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Isolated Foreign Subsidiary's Initiative in Knowledge Transfer Within the MNE

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  • Nadayama, Naoto

Abstract

Knowledge transfer is an essential issue of strategic management in MNEs, because it enables them to utilize their strategic resources across borders. However, it is far from perfect, and there are isolated foreign subsidiaries that are excluded from the knowledge network within the MNE. A primary contribution of this paper is to shed light on a fact which such an isolated foreign subsidiary can initiate the internal knowledge transfer within the MNE, in order to overcome the liability of internal isolation. This paper analyzes such a subsidiary initiative, with an extreme case of a large Japanese ICT company's Finnish subsidiary, which initiated an adoption of its headquarters' strategic practice. I collected and analyzed data by ethnographic fieldwork in this subsidiary for over one year. After depicting the details of the initiation process, I show how the initiation process was influenced by the subsidiary managers' dual motivation; solving the liability of internal isolation, and keeping the advantage of isolation. I hope that this study would enrich theory building of subsidiary isolation and also contribute to subsidiary managers who have struggled with the liability of internal isolation.

Suggested Citation

  • Nadayama, Naoto, 2019. "Isolated Foreign Subsidiary's Initiative in Knowledge Transfer Within the MNE," Journal of International Management, Elsevier, vol. 25(2), pages 1-1.
    • Handle: RePEc:eee:intman:v:25:y:2019:i:2:3
    DOI: 10.1016/j.intman.2018.10.002
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    Cited by:

    1. Elsahn, Ziad & Earl, Anna, 2022. "Alternative ways of studying time in qualitative international business research: A review and future agenda," Journal of International Management, Elsevier, vol. 28(3).
    2. Yang, Yong & Driffield, Nigel, 2022. "Leveraging the benefits of location decisions into performance: A global view from matched MNEs," Journal of Business Research, Elsevier, vol. 139(C), pages 468-483.
    3. López-Sáez, Pedro & Cruz-González, Jorge & Navas-López, Jose Emilio & Perona-Alfageme, María del Mar, 2021. "Organizational integration mechanisms and knowledge transfer effectiveness in MNCs: The moderating role of cross-national distance," Journal of International Management, Elsevier, vol. 27(4).
    4. Zhang, Tingting (Grace) & You, Yu, 2021. "Scale or efficiency? Performance shortfall and engagement in production activities of foreign subsidiaries in China," Journal of International Management, Elsevier, vol. 27(1).
    5. Yunok Cho & Nigel Driffield & Sourindra Banerjee & Byung Il Park, 2023. "Returns to Internationalization: Business Group-Affiliated Firms vs Standalone Firms," Management International Review, Springer, vol. 63(4), pages 603-639, August.
    6. Reilly, Marty & Scott, Pamela Sharkey & Tippmann, Esther & Mangematin, Vincent, 2023. "Sustaining competence creation in the multinational enterprise: The role of piloting in subsidiaries," Journal of International Management, Elsevier, vol. 29(3).
    7. Scuotto, Veronica & Garcia-Perez, Alexeis & Nespoli, Chiara & Messeni Petruzzelli, Antonio, 2020. "A repositioning organizational knowledge dynamics by functional upgrading and downgrading strategy in global value chain," Journal of International Management, Elsevier, vol. 26(4).
    8. Ando, Naoki, 2024. "Multinationals’ intraregional geographic expansion and foreign subsidiary performance," International Business Review, Elsevier, vol. 33(1).

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