The MNC as a Knowledge Structure: The Roles of Knowledge Sources and Organizational Instruments for Knowledge Creation and Transfer

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    Abstract

    Most recent research on the differentiated MNC has been taken up with knowledge flows between MNC units. In contrast, we develop a view of the MNC as a knowledge structure where knowledge elements in MNCs are seen as being structured along a number of dimensions (e.g., complementarity, dispersal, sources of knowledge) that help determining the costs and benefits of knowledge transfer. Based on this conceptualization, we argue that MNC management through choices regarding organizational control, motivation and context can influence the development, characteristics and transfer of knowledge. This further extends existing literature. For example, in most of the literature, the characteristics of knowledge are seen as exogenous rather than endogenous variables. However, to the extent that management chooses a specific way of sourcing knowledge, it also implicitly chooses the characteristics of the sourced knowledge and the ease with which it can be transferred inside the MNC. This is because knowledge from different knowledge sources have different characteristics and are thus transferred at different cost. The six hypotheses that we draw from the main argument are tested against a unique and very rich dataset on subsidiary knowledge development (including information on the organizational setting, sources of subsidiary knowledge and the extent of knowledge transfer to other MNC-units) that has been constructed in connection with a cross-national project Centres of Excellence. The dataset covers more than 2.000 subsidiaries located in seven different European countries.
    Original languageEnglish
    Place of PublicationFrederiksberg
    PublisherDepartment of International Economics and Management, Copenhagen Business School
    Number of pages30
    Publication statusPublished - 2001
    SeriesWorking Paper / Department of International Economics and Management, Copenhagen Business School
    Number12-2001

    Cite this

    Foss, N. J., & Pedersen, T. (2001). The MNC as a Knowledge Structure: The Roles of Knowledge Sources and Organizational Instruments for Knowledge Creation and Transfer. Frederiksberg: Department of International Economics and Management, Copenhagen Business School. Working Paper / Department of International Economics and Management, Copenhagen Business School, No. 12-2001