Internal Embeddedness, Headquarters Involvement, and Innovation Importance in Multinational Enterprises

Internal Embeddedness, Headquarters Involvement, and Innovation Importance in Multinational... abstract In this paper we apply a business network perspective to investigate the effects of internal embeddedness and headquarters involvement on subsidiaries' innovation‐related competencies, and on the perceived importance of innovation in multinational enterprises. A model framed in the innovation context is developed and six hypotheses are tested on 85 innovation projects in 23 multinational enterprises using partial least squares based structural equation modelling. The results suggest that, contrary to predictions of the business network perspective, headquarters involvement in the innovation development process improves subsidiary competencies while internal embeddedness does not. Headquarters involvement, driven by subsidiary internal embeddedness, enhances the innovation impact on the subsidiary, which in turn influences innovation importance at corporate level. Thus, the business network perspective is challenged but at the same time expanded in terms of highlighting the role of, and interplay between, different internal corporate actors, particularly the role of headquarters, in developing competencies and creating competitive advantage. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Management Studies Wiley

Internal Embeddedness, Headquarters Involvement, and Innovation Importance in Multinational Enterprises

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Publisher
Wiley
Copyright
© 2011 The Authors. Journal of Management Studies © 2011 Blackwell Publishing Ltd and Society for the Advancement of Management Studies
ISSN
0022-2380
eISSN
1467-6486
DOI
10.1111/j.1467-6486.2011.01014.x
Publisher site
See Article on Publisher Site

Abstract

abstract In this paper we apply a business network perspective to investigate the effects of internal embeddedness and headquarters involvement on subsidiaries' innovation‐related competencies, and on the perceived importance of innovation in multinational enterprises. A model framed in the innovation context is developed and six hypotheses are tested on 85 innovation projects in 23 multinational enterprises using partial least squares based structural equation modelling. The results suggest that, contrary to predictions of the business network perspective, headquarters involvement in the innovation development process improves subsidiary competencies while internal embeddedness does not. Headquarters involvement, driven by subsidiary internal embeddedness, enhances the innovation impact on the subsidiary, which in turn influences innovation importance at corporate level. Thus, the business network perspective is challenged but at the same time expanded in terms of highlighting the role of, and interplay between, different internal corporate actors, particularly the role of headquarters, in developing competencies and creating competitive advantage.

Journal

Journal of Management StudiesWiley

Published: Nov 1, 2011

References

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