Knowledge governance in multinational firms: Subsidiary roles amid IPR differences

This study examines how multinational firms manage decision delegation in foreign subsidiaries amid varying intellectual property rights (IPR) protection. Analyzing data from 401 subsidiaries, we find that the relationship between institutional IPR differences and decision delegation is mediated by subsidiary strategic roles. In environments with weaker IPR protection, corporate parents position subsidiaries toward competence-exploiting roles, emphasizing non-local engagement and internal reliance on supplies. Conversely, in stronger IPR environments, subsidiaries adopt competence-creating roles with greater local knowledge engagement and external supply inflows. These strategic roles subsequently influence decision structures, with competence-creating roles requiring more autonomy and competence-exploiting roles facilitating centralization. This environment-strategy-structure alignment advances theory of how multinational firms design their organization to balance knowledge protection and creation globally.