Global Innovation in MNCs: The Effects of Subsidiary Self-Determination and Teamwork

Authors


  • *The authors would like to thank seminar participants at the Copenhagen Business School, Janine Black, Sjoerd Beugelsdijk, Nicolai Foss, Vikas Kumar, Jacqueline Pennings, Junfeng Zhang, three anonymous referees, and the special issue editors for their helpful comments on earlier versions of this manuscript.

Address correspondence to: Susan M. Mudambi, Temple University, Department of Marketing, Speakman Hall, Fox School of Business and Management, Philadelphia PA 19122. Tel.: (215) 204-3561. Fax: (215) 204-6237. E-mail: susan.mudambi@temple.edu.

Abstract

The ability of multinational corporations (MNCs) to leverage their innovation competencies across globally dispersed subsidiaries is an increasingly valuable source of competitive advantage. As multinational enterprises turn to foreign subsidiaries for research and development (R&D) and product development, questions arise regarding the most effective organizational structures for global innovation. Although organizational conditions that satisfy the needs for self-determination and teamwork have long been considered intrinsic motivators, past research has not analyzed the consequences of intrinsic motivators on global innovation. The basic research question is this: In globally dispersed subsidiary R&D units, what organizational conditions and motivators are associated with the highest knowledge output? A sample of 275 globally dispersed R&D subsidiaries were studied from 1995 to 2002. Data were collected from a postal survey, field and telephone interviews, and secondary sources. Subsidiary self-determination and teamwork were found to have a significant effect on knowledge output, as objectively measured by patent citations. Subsidiary self-determination on inputs such as sourcing and hiring, and self-determination on outputs such as marketing and product development, emerged as positive determinants of knowledge generation in R&D subsidiaries. In addition, interteam cooperation and intrateam cooperation were significant determinants of knowledge generation by subsidiaries. These findings highlight the importance of self-determination, teamwork, and cooperation to knowledge creation and innovations. Managers face the tough challenge of how to motivate globally dispersed knowledge workers to conduct research that will generate knowledge and will strengthen firm performance. The results provide theoretical and practical insights on how MNCs can leverage their innovation competencies across foreign R&D subsidiaries.

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