Comparative Analysis of Innovation Management in Multinational vs. Domestic Firms

Abstract

Innovation management is a key driver of competitive advantage, yet approaches vary significantly between multinational corporations (MNCs) and domestic firms. This study conducts a comparative analysis of innovation strategies, processes, and outcomes across 120 firms in Europe and Asia, including 60 multinationals and 60 domestic enterprises. Using surveys, interviews with senior managers, and case studies, the research identifies key differences in innovation focus, resource allocation, and knowledge management practices. Multinational firms emphasize global knowledge sharing, cross-border R&D collaboration, and systematic innovation processes, benefiting from economies of scale and diverse expertise. Domestic firms, in contrast, prioritize localized product development, incremental innovation, and rapid adaptation to domestic market needs. While MNCs achieve broad innovation impact and long-term strategic alignment, domestic firms often demonstrate greater agility and responsiveness. The study highlights the complementary strengths of both models and suggests that hybrid approaches—leveraging global resources while maintaining local adaptability—can optimize innovation outcomes. Findings provide actionable insights for managers, policymakers, and innovation strategists, contributing to the literature on organizational innovation, cross-cultural management, and strategic decision-making in dynamic markets.