Knowledge and Strategy Creation in Multinational Companies: Social-Identity Frames and Temporary Tension in Knowledge Combination

• Published in: Management international review Vol. 51; no. 6; pp. 821 - 850
• Main Authors: Regnér, Patrick, Zander, Udo
• Format: Journal Article
• Language: English
• Published: Wiesbaden Gabler Verlag 01.12.2011; SP Gabler Verlag
• Subjects: Book publishing; Business and Management; Business innovation; Business planning; Business plans; Business Strategy/Leadership; Business structures; Competitive advantage; Corporate centripetal frame; Corporate strategies; Decision-making; Emerging Markets/Globalization; Entrepreneurship; Environmental law; Focused Issue: 50 Years of MIR; International business; International economics; Knowledge; Knowledge management; Knowledge transfer; Management research; Management science; Multiculturalism; Multinational corporations; Multinational enterprises; Mutual fund industry; Normativity; Operations Management; Organization; Semiconductor industry; Social identity; Social interaction; Strategic management; Subsidiary companies; United Kingdom; Sweden; Social identity frames; Strategy; Multinational companies; Knowledge creation
• ISSN: 0938-8249; 1861-8901
• DOI: 10.1007/s11575-011-0110-3

While a great deal of research on international business and management has fruitfully focused on knowledge transfer, this paper investigates knowledge creation; the process by which multinational companies (MNCs) continuously combine and recombine knowledge in order to generate a competitive advantage. By integrating contemporary strategic management research into the field of international business, we have developed a new perspective on strategy and knowledge creation in MNCs, by elaborating on and extending the knowledge-based view and other views of MNC strategy making. We suggest that the agglomeration of a multitude of diverse social-identity frames, nested inside a corporate centripetal frame, creates an arena in which exploitable new knowledge can be created. We propose that while a common corporate social-identity frame promotes knowledge transfer, the diversity of various subgroups' social-identity frames, in combination with interaction and temporary tension between them, advances knowledge creation. Although this partly involves a serendipitous process, it promotes a systemic advantage for MNCs compared to local firms, as regards knowledge exploration, (re-) combination, and integration. This competitive advantage is firmly rooted in hard-to-imitate complex social processes and may therefore be sustainable.