Knowledge creation and sharing and the integration-responsiveness framework: the role of functional subunits of the MNC

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 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.