Ruby P. Lee, Qimei Chen, Daekwan Kim, and Jean L. Johnson
Executive Summary
A multinational corporation’s (MNC’s) competitive advantage depends increasingly on control over intangible resources, such as knowledge and relational capital. Although previous research has suggested that cross-border knowledge transfer in MNCs is critical to their new product outcomes, the conditions under which such knowledge transfer can serve to induce positive outcomes remain unclear. Lee, Chen, Kim, and Johnson draw on resource-based theory and its extension and suggest that knowledge and MNC network strength are the two critical firm resources individually and collectively influencing new product outcomes. Because MNCs are subject to pressures from various environmental changes, the authors rely on the contingency theory to examine the degree to which knowledge transfer works at differential levels of global market and technological turbulence.
To investigate their proposed model, the authors collected survey data from 139 MNCs whose headquarters are located in the United States. The results show that knowledge transfer affects new product outcomes positively, but such a relationship depends on both network strength among subsidiaries and global environmental turbulence. In contrast to their expectation, the authors find that high levels of network strength reduce the positive impact of knowledge transfer on new product outcomes, suggesting that high levels of network density can limit the space for entities in the network to develop new ideas and thus can impede successful new product outcomes.
The authors find that global market turbulence not only negatively affects new product outcomes but also weakens the positive effect of knowledge transfer on new product outcomes. Apparently, in a volatile global market environment, frequent changes in customer preferences could make new products obsolete faster, sometimes even before a firm can recuperate its new product development and introduction costs. In contrast, under high technological turbulence—that is, when technology is changing rapidly across firms within the same industry—intensive transfer of market knowledge between the headquarters and the subsidiaries helps the MNC develop successful new products. The results reveal that market knowledge transfer is more important and valuable when there are frequent technological changes and updates in the industry than when there are frequent changes in consumer preferences and market conditions.
Biography
Ruby P. Lee is Assistant Professor of Marketing in the College of Business at Florida State University. She holds a PhD from Washington State University, an MPhil from the Chinese University of Hong Kong, and a BSW (Honors) from the University of Hong Kong. Her current research interests include marketing strategy and metrics, new product development and introduction, knowledge management, interfirm relationships, and international marketing. In addition to Journal of International Marketing, she has recently published in Journal of Marketing, Journal of the Academy of Marketing Science, and Journal of Product Innovation Management.
Qimei Chen is Shidler College Distinguished Professor, Associate Professor of Marketing, and Chair of the Department of Marketing in the Shidler College of Business at the University of Hawaii at Manoa, and an advisory professor at Fudan University, Shanghai, China. She received her MA and PhD from the University of Minnesota, Twin Cities. Her research interests include online/offline consumer behavior, healthcare marketing, and innovation/knowledge. She has published in several journals, such as Journal of Advertising, Journal of Advertising Research, Journal of Retailing, and Journal of Product Innovation Management.
Daekwan Kim is Assistant Professor of International Business and Marketing in the College of Business at Florida State University. He received his PhD in Marketing and International Business from Michigan State University. His research interests include the impact of IT on firm marketing strategies and supply chain activities, international channel relationships, and multinational brand management. His research has appeared in numerous academic journals including Journal of Academy of Marketing Science, Journal of Business Research, Industrial Marketing Management, Journal of International Business Studies, and International Marketing Review, among others.
Jean L. Johnson is Gardner O. Hart Distinguished Professor of Marketing in the College of Business at Washington State University. Dr. Johnson teaches undergraduate and MBA courses on marketing strategy, business-to-business marketing, and distribution channels, and a doctoral seminar on marketing strategy. She has consulted on marketing strategy for several firms and branches of the Japanese government and has acted as an expert witness. Her research interests include marketing strategy and interfirm relationships—in particular, the strategic role of marketing interfirm relationships, capabilities and learning at the firm level, relationship development, and management between buyer and seller firms and in strategic alliances. Her research has appeared in Journal of Marketing, Journal of International Business Studies, Journal of the Academy of Marketing Science, and International Journal of Research in Marketing, among others.
Journal of International Marketing, Vol. 16, No. 2, June 2008
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