Alternative control methods for exploiting subsidiary knowledge within an MNE: quantity versus quality

The aim of this paper is to expose the power of informal control mechanisms over explicit knowledge transfer through information communication technology (ICT) systems in subsidiaries of a multinational enterprise (MNE).

The research used a case study approach consistent with the purpose of exploring control/knowledge transfer relationships. Semi-structured interviews were undertaken with managers across 19 sites in an MNE. Analysed data were thematically organised into two case studies for comparison.

The results show that when control is exerted from bottom-up, knowledge transfer barriers are overcome, quality of outcomes is increased and new and incremental knowledge innovation is more likely to become organisational.

The findings signal a caution for managers to assess the suitability of control type on knowledge transfer incentives to leverage quality knowledge outcomes. By using informal methods, subsidiary managers’ local autonomy and power to resist centralised management objectives was positively moderated.

The paper exposes alternative control methods for exploiting subsidiary knowledge within an MNE. The research is unique in that it identifies a superior role for bottom-up social control to elicit explicit knowledge sharing behaviours through ICT where bureaucratic reward-based control had failed.