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    Pull the Right Levers: Creating Internationally ‘Useful' Subsidiary Competence by Organizational Architecture
    We study the effect of formal organizational architecture on the extent to which a focal subsidiary creates competence that is "useful" to other units of a multinational corporation (MNC). Elements of formal organizational architecture represent levers by which parent firm and subsidiary managers can realize their intentions. Building on motivation theory, we argue that an appropriate organizational architecture stimulates a subsidiary's motivation to create internationally "useful" competence so that its extent of competence creation will increase. We develop and empirically test hypotheses for three specific organizational elements, viz.: a home-base augmenting mission, interfaces with other MNC units, and the subsidiary's strategic and operational autonomy. Unique survey data from 287 subsidiaries provide intimate insights into the internal structure of MNCs and strongly support our account. We close by discussing the implications of our study for the academic literature, management practice, and future research.
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    Scopus© Citations 17
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    Creating Useful Subsidiary Competence by Appropriate Organizational Architecture
    Achieving a decentralized creation of internationally leveraged competence is an important, yet challenging task for many multinational corporations (MNCs). However, the literature provides few insights on the means by which parent firm managers can foster the creation of competence, which is useful to other MNC units, in the firm's subsidiaries. We develop an overarching framework, arguing that by setting the organizational architecture appropriately, parent firm managers can stimulate a subsidiary's self-interest in creating such competence. Testing hypotheses, which link three specific features of formal architecture (home-base augmenting mission, interfaces with other MNC units, subsidiary autonomy) to the extent to which a focal subsidiary creates such competence, with a unique sample of 287 subsidiaries strongly supports our arguments. We discuss implications for academia and practice.
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    Organizational Architecture and Knowledge Transfer Success in Multinational Firms: An Agency Theory Perspective
    We offer a theory and empirical test of the influence of organizational architecture on inter-subsidiary knowledge transfer success within a multinational corporation (MNC). Framing our arguments in an agency theory perspective, we suggest that the parent firm, by appropriately setting the MNC's organizational architecture, can harness the subsidiaries' self-interest to make such knowledge transfers succeed. We build hypotheses on four specific aspects of formal organizational architecture (autonomy, subsidiary mandates, formal cross-unit interfaces between subsidiaries, and formal interfaces with the local environment) and test them with a unique sample of 287 subsidiaries and novel psychometric measures that provide intimate insights into an MNC's internal structure. We find broad support for the proposed theory and highlight the implications of our research for academia and management practice.
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