MNC knowledge transfer, subsidiary absorptive capacity and HRM

Abstract

Based on a sample of 169 subsidiaries of MNCs operating in USA, Russia, and China, this paper investigates the relationship between MNC subsidiary HRM practices, absorptive capacity and knowledge transfer. The paper makes two key contributions. First, the paper examines the relationship between the application of specific HRM practices and the level of the absorptive capacity. Second, the paper suggests that absorptive capacity should be conceptualized as being comprised of two dimensions-ability and motivation. Further, results indicate that the interaction of ability and motivation (absorptive capacity) significantly facilitate transfer of knowledge from other parts of the MNC.-2 -

Theoretical Foundations

“…Four previous JIBS Decade Awards went to CEE-related papers: Lyles and Salk (1996), Ralston, Holt, Terpstra, andYu (1997), Brouthers (2002), and Minbaeva, Pedersen, Björkman, Fey, and Park (2003)-quite a collective accomplishment (!) for scholars interested in CEE.…”

“…In the 1990s, organizations in CEE lacked modern management knowledge and hence the primary concern was the transfer of knowledge from West to East, in particular from MNEs to their JVs and subsidiaries (Child & Markó czy, 1993;Lyles & Salk, 1996;Minbaeva et al, 2003).…”

Knowledge flows in the emerging market MNC: The role of subsidiary HRM practices in Korean MNCs

“…The MNC's effectiveness in transferring knowledge internally is a key determinant of competitive advantage and performance (e.g., Björkman, Barner-Rasmussen, & Li, 2004;Gupta & Govindarajan, 2000;Minbaeva, Foss, & Snell, 2009;Minbaeva, Pedersen, Björkman, Fey, & Park, 2003). Knowledge transfer within MNCs, however, is no mean feat.…”

“…Knowledge transfer within MNCs, however, is no mean feat. Scholars have pointed out that a subsidiary's ability to learn (absorptive capacity), its willingness to share (disseminative capacity) and the nature of inter-unit relationships (corporate socialization) can all act as impediments to knowledge transfer (Björkman et al, 2004;Gupta & Govindarajan, 2000;Minbaeva et al, 2003;Wang et al, 2004). Knowledge residing within MNCs is also notoriously 'sticky' (Szulanski, 1999).…”

“…Where subsidiary employees are well-educated and skilled, they are also more able to recognize the value of knowledge and to assimilate and apply it (Minbaeva et al, 2003). From a social capital perspective, intra-corporate socialization and tight coupling between units can boost internal knowledge transfer within the MNC (Gooderham, Minbaeva, & Pedersen, 2011;Gupta & Govindarajan, 2000;Minbaeva et al, 2003).…”