Strategic knowledge management in subsidiaries and MNC performance. The role of the relational context

Abstract

Purpose – Based on the knowledge-based theories of the MNC, this research aims to develop and test a holistic model to analyse the relationship between the strategic knowledge management (SKM) processes undertaken by subsidiaries and MNC performance. Additionally, it focuses on determining the impact that the relational context can have on knowledge creation and transfer inside the internal network of an MNC. Design/methodology/approach – The research hypotheses are tested by partial least squares (PLS) with data from a sample of Spanish subsidiaries of foreign multinational firms belonging to high-technology and knowledge-intensive sectors. Findings – The results confirm that: the implementation of a SKM by a subsidiary positively impacts on knowledge creation; the knowledge created by a subsidiary positively influences knowledge transfer, increasing the knowledge existing in the MNC; the knowledge transfer across all MNC units has a positive impact on MNC performance; the subsidiary’s relational context arises as a mediating variable between the knowledge created by a subsidiary and its transfer to the rest of the MNC. Originality/value – The research proposes a holistic model that contemplates the joint interaction of the variables knowledge creation, knowledge transfer and performance. In addition, the proposed model contemplates the variable SMK of the subsidiary as the beginning of the knowledge creation-knowledge transfer-performance process. Finally, the mediating role of the relational context in the relationship between knowledge creation and transfer is analysed.