The performance implications of knowledge management and strategic alignment of MNC subsidiaries

Abstract

Purpose The purpose of this paper was to investigate antecedents and results of strategic choices of multinational corporation (MNC) subsidiaries in Croatia economy. Hence, the authors examined knowledge management and its association with performance. Additionally, they explored which of the strategies will be most likely chosen by subsidiaries in transitional economies that are characterized by market volatility and uncertainty. Design/methodology/approach Data were collected from a survey of 131 MNC subsidiaries operating in Croatia. To test the theoretical correlation between knowledge management capabilities and strategic orientation, the authors used the ANCOVA method and controlled for industry, years in international business and firm size. Findings The results pointed out the recognized necessities for a specific alignment between environment, strategy and knowledge management capabilities. The findings also suggest that there is a positive relationship between knowledge management and performance. Research limitations/implications As with most of the research, this paper has limitations. First, all data were collected using self-report surveys raising the possibility of response set biases. Additionally, all data were collected at one point in one country specifically in Croatia. Practical implications Clearly, there is substantial interaction between the MNC subsidiary’s environment and the MNC subsidiary’s strategic orientation. Most notably, the environment studied here was at the competitive and consumer market level. Firms need to develop a strategic plan for knowledge management based upon the local environmental influences. Social implications Other firms from Central and Eastern European and developed countries may compare their own environment, strategy and knowledge management practices in MNCs with findings from Croatia to be aware of similarities and market differences. Originality/value The strategic employment of knowledge acquisition, conversion and application are examined across firms using the Prospector, Analyzer, Defender and Reactor strategic orientations.

Knowledge management processes and organizational performance: the mediating role of organizational learning

“…Firstly, the authors controlled for firm size using the logarithm of a number of employees (Biscotti et al , 2018) on the basis of research suggesting that smaller firms, despite having less resources, and therefore, a reduced capacity to generate knowledge, might be able to apply knowledge more quickly due to a lack of bureaucracy (Dabic and Kiessling, 2019). Next, we controlled for industry category (Segarra-Ciprés and Bou-Llusar, 2018), on the basis that businesses in different industries may show different organizational characteristics (Wiklund and Shepherd, 2005) and reflecting the empirical evidence showing that industry sector affects KM (Meroño-Cerdan et al , 2007; Wu and Chen, 2014; Dabic and Kiessling, 2019). Accordingly, three industry groups were taken into account: the industrial and service sectors were considered the second and third control variables, respectively, with the construction sector being used as the default.…”

Knowledge management, sharing and transfer in cross-national teams and the remote management of team members: the onsite-offshore phenomenon of service EMNEs

“…MNEs use this reverse knowledge transfer and a two-way approach to become more innovative and improve their competitiveness which helps them overcome the various liabilities associated with internationalization (Mudambi, Piscitello, & Rabbiosi, 2014;Rabbiosi & Santangelo, 2013). And, superior knowledge management capabilities ultimately help MNEs improve their performance (Dabic & Kiessling, 2019). For instance, studies by Peng, Qin, Chen, Cannice and Yang (2017) and Zhang and Edwards (2007) on subsidiaries of Chinese MNEs in the United States has shown that reverse knowledge transfer not only leads to the diffusion of best practices but also allowed the HQ to enhance its strategic asset seeking motivations.…”

The differentiated role of organizational ambidexterity and organizational innovation in the subsidiary reverse knowledge transfer process

“…The process of knowledge transfer could be by a strategy of replication or imitation (Hoopes and Madsen, 2008), which depends on the subsidiary's effort to become a knowledge provider acknowledged by the recipient headquarters (Frost et al, 2002). Therefore, the subsidiary needs an organizational design that favors the transfer (Joia and Lemos, 2010) and the alignment (Dabic and Kiessling, 2019) of knowledge between the subsidiary and the headquarters. Organizational innovation (Birkinshaw et al, 2008;Garcı ´a-Morales et al, 2012) allows the organizational design adaptation, which allows structural alignment for knowledge transfer.…”