Knowledge embeddedness and the transfer mechanisms in multinational corporations

This paper reports a qualitative study conducted at four Japanese subsidiaries in China and Vietnam about their process of international knowledge transfer. Building on the literatures concerning the diverse types and characteristics of knowledge in multinational corporations (MNCs), we explore the broad mechanisms adopted and locally generated by the host country subsidiaries for transferring the foreign knowledge and putting the locally embedded knowledge into practical use at the local settings. The findings indicated (1) the limitations of applying a standardized and universal set of knowledge transfer mechanisms without considering local idiosyncrasies and (2) the contributions of local agents and institutions throughout the process of local knowledge adaptation and development.     

基于知识结构的跨国公司子公司成长战略研究

基于知识结构的子公司成长实质上是子公司内外部知识积累互动、优化知识结构的过程。知识基及其构成是子公司成长的内在基本条件;母合知识结构及其外部知识结构的互动是子公司成长的真正机理;子公司知识结构的变化为其成长提供了可能。基于知识结构的子公司成长战略有利于我国企业与跨国公司人力资源和知识网络的有效嫁接,能够促进我国企业的持续快速成长。     

Potential and recognized boundary spanners in multinational corporations

Boundary spanners play an important role in multinational corporations (MNC), yet it is unclear who these valuable individuals are and why certain individuals, and not others, perform this role. We advance a ‘recognition’ perspective based on whether and how relevant others on both sides on the boundary experience positive impact. A dynamic integrated mixed method analysis of 118 individuals involved in headquarters-subsidiary interactions in four MNCs, shows that only a minority are ‘recognized boundary spanners’, experienced by others to positively impact intergroup relations. We identify different categories and mechanisms of recognition, and make a methodological contribution by integrating qualitative and quantitative analysis.     

Aligning corporate transfer intentions and subsidiary HRM practice implementation in multinational corporations

We study HRM practice implementation in subsidiaries of multinational corporations (MNCs) and diverge from extant research by focusing on alignment, which we conceptualize as the degree to which subsidiary implementation of HRM practices corresponds with the subsidiary-specific transfer intentions of corporate headquarters. In explaining alignment we examine different aspects of the headquarters–subsidiary relationship, namely, the extent of formal control, interpersonal relationships and subsidiary strategic HRM capabilities. Based on a sample of 105 subsidiaries from 12 Nordic MNCs, the results highlight the importance of expatriates, trust and the strategic HRM capabilities of the subsidiary HR function. We conduct post hoc analyses to shed further light on (i) the relationship between our independent variables and the two separate components of alignment – corporate intentions and subsidiary implementation, and (ii) two different types of misalignment – excessive and insufficient.     

Innovating across boundaries: A portfolio perspective on innovation partnerships of multinational corporations

This paper examines how and under what conditions alliance portfolio diversity influences a firm's innovative performance, with special attention being given to potential performance differences between multinational corporations (MNCs) and domestic firms. Analyses of data from 1045 German firms, among which 598 MNCs, revealed an inverted U-shaped relationship between alliance portfolio diversity and MNCs’ innovative performance. Findings also indicate MNCs to be better positioned than their domestic counterparts with regards to translating alliance portfolio diversity into superior innovative performance. Importantly though, this only holds for MNCs equipped with strong internal R&D capabilities and, to some extent, high human capital.     

Subsidiary knowledge flow strategies and purpose of expatriate assignments

Although a general association between the role of international assignees and knowledge transfer has been noted in the international human resource literature, very little is known on how subsidiary knowledge flow strategies influence the purpose of expatriate assignments. Building specifically on Gupta and Govindarajan’s typology of subsidiary knowledge flow strategies and Hocking’s expatriate assignment purpose, we examine the link between subsidiary knowledge flow and the purpose of expatriate assignments using a mixed method approach. Combining survey data and qualitative interviews from 156 subsidiaries in the service and manufacturing sector in Malaysia and Singapore, we find that subsidiaries with divergent strategic roles have different knowledge flow strategies, thus leading to different purposes of expatriate assignments.     

Knowledge outflows from foreign subsidiaries and the tension between knowledge creation and knowledge protection: Evidence from the semiconductor industry

This paper analyzes the MNC subsidiaries’ trade-off between the need for knowledge creation and the need for knowledge protection, and relates it to the extent of knowledge outflows generated within the host location. Combining research in International Business with Social Theory, we build a conceptual framework suggesting that subsidiaries that extensively draw on external knowledge sources are also more likely to generate knowledge outflows to local firms. We argue that this may be explained by the subsidiaries’ willingness to build the trust that facilitates the establishment of reciprocal knowledge linkages. However, when the value of the subsidiary's knowledge stock is very high, the need for knowledge protection restrains reciprocity mechanisms in knowledge exchanges, thus reducing the extent of knowledge outflows to the host location. This study contributes to the literature on the firm-level antecedents of FDI-mediated local knowledge outflows, as well as to the broad IB literature on the relationship between subsidiaries and their host regions. The implications for managers and policy-makers are also discussed.     

Intermediate units in multinational corporations: A resource dependency view on coordinative versus entrepreneurial roles

Due to the dispersion of headquarters’ activities across organizational and geographical boundaries, intermediate units (IUs) are emerging as a key actor of international business. IUs are intermediate structural layers between headquarters (HQ) and local subsidiaries with specific HQ responsibilities. Our study relies on original data of 67 IUs and, taking on a Resource Dependence approach, explores empirically the two HQ roles attributed to IUs: coordinative versus entrepreneurial. According to our results, the main differences between both roles relate to external network embeddedness, internal network position and autonomy. We argue that these differences arise from the dominant sources of power in each role. These findings have signi?cant relevance for theory development and managerial practice as we provide a starting point for understanding the dispersion of complex HQ systems as well as how those systems are discharged and add value.     

An exploration of multinational enterprise knowledge resources and foreign subsidiary performance

Successful international expansion requires that parent firms simultaneously transfer multiple MNE knowledge resources and their foreign subsidiaries effectively absorb and utilize the knowledge. In this study, we examine the relationships between multiple knowledge resources (technological and marketing knowledge), the relatedness between parents and foreign subsidiaries, and subsidiary performance. Relatedness is specifically linked to the type of knowledge being transferred from the parent (i.e., technological relatedness versus market relatedness). We hypothesize that subsidiary performance improves with (1) the integration of a parent firm's technological and marketing knowledge resources, (2) high technological (market) relatedness between a parent firm and subsidiaries for transfer of parent technological (market) knowledge and (3) the co-presence of high technological and market relatedness. We find general support in our analysis of pooled cross-sectional data on more than 4000 observations of foreign subsidiaries from 572 Japanese MNEs across 47 countries. Theoretical implications and future research are discussed.     

Expatriate utilization,subsidiary knowledge creation and performance: The moderating role of subsidiary strategic context

Little research examines the mechanisms for the relationship between expatriate utilization and subsidiary performance. Building on the knowledge-based view of the firm, we propose a multi-stage mediation model to explain how expatriate staffing promotes subsidiary financial performance. Our results underscore that expatriate utilization has an indirect, mediated effect on subsidiary financial performance through its links with subsidiaries’ knowledge creation and product performance. Adopting a moderated mediation approach, we also find that the indirect relationship between expatriate utilization and subsidiary product performance via subsidiary knowledge creation is strengthened by the context of transnational strategy as a moderating contingency.     

The overlooked distinction of multinational enterprise subsidiary learning: Its managerial and entrepreneurial learning modes

The theme concerning modes of learning in multinational subsidiaries is the focus of enquiry in the current study. This theme is closely linked to the issue of how subsidiaries become alert and seize opportunities. Such an investigation is also important for management practice because effective subsidiary learning can render sustainable competitive advantage in the host country. We performed an in-depth case examination on six multinational subsidiaries of a large Finnish firm. We identify two learning modes of multinational subsidiaries that we refer to as managerial and entrepreneurial learning. We find that managerial learning shares characteristics with the systems-structural learning perspective; is facilitated by embeddedness of the subsidiary in the MNE system; and, transferred in the MNE through many conventional and reverse knowledge flows. On the contrary, entrepreneurial learning shares characteristics with the interpretive learning perspective; is facilitated by embeddedness of the subsidiary in the host country; and, transferred in the MNE through relatively fewer reverse knowledge flows. The distinction between these two learning modes and their discrete characteristics enlighten past research that has largely failed to pinpoint the importance of the two modes for MNE subsidiary activities.     

Network effect and subsidiary autonomy in multinational corporations: An investigation of Taiwanese subsidiaries

Considering the lack of empirical evidence on the subsidiary autonomy of firms from Asian developing countries, which are usually smaller in size and have limited international experience, this study investigates the antecedents of subsidiary autonomy from a network perspective. We assess the range and the strength of both internal network (i.e., technological network) and external network (i.e., supplier's and distributor's networks) on subsidiary autonomy. Examining a sample of 1473 manufacturers extracted from a Taiwanese government-maintained database, we find that (1) a firm will grant less autonomy to a subsidiary with more internal network range and stronger internal network strength, and (2) a firm will grant more autonomy to a subsidiary with more external network range and stronger external network strength.     

Organizational values and knowledge sharing in multinational corporations: The Danisco case

While the existing knowledge sharing literature, in general, emphasizes the link between organizational culture and knowledge sharing, it remains rather ambiguous about how certain components of the former may shape the latter. This issue is especially relevant to multinational corporations (MNCs), which typically consist of multiple organizational (sub)cultures and whose existence depends, to a great extent, on sharing knowledge across borders. The present study examines the influence of one key component of organizational culture – organizational values – on knowledge sharing. From 2003 to 2007, we studied Danisco, a Danish MNC, to examine the processes of espousement, enactment and internalization of a core organizational value – dialogue. In particular, we studied how these processes influence knowledge sharing behavior among employees. We collected original empirical data using content analysis and a questionnaire-based survey among 219 managers and employees in 11 countries in four continents. We argue that knowledge sharing behavior is not influenced by organizational values per se but by the degree of their internalization by organizational members.     

Subsidiary coopetition competence: Navigating subsidiary evolution in the multinational corporation

This paper examines the engagement of subsidiaries in coopetition, the simultaneous pursuit of competitive and cooperative behavior, in subsidiary role development. Drawing on twelve detailed case studies, we uncover how framing of the mandate situation shapes subsidiary actions to influence role development, thereby leading to competitive and cooperative subsidiary behavior. This paper advances our understanding of coopetition in MNCs by developing the concept of subsidiary coopetition competence and extends theory on subsidiary evolution.     

Multinational subsidiaries and green innovation

We address the questions of whether multinational (MNC) subsidiaries are more likely to introduce green innovation (GI) than domestic firms and how intra-MNC resources are likely contribute to this effort. Using the Community Innovation Survey for 14 European countries and adopting a knowledge-based view of the MNC, our results suggest that subsidiaries have an advantage of foreignness in GI as respect to domestic firms, especially when they have an innovation mandate (i.e., competence-creating subsidiaries). Our findings also support that intra-MNC and extra-MNC cooperation for innovation increases subsidiary probability to introduce GIs, the two being substitutes.     

Political risk assessment by multinational corporations in African markets: A Nigerian perspective

Political risk assessment (PRA) is one of the determinants of foreign direct investment (FDI) and the competitiveness of multinational corporations (MNCs), yet little is known about its use in African markets. This study critically investigates the PRA techniques used by MNCs in Nigeria and their applicability. It uses a multimethod approach to analyze data collected from MNCs and the data set of the International Country Risk Guide (ICRG) PRA annual rating for Nigeria from 2011 to 2015. The findings reveal that most firms use qualitative, rather than quantitative, PRA techniques. Regional variations in the outcome of PRA within Nigeria could also contribute to the low use of quantitative techniques. This article identifies that firms are prepared to invest in Nigeria, in spite of high political risk, due to its economic and financial attractiveness. This article's findings offer some implications for practice with some suggestions on how it could influence firms’ internationalization and their conduct of PRA.     

Globally networked: Intraorganizational boundary spanning in the global organization

Multinational corporations (MNCs) need to sense, source, and mobilize knowledge when and where it arises, whether at home, or elsewhere in the world. For this reason, MNCs benefit from employee networks of relationships that span across intraorganizational barriers, allowing for the efficient mobilization of knowledge across boundaries. Yet, which organizational members are more likely to be able to develop these boundary spanning networks? We leverage a unique data set from a large multinational corporation to empirically test a comprehensive model that captures the effect of an employee’s mandate, expertise, and behavioral orientations on her likelihood to span intraorganizational boundaries that manifest themselves in the form of hierarchies, intra-functional domains, and geographic territories. We find that the employees that are more likely to be boundary spanners are those having mandates with a global impact, high levels of expertise, and a collaborative orientation in their networking behaviors. In addition, we find that these effects are stronger for those employees that have large formal workflow networks.     

Internalization theory and the performance of emerging-market multinational enterprises

Constrained by their peripheral position in the global factory system and underdeveloped institutions at home, emerging-market multinational enterprises (MNEs) are likely to achieve monopoly-based, rather than knowledge-based, financial gains from internationalization conditional on R&D. Emerging market MNEs need to engage in R&D to upgrade orchestration know-how within the global factory. This needs to be accompanied by the development of home-based enabling institutions. This article develops the argument based on internalization theory, and tests hypotheses against the experience of major emerging-market MNEs from 2004 to 2011.     

Practice creation in multinational corporations: Improvisation and the emergence of lateral knowledge

Lateral collaboration across subsidiaries is beneficial for innovation in multinational corporations (MNCs), such as the creation of new organizational practices, because it helps working towards shared, rather than subsidiary-centric, objectives and creates new knowledge. To instill lateral collaboration, prior research has mainly focused on coordination mechanisms that rely on interpersonal exchanges among dispersed individuals across subsidiaries. However, due to rising concerns over coordination cost and sustainability of international travel, MNCs are increasingly challenged to search for other approaches that require less direct interpersonal interaction across subsidiaries. We, therefore, ask: How can MNCs elicit lateral collaboration during practice creation in a less space-time sensitive way? Drawing on a longitudinal case study, we develop a model of practice creation in MNCs. Our model offers two main insights. First, it details a novel approach for unleashing the benefits of lateral collaboration in globally-linked innovation processes in MNCs. In contrast to emphasizing coordination mechanisms that focus on interpersonal interactions across subsidiaries, our study contributes by detailing the emergence of lateral knowledge through a shared technological artefact as key enabler. Second, our model illuminates how MNCs can innovate new organizational practices that reflect both MNC and local subsidiary needs by adopting an improvisational approach.     

The effects of industry cluster knowledge management on innovation performance

Research on industrial clusters mostly focuses on the effects of the competitive advantage they generate. This study takes a different approach, conducting empirical research on three types of Taiwanese parks (export processing zones, industrial zones, and science parks), in which economic development is particularly prominent, and which have industry cluster characteristics. The study explores the effects of special resources and relationships among cluster firms on innovation performance, and focuses on knowledge management as the mediator for investigation. A survey, regression analysis, and correlation analysis probe into the effects of the special resources and relationships among industrial clusters on corporate knowledge management and innovation performance. Knowledge management emerges as the mediator of industry clusters in terms of corporate innovation performance, thus providing support for the research hypotheses. The findings of this study are valuable for further research and strategic thinking on the sustainability of corporate operations.