Unpacking Interunit Knowledge Transfer in Multinational Enterprises

Abstract

We examine the success of knowledge transfer within an MNE network by unpacking aggregate knowledge flows into individual projects. We assess knowledge transfer performance along two dimensions: utilization of transferred knowledge and transfer cost. We argue that the substitutive versus complementary nature of subunits' activities is a key determinant of knowledge utilization at the target subunit. Further, we posit that headquarters' incentives and monitoring are crucial factors affecting both the utilization and transfer cost dimensions. Our empirical results, based on 141 individual intersubunit knowledge transfer projects involving 49 subunits in 12 European countries largely support our arguments. Our methodology highlights the fact that aggregate measures of interunit knowledge flows can be misleading since they may include individual projects with widely differing levels of success.

Boundary Spanning in Global Organizations

“…These allow for the development of awareness, capacity building, and commitment to adoption of foreign practices. In this framework, global boundary spanning is a long‐term commitment to help internal members become aware of foreign knowledge practices, see these practices as valuable, and adopt them internally (Andersson et al, ; Kostova, ).…”

Technology, innovation and knowledge: The importance of ideas and international connectivity

“…Our robustness test on papers in JIBS supports our finding. Within IB research there appears to be growing recognition that (a) the exploration for new sources of value creation is a generic strategy that is served by technology, innovation and knowledge creation; and (b) that exploration processes tend to vary dramatically within firms and even across projects within firm subunits (Andersson, Gaur, Mudambi, & Persson, 2015).…”

Combining Stocks and Flows of Knowledge: The Effects of Intra‐Functional and Cross‐Functional Complementarity

“…To provide the potential for knowledge combination in the MNC, dispersed organizational units develop specific activity profiles due to assignments from headquarters, self‐induced developments, and local environmental determinism (Birkinshaw and Hood ). Hence, subsidiaries are linked with HQ and peer units through collaborative or substitutive relationships (Andersson et al ., ) that determine how and where knowledge flows are used. Researchers have also acknowledged that flows do not ‘automatically’ create value, as they require a fit between organizational contingencies, such as task‐context, distance, or transmission channels and knowledge characteristics (Haas and Hansen, ; Ambos and Ambos, ; Foss and Pedersen, ).…”