Managing Headquarters-Subsidiary Relations From a Knowledge Perspective: Strategies for Transnational Media Companies

Abstract

The purpose of this article is to analyze how transnational media companies manage their headquarters-subsidiary relations from a knowledge perspective. Based on the knowledge-based view of the firm and recent literature, hypotheses regarding the degrees of knowledge in- and outflow are derived, covering the determinants of subsidiary autonomy, corporate socialization, transmission channels, and geographic and cultural distance. The conceptual model is tested in a sample of 30 subsidiaries of German publishing houses by applying a partial least squares path analysis. Results suggest that knowledge outflow is a function of subsidiary autonomy, corporate socialization, the existence of electronic-based transmission channels, and interpersonal communication; whereas knowledge inflow is influenced by subsidiary autonomy, electronic-based transmission channels, and distance. Implications for publishing houses to promote knowledge transfer processes are derived.

Notes

1. Håkanson and Ambos (2010) found evidence that perceptions of distance are mainly influenced by absolute geographic distance, whereas cultural distance used in isolation is a “poor predictor of such perceptions” (p. 195).

2. Values were collected from Web pages or annual reports of the publishing houses under study.

3. CD_x = cultural distance of Country x to Germany, n = number of cultural dimensions, GER_i = value of Cultural Dimension i of Germany, FOR_xi = value of Cultural Dimension i for Country x, and V_i = variance of Cultural Dimension i.

4. For countries that were not included in the House, Hanges, Javidan, Dorfman, and Gupta (2004) study, cultural distances had been assigned according to country clusters, as stated by V. Gupta and Hanges (2004). For every cluster, means have been calculated for each of the nine cultural dimensions.