Governing Entrepreneurial Opportunity Recognition in MNEs: Aligning Interests and Cognition Under Uncertainty

Abstract

Entrepreneurial activities contribute to the innovativeness and performance of subsidiaries and their parent multinational enterprises (MNEs). Though a strong multinational presence can spur the discovery and exploitation of entrepreneurial opportunities, it also creates uncertainty that complicates the alignment of cognition and interest in the governance of MNEs' multi-level entrepreneurial activities. We integrate economic and behavioural approaches to identify communicative, behavioural, and value uncertainties encountered in the MNEs' opportunity recognition phase. In addition, we discuss key contingencies that influence solutions to these uncertainties through delegation of authority, provision of incentives, promotion rules, and use of clan structures.