The fundamental aim of a global multinational is to create and sustain competitive
advantage if they want to survive and prosper.
The global context in which firms develop and implement business strategies has changed
significantly. The knowledge-based economy has made multinational companies increase
the transfer of innovation processes to their foreign subsidiaries in order to adapt their
products and services to local needs and to make use of the knowledge locally available.
The initiatives to optimise the innovation capabilities and obtain competitive advantages
have led to a research and development effort at the subsidiary level. Indeed, the benefits
of decentralized R&D have been mentioned in Pearce (1997), Birkinshaw (2000), Holm
and Pederson (2000), Jones and Davis (2000) and Birkinshaw and Hood (1997, 1998a,
1998b).
Culture is an integrated phenomenon and by recognising and accommodating taboos,
rituals, attitudes toward time, social stratification, kinship systems and many other
components, a modern manager will pave the way toward greater harmony and
achievement in the country in which a multinational business operates (Sherman,
Bohlander & Snell (1995).
In addition to some of the multidimensional concepts of culture, two issues have gained
prominence from a multinational perspective; corporate culture and the national culture.
National culture can be defined as the consolidated programming of the human mind
(Hofstede, 1980). At the firm level American management practices which believed that
one size fits all, tended to be applied globally by US corporations. This outlook is now
being replaced with the knowledge that managerial attitudes, values, behaviours and
efficacy differ across national cultures (Newman & Nollen, 1996) and as a result,
