Headquarter and Subsidiaries: Analyzing a Social Media Platform Within MNCs

Abstract

Knowledge sharing and knowledge transfer within the corporation form an important source of knowledge capital within multinational corporations (MNCs). With the development of social media technologies, more and more MNCs are adopting knowledge sharing platform to facilitate the knowledge sharing and knowledge transfer in their global network, and break the knowledge silo across geographical boundaries. The adoption of this new technology is expected to improve MNCs’ competitive advantage by reducing manufacturing cost, improving employee performance, facilitating product development and localization, and advancing innovation.

In this research, we employ a unique dataset from a social media knowledge sharing platform within a leading multinational manufacturing company headquartered in Europe. We estimate a Hidden Markov Model (HMM) that explicitly allows employee latent engagement to drive employee knowledge sharing decisions on this social media platform, and examine the dynamics of knowledge flow between corporate headquarter and subsidiaries). We illustrate that by contributing more answers and high quality answers on the platform, receiving unit members can improve peers’ engagement towards them, and obtain higher knowledge benefit in the long run. In addition, while social media platform is employed to break the knowledge silo, our results suggest that colocation has a positive impact on knowledge sharing, thus lead to formation of knowledge silo along the boundary between headquarter and subsidiary units. However, engagement and knowledge sharing towards receiving unit can moderate the colocation effect thus break the knowledge silos. Our results provide important managerial implications for implementation of future knowledge sharing platforms.