Managing the Embedded Multinational

Managing the Embedded Multinational

A Business Network View

Mats Forsgren, Ulf Holm and Jan Johanson

This book expands the business network view on managerial issues in multinational corporations. Specifically, it scrutinises the importance of a subsidiary’s external and internal business network for its strategic and organizational role within the corporation.

Chapter 11: Transfer of Knowledge in the Embedded Multinational – The Role of Shared Values and Business Networks

Mats Forsgren, Ulf Holm and Jan Johanson

Subjects: business and management, international business


The importance of shared values as mechanisms for control in MNCs has been emphasized by many scholars. The view presented in this book, however, is that business networks are more important than shared values. In Chapter 9, the possibility of creating shared values in an MNC was questioned. In the present chapter we scrutinize the assumption of shared value as an important mechanism in somewhat greater depth. In doing so, we compare the importance of shared values between the HQ and the subsidiary with the importance of factors such as the subsidiary’s business network and HQ’s knowledge about this network. The analysis is underpinned by data from the 98 subsidiaries used in the two preceding chapters. In Chapter 9 we touched upon the idea of ‘shared value’ as a ‘glue’ holding the whole MNC together. We argued that values and interests at the subsidiary level are rooted in the subsidiary’s own business context, of which HQ has only partial understanding. Values and interests of this kind have been a long time in the making, through interaction with other business network actors. They are context-specific; they differ from one subsidiary to another; and it is difficult to change them. The possibility of replacing this differentiated value structure by a common culture created and implemented by HQ, is probably more problematic than is usually assumed. The importance of shared value as an integrating mechanism in MNCs has been noted by several authors. Ghoshal and Nohria (1994, 1997), for instance, argue that the...

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