Stickiness and the adaptation of organizational practices in cross-border knowledge transfers

The reuse of organizational practices in multiple locations is a fundamental way in which MNCs leverage knowledge to seek competitive advantage. Scholars approaching the issue of adaptation from both a market and an institutional perspective argue that, in order to achieve fit with the local environment, some degree of adaptation is advisable, and the need for adaptation increases as the institutional distance between source and recipient locations increases. However, arguments to date have examined the effect of adaptation primarily on a subsidiary's long-term performance. A necessary precursor is to understand the effect of adaptation on the transfer process itself, as transfer difficulty, or stickiness, may preclude the reuse of an organizational practice in the first place. In this paper, we explore how the adaptation of organizational practices affects the stickiness of cross-border transfers. We use structural equation modeling to analyze data from 122 internal transfers of best practice. Contrary to expectation, we find that adaptation significantly increases, rather than decreases, the stickiness of cross-border knowledge transfer. Journal of International Business Studies (2004) 35, 508–523. doi:10.1057/palgrave.jibs.8400107