MBA student reaches highest level of publication success11 March 2011

UQ MBA graduate Anders Fransson

A paper based on a UQ MBA student’s coursework, which critiques one of the most influential international business papers of the last two decades, will be published in the same premier journal that published the critiqued paper.

The paper is co-authored by MBA graduate Anders Fransson, Professor Lars Håkanson from Copenhagen Business School (who was a visiting professor at UQ at the time) and Anders’ supervisor from the UQ Business School, Professor Peter Liesch.

Professor Liesch said he was so impressed with Mr Fransson’s initial assessment piece that he consulted with Professor Håkanson, who has a long-standing research interest in the field. They discussed the possibility of developing Anders’ ideas further with a view to a formal critique, incorporating some of Håkanson’s earlier theorising.

The outcome is a piece developed by the trio that will be published in the top-tier Journal of International Business Studies (JIBS) later this year. The paper was also presented by Mr Fransson at the recent European International Business Academy Annual Conference in Portugal.

The paper critiques Kogut and Zander’s article “Knowledge of the firm and the evolutionary theory of the multinational corporation”, which won JIBS’ paper of the decade award in 2003 and is one of the publication’s most cited papers.

Mr Fransson said the critique raised several issues with the article, which proposed that multinational corporations (MNCs) existed because their characteristics as social communities made them more efficient at in-house knowledge transfers than at transferring knowledge to third parties. 

“The flaw in their argument is that they ignore the fact that you can have non-hierarchical knowledge-based social communities across firms, even without firms,” Mr Fransson, who worked in corporate law for 18 years prior to enrolling in his MBA, said.

“These knowledge-based communities may be as efficient at transferring knowledge as firms are.

“For example, I can sit at a table with lawyers from around the world and we can be very efficient at transferring knowledge, even though we are not a firm – why?

“Well, using the concepts in the original paper, we’re a social community with shared identities, compatible language, compatible cognitive maps, etc. and this makes us good at sharing knowledge, particularly about what we do.

“So why would an MNC necessarily grow across borders because of knowledge-transfer efficiencies if those efficiencies might be achievable through other, non-hierarchical, governance structures?”

Another issue the authors have with the paper is the argument that opportunism can be ignored when examining why MNCs exist.

Mr Fransson said it was important to challenge the notions in the celebrated Kogut and Zander paper.

“These ideas tend to filter out into practical advice for managers – big decisions are sometimes made based on these theories,” he said.

“When MNC management is deliberating whether to expand through foreign direct investment or through a strategic alliance or some other value-chain arrangement, it might erroneously decide that the firm should grow through foreign direct investment because of these supposedly superior knowledge-transfer efficiencies, without giving due weight to alternative knowledge-based structures.”

Fransson, A.R., Håkanson, L. and Liesch, P.W., “The underdetermined knowledge-based theory of the MNC”, Journal of International Business Studies is available online at: www.palgrave-journals.com/jibs/journal/vaop/ncurrent/index.html.

 

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