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Based on the knowledge-based theories of the MNC, this research aims to develop and test a holistic model to analyse the relationship between the strategic knowledge management (SKM) processes undertaken by subsidiaries and MNC performance. Additionally, it focuses on determining the impact that the relational context can have on knowledge creation and transfer inside the internal network of an MNC.

The research hypotheses are tested by partial least squares (PLS) with data from a sample of Spanish subsidiaries of foreign multinational firms belonging to high-technology and knowledge-intensive sectors.

The results confirm that: the implementation of a SKM by a subsidiary positively impacts on knowledge creation; the knowledge created by a subsidiary positively influences knowledge transfer, increasing the knowledge existing in the MNC; the knowledge transfer across all MNC units has a positive impact on MNC performance; the subsidiary’s relational context arises as a mediating variable between the knowledge created by a subsidiary and its transfer to the rest of the MNC.

The research proposes a holistic model that contemplates the joint interaction of the variables knowledge creation, knowledge transfer and performance. In addition, the proposed model contemplates the variable SMK of the subsidiary as the beginning of the knowledge creation-knowledge transfer-performance process. Finally, the mediating role of the relational context in the relationship between knowledge creation and transfer is analysed.

In today’s ever-increasing context of volatile, uncertain, complex and ambiguous market conditions, the shifts of countries’ protectionist policies toward inward Foreign Direct Investment (FDI), and an increased gap between headquarters’ (HQ) and subsidiaries’ perspectives on what makes business sense, it has become apparent that challenges toward foreign expansion are becoming more severe and require a multidimensional dynamic approach. The authors draw from orchestration theory, dynamic capabilities literature and previous literature on dimensions of internationalization [specifically, density, geographic distance and degree of diversity of the multinational corporation (MNC) subsidiary network] to argue that firms must enhance their orchestration capability. In doing so, this study aims to highlight the nuances of orchestrating a three-dimensional (3D) conceptualization of MNCs’ international configurations.

The authors analyzed the patterns of configurations that are adopted by MNCs. This sample was made up of the international configuration of 78 Fortune 500 MNCs consisting of 3,318 foreign subsidiaries. Furthermore, the authors examined the impact of different configurations of the 3Ds on firm performance using ordinary least squares regression analysis.

While the research did indicate that the sample MNCs adopted the sample configurations of the three internationalization dimensions more frequently than others, the authors found that orchestrating MNCs with an international configuration characterized by high density, low geographic distance and low internetwork scope diversity had a positive impact on firm performance.

While international expansion is often motivated by financial performance or market/resource gains, it is also impacted by the firm’s dynamic capability profile. Thus, as MNCs seek to continue to expand globally, they must assess and, if needed, develop their management team’s orchestration capability, which includes effectively determining how the addition or removal of a subsidiary will impact the density, geographic distance and diversity dynamics of the MNC’s international configuration. Finally, the management team needs to be able to devise plans to respond to the potential challenges associated with each of these dimensions.

The contribution of this study includes bringing a dynamic capabilities lens to the extant international business literature examining the multinationality and performance relationship by highlighting the importance of an MNC’s process orchestrating capability that is needed for firms to effectively manage increasingly complex subsidiary networks. It also conceptually explains and empirically supports that some configurations are likely to yield higher returns than others, which can act as a guide for firms as they are seeking to expand in more geographically distant as well as diverse sectors. Furthermore, this study highlights the need for a multidimensional simultaneous approach to the examination of internationalization to performance relationship. Finally, it highlights the tradeoffs that MNCs must address across the orchestration of the three internationalization dimensions using a dynamic capabilities theoretical lens that acknowledges the differences in perspective that exist between HQs and subsidiaries.

Existing work on convergence/divergence among HRM practices in MNCs and local firms mainly focuses on Europe and the USA. Limited research examines these organizations in Pakistan, hindering our understanding of what policies MNCs are likely to adopt there as well as the extent of any differences between HRM in MNC subsidiaries and local firms. The purpose of this paper is to examine the similarities and differences between the HRM practices of MNC subsidiaries and domestic firms to assess if there is evidence for convergence or divergence.

The authors targeted MNC subsidiaries and domestically owned firms working in the banking, information technology and pharmaceutical sectors in Pakistan. These sectors have enjoyed a steady inflow of foreign direct investment and have a sizeable number of MNC subsidiaries. Out of 1,081 companies, some 392 participated in a face-to-face survey (response rate of 36.4 percent). The authors ran a series of binary logistic regression models to test the hypothesized relationships between HR practices and nationality of ownership.

The authors reveal that a small minority of both types of firm use some practices, such as high compensation contingent on performance and performance review, appraisal and career development. However, domestic firms use some practices, such as extensive training, performance appraisals and performance-related pay significantly less than their multinational counterparts. The authors argue that these differences reflect institutional influences in Pakistan as well as a potential opportunity for local firms to change their HRM practices. In other areas, such as recruitment and employee involvement, there are no differences between the two groups.

The authors deepen our understanding of the types of HR practices that local companies in an emerging economy are likely to adopt as well as those that they are unlikely to adopt. Existing research has tended to downplay HRM in Pakistan and the different use of individual HRM practices among MNC subsidiaries and local firms. This research reveals that some companies in Pakistan have sophisticated HRM practices in place in some areas; however, MNC subsidiaries make greater use of some HR practices, reflecting different cultural norms between the two groups.

The purpose of this study is to examine how foreign firms consider natural disaster risk in subsequent investment decisions in a host country and whether different location portfolios can serve to mitigate investment risk.

The author sample includes data on 437 Fortune Global 500 firms and their initial entry into Chinese provinces between 1955 and 2008.

Using a fixed effects logit model of discrete time event history analysis, results show that geographic proximity to same multinational corporation (MNC) subsidiaries and different MNC subsidiaries from the same home country mitigates the negative effect of natural disasters on MNC entry into an affected province, while geographic proximity to other MNC subsidiaries from different home countries does not.

The knowledge needed to respond to severe disasters appears to be highly context-specific and shared only between firms with a high degree of commonality and trust.

The purpose of this paper is to explore the factors influencing whether a multinational corporation (MNC) appoints an expatriate or a local national as the CEO of its subsidiary.

The study proposes a framework comprising ownership‐specific, location‐specific and internalization‐specific factors to examine determinants of expatriate CEO assignment. MNCs' subsidiaries in Taiwan were selected for the study.

For the effect on the assignment of an expatriated CEO to a subsidiary, the factors of a subsidiary's capability and size, MNC's global strategy and internalization motivation are positive; in contrast, the factor of the host country's locational advantages is negative. In addition, in circumstances of large cultural distances, the effect of high internalization motivation is positive and that of low internalization motivation is negative.

The research does not differentiate between two different types of expatriates and focuses on advanced countries' MNCs' subsidiaries in Taiwan. The theoretical implication of the study lies in the application of the perspectives of resource‐based view and transaction cost theory on an MNC's decision concerning the assignment of an expatriated CEO for subsidiaries.

MNCs could make a subsidiary's staffing decision by taking into account ownership‐, location‐, and internalization‐specific factors. Failure to do so will lead to poor operation of the subsidiary.

The research contributes to knowledge about the determinants of expatriate CEO assignment, and illuminates the importance of ownership, location and internalization factors for MNCs.

This study aims to investigate the influence of transaction cost (TC) factors and the moderating influence of firm capability factors on the extent of domestic outsourcing of a multinational corporation (MNC) subsidiary.

A new research framework is developed comprising four constructs and six research hypotheses, coupled with international experience (IE) and subsidiary scale (SS) as moderating constructs. Applying the regression model, the hypotheses were tested on data from MNC subsidiaries engaged in manufacturing in Taiwan, based on the TC theory, resource‐based view, and outsourcing literature.

The TC factors, including environmental dynamism and subsidiary technology level, are negatively related with degree of domestic outsourcing. Moreover, the MNC IE and SS can reduce the TCs, thus increasing the degree of domestic outsourcing by MNC subsidiaries at the high environmental dynamism and subsidiary technology levels.

The study data were obtained from MNC subsidiaries operating in Taiwan, and the single country research design is a limitation of this study.

This study provides useful insights into how MNCs and subsidiaries should concentrate on the factors that increase the TCs of domestic outsourcing. Moreover, MNCs and subsidiaries must endeavor to cultivate and apply capabilities to mitigate TCs and fully realize the benefits of domestic outsourcing.

This study demonstrates that TC factors can also be applied to examine the outsourcing strategies of firms operating in less advanced countries. Additionally, the capability factors of MNCs and subsidiaries can reduce TCs, thus increasing domestic outsourcing by subsidiaries.

Subsidiary units have traditionally feared relocation of their activities to lower‐cost locations. The authors identify other emerging threats which are changing how multinational corporations (MNCs) manage their subsidiary units, and develop a cycle of subsidiary decline demonstrating how these threats can undermine a subsidiary's position within the MNC.

The paper presents the results of a survey targeted at over 1,100 subsidiary CEOs of MNCs located in Ireland, a program of in‐depth interviews of 24 subsidiary CEOs/directors, and a review of the literature relating to MNC and subsidiary management, are combined to identify emerging threats to subsidiary activities.

The main threats to subsidiaries' efforts to enhance their role within the MNC comprise: erosion of barriers to trade; growing complexities in corporate governance; and increasingly sophisticated information and communication technology (ICT) capabilities. These threats are enabling the disaggregation of value chains and increased headquarters monitoring and control. This shift in how subsidiaries are managed is leading to a cycle of subsidiary decline.

the results from the survey are subject to the standard limitations and a larger pool of interviewees may have reinforced the qualitative findings.

To increase subsidiary managers' awareness of the need for a strategic response, the authors develop a cycle of subsidiary decline which illustrates how these emerging threats combine to undermine a subsidiary's position within the MNC. Disaggregating value chains and tighter headquarters control can reduce subsidiary bargaining power constraining its abilities to challenge for resources, in turn restraining its combinative capabilities and leading to a decline in its position and contribution to the MNC.

This paper is the first to build a framework illustrating how emerging threats in the external environment may impact the ability of subsidiary units to maintain and develop their position within the MNC.

The purpose of this paper is to draw attention to the link between knowledge transfer flow and the location of a multinational corporation (MNC).

The authors put forward a conceptual approach to formulate the mathematical modelling of a firm’s performance following the decision to join a regional cluster. This model builds on a recent stream of theoretical literature which has investigated the relationship between networks and the creation and diffusion of knowledge. The purpose of this model is to propose a mathematical tool to determine the long-term financial results induced by knowledge transfer from an MNC’s acquired subsidiary located in a cluster to another part of the MNC.

This study has several important research implications. First, it is a useful step towards a better understanding of how knowledge transfer effects may interact with cluster effects, while explaining subsidiary location performance. Second, it focuses on the most valuable, often highly tacit knowledge competencies.

Other investigations would certainly be welcome to improve the links between the proposed mathematical model and the efficiency of the location of an MNC in a cluster through a quantitative study.

The authors constructed this study with the aim of developing a model that would give us a better understanding of the impact of embedded knowledge on the efficiency of a localization choice made by an MNC.

To date, there has been little in the literature on the profit arising from a multinational firm’s choice of location.

The present study sought to shed light on the antecedents of HRM integration mechanism usage in MNCs and to establish the extent to which antecedents differ in importance across different mechanism types.

A set of hypotheses was developed and tested on a sample of 76 European‐owned subsidiaries located in China.

The results show that the use of HRM integration mechanisms is greater in more capital‐intensive subsidiaries that employ larger numbers of expatriates. Post‐hoc analyses provide support for the view that integration mechanisms are used in a complementary fashion rather than as substitutes.

The study did not include the MNC's strategic international HRM orientation and the sample size is rather small. The results of the study do not allow any conclusions to be drawn regarding the effectiveness of the mechanisms, however this would be a fruitful issue to pursue in future research.

The paper addresses a neglected issue in the international HRM literature, namely the mechanisms through which MNCs integrate HRM practices across their foreign subsidiaries, and why and how they are used. More specifically, this study makes its contribution by combining multiple mechanisms of HRM integration and providing explanations for their differential usage.

This paper aims to contribute to the multinational company (MNC) literature by studying the diffusion of a management idea within an MNC and its interaction with the MNC’s corporate immune system (CIS).

The qualitative single case study draws on evidence of how a management idea augments within an MNC and changes its development practice.

The study identifies four phases of the diffusion process and presents the interaction between the management idea and the CIS in each phase.

The more subsidiaries within an MNC that take the initiative to adopt a management idea, the harder will it become for the headquarters (HQ) to reject it. Thus, to ensure that changes in management practices are based on informed and, ideally, deliberate decisions, managers should critically evaluate management ideas immediately at inception.

The study breaks new ground by explaining how the CIS reacts to the diffusion of management ideas in MNCs.