The Role of Headquarters
New Horizons in International Business series
Edited by Ulf Andersson and Ulf Holm
Chapter 11: Managing the Transfer of Externally Embedded Subsidiary Knowledge: The Role of Headquarters’ Control Mechanisms
Christine Holmström INTRODUCTION Within the international business literature it is assumed that the MNC can enhance its stock of knowledge through its foreign subsidiaries. Research has shown that the ability of foreign subsidiaries to assimilate new knowledge from their local environment constitutes a crucial competitive advantage (Kotabe et al., 2007) and an expanding stream of research attests to the importance of external relationships for the subsidiary’s ability to assimilate new knowledge from its local environment, turning it into new innovations (von Hippel, 1988) and capabilities (Andersson et al., 2002; Frost, 2001; Holm and Pedersen, 2000; Håkansson, 1989; McEvily and Marcus, 2005; Schmidt and Schurig, 2003). It is argued that, to the extent that subsidiaries control important domestic knowledge, this knowledge will subsequently be transferred and exploited to the benefit of the whole corporation (Andersson et al., 2001, 2002; Foss and Pedersen, 2002). However, several authors have pointed out that it is difficult to accomplish knowledge transfer across MNC units. Indeed, much of the research on knowledge transfer has been concerned with examining how different barriers affect the transfer of knowledge across MNC units, including the intrinsic nature of knowledge (Winter, 1987; Zander and Kogut, 1995) and barriers of cognitive or motivational character (Gupta and Govindarajan, 2000; Szulanski, 1996). In recent research it has been proposed that these barriers are especially manifest in situations where the subsidiary is deeply embedded in external relationships with demanding customers or suppliers (Andersson et al., 2002; Forsgren et al., 2000; Håkanson and...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.