Centers of excellence in multinational corporations

This paper seeks to understand the conditions under which ‘centers of excellence’ emerge in foreign subsidiaries of multinational firms. We define a center of excellence as an organizational unit that embodies a set of capabilities that has been explicitly recognized by the firm as an important source of value creation, with the intention that these capabilities be leveraged by and/or disseminated to other parts of the firm. Drawing on overlapping research in international business and strategic management, we argue that the formation of centers of excellence is shaped by conditions in the subsidiary's local environment as well as by various aspects of the subsidiary's relationship with other parts of the multinational firm. Based on a survey of 99 foreign units in Canada, our results highlight the fundamental role played by parent firm investment as well as the role of internal and external organizations in the development of subsidiary capabilities. Performance implications of the center of excellence phenomenon are also explored. Copyright © 2002 John Wiley & Sons, Ltd.     

Top management incentive compensation and knowledge sharing in multinational corporations

Growing interest has emerged in viewing the multinational corporation as a knowledge creating and diffusing entity. The importance of sharing knowledge across organizational and national boundaries has been established in previous research. However, the question of which organizational policies lead to knowledge sharing between multinational units is still not fully understood. In particular, the link between compensation mechanisms and knowledge sharing has not received attention in previous studies. By studying 164 foreign‐owned subsidiaries located in Finland and China, this article attempts to identify the relationship between subsidiary bonus pay based on MNC‐wide performance and knowledge sharing between different units of the MNC. In line with the knowledge‐based perspective of the firm, the results suggest that incentive pay based on the collective performance of the MNC leads to greater knowledge sharing. Copyright © 2008 John Wiley & Sons, Ltd.     

Building firm-specific advantages in multinational corporations: the role of subsidiary initiative

This paper investigates how subsidiary companies are able to contribute to the firm-specific advantages of the multinational corporation (MNC). Specifically we examine the determinants of the contributory role of the subsidiary and subsidiary initiative. The study reveals the following significant relationships: (a) internal subsidiary resources in combination with initiative have a strong positive impact on the subsidiary's contributory role; (b) subsidiary initiative is strongly associated with the leadership and entrepreneurial culture in the subsidiary; and (c) contributory role is strongly associated with subsidiary autonomy and a low level of local competition. We discuss the implications of these findings and some of the theoretical issues associated with subsidiary initiative. Our provisional conclusion is that MNC subsidiaries can not only contribute to firm-specific advantage creation, they can also drive the process. © 1998 John Wiley & Sons, Ltd.     

Organizing for knowledge generation: internal knowledge networks and the contingent effect of external knowledge sourcing

Research summary : When faced with a new technological paradigm, incumbent firms can opt for internal development and/or external sourcing to obtain the necessary new knowledge. We explain how the effectiveness of external knowledge sourcing depends on the properties of internal knowledge production. We apply a social network lens to delineate interpersonal, intra‐firm knowledge networks and capture the emergence of two important firm‐level properties: the incumbent's internal potential for knowledge recombination and the level of knowledge coordination costs. We rely on firm‐level internal knowledge networks to dynamically track the emergence of these properties across 106 global pharmaceutical companies over a 25‐year time period. We find that a firm's success in developing knowledge in a new technological paradigm using external knowledge sourcing is contingent on these internal knowledge properties . Managerial summary : Incumbent firms in high‐tech industries often face competence‐destroying technological change. In their effort to adapt and develop new knowledge in a novel paradigm, incumbent firms have several corporate strategy options available to them: internal knowledge development and a wide array of external knowledge sourcing strategies, including alliances and acquisitions. In this study, we make an effort to address a critical question: How effective is external knowledge sourcing under different internal knowledge generation regimes? We find that external sourcing strategies are less effective when firms can already internally generate new knowledge or if they have high internal coordination costs. Therefore, when considering external sourcing, managers must carefully weigh the benefits of it vis‐à‐vis its commensurate costs as the benefits of external sourcing may be overstated . Copyright © 2015 John Wiley & Sons, Ltd.     

Parenting advantage in the MNC: An embeddedness perspective on the value added by headquarters

What determines the value an MNC's headquarters adds to its own affiliates? In this paper, we shed light on this question by linking the embeddedness view of the multinational corporation to the literature on parenting advantage. We test our hypotheses on an original dataset of 124 manufacturing subsidiaries located in Europe. Our results indicate that the external embeddedness of the MNC is an antecedent to headquarters' value creation. We find that headquarters' investments into their own relationships with the subsidiaries' contexts are positively related to the value added by headquarters. Furthermore, this relationship is stronger when the subsidiary itself is strongly embedded. We discuss implications for the MNC literature, embeddedness research, and the literature on parenting and headquarters' roles. Copyright © 2013 John Wiley & Sons, Ltd.     

Ambiguity and the process of knowledge transfer in strategic alliances

This research examines the role played by the ‘causally ambiguous’ nature of knowledge in the process of knowledge transfer between strategic alliance partners. Based on a cross‐sectional sample of 147 multinationals and a structural equation methodology, this study empirically investigates the simultaneous effects of knowledge ambiguity and its antecedents—tacitness, asset specificity, prior experience, complexity, partner protectiveness, cultural distance, and organizational distance—on technological knowledge transfer. In contrast to past research that generally assumed a direct relation between these explanatory variables and transfer outcomes, this study’s findings highlight the critical role played by knowledge ambiguity as a full mediator of tacitness, prior experience, complexity, cultural distance, and organizational distance on knowledge transfer. These significant effects are further found to be moderated by the firm’s level of collaborative know‐how, its learning capacity, and the duration of the alliance. Copyright © 1999 John Wiley & Sons, Ltd.     

The role of external knowledge sources and organizational design in the process of opportunity exploitation

Research highlights the role of external knowledge sources in the recognition of strategic opportunities but is less forthcoming with respect to the role of such sources during the process of exploiting or realizing opportunities. We build on the knowledge‐based view to propose that realizing opportunities often involves significant interactions with external knowledge sources. Organizational design can facilitate a firm's interactions with these sources, while achieving coordination among organizational members engaged in opportunity exploitation. Our analysis of a double‐respondent survey involving 536 Danish firms shows that the use of external knowledge sources is positively associated with opportunity exploitation, but the strength of this association is significantly influenced by organizational designs that enable the firm to access external knowledge during the process of exploiting opportunities. Copyright © 2013 John Wiley & Sons, Ltd.     

Gaining from vertical partnerships: knowledge transfer,relationship duration,and supplier performance improvement in the U.S. and Japanese automotive industries

We study sources of operational performance improvement in supplier partnerships. We argue that supplier performance will benefit most where time‐bound relational assets have developed between a buyer and supplier and the firms exploit the resulting communication efficiency by transferring productive knowledge. We examine the effects of two forms of knowledge exchange together with the prior duration of the buyer–supplier relationship. We find similar interaction patterns in two survey samples of Japanese and U.S. automotive suppliers. The effect of ordinary technical exchanges on supplier performance improvement does not vary with relationship duration. The effect of higher‐level technology transfer, however, grows more positive as relationship duration increases. Other results show relevant contrasts consistent with heterogeneous sourcing behavior between the two countries. The findings highlight the role of relational assets and show that it is important to distinguish between simple techniques and higher‐level technological capabilities when studying interfirm relationships. This research extends the literatures on knowledge transfer, buyer–supplier partnerships, and the performance dynamics of interfirm and intrafirm relationships in general. Copyright © 2002 John Wiley & Sons, Ltd.     

International diversification,subsidiary performance,and the mobility of knowledge resources

We examine the link between international diversification, organizational knowledge resources, and subsidiary performance. The success of international corporate diversification depends on a firm's capability to transfer knowledge to its subsidiaries, and how its local subsidiaries effectively utilize that knowledge. As knowledge resources are imperfectly mobile, a firm may find it difficult to transfer knowledge to its subsidiaries. In our analysis of 4964 Japanese subsidiaries over a 14‐year period, we find that knowledge that is valuable, but not rare, positively affects subsidiary performance in the short term, but not the long term. In contrast, knowledge that is both valuable and rare affects subsidiary performance in the long term, but not the short term. Copyright © 2007 John Wiley & Sons, Ltd.     

知识转移在工程项目管理中应用的研究

在工程项目这个复杂的动态过程中，人们不断地获取和创造知识，并将其运用。从知识转移的概念及内涵出发，分析了在工程项目中进行知识转移的必要性，利用一般知识转移的SECI模型分析工程项目管理中的知识转移类型、层次及其具体体现，以工程项目寿命期为主线分析知识转移的过程，并简要说明知识转移效果评价的方法。认为在工程项目管理中应用知识转移可以提高项目成员、参与企业、项目自身及同类项目的知识储备和项目管理水平。     

Beyond boundary spanners: The ‘collective bridge’ as an efficient interunit structure for transferring collective knowledge

This research introduces a framework for selecting efficient interunit structures in facilitating the transfer of knowledge with different levels of complexity. We argue that while the boundary spanner structure is efficient for transferring discrete knowledge, it is inadequate for transferring collectively held complex knowledge. We propose that the transfer of such knowledge requires a more decentralized interunit structure—collective bridge, which is a set of direct interunit ties connecting the members of the source and the recipient units, with the configuration of the interunit ties matching the complexity of knowledge to be transferred. We suggest that while a collective bridge is inefficient in transferring discrete knowledge relative to a boundary spanner structure, it is more efficient for transferring collective knowledge. Copyright © 2013 John Wiley & Sons, Ltd.     

The social underpinnings of absorptive capacity: The moderating effects of structural holes on innovation generation based on external knowledge

Building on absorptive capacity and social network research, in this paper I investigate how individuals inside the organization use external knowledge to generate innovations. Through original sociometric data collected from 276 scientists, researchers, and engineers from the Research and Development division of a large multinational high‐tech company, I show that the effects of external knowledge on individuals' innovativeness are contingent upon individuals' position in the internal social structure. In particular, results indicate that the positive effects of external knowledge on innovation generation become more positive when individuals sourcing external knowledge span structural holes in the internal knowledge‐sharing network. Copyright © 2013 John Wiley & Sons, Ltd.     

When using knowledge can hurt performance: the value of organizational capabilities in a management consulting company

This paper explores the possibility that utilizing the firm's knowledge resources to complete important tasks can backfire and undermine competitive performance. Drawing on organizational capabilities and knowledge‐sharing research, we develop a situated performance view that holds that the value of obtaining and using knowledge within a firm depends on the task situation. Using a data set of 182 sales proposals for client work in a management consulting company, we show that sales teams that had varying needs to learn and differentiate themselves from competitors derived different levels of value from obtaining and using electronic documents and advice from colleagues. Highly experienced teams were more likely than inexperienced teams to lose the sales bids if they utilized such knowledge. Teams that had a high need to differentiate themselves from competitors also had a lower chance of winning if they utilized electronic documents. There were situations, however, where teams performed better if they utilized the firm's knowledge resources. These results suggest that competitive performance depends not on how much firms know but on how they use what they know. Copyright © 2004 John Wiley & Sons, Ltd.     

The double‐edged effect of knowledge acquisition: How contracts safeguard pre‐existing resources

Research summary : Acquiring knowledge on a partner's pre‐existing resources plays an important yet ambiguous role in collaborative relationships. We formally model how contracts trade off productive and destructive uses of knowledge in a buyer‐supplier relationship. We show that, when the buyer's pre‐existing resources are vulnerable to the revelation of sensitive knowledge, the supplier overinvests in knowledge acquisition as it expects to use the knowledge as a threat in price negotiations. A non‐renegotiable closed‐price contract prevents such overinvestment and reduces the supplier's ability to expropriate the buyer ex post. Our results extend to the cases of renegotiable closed‐price contracts, repeated interactions between a buyer and a supplier, and the use of nondisclosure policies. We draw theoretical, empirical, and managerial implications from our model. Managerial summary : This study yields new insights regarding the use of contract design in protecting pre‐existing, nonrelationship specific assets in buyer‐supplier arrangements. Anecdotal examples illustrate the “dark side” of these arrangements where opportunistic suppliers exploit knowledge of buyers' pre‐existing resources to seek rent and appropriate value. When a supplier is likely to act harmfully, a closed‐price contract that specifies the price of the supplier's component upfront may reduce the supplier's incentives to overinvest in acquiring and exploiting knowledge of the buyer's pre‐existing resources. As such, when a buyer's pre‐existing resources are highly valuable, and thus more vulnerable to use by the supplier outside of the arrangement, a non‐renegotiable closed‐price contract is more efficient. Additionally, limited disclosure policies and informal agreements based on repeated interactions complement indirect governance via price contracts. Copyright © 2015 John Wiley & Sons, Ltd.     

The integration between marketing and purchasing in the traceability process

This paper provides an overview of the implications of integrating marketing and purchasing offered by traceability. The research offers some evidence of the adoption of different traceability approaches by actors along the supply chain, illustrating the relevance of the traceability issue and how traceability can be exploited. The paper presents findings from a case analysis process of five actors in the fashion industry. This industry has experienced strong integration between industrial and retail functions and relevant changes in the organisation of production networks (global shift of production to new industrialized countries and emerging markets) which place emphasis on the traceability topic. Traceability emerges as a complex concept that concerns the sharing of information about the product and production processes along the supply chain in BTB networks up to the consumers in the final market. The issue analysed focuses on organising, with a discussion of two different uses of traceability: traceability as a tool for inter-organisational control and traceability as a tool for market power. The two approaches give rise to different implications at the individual company and business network levels. The traceability process has intraorganisational consequences in terms of contents, technologies and actors involved in its implementation. These consequences are different according to the role played by the process.     

Comparing the resource‐based and relational views: knowledge transfer and spillover in vertical alliances

We compare resource‐based and relational perspectives to examine competitive advantages within the context of vertical learning alliances. Previous research has shown that through such alliances suppliers acquire knowledge to forge new capabilities and attain performance improvements. We ask whether such improvements are exclusive to the learning partnership, or are available in other average partnerships of this supplier. We posit that the extent to which such performance improvements are partnership exclusive depends on whether the newly forged capabilities lie entirely within the supplier firm's boundaries, or at the learning dyad level. As such, we untie two forms of performance improvements arising from learning dyads. While the resource‐based view helps explain the performance gains learning suppliers deploy across average partners, the relational view reveals the additional performance edge that remains exclusive to the learning partnership. Based on empirical evidence from a survey of 253 suppliers to the equipment industry, we find that partnership exclusive performance (i.e., ‘relational performance’), the true source of learning dyads' competitive advantage, is a function of suppliers acquiring know‐how within the dyad, developing dyad‐specific assets and capabilities, and structuring buyer‐supplier relational governance mechanisms. We discuss implications for research and practice. Copyright © 2008 John Wiley & Sons, Ltd.     

Boundary management in an ICT‐enabled project‐based organising context

This paper explores the boundaries that emerge and exist within an information and communication technology (ICT)‐enabled project‐based organising context and the ways knowledge workers manage these boundaries through the use of technology. This is done through an exploratory qualitative case study of an early instance of the phenomenon in a knowledge‐intensive professional services organisation. Through the experiences of a group of knowledge workers who started to work in project‐based ways that were highly mediated by ICT, this study aims to understand the boundaries that they faced and the practices they undertook to manage these boundaries. In so doing, this study contributes to the existing literature on new forms of work and organisation, particularly on the issue of boundaries where ICT‐enabled project teams are used. In particular, this study extends our current understanding of boundaries through expanding the lens of investigation beyond a predominant focus on work–home boundaries and considers boundaries within the work sphere.     

The cost of integrating external technologies: Supply and demand drivers of value creation in the markets for technology

A classic question faced by technology suppliers and buyers is whether to compete in the product markets or to cooperate through licensing. We address this question by examining an important, demand‐side barrier to licensing—the buyers' cost of integrating a licensed technology. We argue that this cost can be affected by suppliers' knowledge transfer capabilities, buyers' absorptive capacity, and the cospecialization between R&D and downstream activities in the buyers' industries. Following this argument and a stylized bargaining model, we hypothesize that the supplier's knowledge transfer capability stimulates licensing. Moreover, the importance of this capability increases when licensing to industries where potential buyers have weak absorptive capacity or R&D and downstream activities are cospecialized. We find support for our hypotheses using a panel dataset of small ‘serial innovators.’ Copyright © 2012 John Wiley & Sons, Ltd.     

Governing interfirm knowledge transfer in the Chinese market: The interplay of formal and informal mechanisms

Building on knowledge management literature and relational exchange theory, this study addresses how formal (i.e., ex ante contracts and ex post control) and informal mechanisms (i.e., trust) affect interfirm knowledge transfer in the Chinese emerging market. The results of a survey of 343 manufacturer–supplier relationships show that whereas formal control fosters knowledge transfer, contracts are not significantly related to knowledge transfer, and trust greatly facilitates knowledge flows between exchange relationships. Moreover, trust and contracts have a positive joint effect, whereas trust and control have a negative joint effect, on interfirm knowledge transfer. The findings provide important theoretical and managerial implications for interfirm knowledge governance in China.     

Repeating a familiar pattern in a new way: The effect of exploitation and exploration on knowledge leverage behaviors in technology acquisitions

Research Summary: We identify two types of knowledge leverage behaviors undertaken by acquiring firms: integrated and independent knowledge leverage. We address how the prior exploitation or exploration orientation of acquirers influence these two modes of knowledge leverage behaviors. The degree of exploitation of acquirers promotes integrating their existing knowledge with acquired knowledge in innovative actions. In contrast, the degree of exploration of acquirers increases the likelihood that new innovations will use acquired knowledge without integrating it with their prior knowledge. In addition, the firm's prior acquisition rate moderates the relationship between the acquiring firms’ previous exploitation or exploration orientation and their knowledge leverage mode. The findings of this article suggest that pre‐acquisition innovation capabilities are distinct from but influence the post‐acquisition innovation actions. Managerial Summary: Firms often undertake acquisitions to gain access to new knowledge, but they can differ dramatically in how they leverage acquired knowledge. We show that the firm's prior innovation patterns drive this choice. Firms that have previously focused on incremental innovations in their internal innovation efforts tend to integrate acquired knowledge with their own prior knowledge. In contrast, firms that have previously pursued bold innovations tend to leverage acquired knowledge alone in new innovations. Thus, we show that firms use acquisitions as a means to extend their internal innovation patterns—firms that have focused on incremental innovations extend that with acquisitions by linking new innovations to their prior knowledge while firms that have pursued bold initiatives use acquired knowledge to move in new technology directions.