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Headquarters involvement and efficiency of innovation development and transfer in multinationals: A matter of sheer ignorance?

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  • Ciabuschi, Francesco
  • Forsgren, Mats
  • Martín Martín, Oscar

Abstract

We compare two theoretical perspectives on the knowledge situation of headquarters (HQ) in multinational corporations: the bounded rationality perspective and the sheer ignorance perspective. We claim that these perspectives lead to different expectations when it comes to HQ's role and the effects of HQ involvement in innovation processes at the subsidiary level. More specifically, we examine the impact of HQ involvement on the efficiency of 71 subsidiary innovation projects. The findings show that HQ involvement in innovation development and transfer has a negative rather than a positive impact on efficiency in both processes. We contribute by showing and suggesting that the sheer ignorance perspective might provide a more accurate portrayal of the HQ knowledge situation than the bounded rationality perspective does. This study furthers understanding of the role of HQ in the contemporary, knowledge-creating multinational.

Suggested Citation

  • Ciabuschi, Francesco & Forsgren, Mats & Martín Martín, Oscar, 2012. "Headquarters involvement and efficiency of innovation development and transfer in multinationals: A matter of sheer ignorance?," International Business Review, Elsevier, vol. 21(2), pages 130-144.
  • Handle: RePEc:eee:iburev:v:21:y:2012:i:2:p:130-144
    DOI: 10.1016/j.ibusrev.2011.02.003
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    References listed on IDEAS

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    Cited by:

    1. Utz Schäffer & Matthias D. Mahlendorf & Jochen Rehring, 2014. "Does the Interactive Use of Headquarter Performance Measurement Systems in Foreign Subsidiaries Endanger the Potential to Profit from Local Relationships?," Australian Accounting Review, CPA Australia, vol. 24(1), pages 21-38, March.
    2. Igor Gurkov & Sergey Filippov, 2013. "Innovation processes in the Russian manufacturing subsidiaries of MNCs – an integrated view from case studies," HSE Working papers WP BRP 11/MAN/2013, National Research University Higher School of Economics.
    3. repec:spr:manint:v:57:y:2017:i:4:d:10.1007_s11575-017-0311-5 is not listed on IDEAS
    4. Yuzhe Miao & Yuping Zeng & Jeoung Yul Lee, 2016. "Headquarters Resource Allocation for Inter-Subsidiary Innovation Transfer: The Effect of Within-Country and Cross-Country Cultural Differences," Management International Review, Springer, vol. 56(5), pages 665-698, October.
    5. Igor B. Gurkov & Michael J. Morley, 2017. "Contributions Towards a Renewed Debate on Multinational Headquarter-Subsidiary Relations:Subsidiary Mandates, Corporate Parenting Styles and Collective Psychological Contracts," HSE Working papers WP BRP 55/MAN/2017, National Research University Higher School of Economics.

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