Managing valuable knowledge in weak IP protection countries

Abstract

Although knowledge assets provide multinational corporations (MNCs) with competitive advantages in foreign markets, it can be difficult for firms to protect their knowledge in foreign countries – especially countries with weak intellectual property (IP) protection. Building on and extending the knowledge management, institutional theory and expatriate literatures, this article explores whether home country expatriates can substitute for weak IP protection and drive an increase in more and more valuable knowledge transfers to foreign operations located in weak IP protection countries. Because of their ties to headquarters, knowledge of parent firm assets, priorities and routines, and activities in local operations, I argue that home country expatriates can transform the local operation to offer higher protection for parent firm knowledge in weak IP countries in ways that local managers cannot. The results from a comprehensive panel of US multinationals suggest that home country expatriates can substitute for weak IP protection, but that this effect is contingent on the manufacturing and knowledge capabilities of foreign operations for higher value parent firm knowledge transfers. Overall, this article extends our understanding of the global management and protection of knowledge by MNCs by exploring how organizational practices can buffer country-level institutional deficiencies for firm knowledge.

Résumé

Même si le capital des connaissances fournit aux entreprises multinationales des avantages concurrentiels sur les marchés étrangers, il peut être difficile pour les entreprises de protéger leurs savoirs dans les pays étrangers – en particulier dans les pays offrant une faible protection concernant la propriété intellectuelle (PI). Reprenant et prolongeant les littératures sur la gestion des connaissances, la théorie institutionnelle et les expatriés, cet article étudie si les expatriés du pays d’origine peuvent se substituer à la faible protection de la propriété intellectuelle et conduire à une augmentation des transferts de connaissances de plus grande valeur pour les opérations situées dans des pays à faible protection de la PI. En raison de leurs liens avec le siège, le capital des connaissances de la maison mère, des priorités et routines, et des activités relatives aux opérations locales, j’argumente que les expatriés du pays d’origine peuvent transformer l’opération locale pour offrir une meilleure protection des connaissances de la maison mère dans les pays à faible protection de la PI, et ce d’une façon que les dirigeants locaux ne peuvent pas faire. Les résultats d’un vaste panel de multinationales américaines suggèrent que les expatriés du pays d’origine peuvent se substituer à la faible protection de la propriété intellectuelle, mais que cet effet dépend des capacités de production et de connaissances des opérations à l’étranger pour des transferts de connaissances de la maison mère à plus forte valeur. Dans l’ensemble, cet article élargit notre compréhension de la gestion globale et de la protection des connaissances par les multinationales en explorant comment les pratiques organisationnelles peuvent limiter les effets des déficiences institutionnelles d’un pays concernant les connaissances des firmes.

Resumen

Aunque los activos de conocimiento dan a las empresas multinacionales ventajas competitivas en mercados extranjeros, puede ser difícil para las empresas proteger su conocimiento en países extranjeros – especialmente en países con una débil protección de la propiedad intelectual (IP). Sobre la base y extendiendo las literaturas de gestión del conocimiento, teoría institucional y expatriados, este artículo explora si los expatriados en el país de origen pueden sustituir la debilidad de la protección de la propiedad intelectual e impulsar un aumento en más y más transferencias valiosas de conocimiento a las operaciones extranjeras ubicadas en países con débil protección de la propiedad intelectual. Debido a sus vínculos con la casa matriz, el conocimiento de los activos de la empresa, las prioridades y rutinas, y las actividades de las operaciones locales, sostengo que los expatriados en el país de origen pueden transformar las operaciones locales para ofrecer mejor protección para el conocimiento de la casa matriz en países con propiedad intelectual débil en maneras que los gerentes locales no pueden. Los resultados de un amplio panel de multinacionales estadounidenses sugieren que los expatriados en el país de origen pueden sustituir la debilidad de la protección de propiedad intelectual, pero que este efecto es contingente de las capacidades de manufactura y conocimiento de las operaciones extranjeras para transferencias de conocimiento de mayor valor para la empresa matriz. En general, este artículo extiende nuestro entendimiento de la gestión global y la protección de conocimiento por parte de las multinacionales mediante la exploración de cómo las prácticas organizacionales pueden amortiguar las deficiencias institucionales a nivel país para el conocimiento de la empresa.

Resumo

Embora os ativos de conhecimento ofereçam às empresas multinacionais vantagens competitivas em mercados estrangeiros, pode ser difícil para as empresas protegerem seus conhecimentos em tais países - especialmente em países onde a proteção à propriedade intelectual (IP) é fraca. Baseando-se e estendendo as literaturas sobre gestão do conhecimento, teoria institucional e expatriados, este artigo explora se os expatriados do país de origem podem substituir a fraca proteção à IP e impulsionar um aumento na quantidade e no valor das transferências de conhecimento para operações no exterior localizadas em países em que é fraca a proteção da IP. Por causa de seus vínculos com a matriz, de seu conhecimento dos ativos, prioridades e rotinas da empresa controladora, e das atividades nas operações locais, eu argumento que os expatriados do país de origem podem transformar a operação local para oferecer maior proteção aos conhecimentos da empresa controladora em países de fraca IP de formas que os gerentes não podem. Os resultados de um painel abrangente de multinacionais norte-americanas sugerem que os expatriados do país de origem podem substituir a fraca proteção da PI, mas que esse efeito depende das capacidades de fabricação e conhecimento das operações no exterior para transferências de conhecimento de maior valor da empresa controladora. No geral, este artigo estende a nossa compreensão sobre gestão global e proteção do conhecimento por empresas multinacionais ao explorar como as práticas organizacionais podem amortecer deficiências institucionais a nível de país para o conhecimento da empresa.

概要

虽然知识资产在外国市场为跨国公司提供竞争优势,公司在外国可能难以保护它们的知识 —尤其是在对知识产权(IP)保护薄弱的国家。建立于并拓展知识管理、制度理论及外派文献,本文探讨了本国的外派人员是否可以在薄弱的IP保护国家里替代薄弱的知识产权保护,并推动对海外运营有更多价值的知识转移的增长。因为他们与总部的关系,有关母公司资产、优先事项和程序以及当地运营活动的知识,我认为本国外派人员可以改良当地运营,在薄弱的IP国家以当地经理人不能办到的方式为母公司知识给予更高的保护。来自美国跨国公司的一个综合专家组的调查结果表明,母国的外派人员可以替代薄弱的知识产权保护,但效果由为母公司更高价值知识转移的海外运营的制造和知识能力而定。总之,本文通过对组织实践如何能缓冲国家层面公司知识制度不健全的探讨,拓展了我们对跨国公司全球知识管理和保护的理解。

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Acknowledgements

The statistical analysis of firm level data on US multinational companies was conducted at the BEA US Department of Commerce under arrangements that maintain legal confidentiality requirements. Views expressed in this article do not reflect those of the BEA or the Department of Commerce. I thank three anonymous reviewers for their comments and suggestions. I also appreciate helpful comments from Raymond Mataloni and William Zeile on the BEA data. I am grateful to participants at the Academy of Management and Academy of International Business conferences for feedback on earlier versions of this article. Finally, I thank and acknowledge Mack Institute for Innovation funding for access to the Derwent Patent Database Index.

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Correspondence to Heather Berry.

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Accepted by Paula Caligiuri, Area Editor, on 24 January 2017. This article has been with the author for four revisions.

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Berry, H. Managing valuable knowledge in weak IP protection countries. J Int Bus Stud 48, 787–807 (2017). https://doi.org/10.1057/s41267-017-0072-1

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Keywords

  • knowledge transfer
  • multinational corporations (MNCs) and enterprises (MNEs)
  • intellectual property protection
  • innovation
  • patents
  • knowledge value