Björn Ambos

Offshore Centers of Excellence: Social Control and Success

The global dispersion of knowledge and technological capabilities has moved MNCs to assign lead responsibilities to offshore units in order to take advantage of this phenomenon. Moving core competencies to the periphery enables the firm to take advantage of resources not present in its home country, posing at the same time issues of integration and control. This paper challenges common suggestions of the superiority of social control to best utilize Centers of Excellence (CoEs) established abroad. Utilizing a sample of German national origin, we test propositions grounded in social network theory.

Meeting the Challenge of Offshoring R&D: An Examination of Firm- and Location-Specific Factors

This paper, through a systematic survey of 83 international R&D engagements of 36 German MNCs, seeks to extend previous research on the location decisions of international R&D engagements and inform managers about the critical factors that may be considered when taking this important decision. Covering engagements in 21 countries, we show that the knowledge intensity of the industry as well as variables pertaining to the process school of internationalization play an important role when offshoring R&D.

The New Role of Regional Management

PART I: SUCCEEDING IN EUROPE The Market: Is there Common Ground Between Belgian and Bulgaria or Spain and Slovakia? The Headquarter Dilemma: Does Geography Matter? The Local Dilemma: Why Does Corporate not Recognize How Different We Are From Other Markets? The Regional Solution: Dynamic Management of Market Diversity PART II: CHALLENGES AND SOLUTIONS US Companies in Europe: Going East - Challenges and Solutions Japanese Companies in Europe: Going West - Challenges and Solutions European Companies: Developing the Home Turf - Utilizing Emerging Market Opportunities PART III: SELECTED CASES - THE BEST IN CLASS Learning From the Pharmaceutical Industry Learning From the Automotive Industry Learning From the Sport Shoe Industry Learning From the Banking Industry Conclusion The Dynamic Competence Relay (DCR): The New Role of Regional Management

A Question of Legitimacy? A Dynamic Perspective on Multinational Firm Control

The control and coordination of a network of geographically and culturally dispersed subsidiaries is one of the most prominent challenges in international management. However, many empirical findings on the effectiveness of various control mechanisms and combinations thereof are still counterintuitive. This study uses longitudinal case studies and cross-sectional interview data to extend control theory by examining why, how, and in what sequence large multinational firms MNCs implement controls in their networks of foreign subsidiaries. Our analysis draws from literature on institutional theory, embeddedness, and organizational power to demonstrate that MNC headquarters need to overcome institutional duality when implementing their controls abroad. We find that headquarters do so by using social controls, primarily as a way of legitimizing and institutionalizing their process and output controls that are implemented subsequently.

The Benefits of Hierarchy? - Exploring the Effects of Regional Headquarters in Multinational Corporations

This paper investigates the role Regional Headquarters (RHQs) play in large multinationals. It investigates if the establishment of a RHQ creates “hierarchy benefits�? to the firm that are in line with eh M-form principles. Based on rich qualitative data that we collected for nine different firms (MNCs) in three different industries, we find evidence for benefits of hierarchy when RHQs are introduced very much along the lines of the classic M-form organization with product divisions. However, M-form principles are taken ad absurdum by the fact that there seems to be constant re-organization regarding the mandates and the geographic scope of the regions. This calls into question the effectiveness of RHQs.

EXPLORATION AND EXPLOITATION: A 20-YEAR REVIEW OF EVOLUTION AND RECONCEPTUALISATION

The exploration–exploitation tension has been resonated and applied in diverse areas of management research. Its applications have deviated substantially from the scope of organisational learning as originally proposed by March [(1991). Exploration and exploitation in organizational learning. Organization Science, 2(1), 71–87]. Scholars have developed set of definitions, new conceptualisations, and varied applications in rejuvenating the concept; and literatures on this topic seem do not significantly ensure a conclusive picture. It is still also unclear what are the antecedents and following scientific breakthroughs which may have led to the divergence of this construct.This study offers an added value as it becomes the first to apply a bibliometric analysis, combined with fine-grained content analysis to attain a more comprehensive understanding on how the construct of exploration–exploitation have grown and evolved during the last 20 years. We attempt to grasp the structural pattern of citing behaviour and collective understanding among scholars, through conducting in-depth bibliographic review in a complete population of articles on this topic, published in leading journals following March [(1991). Exploration and exploitation in organizational learning. Organization Science, 2(1), 71–87].This study identifies the intellectual base articles which form the basis of the exploration–exploitation and the turning point articles that shift the discussion into different directions.

Perceptions Versus National-Level Differences: A Mediating Model of Psychic Distance

Abstract Purpose This chapter bridges the gap between two distinct approaches to the concept of psychic distance – measuring it in terms of people’s perceptions of distance or in terms of exogenous national-level differences. The two approaches are reconciled in a “refined and integrative” definition of the concept, which is tested empirically using a mediating model. Methodology Structural equation modeling is used on a bilateral sample of 25 countries to test whether perceptions of psychic distance mediate the relationships between national-level differences and bilateral trade and investment. Findings By testing for alternative direct paths, the chapter confirms that for the main forms of national-level differences, culture, socioeconomic development, language, and religion, psychic distance fully mediates their relationships with both trade flows and investment patterns. However, for geographic distance, while the relationship is fully mediated for investment, it is only partially mediated for exports. Two asymmetric “distance-bridging” factors are also found to be significant antecedents of psychic distance. Originality and implications This chapter is the first to empirically demonstrate the mediating relationship between exogenous national-level differences and perceptions of psychic distance, and thus, provides new insights into the debate over which measurement approach is more appropriate. Perceptions of psychic distance, even if measured by expert panels rather than the actual decision-makers, fully capture the impact of national-level differences on trade and FDI flows; however, if such measures of perceptions are not available, a simple selection of four national-level differences will still capture 80% of the same effect.

How does Geographic Distance Impact the Relevance of HQ Knowledge?: The Mediating Role of Shared Context

Abstract With this chapter, we seek to shed light on the question how headquarters (HQ) can cope with geographic distance and effectively transfer relevant knowledge to their subsidiaries. By constructing a mediating model, we aim at disentangling the effects of geographic distance on the relevance of HQ knowledge to their subsidiaries, via the creation of a shared context between HQ and their subsidiaries. We tested our hypotheses using partial least squares based structural equation modelling on a sample of 124 European subsidiaries. We did not find a significant direct relationship between geographic distance and HQ knowledge relevance. Yet, we found support for our mediation hypotheses that geographic distance makes it more difficult for HQ to establish a shared normative and operational context, but that both dimensions of shared context can help HQ to transfer relevant knowledge to their subsidiaries. We contribute to the research on knowledge flows in multinational corporations (MNC) by investigating knowledge relevance directly rather than knowledge flows as such. We also advance our understanding of shared context in HQ-subsidiary relationships by showing that shared context comprises an operational and a normative dimension. Moreover, we contribute to social learning theory in basing our reasoning on the idea that shared practices and social relationships help overcoming distance to manage knowledge transfer more effectively. Finally, we add to the research of distance in international business by conceptualizing space, organizational context and knowledge transfer in one comprehensive model.

Outside the Triad: An Examination of International R&D Investments within Peripheral Economies

Corporate RD Pearce, 1989). A changing competitive environment, the increasing dispersion of knowledge and the concentration of competencies in so-called ‘pockets of knowledge’ around the world, has forced firms to absorb the risks of loosening control on their core competencies and to set up R&D units in overseas locations.

Are You Ready to Learn from Your Offshore Affiliates

Reverse knowledge transfers are beneficial to MNCs, but just how much so depends on the subsidiaries’ strategic mission, its country’s economic development and the ability of headquarters to absorb incoming information. Within MNCs, the traditional role of headquarters as prime source of knowledge and competencies is changing. Increasingly, headquarters act as receivers of knowledge from their internationally dispersed subsidiaries. The efficiency of the MNC as a knowledge-integrating institution is being influenced by changes in both its subsidiaries’ context and its capabilities to process knowledge. SCHLEGELMILCH, Bodo, AMBOS, Björn, CHINI, Tina. Are You Ready to Learn from Your Offshore Affiliates? Symphonya. Emerging Issues in Management, 2003, vol. 2, p. 27-33 DOI : 10.4468/2003.2.03schlegelmich.ambos.chini