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Managing conflict of interests between headquarters and their subsidiaries regarding technology transfer to emerging markets--a framework

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  • Kaufmann, Lutz
  • Roessing, Soenke
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    Abstract

    This paper studies intra-organizational conflict between headquarters and its foreign subsidiary regarding technology transfer to emerging markets with a lack of protection of intellectual property rights. The purpose is to: (i) develop an understanding when conflict exists; (ii) suggest how the conflict can be structured; and (iii) present conflict design alternatives that maximize the multinational corporations' interest over the interest of the subsidiary. This article proposes that subsidiary self-interest in technology transfer situations may only be detrimental to the overall success of the MNC if products are easy to copy, the host environment has the technological and managerial capabilities to expropriate and the technology represents a competitive advantage. In situations where it is likely that the technology transfer is vulnerable to expropriation headquarters is advised to establish an independent pool of information of expropriation risks, to build trust by starting with small scale technology transfer and to signal career perspectives to subsidiary managers. As a result, the creation of a cooperative climate reduces subsidiary opportunism and information asymmetries.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of World Business.

    Volume (Year): 40 (2005)
    Issue (Month): 3 (August)
    Pages: 235-253

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    Handle: RePEc:eee:worbus:v:40:y:2005:i:3:p:235-253

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    References

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    Cited by:
    1. Jing Yang & Frank Tipton & Jiatao Li, 2011. "A review of foreign business management in China," Asia Pacific Journal of Management, Springer, vol. 28(3), pages 627-659, September.
    2. Lichtenthaler, Ulrich, 2009. "Product business, foreign direct investment, and licensing: Examining their relationships in international technology exploitation," Journal of World Business, Elsevier, vol. 44(4), pages 407-420, October.
    3. Dimitratos, Pavlos & Liouka, Ioanna & Young, Stephen, 2009. "Regional location of multinational corporation subsidiaries and economic development contribution: Evidence from the UK," Journal of World Business, Elsevier, vol. 44(2), pages 180-191, April.
    4. Schotter, Andreas & Beamish, Paul W., 2011. "Performance effects of MNC headquarters-subsidiary conflict and the role of boundary spanners: The case of headquarter initiative rejection," Journal of International Management, Elsevier, vol. 17(3), pages 243-259, September.

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