Boundary Capabilities in MNCs: Knowledge Transformation for Creative Solution Development

• Published date: 01 June 2017
• DOI: http://doi.org/10.1111/joms.12253
• Date: 01 June 2017

Boundary Capabilities in MNCs: Knowledge

Transformation for Creative Solution Development

Esther Tippmann, Pamela Sharkey Scott and

Andrew Parker

University College Dublin; Maynooth University-National University of Ireland Maynooth; University of

Exeter Business School

ABSTRACT The management of knowledge across country units is critical to multinational

corporations (MNCs). Building on the argument that boundary spanning leads to the

development of creative problem solving outcomes, this study advances the concept of MNC

knowledge transformation and examines its relationship with solution creativity. Using

questionnaire data on 67 problem solving projects, we find that opportunity formation is an

underlying mechanism linking MNC knowledge transformation to the development of creative

solutions. These insights contribute to our understanding of boundary spanning in global

organizations by substantiating MNC knowledge transformation and elaborating the

relationship between boundary spanning and creative solution development. If successful at

knowledge transformation, collaborators from across the MNC can construct previously

unimagined opportunities for the generation of creative outcomes.

Keywords: boundary spanning, knowledge transformation, MNE/MNC management,

opportunity formation, problem solving, subsidiaries

INTRODUCTION

For multinational corporations (MNCs), competitive advantage rests on utilising their

most valuable resource, the diverse knowledge located in dispersed headquarters and

subsidiaries to generate creative and innovative outcomes (Bartlett and Ghoshal, 1989;

Doz et al., 2001; Kogut and Zander, 1993). The challenge for MNCs, however, is

unlocking this diverse knowledge, as the underlying specializations and context sensitiv-

ities make it difficult to apply this knowledge in new ways when collaborating across the

organization (Mudambi, 2011). To generate creative or innovative outcomes in this

complex setting, collaborators from MNC units located in different countries need to

Address for reprints: Esther Tippmann, Assistant Professor, Department of Management, University College

Dublin, Michael Smurfit Graduate Business School, Dublin, Ireland (esther.tippmann@ucd.ie).

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C2016 John Wiley & Sons Ltd and Society for the Advancement of Management Studies

Journal of Management Studies 54:4 June 2017

doi: 10.1111/joms.12253

find ways to draw on and interlink their diverse knowledge. The ability of collaborators

to span the boundaries that separate their diverse knowledge is critical.

To date, explorations of the challenges of managing knowledge in MNCs have largely

investigated the pattern of knowledge flows (e.g., Gupta and Govindarajan, 2000; van

Wijk et al., 2008), or the search activities of locating and accessing dispersed knowledge

(Parker and Tippmann, 2016; Tippmann et al., 2014). In addition, work on innovation

within the MNC recognizes the value of utilizing diverse knowledge across country units

(Berry, 2014; Mors, 2010; Mudambi et al., 2007). Yet, the implicit boundary spanning

work (Schotter et al., 2017), in particular the action and interaction required to success-

fully deal with diverse knowledge, is not sufficiently theorized. Similarly, research con-

cerned with boundary spanning in the MNC context has thus far focused on the role

and skills of individual boundary spanners (Barner-Rasmussen et al., 2014; Schotter and

Beamish, 2011) in connecting different knowledge pockets, and on the role of commun-

ities of practice in the access and dissemination of tacit knowledge (Tallman and Chacar,

2011). Despite this progress, there remains a gap in our understanding of the boundary

spanning behaviours of individuals when working together as a group across geographi-

cally distributed MNC units. Little is known about how collaborators from across sub-

sidiary and headquarters units collectively mobilize their unique and specialized

knowledge to achieve boundary spanning. In sum, there is a need to examine the micro-

social activities of collaborators from different geographically dispersed locations as they

seek to apply their knowledge in new and useful ways and the specific mechanisms that

govern the impact of these boundary spanning efforts on the generation of creative or

innovative outcomes.

To address this gap, we draw on seminal work by organization scholars, who have

explored more deeply the micro-social interactions of collaborators with diverse knowl-

edge backgrounds in the context of innovation projects (e.g., Carlile, 2002, 2004;

Dougherty, 1992). This work suggests that boundary spanning is at the heart of the gen-

eration of innovative and creative outcomes during problem solving. However, transfer-

ring knowledge in the sense of ‘simple’ processing of information, or even translating

knowledge in the sense of developing a common meaning to overcome interpretive dif-

ferences between contexts is insufficient for solving non-routine problems. Instead,

knowledge transformation is required, that is a systematic approach by individuals to

utilize, learn from and synthesize knowledge at boundaries (Carlile, 2004; Carlile and

Rebentisch, 2003). This necessitates active and deep engagement to modify common

and individual domain-specific knowledge to effectively share and synthesize knowledge

at the boundary. If collaborators succeed in this demanding task and exhibit a capacity

and ability to act and interact in a manner which iteratively and repeatedly transfers,

translates and transforms knowledge, then a boundary capability is developed (Carlile,

2004). Such a boundary capability enables effective utilization of a firm’s diverse knowl-

edge for the generation of creative and innovative outcomes.

Following this, we propose the concept of MNC knowledge transformation as one under-

pinning of a boundary capability in the MNC, capturing the behavioural aspects of col-

laborators’ actions and interactions in applying diverse knowledge across subsidiary and

headquarters units in situations where innovative or creative outcomes are desired.

Combining arguments from problem solving theory (Baer et al., 2013; Nickerson et al.,

456 E. Tippmann et al.

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C2016 John Wiley & Sons Ltd and Society for the Advancement of Management Studies