Exam 5: Creating Worldwide Innovation and Learning: Exploiting Cross Border Knowledge Management

Frank is director of technology in an MNE in which most of the R&D activities are performed in the parent company's home country, but then, foreign subsidiaries are responsible for introducing the resulting innovations to their local customers. The innovation process adopted by Frank's MNE is:

What is the primary advantage of operating interdependent subsidiaries?

Local-for-Local innovative processes can be enhanced through integrating subsidiary functions across different levels. At which level are the control and conflict resolution tasks best concentrated?

Traditionally, MNEs developed innovation processes that were either very centralized (resulting in center-for-global innovation), or very decentralized (resulting in local-for-local innovation.) More recently, companies have developed two transnational innovation models. Describe the new models and the advantages they have over the older approaches to innovation.

Emerging strategic demands make organizational models based on interdependence the most appropriate form for headquarter-subsidiary relationships.

There is no one best way to manage innovation in MNEs. Please comment.

Which of the following management assumptions is most likely to support transnational innovation in MNEs?

Globally linked innovations involve processes designed to ensure that the special resources and capabilities of each subsidiary are globally available to other units of the organization.

The innovation process described as local-for-local implies the decentralization of R&D activities in multiple countries.

Vito is a consultant advising a major corporation. His client has requested assistance with improving the effectiveness of its innovation process. Vito noticed that the client's subsidiaries enjoy a high degree of independence. Vito suspects that there may be significant risks associated with this degree of independence. What are these risks and what are some alternatives that can be employed to mitigate these risks?

To make central innovation effective, the purpose of building multiple linkages between headquarters and subsidiaries is to exercise better control over those operations.

TechInnovation is a large MNE operating in an environment characterized by rapid changes. During the past 50 years, its subsidiaries have operated independently. Which of the following actions will be least helpful to increase the interdependence across its widely dispersed national organizations?

Linking local managers to corporate decision-making processes makes them more effective in managing local innovation.

Which of the following does not enhance the efficiency of a local-for-local innovation process?

Which of the following is not an appropriate coordination mechanism to be employed by a transnational corporation with worldwide activities?

Company X is operating in a fast-changing, knowledge-intensive industry. The most feasible structure for its innovative processes is therefore central-to-global because that allows for a high degree of corporate control.

The two main prerequisites for local innovation are the dispersal of organizational assets and resources and a concentration of authority.

A local-for-local approach to innovation is not compatible with cross-functional integration within national operations.

With responsibility for his company's largely centralized R&D activities, Frank worries that the center may not understand local market needs, while the subsidiaries may not be committed to innovations developed at the center. To respond to these concerns, Frank's priority should be to:

In transnational companies like Unilever, products, functions, and geographic regions are coordinated in a differentiated manner, accounting for the respective demands for integration and responsiveness.