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2004 | Buch

Knowledge Flows, Governance and the Multinational Enterprise

Frontiers in International Management Research

herausgegeben von: Volker Mahnke, Torben Pedersen

Verlag: Palgrave Macmillan UK

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This book contributes to the understanding of Knowledge Governance in the Multinational Corporation. Intra-firm and inter-firm processes of knowledge creation, sharing and exploitation have attracted increasingly managerial and scholarly interest. However the relation between particular knowledge processes, determinants of organizational choices, governance mechanisms, their relevant costs and benefits, and associated strategic advantages remain less well understood. To address these challenges, this book gives answers to the following questions. What are key challenges of governing knowledge in the multinational corporation? How do contingencies influence relevant trade-offs? How do sets of governance mechanisms respond to problems of cognition and incentives?

Inhaltsverzeichnis

Frontmatter

Fundamental Perspectives on Knowledge Governance

Frontmatter
1. Knowledge Governance and Value Creation
Abstract
Since its inception the field of MNC research notices that knowledge is key in the explanation of the existence, boundaries, internal structure, and competitive advantage of the MNC. No doubt, the governance of knowledge flows has remained a central theme in a large body of current academic work concerned with managerial practices in the MNC. The modern MNC is considered to be a ‘differentiated network’, where knowledge is created in various parts of the MNC and transferred to several interrelated units (Hedlund, 1986; Bartlett and Ghoshal, 1989; Gupta and Govindarajan, 1991, 2000). In this perspective, MNCs are no longer seen as repositories of their national imprint but rather as instruments, through which knowledge is accumulated in various local contexts and transferred horizontally between subsidiaries, shared vertically in headquarters-subsidiary relations, and between the MNC and its environment.
Volker Mahnke, Torben Pedersen
2. The Use of Network Theory in MNC Research
Abstract
In contemporary research on MNC the network concept has been used quite frequently (see e.g. Ghoshal, 1986; Johanson and Mattsson, 1988; Bartlett and Ghoshal, 1989; Forsgren, 1989; Ghoshal and Bartlett, 1990; Forsgren and Johanson, 1992; Ghoshal et al., 1994; Malnight, 1996; Ghoshal and Nohria, 1997; Tsai and Ghoshal, 1998; Zander, 1999; O’Donnell, 2000; Andersson et al., 2001, 2002; Kutschker and Shurig, 2002).1 A closer look at this research reveals that there are some basic differences in how the network concept is used, which partially demonstrates a conflict between two perspectives based on different theory traditions. The first tradition is based on the contingency theory approach and focuses mainly on the internal structure of the MNC. The network concept in this research is mainly used as a new form of organization facilitating the exchange of information between geographically and organizationally dispersed units. The second approach applies the theory of ‘markets-as-business-networks’ in the analysis of the MNC. This approach puts individual business relationships, in which MNC units are involved, at the centre of analysis. In the following discussion we call this approach the business network theory.
Mats Forsgren
3. Multinational Enterprises and Competence-Creating Knowledge Flows: A Theoretical Analysis
Abstract
Historically, multinational enterprises (MNEs) located R&D in their subsidiaries abroad mainly for the purposes of the adaptation of products developed in their home countries to local tastes or customer needs, and the adaptation of processes to local resource availabilities and production conditions. In this situation subsidiaries were dependent on the competence of their parent companies, and so their role was essentially just competence exploiting, or in the terminology of Kümmerle (1999) their local R&D was ‘home-base exploiting’. In recent years instead, linked to the closer integration of subsidiaries into international networks within the MNE, some subsidiary R&D has gained a more creative role, to generate new technology in accordance with the comparative advantage in innovation of the country in which the subsidiary is located (Cantwell, 1995; Papanastassiou and Pearce, 1997; Cantwell and Janne, 1999; Pearce, 1999; Zander, 1999). This transformation has led to a quantitative increase in the level of R&D undertaken in at least those subsidiaries that have acquired this kind of competence-creating mandate, and in these subsidiaries there has been a qualitative upgrading in the types of research project away from the purely applied towards the more fundamental; although the research undertaken is generally of an (increasingly) specialized kind, to take advantage of the particular capability of local personnel and the other local institutions with which the subsidiary is connected.
John A. Cantwell, Ram Mudambi

Governing External Knowledge Relations

Frontmatter
4. Do Good Threats Make Good Neighbours? Social Dilemmas in MNC Networks
Abstract
Articles on strategic networks have been plenty in recent times adding to our understanding of how to establish and maintain successful interorganizational relationships. However, little attention has been paid to the detailed governing and structuring of these relations on a more operational level (Grandori, 1997; Sobrero and Schrader, 1998). Yet this is exactly the level we have to turn to if we want to explain why so many strategic networks still fail despite the obvious advantages of not going it alone.
Margit Osterloh, Antoinette Weibel
5. Learning across Borders: Organizational Learning and International Alliances
Abstract
This chapter presents a conceptual framework of organizational learning that integrates process models of learning (Argyris and Schon, 1974; Lyles, 1988; Nonaka, 1994; Ring and Van de Van, 1992, 1994) with the structural models of learning (Badaracco, 1991; Mowery et al., 1996). We apply this framework by using it to analyse two published case studies on organizational learning in international joint ventures (IJVs).
Marjorie A. Lyles, Charles Dhanaraj
6. Learning versus Protection in Inter-Firm Alliances: A False Dichotomy
Abstract
… the pursuit of greater joint value [in inter-firm arrangements] requires the use of governance structures that are less efficient from a transaction cost perspective&strategic and learning gains often increase transaction value while simultaneously increasing transaction costs. (Zajac and Olsen, 1993: 132, 143)
Joanne E. Oxley
7. Relationship Dynamics: Developing Business Relationships and Creating Value
Abstract
In 1997, a world-leading tooling supplier lost a large customer. Virtually overnight, and without consultation, the customer announced that it would be moving all of its tooling supplies to an integrator. This would distance the supplier from the customer, and indirectly decrease volumes and margins. This dramatic event prompted the supplier to come up with a new strategy to bind customers closer to them, a strategy that came to change the way that they did business and which was highly successful.
Ulf Andersson, Benjamin Ståhl

Governing Internal Knowledge Relations

Frontmatter
8. Identifying Leading-Edge Market Knowledge in Multinational Corporations
Abstract
In his seminal article, ‘The hypermodern MNC - a heterarchy?’ Gunnar Hedlund (1986) argued that one of the distinctive features of the heter-archical multinational corporation (MNC) is its holographic qualities. By this he meant that knowledge about the whole is contained in each part, which is very different from the archetypal hierarchical organization in which each part understands only its only narrowly defined task. Hedlund acknowledged that such holographic qualities were ‘only a theoretical ideal’ (1986: 24) but his argument nonetheless reinforces a critical point: that large MNCs need to become much better at managing the internal flow of knowledge between units, in order to leverage their geographically dispersed capabilities.
Niklas Arvidsson, Julian Birkinshaw
9. Knowledge Flows in International Services Firms: A Conceptual Model
Abstract
Given the increasing involvement of both internal and external network structures and relationships in the internationalization of business (Johanson and Mattsson, 1988), the investigation of services internationalization that involves both parent and foreign subsidiary operations should lead to greater understanding of the dynamics relating to behaviour and performance of these firms (Gupta and Govindarajan, 2000). A key element of these dynamics involves inter- and intra-organizational flows of knowledge. Increased organizational learning and competency development in both parent and subsidiary units of multinational firms requires the effective flow of knowledge between them. In considering the process of knowledge transfer, the role of the individual (Boisot, 1998) also becomes a critical factor to consider. The individual’s role in knowledge generation and decision-making in the internationalization process of firms has been largely overlooked until recently, with some insightful contributions being made by Andersson (2000) and Edvardsson et al. (1993).
Valerie J. Lindsay, Doren Chadee, Jan Mattsson, Robert Johnston
10. The Dilemmas of MNC Subsidiary Transfer of Knowledge
Abstract
To an increasing extent, the success of multinational companies (MNCs) is considered to be contingent upon the ease and speed by which valuable knowledge is disseminated throughout the organization (Hedlund, 1986; Bartlett and Ghoshal, 1989; Gupta and Govindarajan, 1991). Thus, creation of knowledge in a spatially dispersed multinational organization and tapping into advanced local knowledge wherever it can be found are necessary conditions for success in the global marketplace. The implication is that some subsidiaries are supposed to act as bridgeheads (Forsgren et al., 1999) that tap into knowledge created in a local context and subsequently transfer the knowledge to other MNC units where it is of better use. Therefore, some subsidiaries will or ought to have a strategic role in the global organization that reaches beyond their local undertakings (e.g. Gupta and Govindarajan, 1994; Holm and Pedersen, 2000). However, there are obstacles to the internal transfer of knowledge in the MNC, and a number of dilemmas unfold within those subsidiaries that are supposed to ensure internal knowledge transfer.
Jens Gammelgaard, Ulf Holm, Torben Pedersen

Knowledge Governance and Business Development

Frontmatter
11. Governing MNC Entry in Regional Knowledge Clusters
Abstract
The governance of knowledge production and use is central to the theory of the MNC since its inception (Vernon, 1966; Hymer 1959; Buckley and Casson, 1976). One classical motive for FDI is to exploit knowledge assets developed at home. More recent research (Bartlett and Ghoshal, 1989; Hedlund, 1994; Cantwell, 1995; Florida, 1997; Grandstrand et al., 1992; Kümmerle, 1999) stresses the need for cross-border learning. Thus, a central element in location decisions becomes knowledge-exploration in foreign markets.
Mark Lorenzen, Volker Mahnke
12. Learning and Networking in Foreign-Market Entry of Service Firms
Abstract
In 1968, the managing director of a British consulting company in Scandinavia started to develop an idea of how to increase sales with the help of IBM. The idea was developed from experience in selling management consulting services. However, cooperation with a hardware supplier opposed the policy of his company, which wanted to be as independent as possible. But the managing director stood by his view. In 1976, Data system was formed and Data system initiated a long-term cooperation with IBM, which has been reinforced in the meantime. Data system offers software, hardware and services to industrial customers, and is one of the world’s largest suppliers of IBM AS/400-based software and services. Of Data system’s total turnover, services make up about 75 per cent.
Anders Blomstermo, D. Deo Sharma
13. Plumbing and Plugging-In: Networking by Venture Capitalists in Europe and the USA
Abstract
The new economy represents a world marked by uncertainty and change. A key driver of the new economy is information technology, which fuels the new economy with new applications to be both explored and exploited. Firms operating in this environment face ‘hypercompetition’ (D’Aveni, 1994), and they must constantly acquire and try out new combinations of knowledge if they are to survive. Hence, in this environment fast creation and acquisition of new knowledge are important to firms.
Anna Gatti, Morten Thanning Vendelø
Backmatter
Metadaten
Titel
Knowledge Flows, Governance and the Multinational Enterprise
herausgegeben von
Volker Mahnke
Torben Pedersen
Copyright-Jahr
2004
Verlag
Palgrave Macmillan UK
Electronic ISBN
978-0-230-52387-6
Print ISBN
978-1-349-51642-1
DOI
https://doi.org/10.1057/9780230523876