reviews on secondary data, knowledge generation is based on scientific principles and methods, knowledge processes are organized in a more formal way (such as in R&D departments) and outcomes are mostly documented in the form of reports, electronic files or patent descriptions (Asheim et al., 2007). As scientific knowledge is often published in the form of publicly available articles in journals, face-to-face and buzz do not seem of great importance for accessing codified knowledge itself (Asheim et al., 2007). However, firms that draw on this kind of knowledge often compete with their rivals by accessing and absorbing scientific knowledge before they do (Asheim et al., 2007). Even though the knowledge might be abstract and formal in nature, these absorption processes may be facilitated and speeded up through the interactive characters of face-to-face communication and buzz (Asheim et al., 2007). For this reason, these industries tend to cluster around or locate near major universities or research institutes that are carrying out leading research within their field (Cooke, 2005). For the knowledge acquisition itself, face-to-face and buzz do not play a crucial role according to Asheim et al. (2007), but for building trust relations, initial idea spawning and brainstorming among fellow researchers, it can be very important. Moreover, buzz can be an important way to spread information on the reputation of researchers within the scientific community or cluster, promising on-going (unpublished) research and valuable insights concerning experimental failures (Asheim et al., 2007). This would mean that is, hypothetically, an actor within a industrial cluster for whatever reason cannot effectively employ or take part in the buzz, he or she would most likely be at a disadvantage compared to the actors that can. Some of the reasons, that increase the likelihood of not being able or that

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17 would make it harder to fully reap the benefits of face-to-face communication or buzz inside an industrial cluster, will be discussed in the next section, specifically with respect to the experience of local and foreign managers in a knowledge intensive industrial cluster.

2.7. Additional costs faced by foreign international managers

The idea that MNEs (and their managers) face difficulties or ‘additional costs’ when operating abroad is widely spread and accepted in IB literature (Miller & Eden, 2006; Kostova & Zaheer, 2002; Kronborg & Thomsen, 2009; Mezias, 2002a; Mezias, 2002b; Miller & Parkhe, 2002; Nachum, 2003, forthcoming; Zaheer, 1995, 2002; Zaheer & Mosakowski, 1997). However, the labels that have been used to describe these costs are quite divers, which can sometimes lead to confusion. The difficulties that managers encounter when operating in a foreign country have traditionally been discussed in aggregate form at organizational level as ‘the cost of doing business abroad’ (Hymer, 1976) or the ‘liability of foreignness’ (Zaheer, 1995). Economic-based studies label the concept ‘the cost of doing business abroad’ and discuss its consequences in terms of the additional costs undertaken by the firm operating under uncertainty in foreign markets (Buckley & Casson, 1976; Hymer, 1976). Organizational studies label the concept ‘the liability of foreignness’ (LoF) (Zaheer, 1995; Daamen, Hennart, Kim & Park, 2007) and suggest that its consequences are lower performance and increased failure rates (Zaheer, 1995; Zaheer & Mosakowski, 1997). Zaheer (1995) enumerated that this LoF arises from four sources of additional costs, namely: (1) costs related to spatial distance, such as travel-costs and coordination over time and distance; (2) costs incurred due to unfamiliarity with the host-country environment; (3) costs resulting from economic nationalism and lack of legitimacy in the host country; and (4) costs associated with the home country environment such as imposed sales restrictions (Moeller, Harvey, Griffith & Richey, 2013). However, this list is not exhaustive; other scholars identify other causes of the LoF, such as economic and political regulations and culture and language differences (Griffith, 2006; Harvey & Novicevic, 2002a, 2002b; Matsuo, 2000; Zaheer, 1995). In 2009 Johanson and Vahlne added another dimension to this body of literature called ‘the liability of outership’. They argue that the problems and opportunities that international managers may face are becoming less about country-specificity, and more about relationships and networks. If a company is not an insider, it will suffer from lack of business opportunities as a consequence of the lack of relationships (Johanson & Vahlne, 2009).

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18 Two more specific types of difficulties that managers and firms often have to deal with abroad or even in their home country have been described as ‘the liability of origin’ (LoO) (Barlett & Ghoshal, 2000) and ‘the liability of newness’ (LoN) (Stinchcombe, 1965). In some ways these types overlap with the liability of foreignness or outership or some of the other concepts described above. Both being new to an industrial cluster (leading to the experience of LoN), as well as not originating from the cluster’s local spatial ‘area’ (leading to the experience of LoO,) could for instance lead to the ‘outsider’ status discussed by Johanson and Vahlne (2009). These two concepts are the most relevant for managers working at both foreign and domestic firms operating within an industrial cluster. For this reason in this study the focus will be on LoN and LoO, which will be explained more extensively in the coming sections.

2.7.1. Liability of newness

Stinchcombe (1965) introduced the term ‘liability of newness’ (LoN) to highlight that young firms may find it difficult to engage in relationships with other actors in society. One of the prerequisites for creating good professional relationships is trust, which takes time, effort and experience to build up (Nguyen & Rose, 2009). As young firms, by definition, lack time and experience, they are required to work to create these embedded ties (Hite & Hesterly, 2001). Great effort is also required for establishing links to the holders of external resources, given that they do not yet have a reputation to build on, nor do they possess the knowledge of available resources and opportunities (Laursen, Masciarelli, & Reichstein, 2015). Moreover, Nelson and Winter (1982) argue that interlocking routines, bounded rationality, and historical commitments ultimately make it hard for a new firm to adapt to their environment. Therefore, young firms face substantial barriers in terms of accessing knowledge held by external sources, which constrain their knowledge and innovation creating abilities (Laursen et al., 2015). Stinchcombe (1965) identifies four disadvantages that young firms face: (1) the difficulties in creating a culture and learning the skills; (2) the high costs of inventing roles and structuring relations; (3) problems inherent in building relationships with people outside the company; (4) the uncertainty associated with establishing ties to those who use the organization’s services. These difficulties mentioned by Stinchcombe (1965) might apply to firms that are not necessarily young, but firm managers who are new to an industrial cluster, for it has been argued by Lawson and Lorenz (1999) that managers located within the same cluster eventually develop similar language, technological attitudes and interpretive schemes. This suggests that it takes time to develop this local business know-how. Moreover, Lawson and Lorenz (1999) added that possession of this

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19 local knowledge is necessary in order to co-operate effectively inside the cluster. This in turn suggests that until this local knowledge has been absorbed, managers who are new to a cluster will be at a disadvantage compared to the established managers who have already mastered that knowledge. In conclusion, managers who are new to a specific cluster will likely experience a LoN based on a lack of local business knowledge.

2.7.2. Liability of origin

Managers who have a different country of origin than the country they work in can sometimes experience a ‘liability of origin’; these are certain psychological factors that hold the manager back in some way, according to Barlett and Ghoshal (2000). Some scholars believe that national culture can be such a factor (Kumar & Das, 2010; Kumar & Nti, 2004). Especially when it comes to cross-national collaborations between firms, culture has been argued to play an essential role (Kumar & Das, 2010; Kumar & Nti, 2004). In particular, culture influences the critical choices or decisions that are made by collaborating managers (Kumar & Das, 2010). Central to the functioning of collaborating firms is the mediating role of interpretations (Kumar & Das, 2010). Interpretations are dependent on manager’s schemata (e.g. Bartunek, 1993; Weick, 1995). A schema, or ‘interpretative scheme’ is a knowledge structure that an individual uses to make sense of a situation (Kumar & Das, 2010). Kluckhohn and Strodtbeck (1961) already conceptualized culture as reflecting differences in value orientation, which provided a useful framework for assessing how national culture shapes the interpretive schemes used by individuals. According to Kumar and Das (2010) schemes cannot be changed easily, and are able to bring out strong affect among individuals. They also state that in cross-national alliances, managers’ schemes are likely differ from one another. According to Geppert and Clark (2003) these different interpretive schemes provide their bearers with cognitive maps through which they make sense of their management work. Kumar and Das (2010) go on by concluding that interpretative contradictions are at the very center of what makes collaborations prosper and also what makes them fail. This suggests that when a manager has a different interpretive scheme based on their national culture than the managers in his or her surroundings, he is likely to experience a LoO and collaborations are more likely to fail.

Looking at industrial clusters, the top-management team of a firm that operates inside a cluster can consist of any combination of foreigners and locals (Tung, 1982; Zeira & Shenkar, 1986). National background accounts for significant differences when it comes to managerial perspectives, according to several studies (Gupta & Govindarajan, 1991). More specifically, it

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20 has been reported that local managers are more familiar with the local environment and develop stronger ties with other local mangers, compared to foreign managers (Tung, 1982; Zeira, 1976). Moreover, according to Gupta and Govindarajan (1991) local managers are likely to have a better understanding of the local sociocultural, political and economic environment. These findings can be largely explained by looking at managers’ cognitive contexts (Gupta & Govindarajan, 1991). In contrast foreign managers are more likely to have a better understanding of the MNE’s overall global strategy (Gupta & Govindarajan, 1991). This suggests that foreign managers suffering from a LoO will encounter more difficulties in developing strong ties inside the industrial cluster they operate in and therefore are less likely to reap the full benefit of operating inside that area in terms of knowledge creation and collection.

So, LoN and LoO, by their definition, make it harder for actors new and/or foreign to a local joint research setting to engage in collaborative relationships (Barlett & Ghoshal, 2000; Stinchcombe, 1965). This suggests that the same difficulties might be expected to present themselves when it comes to participation in the ongoing activities inside industrial clusters, including the more passive participation in the local buzz. Although it has already been suggested that cognitive and behavioral dimensions play a role in these processes (Gupta & Govindarajan, 1991; Nelson & Winter, 1982), it is still yet to be explicitly and systematically addressed in the literature. This study seeks to generate more insights into cognitive and behavioral processes that may be the underlying mechanisms for the experience of LoN of LoO. In the last two chapters of this literature review, the focus will be on how individual bounded rationality (Simon, 1957) and (perceived) bounded reliability (Verbeke & Greidanus, 2009; Verbeke & Kano, 2015) is related to the experience of LoN and LoO for international managers that are seeking to participate in the local buzz inside industrial clusters.

2.8. Bounded rationality

“Human behavior is intentionally rational, but only limitedly so” (Simon, 1957). Bounded rationality refers to the cognitive limits individuals experience in their ability to digest and analyze large volumes of complex data in their decision-making process (Simon, 1979). Research on bounded rationality over the years has consistently demonstrated that managers are not perfectly rational but ‘boundedly’ rational in their decision-making (Hammond, Keeney & Raila, 1998; Simon, 1979). Managers base their decisions on a fragment or subset of the information that is available to them, in order to cope with their limited ability to process and

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21 interpret the information (Simon, 1979). It has been widely argued that this process generally results in biases in complex decision-making contexts (Bukzar & Connolly, 1988; Hammond et al., 1998; Hilary & Menzly, 2006; March & Sharpira, 1989; Smith & Winkler, 2006). Bounded rationality is particularly suited to providing insights on how managers’ decision-making and sense making mechanisms function (Mellahi & Collings, 2010). Simon (1979) argues that bounded rationality encompasses two key concepts: search and satisficing. Search refers to the extent to which people look for information to guide their decision-making (Simon, 1979). Satisficing refers to the level of information at which managers feel they are able to make a judgment and stop gathering further information (Simon, 1979). According to Simon (1979) decision makers adopt strategies that are satisficing rather than optimizing, searching for solutions that are satisfactory or ‘good enough’. Moreover, according to Simon’s theory of bounded rationality, people rely on rules of thumb to guide their decisions (Simon, 1979). Rules of thumb are simple procedures or principles, based on practice rather than theory, which facilitate decision-making in case of complex data (Simon, 1979). When discussing the relationship between bounded rationality and institutions, it is important to bear in mind that these rules of thumb Simon (1979) discusses may be followed by a single individual, but the concept of institutions implies the involvement of many individuals. Indeed, Simon’s work has been criticized by old as well as new institutionalists for the lack of attention devoted to the social context in which people act and interact (Langlois, 1986; Hodgson, 1988), and institutions are a crucial component of this social context. The contribution to the literature that is being made in this thesis lies in the attention for the social aspect of managerial decision-making, in particular by focusing on the concept of buzz.

2.8.1. Bounded rationality and LoO

Thomas (2008) developed a normative approach, which demonstrates how managers should make decisions. This ‘rational’ or ‘optimizing’ model recognizes that in reality no decision is purely rational, but that decisions are made within limitations that put boundaries on rationality. The results of Thomas’ study indicate that individual managers make decisions almost automatically, based on their cultural scripts. Therefore a person’s home country cultural variation should be taken into account when analyzing managerial decision structures (Thomas, 2008). Moreover, Kim and Drolet (2003) found that culture also has an influence on the variety of choice rules people use in decision making. This suggests that the rules of thumb that managers rely on in their bounded rationality are most likely to be home country-, rather than

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22 host country-based. It also indicates that foreigners can experience bounded rationality when in another country, based on their differing cultural interpretive scheme. This suggests that foreign managers will experience a LoO when interacting with local managers, as a result of their bounded rationality, which in turn is caused by their difference in interpretative schemes based on culture. This observation leads to the following working propositions:

WP1a Foreign managers’ non-local interpretive schemes lead them to experience a LoO when participating in local buzz.

WP1b LoO as a result of bounded rationality based on non-local interpretative schemes can be expected to decline over time through experience-based learning.

2.8.2. Bounded rationality and LoN

Vahlne and Johanson (2013) state that “when firms operate in an environment which is only vaguely known, and where information is unclear and hard to interpret, firms operate in a climate of uncertainty, ambiguity and complexity”. Moreover, according to Vahlne, Schweizer and Johanson (2012), managers have to act on highly subjective grounds, and acting may be the only way to learn and create new knowledge (Vahlne et al., 2012). Augier and Kreiner (2000) add to this that “organizations are characteristically pictured as acting in pursuit of intelligence, but the route to intelligence is not calculative rationality but the application of rules that adapt through conscious intent, learning, imitation and selection”. According to Vahlne and Johanson (2013) those rules can also be named routines. Moreover, Ethiraj and Levinthal (2004) argue managers who are new to a specific (local) context are unlikely to discover the appropriate organizational structure at their first attempt, due to their bounded rationality. They also argue that it is certainly possible that repeated, small adaptive attempts will generate progress toward the appropriate structure (Ethiraj & Levinthal, 2004). This could mean that managers who are new to an

industrial cluster for instance, are relatively more bounded in their rationality than managers who have been active in the cluster for a longer period of time (possibly due to the absence of

routines, as been suggested by Vahlne and Johanson). Following this line of thought, it can be presumed that the bounded rationality that managers of firms entering an industrial cluster is the precedent of the experience of LoN. This leads to the following proposition:

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23 WP2a: International managers who are new to an industrial cluster are boundedly rational compared to established managers due to a lack of local business knowledge, which leads them to experience a LoN when participating in local buzz.

WP2b: LoN as a result of bounded rationality based on a lack of local business knowledge can be expected to decline over time through experience-based

learning.

2.8.3. Experience-based learning and LoO & LoN reduction

Contemporary social theories of learning are based on the argument that expertise is a dynamic commodity that resides within communities of practice, such as industrial clusters (Jensen, Johnson, Lorenz & Lundvall, 2007). According to these theories, learning is a process of

absorbing and being absorbed into the culture of such a community (Lundvall & Nielsen, 1999). Jensen et al. (2007) found that firms with a focus on developing their science and technology base, as is generally the case with firms who are located inside clusters, tend promote informal learning by using, doing and interacting. Moreover, close interaction with actors outside the organization is typically a important for this type of experience-based learning in innovation-based industries (Jensen et al., 2007). Since close interaction and shared knowledge creation is already widely promoted and applied among managers inside clusters, this type of learning-by-doing is expected to be a frequent phenomenon within clusters. Moreover, since this experience-based learning only results in ‘local’ knowledge according to (Jensen et al., 2007) this type of learning is also expected to be a relatively time efficient. Therefore, it is expected that managers who are new to an industrial cluster will relatively quickly overcome their LoN by learning by doing.

In contrast to local business knowledge, learning a new interpretative schemes is expected to take a long time, according to Kumar and Das (2010). They argue that interpretive schemes schemes cannot be changed easily and can bring out strong effect among individuals. This leads to the expectation that a cultural interpretive scheme cannot be learned in a short period of time. Based on the literature it is therefore expected that local knowledge can be learned in a shorter period of time than adopting a new cultural interpretative scheme. This expectation leads to the following working propositions:

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24 WP3a: Local business knowledge can be learned faster than a new cultural interpretative

scheme.

WP3b: LoN as a result of bounded rationality based on local business knowledge can be diminished quicker than LoO as a result of bounded rationality based on interpretative schemes.

2.9. Bounded Reliability

“Where bounded rationality reflects the scarcity of mind, bounded reliability refers to the scarcity of effort to make good on an open-ended promises” (Verbeke, 2013). More specifically, bounded reliability reflects the fact that commitments do not always result in the promised outcome, due to a number of factors on an individual level. According to Holt (2004), managers act from a complex set of motives. Instead of adopting standard modes of judgment and selection, they stay responsive to the dynamics of an evolving set of cognitive and social influences. Bounded reliability captures this dynamic nature of managerial decision-making (Verbeke & Greidanus, 2009; Verbeke & Kano, 2015). Verbeke and Greidanus’ (2009) analysis indicates there are three main ‘bounds’ on a manager’s reliability to fulfill his commitments; (1) opportunism as intentional deceit; (2) benevolent preference reversal associated with reprioritization; (3) benevolent preference reversal associated with scaling back on over-commitment. The first bound on reliability is caused by managers who might act opportunistically by advancing their private interests through obfuscating the true nature of their operations (Verbeke & Greidanus, 2009; Verbeke & Kano, 2015). The second bound, which is caused by reprioritization, captures instances whereby managers make ex ante commitments with good intentions, but whereby those commitments become less important later on because preferences are reordered (Verbeke & Greidanus, 2009; Verbeke & Kano, 2015). The third bound also has to do with the tendency for managers to fail to make good on their commitments, due to ex ante over-commitments that have to be scaled back later on (Verbeke & Greidanus, 2009; Verbeke & Kano, 2015). Again, these commitments are made with good intentions, but it often happens that managers overestimate their abilities, which as a result makes them less reliable (Verbeke & Greidanus, 2009; Verbeke & Kano, 2015).

Thus, bounded reliability is characterized by (1) observable commitments, (2) that are not fulfilled, (3) because of identifiable mechanisms, (4) attributable to specific economic actors, (5)

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25 resulting in a dysfunctional consequence for the MNE (loss of efficiency and/or effectiveness) (Verbeke & Greidanus, 2009).

2.9.1 Bounded reliability and LoO

According to Verbeke and Greidanus (2009) distance between home and host country creates new bounded rationality challenges for managers who must understand drastically different subsidiary environments, as well as bounded reliability problems, to the extent that it becomes difficult for the head office to achieve proper monitoring and goal alignment with the subsidiary. Following this line of thought, the fact that a manager of a foreign subsidiary is not easily monitored and controlled by its headquarter, could lead to him or her being (perceived as) less reliable regarding making good on open-ended promises with other subsidiary managers inside the industrial cluster as well. So this would mean that when bounded reliability that is being experienced within the internal MNE network, it could ‘trickle down’ to the location of the foreign subsidiaries’ knowledge network inside industrial cluster. This would mean that the subsidiary manager inside that foreign industrial cluster, would experience bounded reliability, due to fact that (s)he cannot be monitored and supported properly by the MNE headquarter office-management. His or her bounded reliability is this situation would then likely lead to the experience of LoO, for he or she would be at a relative disadvantage compared to local managers, due to the bounded reliability (s)he experiences because of the distance to the country of his or her company. This train of thought leads to the following working propositions:

WP4a: Foreign managers in an industrial cluster could perceive local managers to be boundedly reliable, as a result of misinterpreting commitments made by local managers, leading to the experience of a LoO when participating in local buzz.

WP4b: Foreign managers in an industrial cluster could be perceived to be boundedly reliable as a result of their cultural interpretative schemes, leading to the experience of a LoO when participating in local buzz

2.9.2. Bounded reliability and LoN

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26 “The concept of bounded reliability offers a non ideological view of human

nature: human beings do not need to be assumed intrinsically trustworthy vs non-trustworthy, or as having a strong inclination to do good or bad. They just have a propensity towards imperfect effort to make good on commitments. Optimal governance as well as governance redesign precisely result from past experience with such imperfect effort, and are achieved through a combination of trial and error and emulating best practices observed inside and outside the organization ("rights from wrongs").”

Verbeke and Greidanus (2009: 1490)

This remark about the only way for managers to counteract their bounded reliability, is by making observations and by trial and error, suggests that a company that is new to an environment –who thus had not yet had the opportunity to do so- can expected to be less reliable than companies who have been stationed in that particular area for a longer period of time. So, firm managers who are new to an industrial cluster, and thus have not yet had the chance to observe and adjust, experience greater bounded reliability and thus greater difficulties (LoN) than the firm managers who are not new to the cluster. This leads to the following hypothesis:

WP5a: International managers who are new to an industrial cluster could be perceived to be boundedly reliable, as a result of a lack of local business knowledge, leading to the experience of a LoN when participating in local buzz.

WP5b: International managers who are new to an industrial cluster could perceive established managers to be boundedly reliable, as a result of a lack of local business knowledge, leading to the experience of a LoN when participating in

local buzz.

With these propositions based on the secondary literature an attempt will be made to generate deeper insights on the underlying mechanisms that come into play when working inside cluster of firms and institutions. In the next section will elaborate on how these insights will be attempted to be obtained.

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27

3. Methodology

In this chapter the research method and design is discussed. This provides a deeper insight into how the data was obtained and how they are analyzed in to be able to draw conclusions.

This research is aimed on exploring what kind of challenges and opportunities international managers face, when trying to communicate and collaborate with other firms and institutions within a Dutch industrial cluster. Since these kinds of interactions are very context-specific a qualitative data collection method has been used to generate relevant data.

This research is a single case study and is both descriptive and exploratory in nature; in the first part of the literature review existing theories are discussed, while the latter part focuses on the discussion of possibilities.

During the preliminary phase of the research the decision was made to apply semi-structured in-depth interviews to the research in order to obtain desirable information and results. Through the interviews, international managers’ experiences regarding operating, learning and interacting within Dutch clusters were explored. As it is typically difficult to examine ones own mental and behavioral processes (Nisbett & Wilson, 1977), this structure of questioning was deemed best as it would allow the interviewees to talk freely about their experiences.

Foss and Pedersen (2004) argue that many strategic decisions that are crucial in terms of innovation are likely to be taken at subsidiary level. It is for this reason that this study will focus on subsidiary managers as unit of analysis, instead of the MNE as a whole. Every manager that agreed to be interviewed was be asked to read and sign an informed consent form prior to participating (see Appendix 8.1). Moreover, a short closed-answered preliminary questionnaire that included a executive summary of the study was emailed along with the consent form (see Appendix 8.2). However, with the exception two participants, all respondents preferred to answer the questions via the phone rather than in an email.

All interviews were conducted via the phone, except for one, which took place via a videoconference tool. In order to retrieve data that was relevant for this study, questions were developed in relation to the working propositions (see Appendices 8.2 and 8.3). Standardizing the open questions and the results obtained from these standardized questionnaires upheld

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28 comparability and objectivity in the report. The managers were asked to tell about when they joined the cluster and which problems they faced when they did. Did it seem easier or harder for them to participate in the cluster-environment than for other managers? Why? Etc. The interviews were informal and open-ended, and carried out in a conversational style. It was anticipated that in this way, by asking them to simply ‘tell their story’, the flow of the interviews would be very natural. All interviews were tape-recorded and are varied in length from 40 minutes to one hour. During the interviews notes were taken and the tape recordings were transcribed afterwards.

Intentionally the only area of focus was going to be Leiden Bio Science Park. The first sample was generated through snowball sampling, meaning a small pool of initial informants was used to nominate, through their social networks, international managers who met the eligibility criteria (Goodman, 1961). However, with a total of six managers; four Dutch managers and two foreign managers, the response rate was not as high as initially expected. As the response rate of the first sample was not deemed sufficient a second sample was devised to increase the representativeness of the research. The second sample consisted of four more Dutch managers and three more foreign managers, which were based in different Dutch clusters among which the TU Delft Science Park Technopolis, the Rotterdam Science Tower, the Erasmus MC, the Utrecht Science Park and the Eindhoven High Tech Campus. With that, the total number of respondents came down to thirteen.

Ideally half of my respondents would have been Dutch, half of them foreign. Then if half of both groups would have been relatively new to the cluster (less 3 years of experience in that cluster), and half of them not (more than 3 years of experience in that cluster), a symmetrical analysis could have been done. However, since the access to these managers turned out to be more limited than initially thought, this type of sample was not easy to generate. The sample table in Figure 1 (p.29) below shows characteristics of the finals sample of managers that participated in the interviews. Six out of the thirteen interviewees less than 3 years of cluster experience, others had 3 to 14 years of cluster experience.

Strengths of this study concern its abductive approach to getting a deeper insight on a subject that has not been discussed before. However, one of the limitation of this study may be the probability of not covering all eight types of managers, due to limited access to respondents. This could have a negative impact on the internal validity of the study.

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29

# Name Function Nationality Cluster Cluster

experience Company Company experience Company nationality 1. Ronald Loggers

CEO Dutch LBSP** 3 years ISA

Pharma-ceuticals

3 years Dutch

2. Jos Joore Managing director, Co-founder

Dutch LBSP 3 years Mimetas 3 years Dutch

3. Andre Wijfjes

Scientific Specialist Sales

Dutch LBSP 3 years GenomeScan 14 years Dutch

4. Andre Hoekema

Senior VP Corporate Development

Dutch LBSP 18 years Galapagos 11 years

Dutch-Belgium

5. Teun Kelderman

CCO Dutch Delft

Technno-polis

<1 year NightBalance < 1 year Dutch

6. Tom Crafoord*

CEO, Founder Dutch USP 10 years Motech* 10 years Dutch

7. Mark de Wit*

FRS, CFO, Founder

Dutch Erasmus MC 10 years ImmunoTech* 10 years Dutch

8. Gerwin Puppels CTO & Managing Director Dutch Rotterdam Science Tower

4 years RiverD 4 years Dutch

9. Michela Tessari

Target Discovery Manager

Italian LBSP 11 years Galapagos 11 years

Dutch-Belgium

10. Leo Price CEO, CSO, Founder

English LBSP 8 years OcellO 5 years Dutch

11. Holger Gruell

Principle Science Manager

German EHTC** 2 years Philips

Research

16 years Dutch

12. Yves Decadt

CEO Belgium EHTC <1 year MediMetrics <1 year Dutch

13. Mayur Dalwani Program Manager Indian Vossenberg Tilburg

5 years Fuji Film Manufacturing

5 years Japanese

Table 1. Sample characteristics. Source: Author. *Pseudonyms, based on degree of anonymity requested

International managers’ participation in local buzz inside Dutch industrial clusters