MNC Knowledge Transfer, Subsidiary Absorptive Capacity and HRM

Centered on a sample of 169 subsidiaries associated with MNCs functioning in USA, Russia, and China, this particular report investigates the connection between MNC subsidiary HRM strategies, absorptive potential and knowledge transfer. The document makes 2 important contributions. First, the report looks at the relationship between the use of certain HRM practices and the level of the absorptive capacity. Second, the paper demonstrates that absorptive capacity needs to be conceptualized as being comprised of two dimensions-ability and motivation. Additionally, outcomes suggest that the interaction of ability and motivation (absorptive capacity) substantially help transfer of knowledge from other parts of the MNC…

Introduction: Latest research stresses that the capability to produce and transfer knowledge internally is probably the key competitive advantages of multinational corporations (MNCs) in contrast to their local rivals. Indeed, Kogut and Zander (1993) highlighted that the MNCs’ ability to transfer knowledge more efficiently and effectively than the market is the main reason for their existence. The MNC is regarded as a “differentiated network”, where knowledge is created in different parts of the MNC and moved to various interrelated units (Hedlund, 1986; Bartlett and Ghoshal, 1989). The conceptualization of MNCs as differentiated networks has inspired a recent stream of research on the creation, assimilation and diffusion of internal MNC knowledge….

Author: Dana Minbaeva, Torben Pedersen, Ingmar Bjoerkman, Carl F. Fey, H.J. Park

Source: Copenhagen Business School

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