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Knowledge and Strategy Creation in Multinational Companies

Author

Listed:
  • Patrick Regnér

    (Stockholm School of Economics)

  • Udo Zander

    (Ragnar Söderberg Professor of Business Administration, Stockholm School of Economics)

Abstract

While a great deal of research on international business and management has fruitfully focused on knowledge transfer, this paper investigates knowledge creation; the process by which multinational companies (MNCs) continuously combine and recombine knowledge in order to generate a competitive advantage. By integrating contemporary strategic management research into the field of international business, we have developed a new perspective on strategy and knowledge creation in MNCs, by elaborating on and extending the knowledge-based view and other views of MNC strategy making. We suggest that the agglomeration of a multitude of diverse social-identity frames, nested inside a corporate centripetal frame, creates an arena in which exploitable new knowledge can be created. We propose that while a common corporate social-identity frame promotes knowledge transfer, the diversity of various subgroups’ social-identity frames, in combination, with interaction and temporary tension between them, advances knowledge creation. Although this partly involves a serendipitous process, it promotes a systemic advantage for MNCs compared to local firms, as regards knowledge exploration, (re-)combination, and integration. This competitive advantage is firmly rooted in hard-to-imitate complex social processes and may therefore be sustainable.

Suggested Citation

  • Patrick Regnér & Udo Zander, 2011. "Knowledge and Strategy Creation in Multinational Companies," Management International Review, Springer, vol. 51(6), pages 821-850, December.
  • Handle: RePEc:spr:manint:v:51:y:2011:i:6:d:10.1007_s11575-011-0110-3
    DOI: 10.1007/s11575-011-0110-3
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