The theme of this book is that, today, much economic activity (both in manufacturing and services) is location bound, taking place in clusters in the principal regions of the broad “triad” of the EU, North America, and Asia. The geography of location has been summed up in the phrase “sticky places” and these rigidities influence the strategic management decisions of firms, including multinational enterprises (MNEs). In practice, the choice of entry mode and choice of location are complementary strategic management decisions of profound importance to MNEs.

The key theoretical driver behind this book is the insight from MNE scholars, such as Dunning (2001), Enright (2000), and Rugman and Verbeke (2001), that in most regional clusters of value-added activities in the triad the MNEs are embedded as leading participants. The most extreme articulation of this viewpoint is that of Rugman and D'Cruz (2000) who argue that MNEs act as “flagship firms” to lead, direct, co-ordinate, and manage strategically the value-added activities of partner firms in a business network, including key suppliers, key customers, and the non-business infrastructure. While Dunning (2001) refers to flagships as leaders only of vertical clusters (as in autos), Rugman and D'Cruz (2000) also include horizontal clusters (as in textiles, financial services, etc.).