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


  • Kaufmann, Lutz
  • Roessing, Soenke


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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  • Kaufmann, Lutz & Roessing, Soenke, 2005. "Managing conflict of interests between headquarters and their subsidiaries regarding technology transfer to emerging markets--a framework," Journal of World Business, Elsevier, vol. 40(3), pages 235-253, August.
  • Handle: RePEc:eee:worbus:v:40:y:2005:i:3:p:235-253

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    References listed on IDEAS

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    Cited by:

    1. Andersson, Ulf & Dasí, Àngels & Mudambi, Ram & Pedersen, Torben, 2016. "Technology, innovation and knowledge: The importance of ideas and international connectivity," Journal of World Business, Elsevier, vol. 51(1), pages 153-162.
    2. repec:spr:manint:v:50:y:2010:i:2:d:10.1007_s11575-010-0033-4 is not listed on IDEAS
    3. 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.
    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.
    5. Hitt, Michael A. & Li, Dan & Xu, Kai, 2016. "International strategy: From local to global and beyond," Journal of World Business, Elsevier, vol. 51(1), pages 58-73.
    6. repec:spr:manint:v:57:y:2017:i:6:d:10.1007_s11575-017-0326-y is not listed on IDEAS
    7. Krammer, Sorin M.S., 2016. "The role of diversification profiles and dyadic characteristics in the formation of technological alliances: Differences between exploitation and exploration in a low-tech industry," Research Policy, Elsevier, vol. 45(2), pages 517-532.
    8. 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.
    9. Kostova, Tatiana & Marano, Valentina & Tallman, Stephen, 2016. "Headquarters–subsidiary relationships in MNCs: Fifty years of evolving research," Journal of World Business, Elsevier, vol. 51(1), pages 176-184.
    10. Lorena D’Agostino, 2015. "How MNEs respond to environmental regulation: integrating the Porter hypothesis and the pollution haven hypothesis," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 32(2), pages 245-269, August.
    11. 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.

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