Global exogenous shocks disrupt established knowledge transfer routines in multinational enterprises (MNEs) and challenge assumptions about organizational learning. While prior research emphasizes learning after crises, less is known about how MNEs learn during simultaneous disruption and shared uncertainty. This study aims to examine how knowledge transfer and learning unfold during such shocks and how subsidiary managers facilitate collective learning.
Adopting an interpretivist epistemological stance, this study uses a phenomenon-driven, exploratory sequential mixed-methods design. Data were collected during the COVID-19 pandemic through a Delphi study, survey, in-depth interviews and a follow-up poll conducted one year later, from chief executive officers and managing directors of Australian subsidiaries of foreign-owned MNEs. Data were analyzed abductively, iterating between empirical patterns and theory to develop propositions and a conceptual model grounded in organizational learning and knowledge management theory.
Learning during global exogenous shocks is initiated through managerial interpretation rather than objective timelines. Subsidiary managers’ perceptions reconfigure the salience of units within the MNE network, prompting a search for experiential knowledge from subsidiaries perceived as having earlier exposure. Perceived subsidiary autonomy enables initiative-taking and reciprocal engagement, giving rise to coactive vicarious learning (CVL) – an interactional process supporting the enactment, adaptation and retention of new routines during crisis.
For managers, the findings suggest that learning during crisis depends less on centralized control and more on enabling knowledge-rich interaction, interpretation and initiative across the MNE network. Parent firms can support learning by valuing locally generated experiential knowledge, encouraging cross-subsidiary dialogue and attending to the reasoning and sensemaking underlying subsidiary actions, rather than interpreting local responses as deviations from established practices. As crises become more frequent and extreme, deliberately fostering organizational conditions that support coactive vicarious learning may strengthen knowledge sharing, enhance organizational learning capacity and ultimately improve MNE resilience and adaptive capability.
This study advances knowledge management research by theorizing the simultaneity of global exogenous shocks as a structural condition that activates CVL, through which crisis intensifies rather than constrains knowledge flows across subsidiaries and headquarters. The resulting process-oriented model identifies managerial interpretation and perceived subsidiary autonomy as the enabling mechanisms.
