IDEAS home Printed from https://ideas.repec.org/p/unm/unumer/2013046.html
   My bibliography  Save this paper

Exploring the paradox of competence‐creating subsidiaries : balancing bandwidth and dispersion in MNEs

Author

Listed:
  • Narula R.

    (UNU-MERIT)

Abstract

This paper seeks to synthesise the various contributions to the special issue ofLong Range Planning on competence-creating subsidiaries CCS, and identifies avenues for future research. Effective competence-creation through a network of subsidiaries requires an appropriate balance between internal and external embeddedness. There are multiple types of firm-specific advantages FSAs essential to achieve this. In addition, wide-bandwidth pathways are needed with collaborators, suppliers, customers as well as internally within the MNE. Paradoxically, there is a natural tendency for bandwidth to shrink as dispersionincreases. As distances technological, organisational, and physical become greater, there may be decreasing returns to MNE spread. Greater resources for knowledge integration and coordination are needed as intra- and inter-firm RD cooperation becomes more intensive and extensive. MNEs need to invest in mechanisms to promote wide-bandwidth knowledge flows, without which widely dispersed and networked MNEs can suffer from internal market failures.

Suggested Citation

  • Narula R., 2013. "Exploring the paradox of competence‐creating subsidiaries : balancing bandwidth and dispersion in MNEs," MERIT Working Papers 2013-046, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2013046
    as

    Download full text from publisher

    File URL: https://www.merit.unu.edu/publications/wppdf/2013/wp2013-046.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gabriel R. G. Benito & Randi Lunnan & Sverre Tomassen, 2011. "Distant Encounters of the Third Kind: Multinational Companies Locating Divisional Headquarters Abroad," Journal of Management Studies, Wiley Blackwell, vol. 48(2), pages 373-394, March.
    2. Criscuolo, Paola & Verspagen, Bart, 2008. "Does it matter where patent citations come from? Inventor vs. examiner citations in European patents," Research Policy, Elsevier, vol. 37(10), pages 1892-1908, December.
    3. John Cantwell & Rajneesh Narula, 2001. "The Eclectic Paradigm in the Global Economy," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 8(2), pages 155-172.
    4. Henry Chesbrough & Richard S. Rosenbloom, 2002. "The role of the business model in capturing value from innovation: evidence from Xerox Corporation's technology spin-off companies," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 11(3), pages 529-555, June.
    5. Paola Criscuolo & Rajneesh Narula, 2007. "Using multi-hub structures for international R&D: Organisational inertia and the challenges of implementation," Management International Review, Springer, vol. 47(5), pages 639-660, September.
    6. Ambos, Tina C. & Ambos, Björn & Schlegelmilch, Bodo B., 2006. "Learning from foreign subsidiaries: An empirical investigation of headquarters' benefits from reverse knowledge transfers," International Business Review, Elsevier, vol. 15(3), pages 294-312, June.
    7. Tina C Ambos & Ulf Andersson & Julian Birkinshaw, 2010. "What are the consequences of initiative-taking in multinational subsidiaries?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(7), pages 1099-1118, September.
    8. Ulf Andersson & Mats Forsgren & Ulf Holm, 2007. "Balancing subsidiary influence in the federative MNC: a business network view," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(5), pages 802-818, September.
    9. John Cantwell & Grazia D. Santangelo, 2002. "special issue: The new geography of corporate research in Information and Communications Technology (ICT)," Journal of Evolutionary Economics, Springer, vol. 12(1), pages 163-197.
    10. John H Dunning, 1988. "The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 19(1), pages 1-31, March.
    11. Juan Alcácer & Minyuan Zhao, 2012. "Local R&D Strategies and Multilocation Firms: The Role of Internal Linkages," Management Science, INFORMS, vol. 58(4), pages 734-753, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Saptarshi Purkayastha, 2015. "A Comment on the Extension of the OLI Framework to Emerging Economies," Global Business Review, International Management Institute, vol. 16(2), pages 336-340, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Klaus E. Meyer & Chengguang Li & Andreas P. J. Schotter, 0. "Managing the MNE subsidiary: Advancing a multi-level and dynamic research agenda," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 0, pages 1-39.
    2. Achcaoucaou, Fariza & Miravitlles, Paloma & León-Darder, Fidel, 2014. "Knowledge sharing and subsidiary R&D mandate development: A matter of dual embeddedness," International Business Review, Elsevier, vol. 23(1), pages 76-90.
    3. Blomkvist, Katarina & Kappen, Philip & Zander, Ivo, 2017. "Gone are the creatures of yesteryear? On the diffusion of technological capabilities in the ‘modern’ MNC," Journal of World Business, Elsevier, vol. 52(1), pages 1-16.
    4. Zhang, Feng & Jiang, Guohua & Cantwell, John A., 2019. "Geographically Dispersed Technological Capability Building and MNC Innovative Performance: The Role of Intra-firm Flows of Newly Absorbed Knowledge," Journal of International Management, Elsevier, vol. 25(3), pages 1-1.
    5. Santangelo, Grazia Domenica, 2012. "The tension of information sharing: Effects on subsidiary embeddedness," International Business Review, Elsevier, vol. 21(2), pages 180-195.
    6. Liu, Ting & Li, Xizhuo, 2022. "How Do MNCs Conduct Local Technological Innovation in a Host Country? An Examination From Subsidiaries' Perspective," Journal of International Management, Elsevier, vol. 28(3).
    7. Rabbiosi, Larissa, 2011. "Subsidiary roles and reverse knowledge transfer: An investigation of the effects of coordination mechanisms," Journal of International Management, Elsevier, vol. 17(2), pages 97-113, June.
    8. Julian Birkinshaw & Tina C. Ambos & Cyril Bouquet, 2017. "Boundary Spanning Activities of Corporate HQ Executives Insights from a Longitudinal Study," Journal of Management Studies, Wiley Blackwell, vol. 54(4), pages 422-454, June.
    9. Phillip C. Nell & Philip Kappen & Tomi Laamanen, 2017. "Reconceptualising Hierarchies: The Disaggregation and Dispersion of Headquarters in Multinational Corporations," Journal of Management Studies, Wiley Blackwell, vol. 54(8), pages 1121-1143, December.
    10. Reilly, Marty & Scott, Pamela Sharkey & Tippmann, Esther & Mangematin, Vincent, 2023. "Sustaining competence creation in the multinational enterprise: The role of piloting in subsidiaries," Journal of International Management, Elsevier, vol. 29(3).
    11. Klaus E. Meyer & Chengguang Li & Andreas P. J. Schotter, 2020. "Managing the MNE subsidiary: Advancing a multi-level and dynamic research agenda," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(4), pages 538-576, June.
    12. Driffield, Nigel & Love, James H. & Yang, Yong, 2016. "Reverse international knowledge transfer in the MNE: (Where) does affiliate performance boost parent performance?," Research Policy, Elsevier, vol. 45(2), pages 491-506.
    13. Tomasz Gołębiowski & Małgorzata Stefania Lewandowska & Małgorzata Rószkiewicz, 2019. "Subsidiaries’ dual embeddedness and innovation-related competitive advantage," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 3, pages 5-30.
    14. Narula, Rajneesh & Michel, Julie, 2009. "Reverse knowledge transfer and its implications for European policy," MERIT Working Papers 2009-035, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    15. Benoit Decreton & Henrik Dellestrand & Philip Kappen & Phillip C. Nell, 2017. "Beyond Simple Configurations: The Dual Involvement of Divisional and Corporate Headquarters in Subsidiary Innovation Activities in Multibusiness Firms," Management International Review, Springer, vol. 57(6), pages 855-878, December.
    16. Conroy, Kieran M. & Collings, David G., 2016. "The legitimacy of subsidiary issue selling: Balancing positive & negative attention from corporate headquarters," Journal of World Business, Elsevier, vol. 51(4), pages 612-627.
    17. Manuel Hensmans & Guangyan Liu, 2016. "How do the normativity of headquarters and the knowledge autonomy of subsidiaries co-evolve?," Working Papers TIMES² 2016-020, ULB -- Universite Libre de Bruxelles.
    18. Zhaleh Najafi-Tavani & Axèle Giroud & Rudolf R. Sinkovics, 2012. "Mediating Effects in Reverse Knowledge Transfer Processes," Management International Review, Springer, vol. 52(3), pages 461-488, June.
    19. Manuel Hensmans & Guangyan Liu, 2018. "How Do the Normativity of Headquarters and the Knowledge Autonomy of Subsidiaries Co-Evolve? Capability-Upgrading Processes of Chinese Subsidiaries in Belgium," Management International Review, Springer, vol. 58(1), pages 85-119, February.
    20. Randi Lunnan & Sverre Tomassen & Ulf Andersson & Gabriel R. G. Benito, 2019. "Dealing with headquarters in the multinational corporation: a subsidiary perspective on organizing costs," Journal of Organization Design, Springer;Organizational Design Community, vol. 8(1), pages 1-24, December.

    More about this item

    Keywords

    Multinational Firms; International Business; Business Economics; Economic Sociology; Economic Anthropology; Social and Economic Stratification;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:unm:unumer:2013046. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ad Notten (email available below). General contact details of provider: https://edirc.repec.org/data/meritnl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.