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The New MNE: ‘Orchestration’ Theory as Envelope of ‘Internalisation’ Theory

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Abstract

We propose an orchestration theory of the (new) MNE as an envelope of internalisation theory and its variants. We first critically assess extant varieties of internalisation theory of the MNE. We then discuss their limitations and explain why it is important to move from internalisation to an orchestration theory of the MNE. Orchestration theory, rooted in and encompassing the dynamic capabilities framework, helps explain a number of MNE phenomena that challenge internalisation theory, including entrepreneurship, learning, co-opetition, open innovation, value capture and market and ecosystem co-creation. It entails much more than the make-or-buy decision of internalisation theory and it is more closely aligned to today’s global environment, conceptual developments in cognate fields and the strategies and practices of MNEs. We also discuss prospects for further research using an orchestration approach.

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Acknowledgements

We are grateful to participants at the 2016 AIB panel on internalisation for comments, to Greg Linden for helpful feedback and research support, to Johan Wallin for discussion, to the Editors of this journal and to Alkis Pitelis for research assistance.

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  1. Brunel University London, Kingston Lane, Uxbridge, UK

    Christos N. Pitelis

  2. Institute for Business Innovation, Haas School of Business, University of California, Berkeley, Berkeley, CA, USA

    David J. Teece

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  1. Christos N. Pitelis
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Correspondence to Christos N. Pitelis.

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Pitelis, C.N., Teece, D.J. The New MNE: ‘Orchestration’ Theory as Envelope of ‘Internalisation’ Theory. Manag Int Rev 58, 523–539 (2018). https://doi.org/10.1007/s11575-018-0346-2

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