Knowledge Role and Subunit Characteristics in Multiunit Firms

Effective knowledge flows among organisational subunits have the potential to increase subunit performance and innovation, and are thus an important concern for both domestic multiunit firms and multinational firms. In what ways do subunit characteristics of a multiunit firm vary to facilitate inter-unit knowledge flows? Based on information processing theory, this paper proposes that subunit characteristics, including formal structure, informal structure and human capital, are partly a response to the information processing requirement of a subunit's specific knowledge role. A contingency framework is developed to explain the alignment between knowledge role and subunit characteristics. An intensive case study of a Chinese multiunit firm is conducted to obtain more insights about the proposed framework, which provides a comprehensive tool for managers to understand the connection between knowledge flow and various aspects of their subunits in a more systematic and holistic manner.