Study of the Driving Factors of MNCs Subsidiaries’ Absorptive Capacity on the Perspective of dual Embeddedness
Abstract
The paper studies MNCs’ organizational mechanism setting (Decentralization, Normative integration, Innovative organizational culture) play a role in promoting subsidiary absorptive ability, as well as the host country environment play a role in promoting MNCs’ organizational mechanism setting on the perspective of dual embeddedness, and then builds a conceptual model of the driving factors of MNCs’ subsidiary absorptive ability. Finally, the paper takes the world's largest retailer Wal-Mart as an example, analyze How Wal-Mart adjust the organization mechanism under the change of Chinese retail market environment, and then enhance subsidiary’s ability to absorb knowledge that are initiated by the MNC parent, which further demonstrates the conceptual model in the paper.
Keywords: Dual embeddedness, Absorptive capacity, MNC organizational mechanisms, Host country environment.
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