The dual knowledge role of open innovation intermediaries: internal weaving and external filtering for MNE subsidiaries

Developing dual embeddedness for subsidiaries with competence-creating mandates in multinational enterprises (MNE) presents contradictory knowledge demands in internal and external networks that hamper their innovative capacity. Sourcing knowledge externally and transferring this across the MNE is a delicate yet demanding balancing act, and scholars suggest that competence-creating subsidiaries achieve this by building firm-specific innovative capabilities. Although open innovation (OI)studies contend that intermediaries may be important in connecting subsidiaries locally, we have yet to fully understand if, and how, these intermediaries influence subsidiary dual embeddedness. Through an exploratory qualitative case study design, we find that an OI intermediary performs a critical dual knowledge role through internal weaving and external filtering in helping subsidiaries navigate the conflicting knowledge challenges of dual embeddedness. Specifically, we disentangle how performing this role requires the OI intermediary to habitually engage in a range of complementary activities that enhance intra-firm knowledge transfer both vertically and laterally, to and from the subsidiary, as well as expanding the capacity of the subsidiary to source knowledge externally in their local network. In spotlighting the intermediary-subsidiary interface, our findings generate greater integration between the literature in international business (IB) and open innovation, specifically subsidiary dual embeddedness, and OI intermediaries.