Organizational Architecture and the Realization of Competitive Advantages from Multinationality
Series
Dissertationen / Universität St. Gallen
Type
doctoral thesis
Date Issued
2012
Author(s)
Abstract
Today, multinational corporations (MNCs) account for a substantial share of economic activity in most industries and countries. The appeal of a multinational organization can be explained by the associated competitive advantages, which entail prospects of superior performance: MNCs can create knowledge and competence in geographically dispersed subsidiaries, transfer knowledge from a focal subsidiary to other subsidiaries and to the parent firm, and integrate subsidiaries into their intrafirm network. While these advantages from multinationality have been highlighted frequently, many scholars also observed that we know little about the means by which MNCs can actually realize them. This cumulative dissertation addresses these knowledge gaps.
To this end, it focuses on the effects that organizational architecture (OA) exerts on the above advantages. By adopting this focus, it responds to the calls which have identified OA as an important, yet neglected area in this context. Parent firm executives can set elements of OA, especially formal OA (such as subsidiary autonomy and mandates), to realize their intentions.
Besides an introductory chapter, this thesis consists of four manuscripts that examine the influence of selected elements of formal OA on (a) a focal subsidiary's integration into the MNC's intrafirm network, (b) the extent to which its knowledge is successfully transferred to other subsidiaries, (c) the extent to which a focal subsidiary transfers knowledge to the parent firm, and (d) the extent to which it creates competence that can be leveraged internationally. Three of these manuscripts test their theoretical predictions empirically by applying both regression analyses and structural equation modeling (SEM) to a sample of 287 subsidiaries. The results strongly support the arguments of this thesis.
Overall, this dissertation suggests that MNCs can realize the competitive advantages from multinationality when an appropriate OA is implemented. Further, by setting the OA appropriately, MNCs should be able to realize several of these advantages simultaneously. These insights do not only help close important gaps in our theoretical understanding. Rather, they can also yield beneficial advice to management practice because so far, many MNCs struggle with realizing these advantages.
To this end, it focuses on the effects that organizational architecture (OA) exerts on the above advantages. By adopting this focus, it responds to the calls which have identified OA as an important, yet neglected area in this context. Parent firm executives can set elements of OA, especially formal OA (such as subsidiary autonomy and mandates), to realize their intentions.
Besides an introductory chapter, this thesis consists of four manuscripts that examine the influence of selected elements of formal OA on (a) a focal subsidiary's integration into the MNC's intrafirm network, (b) the extent to which its knowledge is successfully transferred to other subsidiaries, (c) the extent to which a focal subsidiary transfers knowledge to the parent firm, and (d) the extent to which it creates competence that can be leveraged internationally. Three of these manuscripts test their theoretical predictions empirically by applying both regression analyses and structural equation modeling (SEM) to a sample of 287 subsidiaries. The results strongly support the arguments of this thesis.
Overall, this dissertation suggests that MNCs can realize the competitive advantages from multinationality when an appropriate OA is implemented. Further, by setting the OA appropriately, MNCs should be able to realize several of these advantages simultaneously. These insights do not only help close important gaps in our theoretical understanding. Rather, they can also yield beneficial advice to management practice because so far, many MNCs struggle with realizing these advantages.
Language
English
Keywords
Organizational Architecture
Multinational Corporation
Subsidiary
Integration
Knowledge Transfer
Competence Creation
Strategic Autonomy
Operational Autonomy
HSG Classification
contribution to scientific community
Refereed
No
Publisher
Difo-Druck
Publisher place
Bamberg
Number
4100
Start page
187
Subject(s)
Division(s)
Eprints ID
221072