The role of dual embeddedness and organizational learning in subsidiary development

Ming Pu () and Pek-Hooi Soh ()
Additional contact information
Ming Pu: Harbin University of Science and Technology
Pek-Hooi Soh: Simon Fraser University

Asia Pacific Journal of Management, 2018, vol. 35, issue 2, No 4, 373-397

Abstract: Abstract We investigate how subsidiaries exploit the knowledge flows embedded in internal and external networks and support their development in terms of scope (breadth of functional operations) and competence (ability to perform specific activities). We argue that individual subsidiaries have different organizational learning processes, which would influence the way subsidiaries evolve and manage multiple sources of knowledge and adapt their knowledge structure and routines systematically for subsidiary-wide development. Our analysis of 81 foreign-owned subsidiaries in China shows that subsidiary competence is enhanced by the knowledge arising from MNC networks whereas subsidiary scope depends on the knowledge embedded in the host environments. Moreover, organizational learning affects the way knowledge adapted from internal embeddedness but not external embeddedness. These findings imply that foreign subsidiaries must effectively cope with increased flows of distant knowledge within MNC networks while maintaining their location-specific advantage. The different outcomes of subsidiary development add a nuanced understanding of the relationship between dual embeddedness and subsidiary development.

Keywords: MNC network; Internal embeddedness; External embeddedness; Organizational learning; Subsidiary development (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://link.springer.com/10.1007/s10490-017-9513-4 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:asiapa:v:35:y:2018:i:2:d:10.1007_s10490-017-9513-4

Ordering information: This journal article can be ordered from
http://www.springer. ... 29/journal/10490/PS2

DOI: 10.1007/s10490-017-9513-4

Access Statistics for this article

Asia Pacific Journal of Management is currently edited by Jane Lu

More articles in Asia Pacific Journal of Management from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().