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Organizing for knowledge flows within MNCs


  • Gupta, Anil K.
  • Govindarajan, V.


This paper conceptualizes the multinational corporation (MNC) as a network of knowledge flows and argues that, within the same MNC, subsidiary strategic roles can be expected to differ in terms of the extent and directionality of knowledge flows between a focal subsidiary and the rest of the corporation. Building on this framework, the paper hypothesizes and empirically tests for systematic associations between a subsidiary's knowledge-flow based strategic role and the systems and processes linking the subsidiary to the rest of the corporation. The empirical data, collected from 359 subsidiaries of major US, Japanese, and European MNCs (i) provide strong support to the notion of differentiated knowledge flow roles as well as differentiated systems and processes within MNCs, and (ii) suggest that innovation by foreign subsidiaries is more typically the result of autonomous initiative by the subsidiaries rather than strategic directives issued from corporate headquarters.

Suggested Citation

  • Gupta, Anil K. & Govindarajan, V., 1994. "Organizing for knowledge flows within MNCs," International Business Review, Elsevier, vol. 3(4), pages 443-457, December.
  • Handle: RePEc:eee:iburev:v:3:y:1994:i:4:p:443-457

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    References listed on IDEAS

    1. Erin Anderson & Hubert Gatignon, 1986. "Modes of Foreign Entry: A Transaction Cost Analysis and Propositions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 17(3), pages 1-26, September.
    2. Norman McGuinness & Nigel Campbell & James Leontiades, 1991. "Selling Machinery to China: Chinese Perceptions of Strategies and Relationships," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 22(2), pages 187-207, June.
    3. Bansard, Denis & Cova, Bernard & Salle, Robert, 1993. "Project marketing: Beyond competitive bidding strategies," International Business Review, Elsevier, pages 125-141.
    4. Alston, Jon P., 1989. "Wa, Guanxi, and Inhwa: Managerial principles in Japan, China, and Korea," Business Horizons, Elsevier, vol. 32(2), pages 26-31.
    5. Greve, Arent, 1995. "Networks and entrepreneurship -- an analysis of social relations, occupational background, and use of contacts during the establishment process," Scandinavian Journal of Management, Elsevier, pages 1-24.
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