Procedural Justice, Not Absorptive Capacity, Matters in Multinational Enterprise ICT Transfers View Full Text


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Article Info

DATE

2013-08

AUTHORS

Alain Verbeke, Vernon Bachor, Brenda Nguyen

ABSTRACT

This paper empirically tests the effectiveness of information and communications technology (ICT) knowledge transfer and adoption in the multinational enterprise (MNE) as an issue of critical importance to contemporary MNE functioning. In contrast to mainstream thinking on absorptive capacity, but in line with prevailing international business theory, our research supports the proposition that perceptions of procedural justice, rather than absorptive capacity, determine effectiveness, especially in cases of high tacit knowledge transfers.Data was collected from senior ICT representatives in 86 Canadian subsidiaries of foreign owned MNEs. Each of these subsidiaries recently experienced a significant ICT transfer imposed by the parent organization.Support was found for the main propositions: Procedural justice significantly predicted successful ICT transfer and adoption, while absorptive capacity was not significant. These findings are consistent even when knowledge tacitness was high.The perceived success of the ICT transfer as well as its adoption varied widely across these firms. The potential reasons for this divergence in effectiveness are manifold, but our findings suggest that in situations of substantial knowledge tacitness, a higher level of procedural justice, rather than a higher level of absorptive capacity, is critical to effective transfer and adoption. This paper empirically tests the effectiveness of information and communications technology (ICT) knowledge transfer and adoption in the multinational enterprise (MNE) as an issue of critical importance to contemporary MNE functioning. In contrast to mainstream thinking on absorptive capacity, but in line with prevailing international business theory, our research supports the proposition that perceptions of procedural justice, rather than absorptive capacity, determine effectiveness, especially in cases of high tacit knowledge transfers. Data was collected from senior ICT representatives in 86 Canadian subsidiaries of foreign owned MNEs. Each of these subsidiaries recently experienced a significant ICT transfer imposed by the parent organization. Support was found for the main propositions: Procedural justice significantly predicted successful ICT transfer and adoption, while absorptive capacity was not significant. These findings are consistent even when knowledge tacitness was high. The perceived success of the ICT transfer as well as its adoption varied widely across these firms. The potential reasons for this divergence in effectiveness are manifold, but our findings suggest that in situations of substantial knowledge tacitness, a higher level of procedural justice, rather than a higher level of absorptive capacity, is critical to effective transfer and adoption. More... »

PAGES

535-554

References to SciGraph publications

  • 1980. What Should Be Done with Equity Theory? in SOCIAL EXCHANGE
  • 2005. The Impact of Knowledge Management on MNC Subsidiary Performance: The Role of Absorptive Capacity in KNOWLEDGE TRANSFER IN MULTINATIONAL CORPORATIONS
  • 1988-09. The Effect of National Culture on the Choice of Entry Mode in JOURNAL OF INTERNATIONAL BUSINESS STUDIES
  • 2003-11. MNC knowledge transfer, subsidiary absorptive capacity, and HRM in JOURNAL OF INTERNATIONAL BUSINESS STUDIES
  • 2011-04. The Performance Effects of Headquarters’ Involvement in Lateral Innovation Transfers in Multinational Corporations in MANAGEMENT INTERNATIONAL REVIEW
  • 2010-10. Beyond Hofstede and GLOBE: Improving the quality of cross-cultural research in JOURNAL OF INTERNATIONAL BUSINESS STUDIES
  • 2003-03. Extending the theory of the multinational enterprise: internalization and strategic management perspectives in JOURNAL OF INTERNATIONAL BUSINESS STUDIES
  • 2011-09. Rationality vs ignorance: The role of MNE headquarters in subsidiaries’ innovation processes in JOURNAL OF INTERNATIONAL BUSINESS STUDIES
  • 1997-03. Autonomy and Procedural Justice: A Framework for Evaluating Subsidiary Strategy in JOURNAL OF INTERNATIONAL BUSINESS STUDIES
  • 1988. The Social Psychology of Procedural Justice in NONE
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  • 1993-12. Knowledge of the Firm and the Evolutionary Theory of the Multinational Corporation in JOURNAL OF INTERNATIONAL BUSINESS STUDIES
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    49 schema:description This paper empirically tests the effectiveness of information and communications technology (ICT) knowledge transfer and adoption in the multinational enterprise (MNE) as an issue of critical importance to contemporary MNE functioning. In contrast to mainstream thinking on absorptive capacity, but in line with prevailing international business theory, our research supports the proposition that perceptions of procedural justice, rather than absorptive capacity, determine effectiveness, especially in cases of high tacit knowledge transfers.Data was collected from senior ICT representatives in 86 Canadian subsidiaries of foreign owned MNEs. Each of these subsidiaries recently experienced a significant ICT transfer imposed by the parent organization.Support was found for the main propositions: Procedural justice significantly predicted successful ICT transfer and adoption, while absorptive capacity was not significant. These findings are consistent even when knowledge tacitness was high.The perceived success of the ICT transfer as well as its adoption varied widely across these firms. The potential reasons for this divergence in effectiveness are manifold, but our findings suggest that in situations of substantial knowledge tacitness, a higher level of procedural justice, rather than a higher level of absorptive capacity, is critical to effective transfer and adoption. This paper empirically tests the effectiveness of information and communications technology (ICT) knowledge transfer and adoption in the multinational enterprise (MNE) as an issue of critical importance to contemporary MNE functioning. In contrast to mainstream thinking on absorptive capacity, but in line with prevailing international business theory, our research supports the proposition that perceptions of procedural justice, rather than absorptive capacity, determine effectiveness, especially in cases of high tacit knowledge transfers. Data was collected from senior ICT representatives in 86 Canadian subsidiaries of foreign owned MNEs. Each of these subsidiaries recently experienced a significant ICT transfer imposed by the parent organization. Support was found for the main propositions: Procedural justice significantly predicted successful ICT transfer and adoption, while absorptive capacity was not significant. These findings are consistent even when knowledge tacitness was high. The perceived success of the ICT transfer as well as its adoption varied widely across these firms. The potential reasons for this divergence in effectiveness are manifold, but our findings suggest that in situations of substantial knowledge tacitness, a higher level of procedural justice, rather than a higher level of absorptive capacity, is critical to effective transfer and adoption.
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