Exploring Reverse Knowledge Transfer and Asset Augmentation Strategy by Developed Country MNEs:Case Study Evidence from the Indian Pharmaceutical Industry

Abstract

Using an in-depth qualitative longitudinal case study approach, we examine strategic asset and knowledge augmentation strategies of an advanced economy multinational enterprise (MNE). Our study is unique as it is contextualized in the knowledge-intensive pharmaceutical industry within the changing institutional landscape in India. And, in contrast to previous studies, it focuses on RKT from a newly acquired subsidiary where the protocol for knowledge transfer and relationship between MNE headquarters (HQ) and subsidiary does not exist. We contribute to the evolving literature on reverse knowledge transfer (RKT) which assumes that MNEs extract knowledge from their existing subsidiaries to strengthen their competitive advantages. We also reveal that MNEs design an architecture, that is reflected in the mechanism, governance structure, and timing, for efficient transfer and effective absorption of the knowledge and assets acquired. We introduce a novel concept of ‘reverse asset augmentation’ (RAA) to capture the MNE’s behavior of strategic asset seeking from emerging economies. RAA is parallel to and entwined with RKT conceptualization as knowledge is embedded within certain physical assets, other assets, such as brand name/image, may not embody knowledge. Thematic and processual analysis of interview data, collected in three phases, suggests that RAA complements RKT and that both concepts together capture the unconventional strategies of advanced economy MNEs acquiring emerging economy MNEs in search of strategic assets and knowledge.

Publication DOI: https://doi.org/10.1016/j.ibusrev.2021.101882
Divisions: College of Business and Social Sciences > Aston Business School > Work & Organisational Psychology
College of Business and Social Sciences > Aston Business School > Aston India Foundation for Applied Research
College of Business and Social Sciences > Aston Business School
Additional Information: Copyright: 2021, Elsevier and European International Business Academy (EIBA). Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/
Uncontrolled Keywords: Asset Augmentation,institutions,Indian pharmaceutical industry,knowledge transfer,organizational architecture,qualitative research
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Related URLs: https://www.sci ... 969593121000937 (Publisher URL)
http://www.scop ... tnerID=8YFLogxK (Scopus URL)
PURE Output Type: Article
Published Date: 2021-12
Published Online Date: 2021-06-10
Accepted Date: 2021-05-19
Authors: Munjal, S.
Pereira, V.
Andersson, U.R.
Budhwar, Pawan (ORCID Profile 0000-0001-8915-6172)

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Version: Accepted Version

Access Restriction: Restricted to Repository staff only until 10 December 2022.

License: Creative Commons Attribution Non-commercial No Derivatives


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