The Impact of Knowledge Management and Localization Activity on Global Competitiveness

The ultimate goal of a Multinational Enterprise (called hereafter, MNE) is to set up its objective in the direction of maximizing the total profit of the entire corporate system of MNE. During the process of the globalization of MNEs, the overseas investments and the establishment of the overseas subsidiary companies have inevitably taken place as well as the efforts to strengthen their competitiveness and competence. In this context and background, we have classified the strengthening factors of Competitiveness of Multinational Enterprise (called hereafter, CME) into Capacity of Knowledge Management (called hereafter, CKM) and Competence of Localization-associated Activity (called hereafter, CLA) and statistically analyzed how the respective factors will influence each other and affect the strengthening of the competitiveness, not only of locally invested subsidiary companies, but also of MNEs themselves. To enhance the business performance result under the close organic communication with the Headquarter (called hereafter, HQ), the local subsidiary companies in Korea are also strengthening competitiveness through attempts to differentiate themselves from domestic companies. Based on the result of our empirical analysis, it will help contribute to improving the investments of MNEs into the Korea domestic market and, practically and politically, also in strengthening their competitive edge.