• Hypothesis (H2): Dispersed functionality is predicted by indicators of capitalization, degree of control needed, and conflict in dispersion.
Managing Knowledge Flows. Between the extremes of market and direct internal hierarchy, subsidiary-level integration along value chains is intensifying (UNCTAD 1993). Gupta and Govindarajan (1994) recognize that, as relevant pieces of knowledge are located in different parts of the firm, MNE subsidiaries have degrees of intra-organizational interdependence that vary, according to nodal stocks of knowledge and inter- subsidiary knowledge flows. Kogut and Zander (1993) propose that MNEs economize costs of knowledge transfers through “combinative capabilities” (creating new applications from existing knowledge).