1 ORGANIZATIONAL LEARNING: A BY-PRODUCT OF INTERNATIONAL DIVERSITY OR INSTITUTIONAL LEGACIES?

This paper investigates the impact of institutional and organizational variation on the extent to which multinational corporations (MNCs) learn from their affiliate firms. It presents a multi-level comparative approach to investigating the extent to which MNCs engage in lower-level and higher-level learning. MNC learning is defined here as some combination of improving actions (Fiol and Lyles, 1985) and acquiring new knowledge (Argyris and Schön 1978; Hedberg 1981), whether it is new structures (Chandler, 1962), or new processes (Geppert 2000), that is of strategic importance to the parent company. Learning takes place when acquired knowledge is collectively translated or internalised to either reinforce or change routines. The translation of acquired knowledge into routine behaviour refers to lower-level learning. By contrast, higher-level learning refers to the translation of acquired knowledge into nonroutine behaviour. Previous research in international business and organizational learning has focused on such issues as the antecedents of international operations (e.g. Shrader et al., 2000), and the performance effects of internationalizations (e.g. Bloodgood et al., 1996). Factors at multiple levels have been shown to influence international expansion and performance outcomes (e.g. Bartlett and Ghoshal, 1998). However, the effects of multi-level factors on organizational learning have received limite