Knowledge creation and sharing: the role of functional units of the MNC subsidiary
2013
We theoretically and empirically examine the role of functional subunits in knowledge creation and sharing in
the differentiated multinational company (MNC). Specifically, we look at the extent to which functional subunits
acquire knowledge from their host country environment which they then share with other parts of the MNC AIB 2013 Conference Proceedings network. Inspired by the influential integration-responsiveness framework in strategic management, we posit a
model to show how the strategy dimensions of functional subunits (i.e. integration and responsiveness) act in a
complementary way to determine their knowledge creation and sharing capacities. We test this empirically using
data from close to 100 functional activities of 16 American wholly owned subsidiaries in Taiwan’s IT industry.
The results confirm our theoretical proposition while exerting significant implications for our research topic more
generally as well as for the theoretical approach we adopted. First, knowledge creation and sharing in a
differentiated MNC emanate from all functional activities and all national subsidiaries and not just in specific
functions or in subsidiaries with particular mandates or strategy type. Secondly, it is necessary to consider both
demand-side and supply-side factors and to assess their relative importance in the knowledge creation and
sharing of MNC units and subunits.
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