Problem solving in MNCs: How local and global solutions are (and are not) created

Abstract

It is widely acknowledged in the international business literature that subsidiaries can make a strategic contribution to multinational corporations (MNCs). Departing from the common focus on subsidiary role, contexts and organizational MNC factors, this study explores the micro-level details of managers' actions and interactions. We conducted an in-depth qualitative study into 38 problem-solving processes employed across four subsidiaries. Taking a non-routine problem-solving perspective on how subsidiaries contribute strategically to renewing MNC competences, this paper uncovers four problem-solving approaches: local template adaptation; superior technology creation; local template creation; and global principle creation. The findings depict how the way problems are framed influences knowledge search and solution-finding activities, and how these different activities may result in local and global solutions. The paper extends insights into MNC innovation and subsidiary initiative by detailing how subsidiary managers navigate different problem-solving approaches, and contributes to discussions on the micro-foundations and social aspects of MNC knowledge flows, revealing factors that trigger distance-spanning knowledge search.

The microfoundations of subsidiary initiatives: How subsidiary manager activities unlock entrepreneurship

“…Charged with translating the wishes of the organization into action, the subsidiary manager is, similarly to other middle managers, an influential actor who must "mediate, negotiate, and interpret connections" (Floyd & Wooldridge, 1997, p. 466), champion alternatives (Floyd & Wooldridge, 1992;Mantere, 2008), seize opportunities (Burgelman, 1994), search for solutions to complex problems (Tippmann, Sharkey Scott, & Mangematin, 2012), encourage and integrate divergent views (Beck & Plowman, 2009), and shape strategy (Balogun & Johnson, 2005;Browne, Sharkey-Scott, Mangematin, Lawlor, & Cuddihy, 2014;Wooldridge, Floyd, & Schmid, 2008). Floyd and Wooldridge's (1992) seminal typology captures the vertical relationships of such middle managers: their interactions both upward and downward through integrative and divergent activities (Aherne, Lam, & Kraus, 2014;Mom et al, 2007;Pappas & Wooldridge, 2007;Wooldridge et al, 2008).…”

Boundary Capabilities in MNCs: Knowledge Transformation for Creative Solution Development

“…Following this, we suggest that MNC knowledge transformation enables opportunity formation as it modifies the contributions of collaborators across pragmatic boundaries within MNCs to generate new problem formulations. Subsidiary driven problem solving can exhibit strong tendencies to formulate problems within local and context‐specific constraints (Tippmann et al, ). The value of MNC knowledge transformation in breaking out of such narrow and habitual problem formulation can be illustrated with an example of an atypical situation experienced by one of the organizations that participated in our study, a French subsidiary.…”

The dynamics of experiential learning: Microprocesses and adaptation in a professional service INV

“…We analyse our data through the inductive technique outlined by Corley and Gioia (2004) and recently adopted in international business studies (e.g., Tippmann, Scott, & Mangematin, 2012). The first stage of data analysis takes place in parallel with the data collection and consists of fracturing each interview into accounts of specific internationalisation events since firm inception.…”