Multinational Enterprises in Dissimilar Cultural Contexts: the Role of Global Virtual Teams

Multinational Enterprises face major impediments to transferring firm specific advantages within the MNE network given their relatively low capacity to absorb knowledge from other internationally dispersed units. Additionally, because MNE units are located in two (or more) distinct nations, the effectiveness of crossborder transfer of organizational knowledge is profoundly affected by the cultural diversity of its corporate members engaged in such transactions. Global virtual teams, conversely, hold the promise of enabling dispersed groups to overcome distance and time barriers with the use of information and communications technologies (ICTs) by facilitating communicative practices, process structures, and information processes. This study offers a theoretical framework that explains the potential benefits of global virtual teams to multinational enterprise practices in dissimilar cultural contexts by explicitly examining the role of technology, culture, and absorptive capacity in the cross-border transfer of knowledge within the MNE network. It also presents a set of propositions distilled from empirical evidence and theoretical considerations to guide future research in this area.