Embedding with multiple knowledge sources to improve innovation performance: the learning experience of Motorola in Brazil

Abstract

This article explores how a subsidiary of a multi-national enterprise (MNE) in an emerging economy embeds with multiple knowledge sources, both in its corporate network (internal) and in the host country (external), to create the capability to undertake innovative activities. Drawing on first-hand and intrafirm field evidence over the lifetime of a subsidiary in the information and communications technology industry in Brazil (1996-2009) the article finds that: (1) Within 10 years, the case subsidiary attained advanced, near-world leading innovation performance in three technological functions: project management, software engineering and product and solutions; (2) This was an outcome of how the firm simultaneously engaged in knowledge-intensive linkages based on increased frequency of use and improved quality over time, with specific internal and external counterparts; (3) However, some counterparts and linkages were more effective than others in contributing to the subsidiary's innovation performance. Drawing on a novel approach that examines the relationship between dual embeddedness and innovative performance, this article extends our understanding of embeddedness as part of knowledge-seeking strategies of MNE-subsidiaries. It also provides new insights to deepen the analysis of the nuances of subsidiaries' multiple embeddedness, especially in emerging economies.