How much lateral collaboration is optimal? Insights from computer simulations of MNEs as complex adaptive systems

The paper models the MNE as a complex adaptive system and investigates the effects of lateral collaboration on performance at both the MNE and subsidiary level. Applying the NKC and rugged landscapes methodology, computer simulations are conducted to explore the boundary conditions governing lateral collaboration in MNEs. At the MNE level, the results show that the success of lateral collaboration across subsidiaries is related to the level of within-subsidiaries collaboration, which is a measure of internal complexity. More specifically, increasing the level of lateral collaboration above the level of internal complexity results in inferior performance and hence internal complexity represents an upper limit on productive lateral collaboration. At the subsidiary level, the results indicate that flatter structures generally outperform hierarchical ones. They also point to the advantage of concentrating the responsibilities for lateral collaboration within the subsidiary in the hands of one or few boundary spanners.