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Headquarters involvement and efficiency of innovation development and transfer in multinationals: A matter of sheer ignorance?

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  • Ciabuschi, Francesco
  • Forsgren, Mats
  • Martín Martín, Oscar

Abstract

We compare two theoretical perspectives on the knowledge situation of headquarters (HQ) in multinational corporations: the bounded rationality perspective and the sheer ignorance perspective. We claim that these perspectives lead to different expectations when it comes to HQ's role and the effects of HQ involvement in innovation processes at the subsidiary level. More specifically, we examine the impact of HQ involvement on the efficiency of 71 subsidiary innovation projects. The findings show that HQ involvement in innovation development and transfer has a negative rather than a positive impact on efficiency in both processes. We contribute by showing and suggesting that the sheer ignorance perspective might provide a more accurate portrayal of the HQ knowledge situation than the bounded rationality perspective does. This study furthers understanding of the role of HQ in the contemporary, knowledge-creating multinational.

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  • Ciabuschi, Francesco & Forsgren, Mats & Martín Martín, Oscar, 2012. "Headquarters involvement and efficiency of innovation development and transfer in multinationals: A matter of sheer ignorance?," International Business Review, Elsevier, vol. 21(2), pages 130-144.
    • Handle: RePEc:eee:iburev:v:21:y:2012:i:2:p:130-144
    DOI: 10.1016/j.ibusrev.2011.02.003
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    4. William G. Egelhoff, 2020. "How a Flexible Matrix Structure Could Create Ambidexterity at the Macro Level of Large, Complex Organizations Like MNCs," Management International Review, Springer, vol. 60(3), pages 459-484, June.
    5. Igor Gurkov & Sergey Filippov, 2013. "Innovation processes in the Russian manufacturing subsidiaries of MNCs – an integrated view from case studies," HSE Working papers WP BRP 11/MAN/2013, National Research University Higher School of Economics.
    6. Su, Cong & Kong, Lingshuang & Ciabuschi, Francesco & Holm, Ulf, 2020. "Demand and willingness for knowledge transfer in springboard subsidiaries of Chinese multinationals," Journal of Business Research, Elsevier, vol. 109(C), pages 297-309.
    7. Christine Holmström Lind & Olivia H. Kang, 2017. "The Value-Adding Role of the Corporate Headquarters in Innovation Transfer Processes: The Issue of Headquarters Knowledge Situation," Management International Review, Springer, vol. 57(4), pages 571-602, August.
    8. Clark, Kim & Ramachandran, Indu, 2019. "Subsidiary Entrepreneurship and Entrepreneurial Opportunity: An Institutional Perspective," Journal of International Management, Elsevier, vol. 25(1), pages 37-50.
    9. Manuel Hensmans & Guangyan Liu, 2016. "How do the normativity of headquarters and the knowledge autonomy of subsidiaries co-evolve?," Working Papers TIMES² 2016-020, ULB -- Universite Libre de Bruxelles.
    10. Stendahl, Emma & Tippmann, Esther & Yakhlef, Ali, 2022. "Practice creation in multinational corporations: Improvisation and the emergence of lateral knowledge," Journal of World Business, Elsevier, vol. 57(3).
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    13. Tomasz Gołębiowski & Lidia Danik & Małgorzata Stefania Lewandowska & Piotr Zaborek, 2022. "Innovation Performance of Foreign Subsidiaries in Post-Transition Economy: Evidence from Poland," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 3, pages 46-66.
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