Procedural Justice, Not Absorptive Capacity, Matters in Multinational Enterprise ICT Transfers

Abstract

this paper empirically tests the effectiveness of information and communications technology ( ict ) knowledge transfer and adoption in the multinational enterprise (MN e ) as an issue of critical importance to contemporary MN e functioning. i n contrast to mainstream thinking on absorptive capacity, but in line with prevailing international business theory, our research supports the proposition that perceptions of procedural justice, rather than absorptive capac- ity, determine effectiveness, especially in cases of high tacit knowledge transfers. 0 Data was collected from senior ict representatives in 86 c anadian subsidiaries of foreign owned MN e s. e ach of these subsidiaries recently experienced a significant ict transfer im- posed by the parent organization. 0 support was found for the main propositions: Procedural justice significantly predicted suc- cessful ict transfer and adoption, while absorptive capacity was not significant. t hese find- ings are consistent even when knowledge tacitness was high. 0 the perceived success of the ict transfer as well as its adoption varied widely across these firms. t he potential reasons for this divergence in effectiveness are manifold, but our find- ings suggest that in situations of substantial knowledge tacitness, a higher level of procedural justice, rather than a higher level of absorptive capacity, is critical to effective transfer and adoption.