Getting the seal of approval: Pathways to subsidiary initiative acceptance

Multinational corporations (MNCs) are proactive, entrepreneurial, and decentralized organizations. They seek to incorporate and leverage knowledge from their foreign subsidiaries. Initiatives in which subsidiaries pursue new business opportunities are one way that subsidiaries contribute to MNCs' knowledge stocks, but prior research suggests that few subsidiary initiatives secure headquarters approval. We argue that the extent to which initiatives are accepted by the headquarters of an MNC depends on a range of relational and contextual conditions that configure in complex ways. Using a neoconfigurational approach, we identify five equifinal configurations associated with the acceptance of subsidiary initiatives. We advance theory of subsidiary management by uncovering how subsidiary activities gain traction within the MNC.     

Geographically Dispersed Technological Capability Building and MNC Innovative Performance: The Role of Intra-firm Flows of Newly Absorbed Knowledge

This study identifies key mechanisms linking multinationality with the knowledge advantages of multinational corporations (MNCs). These mechanisms are the absorption of new knowledge by one individual MNC unit and the subsequent flows of such newly absorbed knowledge to other geographically distant units of the same firm. The intra-MNC and inter-unit flows of such newly absorbed knowledge include exchanges between a parent and its overseas subsidiaries and those between subsidiaries. Through analyzing the U.S. patent data of the world's largest firms in the electrical equipment industry, our study shows that those two mechanisms are complementary in affecting MNC innovative performance. More notably, given the geographically dispersed new knowledge absorption within an MNC, only the flows of the newly absorbed knowledge between the parent and subsidiaries, in contrast to those between subsidiaries, are positively associated with MNC innovative performance. This study contributes to the MNC literature. Managerial implications are also discussed.     

Does attention from headquarters influence subsidiary behavior? A social psychological perspective

Prior research has not explored fully the effect of headquarters (HQ) attention on subsidiary behavior. We address the gap via a social psychological lens, proposing that subsidiaries with more HQ attention often deal with higher performance expectation in terms of contributing towards the MNC, and thus, they tend to have a greater participation in the activities that can demonstrate such contribution. We test the idea in the context of MNC knowledge flows, hypothesizing a positive correlation between HQ attention and a subsidiary's reverse knowledge, and further the moderation effects of a subsidiary's shared vision and local market performance. Results lend support for the model. The study introduces a novel perspective of how HQ attention may influence subsidiaries, as well as the importance of attention allocation for the multinational corporation (MNC).     

The impact of distance on knowledge transfer effectiveness in multinational corporations

This paper aims to shed light on the interplay of knowledge transfer mechanisms and distance within the MNC. While it is largely undisputed that cross-boarder knowledge flows contribute to the firm's success, our knowledge on the effects of specific transfer mechanisms is scarce. We examine the impact of different dimensions of distance to test the applicability of personal coordination mechanisms (PCM) and technology-based coordination mechanisms (TCM) in situations of differentiation and dispersion. Data on 324 knowledge transfer relationships of MNC units was used to test our hypotheses. While TCM function relatively context-free, we find that PCM are moderated by distance. Our results support moderating effects of geographic, cultural and linguistic distance, which are vital to our understanding of knowledge transfer effectiveness in MNCs.     

Subsidiary marketing knowledge and strategic development of the multinational corporation

This paper explores distinctive marketing knowledge of subsidiaries as an important resource contributing to the performance of the multinational corporation (MNC). Two different paths are analyzed. The first is the direct effect of the usage of subsidiary marketing knowledge on the perceived performance of other MNC units. The second is the indirect effect in which an MNC's usage of subsidiary marketing knowledge affects its performance via capability development in technology and market expansion within the MNC. Using data on 237 MNC subsidiaries in Sweden, six hypotheses are tested in a LISREL model. The results indicate that an MNC's usage of subsidiary marketing knowledge directly affects its performance. Additionally, the results reveal a strong relation between subsidiary marketing knowledge and the subsidiary's impact on development of the capabilities of other MNC units' technology and their expansion on the market, which in turn, positively impacts the performance of the MNC.     

Transferring knowledge in MNCs: The role of sources of subsidiary knowledge and organizational context

We link up with the recent literature on the differentiated MNC and in particular with its stress on intra-MNC knowledge flows. However, rather than focusing on the characteristics of knowledge as determinants of knowledge transfer within MNCs, we focus instead on levels of knowledge in subsidiaries, the sources of transferable subsidiary knowledge and on the organizational means and conditions that realize knowledge transfer as the relevant determinants. We find largely positive support for the relevant hypotheses. These are tested on a unique dataset on knowledge development in subsidiary firms [the Centre of Excellence (CoE) project].     

False foe? When and how code switching practices can support knowledge sharing in multinational corporations

The operating environment of multinational corporations (MNC) is multilingual, adding significant complexity to knowledge-sharing interactions between employees. In this paper, we explore how knowledge sharing in MNCs is influenced by code switching, or shifting between languages during interaction. Previous international business research has mostly described code switching as a behavior that has a negative impact on knowledge sharing by creating distrust and exclusion. Our case study of a major Finnish MNC from the perspective of faultline theory shows that in situations where organizational norms and routines help limit the potential impacts of code switching on subgroup formation and inter-subgroup animosity, it can also aid knowledge sharing by (i) supporting the development and maintenance of key technical vocabulary, (ii) enhancing inclusion in knowledge-sharing interactions, and (iii) supporting knowledge contextualization processes. Thus, code switching is not necessarily just a form of linguistic interference, but it can also be intended—and often functions—as a strategic behavior that draws on multiple languages to build efficient and successful knowledge-sharing interactions.     

Upgrading local operations for global arbitrage

This study shows that upgrading sales operations in host countries towards production allows MNCs to perform global arbitrage in their networks of foreign subsidiaries and thereby contributes to a strategy of reaping the benefits of multinationality. We predict and find that operation upgrades follow opportunities of improving resource flows in the subsidiary network to exploit the advantages of host countries in tax rates, investment incentives, and technological knowledge across borders. Performance effects on the level of the MNC network give evidence of these benefits from global arbitrage.     

Knowledge management in SMEs and MNCs: matching knowledge mobility mechanisms to supply network configuration profiles

Abstract

While ‘knowledge mobility’ presents significantly different challenges for SMEs and MNCs, it is strongly influenced by two common factors: the type of knowledge to be integrated and the configuration of the operations network. Here, SMEs and MNCs are required to make critical decisions about ‘levels’ of collaboration and knowledge sharing with network partners. A Knowledge Mobility Configuration (KMC) framework was developed, tested and refined using five case studies indicative of a growing shift towards information and knowledge-intensive activities. In terms of contribution, there has been limited empirical research to-date into the determinants of successful knowledge transfers in MNC-SME network contexts. The network configuration element of the KMC framework provides insights on how such networks evolve, and how specific knowledge mobility profiles may evolve over time. This more nuanced approach may be used as a basis for a proactive and differentiated approach to knowledge mobility and integration across SME and MNC networks.     

The Management of Information and Managers in Subsidiaries of Multinational Corporations

A key challenge facing multinational corporations (MNCs) is how to encourage the development of firm specific advantages throughout the network of subsidiaries while maintaining global coherence. As a result, a critical task for top managers in the MNC is to structure the relationship between headquarters and subsidiaries. Thus, headquarters' control of subsidiary behaviour and performance becomes a central integrating function in the MNC. We examine first the relationship between the nationality of the MNC headquarters and its information management, namely the key performance metrics utilized by the parent to evaluate subsidiary performance. Second, we investigate the relationship between the MNC nationality and its management of managers, specifically, the transfer of parent company nationals and corporate acculturation. These questions are investigated in a study of MNC subsidiaries located in Australia, Ireland and Singapore. Our data provide strong evidence that MNCs of all nationalities place the greatest emphasis on financial metrics compared to other performance metrics. Moreover, there are differences in the degree of emphasis on performance metrics across MNC nationality. We found that Japanese and German MNCs place significantly less emphasis on financial measures than US and UK MNCs. Our hypotheses relating to the management of managers were also supported by the data. In comparison with all other MNC nationalities, Japanese MNCs place greater emphasis on the transfer of Japanese managers to overseas subsidiaries and less emphasis on corporate acculturation. While some researchers have argued that management control has become more isomorphic as a result of globalization, our results show that companies from different nationalities diverge in their practices.     

The Exploration Phase of Replication Strategies: The Role of Autonomous Action for Reverse Knowledge Flows

Replication strategies rely on the exploration of new knowledge. An important source of new knowledge is the transfer of unit level experience to headquarters, a process referred to as reverse knowledge flows. Such knowledge flows are fraught with difficulty as formal mechanisms often break down due to diverging business interests of unit and headquarters managers. This study brings together research on knowledge stickiness and autonomous action to provide a new avenue for understanding reverse knowledge flows. By drawing on an exploratory study of a franchise network, we provide an insight into how autonomous action reduces initiation stickiness but potentially increases implementation stickiness. Our analysis suggests that the role of autonomous action for reverse knowledge flows is moderated by unit managers’ resource expectations that emerge as a result of autonomous action. Exploring the interplay of autonomous action and knowledge stickiness provides new explanatory means for understanding reverse knowledge flows in replicator organizations.     

以知识为视角的跨国公司理论演化过程分析

跨国公司理论由垄断优势理论和内部化理论强调的市场交易性失效观点过渡到了知识基础观理论强调的市场在能力上的不完善源于对知识特征看法的演变。因此以知识为着眼点在MNCs理论领域描绘一个清晰的研究纲要,系统地梳理各理论对知识属性看法以及其对跨国公司本质分析的演变,对于构建在跨国公司领域更加折中的分析框架是有益的。     

Replication of Routines in Organizations: Existing Literature and New Perspectives

Replication of existing routines in new contexts is an important value‐creating strategy for organizations. This paper synthesizes the state of research on replication and organizes the literature around two broad themes: forward knowledge flows (i.e. from a replicator to a replicatee) and reverse knowledge flows. The authors show that the theoretical assumptions of existing research leave important questions around the replication of routines unaddressed. More specifically, they identify research gaps in regard to micro‐level processes of replication. Little is understood about the performance of routines in practice and, related to that, the processes through which routines change during replication. Drawing on recent theorizing on organizational routines, in particular the relationship between the ostensive and performative aspects, helps the authors to unpack the micro‐level processes of forward and reverse knowledge flows. This paper opens two new trajectories for research on replication: (1) a focus on the actions of individual actors in the enactment of organizational routines provides new possibilities for understanding how replication is an inherently political process; (2) conceptualizing change as endogenous within the performance of routines offers a route to a more nuanced understanding of change and deviation in the process of replication. The paper closes with a summary of major theoretical arguments, questions for further research and implications for practitioners.     

Performance effects of MNC headquarters–subsidiary conflict and the role of boundary spanners: The case of headquarter initiative rejection

Recent research suggests that both the scholarly and the managerial perspectives on intra-organizational conflict in multinational corporations (MNC) between headquarters (HQ) and their foreign subsidiaries have changed. Today, conflict is not necessarily regarded as dysfunctional or the result of inefficient global integration. Instead, conflict is now considered a normal consequence of organizing and managing across national borders. This research advances the literature on HQ–subsidiary relationships by adding new insights to the Headquarters–subsidiary conflict discussion, especially in the so far under-researched case of headquarter initiative rejection by foreign subsidiaries. We specifically focus on subsidiary conflict negotiation tactics, the effects of organizational and individual managerial power, and the characteristics and roles of MNC managers that act as boundary spanners during intra-organizational conflict processes. A qualitative, iterative, multiphase research approach was used to develop new theory pertaining to the phenomenon. The results show that in the presence of boundary spanners, dysfunctional conflict is less common and better overall organizational performance can be achieved for both the subsidiary and the MNC as a whole. The results also indicate that the boundary spanning ability is only partly formalizable and that some MNCs are able to foster boundary spanners better than others.     

From Rocking the Boat to Wagging the Dog: A Literature Review of Subsidiary Initiative Research and Integrative Framework

This literature review on the topic of subsidiary initiatives discloses a certain lack of conceptual clarity concerning the phenomenon. After providing an overview of the research field, the paper applies a conception of entrepreneurship inspired by Schumpeter (1912) as a basis for refining our understanding of just what a subsidiary initiative is and of the different kinds of subsidiary initiative. A framework is developed with a view to the current and anticipated growing importance of highly populated countries like China and India which are bound to raise the MNC-internal profile and weight of subsidiaries serving these national mega-markets. The framework distinguishes between organizational disequilibrium and market disequilibrium as a way to classify different types and different degrees of subsidiary initiative. It is argued that prior conceptions of subsidiary initiative in practice reveal a bias towards organizational disequilibrium and tend to overlook important MNC subsidiary initiatives involving market disequilibrium, generally neglecting the entrepreneurial dimension that Birkinshaw (1997) associated with the term when he initiated this research stream. Metaphorically speaking, although Birkinshaw was always clearly interested in MNC subsidiary initiatives that “wag the dog,” most follow-up research examines initiatives that merely “rock the boat.” Our framework helps capture the distinction and anticipates more dog-wagging by MNC subsidiaries in the future.     

Subsidiary-level determinants of global initiatives in multinational corporations

This article examines subsidiary-level factors that promote global initiatives in MNCs. Global initiatives are a key capability of MNCs that domestic firms do not possess, yet there has been little research on how MNCs promote initiatives on a global basis. I draw principally on the knowledge-based view to develop a model in which three subsidiary-level variables explain the propensity of the MNC to pursue global initiatives. These variables are: (1) inter-unit networking, (2) subsidiary learning from internal and external sources, (3) shared strategic goals. A survey of 118 subsidiary managers, triangulated with interviews with 20 key informants, provides support for the hypothesized effect of subsidiary learning and shared strategic goals on global initiatives. The result for inter-unit networking is less clear. These variables combine to activate initiatives within the MNC and thus act as a source of competitiveness on a worldwide basis. The results have important implications for MNC managers as well as for theory, and these are discussed.     

Exploring the antecedents of potential absorptive capacity and its impact on innovation performance

This paper builds upon the theoretical framework developed by Zahra and George [Absorptive capacity: a review, reconceptualization, and extension. Academy of Management Review 2002;27:185–203] to empirically explore the antecedents of potential absorptive capacity (PAC), i.e. the ability to identify and assimilate external knowledge flows. Based on a sample of 2464 innovative Spanish firms, we find evidence that R&D cooperation, external knowledge acquisition and experience with knowledge search are key antecedents of a firm's PAC. Also, during periods of important internal reshaping, when there are significant changes in strategy, design of the organization and marketing, firms exert more effort to accumulate PAC. Finally, we find that PAC is a source of competitive advantage in innovation, especially in the presence of efficient internal knowledge flows that help reduce the distance between potential and realized capacity.     

Understanding and Planning for Freight Movement in Cities: Practices and Challenges

ABSTRACT

Planning for freight presents a perpetual challenge for governments. Understanding freight flows has attracted increasing research attention, though such knowledge can be difficult to translate to address problems in planning practice. This paper critically assesses the challenges of understanding and planning for urban freight movement, especially with reference to achieving more sustainable outcomes. In doing so, we elucidate guidance for broader analytical and policy approaches suited to meeting diverse public interest objectives. We review the literature with specific reference to the nature of policy problems, while collating existing conceptual knowledge for broad urban land use types.     

Flow and stock analysis of Polish unemployment: January 1990-June 1991*

Abstract. Unemployment is and will be for the foreseeable future one of the major issues of economies in transition. Not onIy is unemployment in post-communist economies a socially explosive problem; what happens on the unemployment front allows us to also make inferences about the state of the transition process in general. In this paper we look at Polish unemployment as it evolved from January 1990 to June 1991. A framework is developed which allows us to discuss flows into and out of unemployment. In analyzing the determinants of the various flows we discuss the macroeconomic environment brought about by the reforms and the role of prices and wages. However, we stress above all institutional and structural factors which have an impact on labour flows in the Polish post-communist economy. The stocks of several variables are also analyzed. We relate the trends of some unemployment stocks (especially the stocks of school leavers and group layoffs) to the trend of the overall stock of unemployment. We also look at the trends of vacancies and of various UIV ratios and touch upon the short run and long run trends of employment by sector. The main conclusion of the paper is that the high level of unemployment in Poland is neither due to the elimination of hidden unemployment (it actually increased in 1990!) nor a result of restructuring. The level of unemployment is high because of large inflows from outside the labour force and because hirings have been much fewer than in previous years while separations have only been slightly greater.     

Inventory control for the supply chain: An adaptive control approach based on the identification of the lead-time

In this paper, an Internal Model Control (IMC) scheme is incorporated in production inventory control systems in a complete supply chain. This control scheme presents a good target inventory tracking under the perfect knowledge of the system. Furthermore, the inventory tracking and load disturbance rejection control problems can be tackled separately. However, the closed-loop performance of the IMC scheme may be degraded due to a mismatch between the modelled and actual delay or to the fact that delays may be time-varying. Thus, the IMC control scheme is enhanced in this work with a novel method for the online identification of lead times based on a multimodel scheme. In this way, all benefits of the IMC scheme can be exploited. A detailed discussion of the proposed production inventory system is provided including a stability and performance analysis as well as the identification capabilities of the algorithm. Several simulation examples illustrate the efficiency of the approach.