THE DILEMMA OF CENTRES OF EXCELLENCE - CONTEXTUAL CREATION OF KNOWLEDGE VERSUS GLOBAL TRANSFER OF KNOWLEDGE

Ulf Holm and Torben Pedersen
Additional contact information
Ulf Holm: Uppsala University, Postal: Department of Business Studies , Uppsala University and, Institute of International Business, Stockholm School of Economics, Sweden
Torben Pedersen: Department of International Economics and Management, Copenhagen Business School, Postal: Department of International Economics and Management, Copenhagen Business School, Howitzvej 60, 2nd floor , DK-2200 Copenhagen N, Denmark

No 8-2000, Working Papers from Copenhagen Business School, Department of International Economics and Management

Abstract: A common understanding in recent literature on the development of multinational corporations (MNCs) and headquarters-subsidiary relations is that some subsidiaries will have, or ought to have, a strategic role in the global organization that reaches beyond their local undertakings. This notion implies that MNC competitive advantage depends on the ability of several corporate units to assimilate and make use of knowledge created in other business contexts than their own. Hence, an MNC subsidiary must adapt and commit to the local environment in order to survive in the market competition. On the other hand, corporate sister units’ usage of subsidiary knowledge implies that the subsidiary also must adapt and commit within the corporate environment. The dilemma here lies in the extent to which the subsidiary’s external market environment and its corporate environment are separated (or integrated) systems in terms of connections between resources and activities and knowledge development. In this paper, we will reveal empirical findings from an international project on the occurrence of strategic subsidiaries - denoted Centres of Excellence (CoE) - in MNCs. We also investigate if CoEs play an influential role over corporate decisions on investments. Our investigation reflects the extent to which the subsidiary competencies are of context-specific nature or if they affect other parts of the MNC. The paper also discusses and presents case-examples of how the subsidiary can retain its uniqueness and sustain as a CoE even if it continues to transfer knowledge to other parts of the MNC.

Keywords: Multinational corporations; subsidiaries; Globalization; Competitive advantage; Knowledge creation; Corporate strategy; Foreign investments; Corporate culture (search for similar items in EconPapers)
Pages: 23 pages
Date: 2000-06-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://openarchive.cbs.dk/cbsweb/handle/10398/6584 (application/pdf)

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:hhb:cbsint:2000-008

Access Statistics for this paper

More papers in Working Papers from Copenhagen Business School, Department of International Economics and Management Department of International Economics and Management, Copenhagen Business School, Howitzvej 60, DK-2000 Frederiksberg, Denmark. Contact information at EDIRC.
Bibliographic data for series maintained by Lars Nondal ().