Knowledge management and involvement in innovations in MNC subsidiaries

This study investigates Penrose’s analysis of the relationship between resources (especially knowledge), management of those resources and innovation in a sample of 313 Australian subsidiaries of foreign-owned multinational corporations (MNCs). The frequency of use of knowledge management (KM) techniques by subsidiaries tended to be associated with factors internal to the MNC/subsidiary such as MNC size, level of technology and extent of communications networks. The subsidiary’s involvement in the MNC’s innovations network tended to be associated with external factors such as the innovativeness of the industry and degree of involvement with local organizations. Nevertheless, in accordance with the expectations from the literature, there remained a significant association between frequency of use of KM techniques and involvement in the innovations network of the MNC.