The Value-Adding Role of the Corporate Headquarters in Innovation Transfer Processes: The Issue of Headquarters Knowledge Situation

Abstract

The aim of this study is to investigate the value-adding role of corporate monitoring and corporate involvement in 'sticky' inter-subsidiary innovation transfer environments. The value added role of these two managerial approaches is viewed in terms of their impact on innovation transfer efficiency and effectiveness. Based on the network view of the MNC, our research builds on the notion that the corporate headquarters (CHQ) is ill-informed and may suffer from a radical uncertainty about what it actually knows and needs to know. By using a data sample containing 87 innovation transfer projects in 25 multinational companies, we test six sets of hypotheses. Overall, our findings show that the value added of CHQ monitoring as well as an active CHQ involvement is considerably constrained. However, contrary to our expectations, the results show that CHQ monitoring gives rise to an increase in both transfer efficiency and effectiveness when the 'stickiness' is based on tangible resource constraints. The results imply that when it comes to CHQ involvement during the innovation transfer processes, the choice between a handsoff and a hands-on approach has to be understood in the light of the CHQ's knowledge situation.

The effects of internal stickiness on the success of projects

“…The difficulties involved in knowledge transfer were tested at the organizational level to understand how IS occurs (Szulanski, 1996). Prior research (Szulanski, 2000) suggested that the characteristics of the shared best practice are important, in our case, the project's context (Holmström Lind and Kang, 2017). Araujo and Scafuto (2021) argued the need for empirical studies on project management considering the scope of knowledge transfer.…”

“…Lack of motivation: There is a repulsion of certain receptors to accept external knowledge due to the “not invented here” syndrome (NIH syndrome) (Katz and Allen, 1982). Lack of motivation can lead to a lack of action (Holmström Lind and Kang, 2017).…”