MNC strategy, knowledge transfer context, and knowledge flow in MNEs

Cross-border flow of knowledge is fraught with many challenges. The complexity associated with the organization of multinational corporations (MNCs), and the information asymmetry in foreign locations poses particular challenges to knowledge flow. Yet, effective transfer of knowledge is critical for the survival and performance of MNCs. The purpose of this paper is to present a comprehensive framework to understand the difficulties in the smooth flow of knowledge in MNCs.,The study is conceptual in nature and is based on an extensive review of the extant literature.,This review of the literature suggests that knowledge flow in MNCs is affected by country-level, firm-level and individual-level factors. The authors discuss these in the backdrop of the MNC strategy and the knowledge transfer context. The authors present their theoretical model and discuss the implications for advancing research in this domain.,This is one of the first papers to present a comprehensive framework to understand knowledge flows in MNCs.

[1]  T. Pedersen,et al.  The effect of organizational separation on individuals’ knowledge sharing in MNCs , 2017 .

[2]  Avimanyu Datta,et al.  Understanding Commercialization of Technological Innovation: Taking Stock and Moving Forward , 2015 .

[3]  Christian Catalini,et al.  Microgeography and the Direction of Inventive Activity , 2017, Manag. Sci..

[4]  Morten T. Hansen,et al.  Knowledge Networks: Explaining Effective Knowledge Sharing in Multiunit Companies , 2002 .

[5]  Stephen Tallman,et al.  A Strategic Management Perspective on Host Country Structure of Multinational Enterprises , 1992 .

[6]  Ajai S. Gaur,et al.  Pro-market institutions and global strategy: The pendulum of pro-market reforms and reversals , 2018, Journal of International Business Studies.

[7]  Ajai S. Gaur,et al.  Home country supportiveness/unfavorableness and outward foreign direct investment from China , 2017 .

[8]  Li Li,et al.  Managing Knowledge Transfer in Mncs: The Impact of Headquarters Control Mechanisms , 2004 .

[9]  Ajai S. Gaur,et al.  Merger Waves, Entry-Timing, and Cross-Border Acquisition Completion: A Frictional Lens Perspective , 2018, Journal of World Business.

[10]  R. Mudambi Location, Control and Innovation in Knowledge-Intensive Industries , 2008 .

[11]  Ajai S. Gaur,et al.  Institutional Environments, Staffing Strategies, and Subsidiary Performance , 2007 .

[12]  D. Mukherjee,et al.  Ownership strategies in knowledge-intensive cross-border acquisitions: Comparing Chinese and Indian MNEs , 2018, Asia Pacific Journal of Management.

[13]  S. Ghoshal,et al.  Internal differentiation within multinational corporations , 1989 .

[14]  Adam Smale,et al.  Predicting Stickiness Factors in the International Transfer of Knowledge Through Expatriates , 2007 .

[15]  Ajai S. Gaur,et al.  Subsidiary staffing, cultural friction, and subsidiary performance: Evidence from Korean subsidiaries in 63 countries , 2019, Human Resource Management.

[16]  Felix Höffler,et al.  On the Consistent Use of Linear Demand Systems if Not All Varieties are Available , 2007 .

[17]  C. Bartlett,et al.  Managing across Borders , 2003 .

[18]  B. Kogut,et al.  Knowledge of the firm and the evolutionary theory of the multinational corporation , 1993 .

[19]  Ajai S. Gaur,et al.  Boundary Spanning in Global Organizations , 2017 .

[20]  R. Mudambi,et al.  Is Knowledge Power? Knowledge Flows, Subsidiary Power and Rent-Seeking within MNCs , 2004 .

[21]  Rosalie L. Tung,et al.  International expansion of emerging market enterprises: A springboard perspective , 2007 .

[22]  G. Hofstede Motivation, leadership, and organization: Do American theories apply abroad? , 1980 .

[23]  R. Mudambi,et al.  A longitudinal study of MNE innovation: the case of Goodyear , 2014 .

[24]  Stephen Tallman Strategic management models and resource-based strategies among mnes in a host market , 1991 .

[25]  G. Santangelo,et al.  From Shallow Resource Pools to Emerging Clusters: The Role of Multinational Enterprise Subsidiaries in Peripheral Areas , 2016 .

[26]  Susan M. Mudambi,et al.  Global Connectivity and the Evolution of Industrial Clusters: From Tires to Polymers in Northeast Ohio , 2017 .

[27]  T. Kostova,et al.  Adoption of an Organizational Practice by Subsidiaries of Multinational Corporations: Institutional and Relational Effects , 2002 .

[28]  Benjamin Gomes-Casseres,et al.  Firm Ownership Preferences and Host Government Restrictions: An Integrated Approach , 1990 .

[29]  R. Parente,et al.  Determinants of cross-national knowledge transfer and its effect on firm innovation , 2007 .

[30]  Ajai S. Gaur,et al.  Reconceptualizing cultural distance: The role of cultural experience reserve in cross-border acquisitions , 2016 .

[31]  L. Welch,et al.  The importance of language in international knowledge transfer , 2008 .

[32]  B. Kedia,et al.  Cross-Border Learning, Technological Turbulence and Firm Performance , 2015 .

[33]  Björn Ambos,et al.  Unravelling agency relations inside the MNC: The roles of socialization, goal conflicts and second principals in headquarters-subsidiary relationships , 2019, Journal of World Business.

[34]  K. Eisenhardt Agency Theory: An Assessment and Review , 1989 .

[35]  Ajai S. Gaur,et al.  Search Motives, Local Embeddedness, and Knowledge Outcomes in Offshoring , 2017, Journal of Business Research.

[36]  Philip McCann,et al.  Introduction: Place, space and organization— economic geography and the multinational enterprise , 2010 .

[37]  Paul W. Beamish,et al.  Ownership Strategy of Japanese Firms: Transactional, Institutional and Experience Influences , 1999 .

[38]  Ajai S. Gaur,et al.  A systematic approach to conducting review studies: An assessment of content analysis in 25years of IB research , 2017 .

[39]  M. Lazarova,et al.  Repatriate knowledge transfer: Antecedents and boundary conditions of a dyadic process , 2018, Journal of World Business.

[40]  Piers Steel,et al.  Complements or substitutes? A meta-analysis of the role of integration mechanisms for knowledge transfer in the MNE network , 2018, Journal of World Business.

[41]  J. Johanson,et al.  The Internationalization Process of the Firm—A Model of Knowledge Development and Increasing Foreign Market Commitments , 1977 .

[42]  J. Dunning Toward an Eclectic Theory of International Production: Some Empirical Tests , 1980 .

[43]  J. March Exploration and exploitation in organizational learning , 1991, STUDI ORGANIZZATIVI.

[44]  T. Kostova,et al.  Utilizing the broader agency perspective for studying headquarters–subsidiary relations in multinational companies , 2015 .

[45]  Nicholas Athanassiou,et al.  Internationalization, Tacit Knowledge and the Top Management Teams of MNCs , 2000 .

[46]  Z. Zhao,et al.  A multilevel perspective on knowledge transfer: evidence from the Chinese automotive industry , 2009 .

[47]  Vesa Peltokorpi,et al.  Corporate language proficiency in reverse knowledge transfer: A moderated mediation model of shared vision and communication frequency , 2017 .

[48]  Francisco J. Acedo,et al.  Speed in the Internationalization Process of the Firm , 2013 .

[49]  J. Hennart,et al.  The transaction costs theory of joint ventures: an empirical study of Japanese subsidiaries in the united states , 1991 .

[50]  R. Mudambi,et al.  Divisional Power, Intra-Firm Bargaining and Rent-Seeking Behavior in Multidivisional Corporations , 2004 .

[51]  Erin E. Makarius,et al.  Business group reputation and affiliates’ internationalization strategies , 2018 .

[52]  Paul R. Carlile,et al.  Transferring, Translating, and Transforming: An Integrative Framework for Managing Knowledge Across Boundaries , 2004, Organ. Sci..

[53]  R. Grant Toward a Knowledge-Based Theory of the Firm,” Strategic Management Journal (17), pp. , 1996 .

[54]  R. Caves International Corporations: The Industrial Economics of Foreign Investment , 1971 .

[55]  Marjorie A. Lyles,et al.  Managing Tacit and Explicit Knowledge Transfer in Ijvs: The Role of Relational Embeddedness and the Impact on Performance , 2004 .

[56]  P. Naudé,et al.  How collaborative innovation networks affect new product performance: Product innovation capability, process innovation capability, and absorptive capacity , 2018, Industrial Marketing Management.

[57]  Erik Brynjolfsson,et al.  The second machine age: work, progress, and prosperity in a time of brilliant technologies, 1st Edition , 2014 .

[58]  R. Vernon International investment and international trade in the product cycle , 1966 .

[59]  N. Noorderhaven,et al.  Knowledge-sharing and social interaction within MNEs , 2009 .

[60]  David P. McCaffrey,et al.  Multinational Enterprises and the Global Economy. , 1995 .

[61]  R. Narula,et al.  Multinational Enterprises and Local Contexts: The Opportunities and Challenges of Multiple Embeddedness , 2011 .

[62]  Lucia Piscitello,et al.  Reverse knowledge transfer in MNEs: : subsidiary innovativeness and entry modes , 2014 .

[63]  Klaus E. Meyer,et al.  Boundary spanners, HRM practices, and reverse knowledge transfer: The case of Chinese cross-border acquisitions , 2020, Journal of World Business.

[64]  Gabriel Szulanski,et al.  Stickiness and the adaptation of organizational practices in cross-border knowledge transfers , 2004 .

[65]  R. Mudambi Knowledge management in multinational firms , 2002 .

[66]  Ajay Agrawal,et al.  International labor mobility and knowledge flow externalities , 2008 .

[67]  Robert E. Hoskisson,et al.  International Diversification: Effects on Innovation and Firm Performance in Product-Diversified Firms , 1997 .

[68]  Ajai S. Gaur,et al.  Are large business groups conducive to industry innovation? The moderating role of technological appropriability , 2017 .

[69]  W. Davidson The Location of Foreign Direct Investment Activity: Country Characteristics and Experience Effects , 1980 .

[70]  Jonas F. Puck,et al.  Bridging the language gap in multinational companies: Language strategies and the notion of company-speak , 2017 .

[71]  K. S. Reddy,et al.  Country-specific determinants of cross-border mergers and acquisitions: A comprehensive review and future research directions , 2017 .

[72]  T. Kostova Transnational Transfer of Strategic Organizational Practices: A Contextual Perspective , 1999 .

[73]  Ajai S. Gaur,et al.  Institutions, Resources, and Internationalization of Emerging Economy Firms , 2013 .

[74]  M. Gordon,et al.  PUBLICATION RECORDS AND TENURE DECISIONS IN THE FIELD OF STRATEGIC MANAGEMENT , 1996 .

[75]  Lars Håkanson,et al.  Technology characteristics and reverse technology transfer , 2000 .

[76]  Preet S. Aulakh,et al.  International Principal–Agent Relationships , 2000 .

[77]  Alvaro Cuervo‐Cazurra,et al.  Barriers to absorptive capacity in emerging market firms , 2017 .

[78]  Sharon O'donnell,et al.  MANAGING FOREIGN SUBSIDIARIES: AGENTS OF HEADQUARTERS, OR AN INTERDEPENDENT NETWORK? , 2000 .

[79]  Ajai S. Gaur,et al.  Creating Value through Offshore Outsourcing: An Integrative Framework , 2013 .

[80]  Jung Hoon Sohn Social Knowledge as a Control System: A Proposition and Evidence from the Japanese FDI Behavior , 1994 .

[81]  Ajai S. Gaur,et al.  Spatial geography and control in foreign acquisitions , 2012 .

[82]  Ajai S. Gaur,et al.  UNPACKING INTERUNIT KNOWLEDGE TRANSFER IN MULTINATIONAL ENTERPRISES , 2015 .

[83]  Paul M. Vaaler,et al.  Organizational slack, national institutions and innovation effort around the world , 2017 .

[84]  Ajai S. Gaur,et al.  Ownership Strategies and Survival of Foreign Subsidiaries: Impacts of Institutional Distance and Experience , 2007 .

[85]  Ajai S. Gaur,et al.  A microfoundations approach to studying innovation in multinational subsidiaries , 2019 .

[86]  I. Vertinsky,et al.  Disseminative capacity and knowledge acquisition from foreign partners in international joint ventures , 2018, Journal of World Business.

[87]  C. Pattnaik,et al.  Competing to be innovative: Foreign competition and imitative innovation of emerging economy firms , 2019, International Business Review.

[88]  Gabriel Szulanski Exploring internal stickiness: Impediments to the transfer of best practice within the firm , 1996 .

[89]  Julían Andrés,et al.  La gestión del conocimiento y su influencia en las capacidades dinámicas: Contrastación empírica en Empresas Colombianas Intensivas en uso de conocimiento , 2020 .

[90]  Anil K. Gupta,et al.  Knowledge flows within multinational corporations , 2000 .

[91]  G. Knight,et al.  Information Internalization and Hurdle Rates in Small and Medium Enterprise Internationalization , 1999 .

[92]  Douglass C. North,et al.  A Transaction Cost Theory of Politics , 1990 .

[93]  Snejina Michailova,et al.  Subsidiary knowledge flows in multinational corporations: Research accomplishments, gaps, and opportunities , 2012 .

[94]  Ajai S. Gaur,et al.  Firm-specific intangible assets and subsidiary profitability: The moderating role of distance, ownership strategy and subsidiary experience , 2016 .

[95]  S. Hymer,et al.  The International Operations of National Firms: A Study of Direct Foreign Investment , 1976 .