Internal Knowledge Sharing Challenges within Western MNE R&D centers in China

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Abstract

Today, most western multinational enterprises (MNEs) have a presence in China, and many of them go beyond simple production and sales activities, but involve knowledge-seeking and knowledge-generating activities in the form of R&D and innovation centers (Dunning, 1988; Pearce, 2012). Despite weak enforcement of intellectual property rights (IPR), it became essential for western MNEs to utilize Chinese resources and to conduct R&D activities in China to be successful in the local market. Over time, foreign subsidiaries co-evolve with their local environment and have additionally invested a large number of resources to build up their R&D activities and extend their local mandate to have a global responsibility for certain products or complete industries (Volberda and Lewin, 2003; Sun, Von Zedtwitz and Fred Simon, 2007; Walsh, 2007; Haakonsson, Jensen and Mudambi, 2013). Thus, knowledge management such as knowledge dissemination activities internally within foreign subsidiaries and between foreign subsidiaries and headquarters are essential to facilitate global operations of MNE R&D activities and develop R&D activities abroad (Teigland, Fey and Birkinshaw, 2000). Previous research has focused on analyzing intra-MNC knowledge transfer and flows (Gupta and Govindarajan, 2000; Foss and Pedersen, 2002; Minbaeva, 2005) and knowledge sharing in relation to culture (Xiong and Deng, 2008; Rivera-Vazquez, Ortiz-Fournier and Flores, 2009) and knowledge sharing barriers in multinational organizations (Teagarden, Meyer and Jones, 2008; Mäkelä, Andersson and Seppälä, 2012; Haas and Cummings, 2015). Drawing on co-evolutionary perspective and knowledge-based perspective, this article investigates knowledge sharing challenges in two foreign R&D subsidiaries in China with different time of experience on the Chinese market. The first company is a leading Scandinavian biotechnology MNE with around 100 R&D employees and 20 years of experience within R&D in China. The subsidiary is categorized with a global mandate with project responsibilities divided between 60% of global projects with team members from different countries and 40% of local projects with teams consisting mostly of local employees. One specific industry within the entire MNE has relocated its global competence center from headquarter to China. With a single exception, both management and staff are Chinese nationals employed in China. The second company is a leading German automotive MNE with around 500 R&D employees, and 10 years of experience within R&D in China. The subsidiary is categorized with a local mandate and project responsibilities completely focused on the local market with future aspirations to contribute to other markets in the near future. Most managerial positions are occupied my German expats, while most staff positions are filled by locals. Data has been collected in a four months research stay with each company in 2016. In this period 72 interviews were conducted equally with managers and staff. In accordance with the co-evolutionary perspective, the current work in process findings indicate the following: The automotive MNE has more knowledge sharing challenges caused by language differences, cultural mindset and joint work process alignment. The biotechnology MNE has more knowledge sharing challenges caused by joint database access, locating documents and experts across the MNE. Overall, the biotechnology MNE has less knowledge sharing challenges and the employees themselves can resolve the challenges by themselves, while the management involvement may be necessary more frequently in the automotive MNE. The paper contributes theoretically to the co-evolutionary perspective with supportive cases that indicate decreasing knowledge sharing challenges in foreign R&D subsidiaries over time. Practically, the case studies can provide implications to executives for cross-border knowledge sharing practices.
Original languageEnglish
Publication date1 Jun 2018
Publication statusPublished - 1 Jun 2018
Event7th Aalborg Conference on International Business: The Rise of New Approaches to Internationalization: Strategic and Managerial Implications - Comwell Conference Center, Aalborg, Denmark
Duration: 30 May 20182 Jun 2018
Conference number: 7th

Conference

Conference7th Aalborg Conference on International Business
Number7th
LocationComwell Conference Center
CountryDenmark
CityAalborg
Period30/05/201802/06/2018

Keywords

  • China
  • Knowledge sharing
  • Mandate
  • Multinational companies
  • R&D
  • Subsidiary

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    Schulzmann, D., & Slepniov, D. (2018). Internal Knowledge Sharing Challenges within Western MNE R&D centers in China. Abstract from 7th Aalborg Conference on International Business, Aalborg, Denmark.