The Exploration Phase of Replication Strategies: The Role of Autonomous Action for Reverse Knowledge Flows

Abstract

Replication strategies rely on the exploration of new knowledge. An important source of new knowledge is the transfer of unit level experience to headquarters, a process referred to as reverse knowledge flows. Such knowledge flows are fraught with difficulty as formal mechanisms often break down due to diverging business interests of unit and headquarters managers. This study brings together research on knowledge stickiness and autonomous action to provide a new avenue for understanding reverse knowledge flows. By drawing on an exploratory study of a franchise network, we provide an insight into how autonomous action reduces initiation stickiness but potentially increases implementation stickiness. Our analysis suggests that the role of autonomous action for reverse knowledge flows is moderated by unit managers’ resource expectations that emerge as a result of autonomous action. Exploring the interplay of autonomous action and knowledge stickiness provides new explanatory means for understanding reverse knowledge flows in replicator organizations.

Exploring digitalisation at IKEA

“…Compared with previous studies on exploration and exploitation (e.g. March 1991; Winter and Szulanski, 2001) and specifically in the context of retailing (Jonsson and Foss, 2011; Picot-Coupey et al , 2016; Friesl and Larty, 2018), our paper contributes with insights on how the exploration phase is understood and organised in practice. The study further contributes to previous literature of IKEA's business model (Hedman and Kalling, 2003; Sorescu et al , 2011) and specific aspects of the IKEA business model (see e.g.…”

“…Winter and Szulanski (2001) use the two concepts when outlining their theory of replication as strategy and suggest a two-phase model where the organisation first enters the exploration phase “in which the business model is created or refined” (p. 731) and then move on to the exploitation phase. The argument that exploration and exploitation can be understood in terms of different phases of a process has been adopted also by researchers focussing on, for instance, retailers' internationalisation process (Jonsson and Foss, 2011), the transition into retail omni-channel strategies (Picot-Coupey et al , 2016) and reverse knowledge flows within franchise organisations (Friesl and Larty, 2018). Still, how the exploration phase is organised and how it can be understood remains to be further investigated.…”

Preventing organizational knowledge leakage: the influence of knowledge seekers’ awareness, motivation and capability

“…The organizational members in these relationships can be assessed and trained to improve knowledge acquisition (Hagemeister and Rodrı ´guez-Castellanos, 2019). Organizational members can also engage in autonomous behaviors to increase knowledge absorption (Friesl and Larty, 2018). These factors contribute to the absorptive capacity of the organization, which helps determine its ability to acquire knowledge.…”

Subsidiary autonomy and knowledge transfer

“…A critical element in MNE governance with implications for intra-MNE knowledge flows concerns the level of autonomy awarded to or assumed by the subsidiary. Friesl and Larty (2018) point to the need for further research investigating the role of autonomous action concerning reverse knowledge transfer in hierarchical settings such as MNEs. The extant literature suggests that subsidiary age (Rabbiosi and Santangelo, 2013) and the level of national development (Ambos et al , 2006) positively influences the benefit of reverse knowledge flows.…”

“…However, existing research tends to study only parts of these flows (Andersson et al , 2015; Ishihara and Zolkiewski, 2017), and mixed performance results necessitate longitudinal studies (Capolupo et al , 2017), particularly of technical functions such as R&D and manufacturing in emerging markets (Søberg, 2012a; Søberg, 2014; Mykhaylenko et al , 2015). A central challenge concerns how offshore subsidiaries reduce capability gaps (Mutlu et al , 2015; Nair et al , 2016; Elg et al , 2017) and are integrated into the MNE network while obtaining the benefits of being embedded in the local context (Birkinshaw and Hood, 1998; Dellestrand, 2010; Narula, 2014; Friesl and Larty, 2018) and the role of subsidiary autonomy in this context (Young and Tavares, 2004; Ambos and Schlegelmilch, 2007; Palmié et al , 2014).…”