Knowledge transfer roles of subsidiaries in MNCs’ networks

Abstract

PurposeAlthough there have been a considerable number of studies regarding subsidiary role typology in multinationals’ management literature, there appear to be few studies that consider knowledge-based role typology from the network-based perspective. The purpose of this study is to fill this gap and extend the study of Gupta and Govindarajan (1991). Thus, the study focuses on answering the following research question: Do subsidiaries have different roles in terms of knowledge flows within a multinational company (MNC)?Design/methodology/approachThis empirical study has been carried out as an explorative single case study. An MNC with 15 foreign subsidiaries headquartered in Turkey, which operated in the manufacturing of household appliances and consumer electronics, has been selected as the case. Knowledge transfer is analyzed in this MNC from the network perspective.FindingsFour role typologies are detected for subsidiaries of the MNC: collector transmitter, collector diffuser, converter transmitter and converter diffuser.Research limitations/implicationsFindings of this study are specific to this case. Testing the findings in a sample consisting of subsidiaries of MNCs producing transnational products may contribute to the generalizability of these roles.Practical implicationsThis study offers potentially important findings for MNC managers to use. First, in this study, knowledge flows' route could be defined within MNCs’ dual network. Second, role typologies could inform MNC managers to design their MNCs’ knowledge network.Originality/valueThe suggested typologies are expected to more accurately define the roles of subsidiaries within contemporary MNCs which are accepted to be transformed from hierarchical structures to network-based organizations.