Andreas Schotter

Intra‐organizational knowledge exchange

Purpose – Recent research on intra‐organizational knowledge‐transfer showed that new capability development within multinational corporations shifts from parent companies to foreign subsidiaries. This paper seeks to identify antecedents and barriers for reverse capability‐transfer in multinational corporations.Design/methodology/approach – The paper adopts a multiple case study approach based on active interviews at six subsidiaries of a multinational manufacturing company.Findings – The results suggest that subsidiary autonomy, environmental heterogeneity, and managerial initiatives are all necessary antecedents of unique capability development at the subsidiary level, but that companies do not utilize foreign subsidiary‐originated capabilities in their home‐country operations. The results also show that person‐to‐person communication is required for intra‐MNC capability‐transfer in any direction, and that other forms of communication seem to be inefficient.Research limitations/implications – A logical n...

General Manager Staffing and Performance in Transitional Economy Subsidiaries: A Subnational Analysis

Drawing from institutional theory, we address the issues that headquarters of multinational corporations (MNCs) face when selecting local versus expatriate subsidiary general managers (GMs). Our analysis of 2,315 MNC subsidiaries in China shows that foreign direct investment (FDI) legitimacy is a reliable measure of institutional environment differences at the subnational level and that the commonly used country-level measures, including institutional distance and cultural distance, mask pertinent withincountry differences. MNCs that invest in Chinese provinces with lower FDI legitimacy use more local nationals as subsidiary GMs, compared to MNCs that invest in provinces with higher FDI legitimacy. In provinces with low FDI legitimacy, subsidiaries with local GMs perform relatively better than subsidiaries with expatriate GMs. This effect is particularly strong for wholly owned subsidiaries, as compared with joint ventures, and applies to all provinces except the most developed coastal regions. In provinces with higher levels of FDI legitimacy, these effects are reversed.