The Multilayered Acculturation Challenge of MNCs’ Subsidiaries in Strategic Alliances: Threat or Opportunity for Innovation?
Paper presented at the 2016 Strategic Management Society (SMS) Conference – Berlin (Germany), September 17–20
43 Pages Posted: 5 Feb 2018
Date Written: September 17, 2016
The alliance literature has widely highlighted the negative impact of cultural diversity between allied organizations on their innovative performance. We propose that this issue is even more challenging when considering subsidiaries of Multinational Companies (MNC), as they already embody a dual background, i.e. the culture of both their host and home country. We also advance that the effect of cultural diversity is dependent on the specific content of the alliance, distinguishing between explorative and exploitative collaborations. Our findings confirm that allying with partners culturally diverse from both the host and home country makes the subsidiary less innovative. However, when alliances concern exploration activities, the challenges of cultural diversity are counterbalanced by the benefits of being exposed to novel knowledge and cognitive schemes.
Keywords: Cultural Diversity, Cross-Border Alliances, MNC Subsidiaries, Dual Cultural Background, Innovation, Exploration and Exploitation
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