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Recent research suggests that multinational corporations (MNCs) should be viewed as repositories of knowledge, and a network of capabilities. If we adopt this view, then resources are the property of organizations, rather than unit assets. Furthermore, accepting the notion of Multinational corporations as a network of resources and capabilities implies that the interaction among individuals within units is a critical factor in the transfer of knowledge between units. These arguments have significant implications for which theoretical lenses should be used to examine MNC activities. Here, it is argued that the network approach to understanding knowledge transfer among MNC units is more informative than theories that advocate efficiency considerations and resource dependency. This paper argues that how knowledge is transferred among units is closely related to such factors as proximity, cultural and geographic similarities, local responsiveness, strength of the informal network, and location of the unit within the value chain.