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Headquarters Allocation of Resources to Innovation Transfer Projects within the Multinational Enterprise

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  • Dellestrand, Henrik
  • Kappen, Philip

Abstract

This paper examines headquarters allocation of resources to specific innovation transfer projects within the multinational enterprise between sending and receiving subsidiaries, focusing on the role of the subsidiary hosting the transfer. Resource allocation is of key strategic importance for the organization given that resources are limited in the multinational enterprise and that headquarters is the principal actor in distributing resources internally between competing innovation transfer projects. Findings from a dataset of 169 innovation transfer projects reveal that headquarters tend to favor established lines of innovation at the subsidiary level, as opposed to overall subsidiary operational relatedness for additional corporate resources. It is found that headquarters also tend to allocate resources to acquired subsidiaries' transfer projects to a higher degree than to those of greenfield ones. A curvilinear effect is found for subsidiary bargaining power which is initially positive and subsequently negative. The results highlight that certain subsidiary and innovation traits are determinants of headquarters resource allocation.

Suggested Citation

  • Dellestrand, Henrik & Kappen, Philip, 2011. "Headquarters Allocation of Resources to Innovation Transfer Projects within the Multinational Enterprise," Journal of International Management, Elsevier, vol. 17(4), pages 263-277.
  • Handle: RePEc:eee:intman:v:17:y:2011:i:4:p:263-277
    DOI: 10.1016/j.intman.2011.02.001
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    1. repec:spr:manint:v:57:y:2017:i:6:d:10.1007_s11575-017-0325-z is not listed on IDEAS
    2. Lee, Jeoung Yul & Park, Young-Ryeol & Ghauri, Pervez N. & Park, Byung Il, 2014. "Innovative Knowledge Transfer Patterns of Group-Affiliated Companies: The effects on the Performance of Foreign Subsidiaries," Journal of International Management, Elsevier, vol. 20(2), pages 107-123.
    3. 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.
    4. Schmid, Stefan & Dzedek, Lars R. & Lehrer, Mark, 2014. "From Rocking the Boat to Wagging the Dog: A Literature Review of Subsidiary Initiative Research and Integrative Framework," Journal of International Management, Elsevier, vol. 20(2), pages 201-218.
    5. repec:bla:jomstd:v:54:y:2017:i:3:p:304-339 is not listed on IDEAS
    6. Ciabuschi, Francesco & Dellestrand, Henrik & Kappen, Philip, 2012. "The good, the bad, and the ugly: Technology transfer competence, rent-seeking, and bargaining power," Journal of World Business, Elsevier, vol. 47(4), pages 664-674.
    7. 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.
    8. Celo, Sokol & Nebus, James & Kim Wang, I., 2015. "MNC structure, complexity, and performance: Insights from NK methodology," Journal of International Management, Elsevier, vol. 21(3), pages 182-199.
    9. Bachmann, Jan-Thomas & Engelen, Andreas & Schwens, Christian, 2016. "Toward a Better Understanding of the Association Between Strategic Planning and Entrepreneurial Orientation — The Moderating Role of National Culture," Journal of International Management, Elsevier, vol. 22(4), pages 297-315.

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