Business Systems and Organizational Capabilities

<jats:title>Abstract</jats:title><jats:p>Twenty-first century capitalism has been marked by an increasing international economic independence, and considerable differences between dominant economic systems of coordination and control. In this context, national competition and coordination within industries has increased, but the governance of leading firms and the kinds of competences they develop remains quite diverse. This book suggests how we can understand this combination of diversity and integration by developing the comparative business systems framework in three major ways. First, by identifying the particular circumstances in which distinctive business systems and innovation systems become nationally established and reproduced, as well as how changing endogenous and exogenous pressures have affected the major kinds of business systems that developed in many OECD states during the post-war period. Second, by showing how variations in authority sharing with employees and business partners and in the provision of organizational careers lead institutional regimes to affect the nature of organizational capabilities that dominant firms develop and enable them to deal with different kinds of risks and opportunities in particular technologies and markets. Third, by identifying the circumstances in which multinational firms are likely to develop distinctive transnational organizational capabilities through such authority sharing and careers, and so become different kinds of companies from their more domestically focused competitors. In many if not most cases of cross-national managerial coordination, these conditions rarely exist, and so the extent to which multinational firms do indeed constitute distinct organizational forms and strategic actors is much less than is sometimes claimed.</jats:p>