Absorptive capacity is frequently highlighted as a key determinant of knowledge transfer within MNEs. But how individual behaviour translates into absorptive capacity at the subsidiary level, and exactly how this is contingent on subsidiaries' social context, remains under-addressed. This not only limits our understanding of the relationship between individual and organizational level absorptive capacity, it also hampers further research on potentially relevant managerial and organizational antecedents, and limits the implications we can draw for practitioners that seek to increase their organization's capacity to put new knowledge to use. To address this shortcoming we conduct an in-depth comparative case study of a headquarters-initiated knowledge transfer initiative at two subsidiaries of the same MNE. The findings demonstrate that social interaction is a prerequisite for subsidiary absorptive capacity as it enables employees to participate in the transformation of new knowledge to the local context and the development of local applications. Second, the findings illustrate how organizational conditions at the subsidiary level can impact subsidiary absorptive capacity by enabling or constraining local interaction patterns. These insights contribute to the absorptive capacity literature by demonstrating the scale and scope of social interaction as a key link between individual-and organizational-level absorptive capacity.

0Reviewing the International Business (IB) literature on intra-firm competition as well as the more extensive literature on subsidiary mandate change, the paper uncovers that both literature streams so far pay rather little systematic attention to the political dimension of intra-firm competition. 0Taking a micro-political perspective, an alternative framework is developed that helps to identify key actors, their behavioral rationales and the contextual conditions that inform such rationales in intra-firm competition. 0 Specifically, we argue that subsidiary managers' ability to mobilize resources (based on their resource exchange relationships) within and outside the multinational corporation (MNC) and their willingness to employ these in favor of the subsidiary (based on their strategic orientation) form an important strategic asset in intra-firm competition. 0 Further, we argue that the subsidiary manager's resource exchange relationships and their strategic orientation-in combination understood as different resource mobilization strategies-are informed by their career path, position and aspiration.

The study of power and politics in multinational companies (MNCs) has been a niche area of study for both scholars of organization studies (OS) and international business (IB). Further, the awareness of each research community with regard to the efforts of the other has been rather superficial. Hence, bridgebuilding efforts to cross-fertilize ideas developed in IB and OS in order to enhance our understanding of the nature and role of politics and power in the MNC are overdue. In order to develop the basis for integration, we trace the conceptual developments in the two disciplines, that enables us to highlight particularly promising opportunities for integrative advances. Using a typology which differentiates among four 'faces' of power in the study of management and organization, we discuss how focusing on each of these four dimensions may help us to both see and make sense of different aspects of power relations and facets of politics in MNCs. We then use the 'four faces' framework to outline how OS and IB approaches can be integrated to develop a more complete understanding of politics and power in MNCs. Finally we suggest some directions for future research.

LUFTHANSA INTRODUCTIONIn recent years, the notion of business models has gained momentum in management research (Baden-Fuller et al., 2010;Zott, Amit and Massa, 2011). In this debate, scholars have also discussed barriers to changing the business model of existing firms. Several barriers have been identified, such as cognitive lock-ins (Chesbrough and Rosenbloom, 2002). The institutional environment of market economies in which firms operate has not yet been discussed as a barrier and so is identified as a research gap in the debate on business models (Zott and Amit, 2013).Whereas the institutional framework of market economies such as the United Kingdom (UK) provides a high degree of flexibility to firms, the framework of market economies such as Germany provides a substantially lower degree of flexibility (Crossland and Hambrick, 2011;Hall and Soskice, 2001). We investigate how business model changes in firms in the UK and Germany are affected by the influence of employee representation. This employee representation has been discussed in recent work on strategic management as a potential constraint on strategic choice, which accounts for the differential in flexibility provided to firms in both the aforementioned countries (Fiss and Zajac, 2004).We selected the aviation industry because it is a globalised industry in which established companies from different countries face similar challenges, particularly the challenge presented by low cost carriers (LCCs). Since the mid-1990s, the European aviation industry has undergone a massive transformation. The traditional business model of full service carriers (FSCs) has been challenged by LCCs. Hence, FSCs face strong pressures to reconsider their traditional business The paper has been accepted for publication in the British Journal of Management in Dec. 2014! 2 Changing Business Models models based purely on differentiation and move them, at least to some extent, in the direction of the LCC model (Bamber et al., 2009; Delfmann et al., 2005). This paper analyses whether, and the extent to which, two FSCs in two different countries (BA in the UK and LH in Germany) have adopted elements of the LCC model, and the extent to which this process has been influenced by employee representation. There have been no systematic comparisons of the strategic reactions of FSCs, which are embedded in different institutional frameworks, to the low cost pressure exerted by LCCs in the aviation industry. Hence, we propose a systematic comparison of two leading FSCs and their strategic responses to the emergence of LCCs, originating from contrasting market economies, the UK and Germany. Our analysis focuses on the following two questions: The paper is structured as follows. First, we distinguish between strategy and the business model concept and discuss recent work on strategic management which has considered the effect of institutions on strategic choice. Second, we outline our methodological approach. Third, we present the findings of our two case studies. Finally, we discuss the th...

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Screening the International Business (IB) literature on intra-firm competition as well as the more extensive literature on subsidiary mandate change, the paper uncovers that both literature streams so far pay rather little systematic attention to the political dimension of intrafirm competition. Drawing on Crozier and Friedberg's micro-political approach of organized action, an alternative framework is developed that helps to identify key actors, their behavioral rationales and the contextual conditions that inform such rationales in political games surrounding intra-firm competition.

Formatted: Swedish Sweden 2 PRACTICE TRANSFER IN MNES AS THE SOCIALLY EMBEDDED TRANSLATION OF PRACTICES ABSTRACTPurpose -With a few exceptions the mainstream literature on learning in MNEs has shown little concern for the transformational nature and the social constitution of learning. We address this gab by drawing on Scandinavian institutionalism, social learning perspectives and comparative institutionalism.Design/methodology/approach -A comparative case study was conducted of two subsidiaries of the same MNE. The subsidiaries received similar practices from HQ but displayed contrasting learning outcomes.Findings -It is shown that learning outcomes differed based on the varying extent to which practices were translated, which depends on the participation of local actors. The difference in participation pattern in turn is rooted in differences in the institutional context of the two subsidiaries. Originality/value -This paper highlights that MNE practice transfer rests on the translation of the practice content to the local context, and that subsidiary-level learning processes may be institutionally embedded thus establishing a link between subsidiary learning and the macro-level context. As such, this paper both illustrates the value of social learning perspectives and highlights the relevance of the work of institutionalists for understanding MNE learning processes. Research limitations/implications

Purpose The purpose of this paper is to develop a theoretical framework that addresses the question of how and why multinational corporations (MNCs) from developed economies engage in divergent patterns of institutional entrepreneurship (IE) in emerging markets. Design/methodology/approach The authors combine IB’s concept of institutional voids with comparative capitalism’s insights into the institutional embeddedness of firm capabilities and IE. This theoretical cross-fertilisation is instrumental in developing a refined understanding of institutional voids and how MNCs proactively engage with them. Findings The authors emphasise the notion of institutional voids as a relative concept and, thereby, move away from an ethnocentric view of emerging markets as “empty spaces” that are void of institutions. The authors’ framework proposes that MNCs from liberal and coordinated market economies experience institutional voids differently and engage in different patterns of IE. Research limitations/implications The main limitation of this work is that the propositions are restricted to the country-of-origin effect and that the observations are based on anecdotal evidence only. Against these limitations the authors call for a more comprehensive research agenda in their conclusion. Social implications The paper sensitises policymakers in emerging markets for the potentially different patterns of involvement of MNCs in their institutional environments. Specifically, the authors argue that MNCs may have a strong inclination to rebuild critical elements of their home country’s institutional setting in emerging markets. This touches upon questions of national sovereignty and highlights the need for emerging market policymakers to decide which kinds of institutional settings they would like or not like to see imported. Originality/value The paper provides a new and critical perspective of the mainstream IB concept of institutional voids. The authors’ key contribution is to highlight that the home country institutional context may substantially matter in how MNCs perceive and respond to institutional voids in emerging markets.