Global Competitive Environment Has Forced More And More Multinational Corporations ( Mncs )

Decent Essays
Since the mid-1980s, the changing global competitive environment have forced more and more multinational corporations (MNCs) to development worldwide learning as their competitive viability, which requires to create worldwide innovative processes and knowledge transfer (Bartlett and Ghoshal, 1989). Knowledge from a subsidiary could be transferred to both parent company and peer subsidiaries, helping MNCs realize worldwide learning (Miao, Choe and Song, 2011). Knowledge flow from a subsidiary to parent firm could be considered as a critical condition to facilitate “local-for-center” innovation processes (Bartlett and Ghoshal, 1989, cited by Miao, Choe and Song, 2011). Traditionally, MNEs develop innovative capabilities by two classic processes, including “center-for-global” and “local for local” innovation model. Specifically, utilize the centralized resources and capabilities of parent company to create new products and operations and then implement these to subsidiaries, which could be defined as the central innovation process. By contrast, in the local innovation process, based on the local customers’ needs and market environment, subsidiaries development new products by their own resources and capabilities (Bartlett and Beamish, 2014). Based on different strategic roles and organizational specifics, the knowledge transfer includes two types, which are vertical and horizontal way. Horizontal knowledge flows in the multinational enterprise are generally adopted
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