Search results

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 role of HQ in the contemporary MNC has recently received a good deal of research attention. This article argues that the contemporary MNC requires an organizational model that can embrace different perspectives of the HQ role. The same HQ must at times hierarchically lead the firm and at other times assume a more passive, facilitative role that allows direct interaction and decision making among the subunits to coordinate interdependency within the firm. To achieve this integration, the article proposes a contingency model that specifies when the HQ should assume a hierarchical role and when it should assume a facilitative role.

For over four decades, IB scholars have been conceptualizing and empirically examining the organizational structure of the multinational corporation (MNC) without really placing relationships at the center of attention. It therefore remains unclear what characterizes those relationships beyond subunits’ roles, motivation, or control mechanisms. Relationship as a term has often been used but rarely defined in the IB literature on intra-firm networks. We develop arguments that position such relationships as the focal unit of analysis. We extend current IB literature to examine in detail the nature and dynamics of relationships in MNCs by borrowing insights from Industrial Marketing and Purchasing research, which focuses on the relational nature and dynamics of interactions between actors. We offer a theoretical framework and develop a conceptual model that brings to the fore the multiplexity and temporality of relationships in MNCs. We also argue that intra-MNC network relationships can be seen as an evolving process and advocate for shifting away from variance-based and typological views toward a process view for examining relationships. Theoretically, understanding what characterizes the nature of MNC intra-firm relationships and what processes contribute to structuring them provides important insights into the global configuration of the MNC and the required organizational design mechanisms needed for MNC existence and resilience. The study is timely and practically relevant in the sense that considering intra-firm relationships deserves even more attention in the current global economic environment when accessing external resources becomes costly and/or inefficient.

As markets become increasingly competitive, it is important for multinational corporations to generate value. Both headquarters and subsidiaries are responsible for contributing to value generation, albeit they may do so in different ways. This builds on the notion from the literature that it is possible to discern two separate concepts that relate to the generation of value, namely, value creation and value added. These concepts are often used interchangeably, without a clear distinction what they de facto reflect or what the underlying mechanisms of value creation and value added are.

Based on a set of assumptions regarding headquarters–subsidiary relations conceptual arguments related to value generation are developed.

Teasing out the differences between the concepts becomes important as it leads to a fuller understanding of what a headquarters do in different situations and of what a headquarters–subsidiary relationship entails for value generation.

In this chapter, it is argued that value-adding activities tend to be conducted by a headquarters, but are dependent on varying knowledge situations of headquarters, while the value creation process tends to take place at the subsidiary level.

Intensified internal social needs and changed expectations of the role of government obligate governments everywhere today to accept responsibility for an increasing number of economic and social objectives. National economic goals are defined and policies devised to further these goals. As a principal agent of economic change, the multinational corporation (MNC) is frequently the target of these economic policies. However, the multinational corporation has its own objectives and concerns. With its numerous alternatives and greater flexibility in reallocating resources, the MNC will usually respond differently to government policies than will purely domestic corporations. Yet all too often governments misunderstand the nature of the multinational corporation and devise regulatory policies which have unanticipated, even undesirable, consequences. A vicious cycle then ensues as governments attempt to regulate MNC behavior still further.

Purpose – We examine the fundamental assumptions and features of the Uppsala model of internationalization and argue that we need to look beyond this model for studying internationalization processes in the multinational corporations (MNCs) of today. The purpose of our paper is to identify gaps and neglected issues regarding MNCs' internationalization processes that demand further theoretical and empirical study.

Methodology – Our approach is conceptual: based on the most cited model on internationalization, the Uppsala model, we approach the complex internationalization processes that continuously go on in modern MNCs. We use related bodies of literature, on MNC structure and strategy, headquarters–subsidiary relationships, MNC subsidiary strategy and development, and opportunity seeking and entrepreneurship, to fill in the gaps and develop the emerging research themes.

Findings – We identify the following three issues that need further investigation: the opportunity recognition process preceding internationalization processes in MNCs, the internationalization of multiple products within the confines of the growing MNC, and the internationalization of foreign MNC units.

Research limitations – In this paper, we open up new research fields, but do not offer empirical studies to inform us about these relevant issues. Future research should study these issues empirically, preferably through case study methodologies and/or with longitudinal designs.

Originality – The contribution of our paper is its identification of three research issues in relation to internationalization processes of modern MNCs, which we argue are neglected by contemporary research.

Increased global competition originating from both within the multinational corporation (MNC) and from global adversaries dictates that subsidiaries must be responsive to change, adaptable, and capable of sensing and seizing new opportunities for capability development and growth. For many subsidiaries adhering to, or being seen to adhere to, the wider organizational goals dictated by their parent represents an additional complexity. While it may be necessary to divert slack resources towards capability development, subsidiaries which do so, on their own initiative, may well run the risk of being categorized as an unruly node in the MNC’s network. Further, by failing to show compliance with organizational strategy future subsidiary-driven efforts may be curbed or prohibited.

The need to demonstrate value to the MNC through developing new and novel capabilities while complying with parent-driven strategy thus represents a key subsidiary dilemma, yet remains an underexplored phenomenon in international business research. Framing this dilemma via an ambidexterity lens, our chapter explores how five subsidiary units balance and negotiate allegiances within a modern MNC context. We find that in the subsidiary context aligning and adapting may not be competing or exclusive strategies, but in effect two sides of the same coin. The structural context can shape relative levels of alignment via controlling mechanisms and monitoring of operations while the subsidiary’s behavioral context, idiosyncratic to the subsidiary, can dictate its capacity to generate initiatives and to create new and novel capabilities for diffusion across the MNC network.

Contemporary organizations with multinational business activities must strive to achieve strategic responsiveness to thrive and survive as they operate across a highly dynamic and complex global business environment. Here we emphasize the importance of combining the slow analytical strategy processes at headquarters with the fast autonomous responses taken by frontline agents in the subsidiaries in view of the changing conditions. New business developments are observed first in the fast activities around the multinational periphery where updated experiences from ongoing responses create useful insights that can be used strategically if management at headquarters is cognizant about its existence and able to collect this information. We introduce the notion of democratizing the strategic engagement of managers and employees at all levels and locations of the multinational corporation (MNC) as an essential leadership paradigm. The implied interaction between slow central analytical reasoning at headquarters and updated insights from fast decentralized initiatives in local subsidiaries constitutes an effective dynamic responsive mechanism. This dynamic interaction implies that critical strategic decisions made in the MNC must be informed by the diverse updated insights of managers and employees operating on the corporate frontlines tapping into the crowd wisdom readily available in and around the organization.

In this paper, I review and evaluate the concept of subsidiary initiative, and I discuss how theorizing about the multinational corporation (MNC) in general has been informed by studies focusing on subsidiary initiative and related subsidiary-level issues. In the second part of the paper, I discuss some of the trends underway in the world of business that are influencing the nature and amount of subsidiary initiative observed in MNCs. Most of these seem likely to make subsidiary initiative more common, though some of them will favor externally focused initiatives while others will favor internally focused ones.

The vulnerability of multinational corporation (MNC) knowledge network is one of the major causes for the failure and even the death of MNCs in the fierce global market competition. Employee turnover and knowledge loss are the triggers for the MNC knowledge network vulnerability and a matter of serious concern in the evolution and development of MNC knowledge network. The purpose of this work is to propose a valid and quantitative measurement method to investigate the influence of employee loss and knowledge loss on the vulnerability of MNC knowledge network.

MNC knowledge network is inherently a heterogeneous network where there are mainly two types of units: employees and their knowledge. Therefore, this paper establishes a weighted super-network model for MNC knowledge network to depict its heterogeneous composition. On the basis of the weighted MNC knowledge super-network, the static and dynamic vulnerability measurement methods are further proposed to investigate and evaluate MNC knowledge network vulnerability.

A real case is given to illustrate the applicability of the proposed weighted MNC knowledge super-network model and the network vulnerability measurement methods. The results show the super-network model proposed in this paper can effectively embody the complex features of MNC knowledge network, and the vulnerability measurement methods can effectively investigate the influence of employee loss and knowledge loss on network vulnerability.

From the perspective of super-network, researchers and practitioners can get a more systematic and deeper understanding of the MNC knowledge network and its human and knowledge resource constitute which are vital for the evolution and development of MNC. Moreover, the MNC knowledge network vulnerability measurement methods can effectively measure and analyze the influence of resource loss on network vulnerability, which can provide a helpful decision support for monitoring and managing of MNC knowledge network vulnerability to reduce its adverse effects.