The Role of Headquarters
- New Horizons in International Business series
Edited by Ulf Andersson and Ulf Holm
Chapter 9: Determinants of HQs’ Involvement in Innovation Transfer
9. Determinants of HQs’ involvement in innovation transfer Francesco Ciabuschi and Oscar Martín Martín INTRODUCTION Innovation is without any doubt a core component of multinational corporations’ (MNCs) competitive advantage. The MNC itself is recognized as an important source of innovation and competence and a vehicle for knowledge transfer between centres and countries (for example, Teece, 1977; Ghoshal and Bartlett, 1988; Zander and Kogut, 1995; Cantwell and Mudambi, 2004). By internally transferring new products, technologies and practices, an MNC can employ them on a larger scale and, therefore, the profits from them can be multiplied. Thus, the corporate capabilities driving the innovation process, that is, the development and inter-unit transfer of valuable competence and innovations, constitute part of the essence of the modern MNC (for example Ghoshal and Bartlett, 1988; Zander, 1991; Zander and Kogut, 1995; Forsgren et al., 2005). Research in this area has been increasingly focusing on identifying factors that may hinder or enhance the development and transfer processes (for example Szulanski, 1996; Andersson et al., 2002; Björkman et al., 2004). One important group of factors is certainly related to the HQs. Issues that have been studied include the effects of control and incentive systems, organizational design, resource allocation and decision-making on unit innovation (for example Nobel and Birkinshaw, 1998; Birkinshaw and Ridderstråle, 1999). Literature presents both positive and negative effects of these different factors. In this chapter we specifically focus on HQs’ means of control and direct involvement in the processes of innovation development...
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