Managing product innovation diffusion within multinational corporations: leveraging global scale and local responsiveness

How multinational corporations (MNCs) manage knowledge and engage in product innovation diffusion is a central theme of study within international management, and it raises the tension of balancing global integration and local responsiveness, which is the subject of this paper. It uses a qualitative research methodology based on a case study of a MNC from the pharmaceutical industry. We demonstrate the value of a funnel and network structure for diffusion which capitalises upon the global resources and scale within the MNC but which leverages resources within subsidiaries for both reverse and horizontal diffusion. We unpack an innovation diffusion funnel framework and demonstrate how a MNC can effectively utilise the extensive inputs within its ecosystem and transform them into product innovation through a production function process. We contribute by providing an understanding of what is required within the “transformation box” with its associated implications for how innovation is managed through both formal and informal mechanisms.