RELEVANT KNOWLEDGE AS AN INSTRUMENT FOR EXPATRIATE MANAGER’S ACTIONS

Purpose: This paper examines the philosophy behind multinational companies’ global knowledge flows, highlighting links between external actors’ knowledge and expatriate managers’ actions. Applying philosophical pragmatism as a theoretical background, expatriate managers’ perception of external actors’ knowledge is presented as a tool enabling successful knowledge transfer. Design/methodology/approach: Data obtained via a survey on a sample of expatriate managers in Croatia is used. Using a partial least square structural equation modeling method, the correlations between external actors’ impact and subsidiary investment and headquarter benefits are explored. Findings and implications: Expatriate managers believe that headquarters benefit from a stronger impact of external actors on subsidiaries and an increase in subsidiaries’ internal investment. Our findings direct managers towards the harmonization of their priorities, highlighting the importance of inter- and intra-organizational agreements, suggesting that financial means should be directed towards widening internal knowledge bases and exploiting the potential of external knowledge. Limitations: Expats relevance perception priorities may be disrupted when headquarters impose performance evaluation criteria. This paper is also subject to expatriate managers’ experience limitations, which decreases their likelihood of recognizing relevant knowledge. Originality/value: Focusing on the psychology of expatriate managers, this paper introduces philosophical pragmatism as a theoretical framework underpinning successful knowledge transfer actions. Originating from pragmatism, successful actions are made through a manager’s perception of relevant knowledge. Expatriate managers’ actions are thus not passive reflections of their reality, but rather the result of their perception of relevant knowledge.