The differentiated role of organizational ambidexterity and organizational innovation in the subsidiary reverse knowledge transfer process

Abstract

Purpose This paper underscores how organizational ambidexterity and organizational innovation play differentiated roles in the subsidiary reverse knowledge transfers (RKT). The authors argue that both organizational ambidexterity and organizational innovation play a positive but differentiated role in the RKT process in that the former positively influences subsidiary knowledge creation, whereas the latter positively influences subsidiary knowledge transfers. Design/methodology/approach Data were collected from 289 foreign subsidiaries operating in Brazil. Hypotheses were developed and tested by applying partial least squares structural equation modeling. Findings The results supported the hypotheses and showed that organizational ambidexterity promotes knowledge creation, and that organizational innovation facilitates knowledge transfers. Research limitations/implications The paper offers implications with regard to drivers of subsidiary investments and actions of subsidiary managers vis-à-vis the subsidiary objectives of knowledge creation and/or transfers. Originality/value Showing the different roles of organizational ambidexterity and organizational innovation, this paper reveals some underlying mechanisms of the RKT process and contributes by explaining the competitive heterogeneity of subsidiaries, with impacts on subsidiary management’s evolutionary and resource dependence perspective.