Organizational Identity and Knowledge Sourcing of Overseas R&D Subsidiaries

Abstract

This dissertation aims to examine the impact of organizational identity of multinational corporations overseas R&D subsidiaries on knowledge related behaviors and consequences of those subsidiaries. Drawing upon social identity theory and capability/ knowledge-based view of the firm, I focused on the complex context of an overseas R&D subsidiary and its effects on knowledge sourcing of the subsidiary. As a local entity of the multinational corporation located in the host country, a foreign subsidiary can identify itself simultaneously with more than one target: A subsidiary is capable of identifying both with the parent organization, the multinational corporation, and with the local community in the host country. Also, a subsidiary can identify itself with the global community. These complex psychological attachments of a subsidiary can change its attitudes and behaviors to enhance its self-esteem or to reduce uncertainty. By combining literatures on organizational identification and knowledge related behaviors of multinational corporations, I addressed the question how does organizational identity or organizational identification of an overseas R&D subsidiary within the complex context affect its attitudes and behaviors related to knowledge sourcing and innovation? In the first empirical research of this essay(Study I), I investigated the effect of relative magnitude of a R&D subsidiarys dual organizational identification on its knowledge sourcing from the host country. I hypothesized that organizational antecedents of organizational distinctiveness, organizational prestige, inter-organizational cooperation, tenure and recent participation of membership are related to knowledge sourcing direction as the organizational consequences. Based on social identity theory and self-categorization theory, I expected that an overseas R&D subsidiary is more likely to source knowledge from the host country when it is more autonomous

when it has clear mission as local innovator

when it is more prestigious than the parent organization (MNC)

when it is less deeply embedded in the relationship with the MNC

when it is more deeply embedded in the relationship with the local community

when it spends more time in the host country

and when it was acquired by the MNC. To test these hypotheses, I used data of overseas R&D laboratories of Japanese multinational corporations. Using combinative data with the extensive survey and patent data from the U.S. patent database, the statistical analysis with generalized linear modeling shows that most of hypotheses of Study I were supported by empirical findings. In the second part of this dissertation (Study II), I firstly demonstrate the applicability of the global identity construct to knowledge sourcing of overseas R&D subsidiaries. Drawing upon social identity theory, social psychology and knowledge based view of the firm, I examined the impact of organizational identification of multinational corporations overseas R&D subsidiaries on their global knowledge sourcing

knowledge sourcing from other countries (neither home nor host country). Within complex identity and knowledge context, an overseas R&D subsidiary can identify itself with its multinational corporation, with the local community in the host country and with the global community. To enhance its self-esteem or to reduce uncertainty, an overseas R&D subsidiary with global identity can change its attitudes and behaviors to specific knowledge sources for identity congruence. Based on social identity theory, I expected that an overseas R&D subsidiary is more likely to source knowledge from other countries (global knowledge sourcing) when it has clear mission as global innovator

when it is more autonomous

and when it is more deeply embedded in the relationship with the global community. Furthermore, I also hypothesized that technological capability of an overseas R&D subsidiary can positively moderate the relationship between mission/ autonomy/ global embeddedness and global knowledge sourcing. To test these hypotheses empirically, I used data of overseas R&D laboratories of Japanese multinational corporations by combining data from the survey responses and patent data from the U.S. patent database. The results of statistical analysis with negative binomial regression model show that autonomy and global embeddedness of an overseas R&D subsidiary have positive impacts on its global knowledge sourcing and that its technological capability strengthens the relationship between its autonomy and global knowledge sourcing. The degree of globalization of R&D by multinational corporations has increased since 1990s and the role of overseas R&D laboratories has evolved. By advancing the understanding related to these important phenomena with social identity lens, this dissertation aims to offer both theoretical arguments and practical implications. Based on two empirical studies, this essay suggests new explanations about motivational factors of knowledge related behaviors by integrating organizational behavior researches on social identity theory and knowledge related researches on international business and strategy of multinational corporations.