The 1960s were a decade of vigorous technological and organizational renewal. Falconbridge developed into a relatively diversified mining business, but nickel was still the heart of the enterprise and the cash machine that made other investments possible. However, the future of the Kristiansand plant was uncertain. As the reader will remember, Ontario's politicians had from the 1930s onwards tried to pressure the company to build a new refinery in Canada. In the 1960s it looked as if they were to succeed.

This chapter investigates how this external ‘threat’ spurned innovation and change at the Kristiansand subsidiary. Multinational companies often locate most of their research and development at their home base. Falconbridge was at least somewhat different in this respect. The Kristiansand staff co-developed a new refining process and pioneered new digital control systems. We will use this case to explore head office–subsidiary relations and the Kristiansand refinery's linkages to the wider Norwegian business and research system. The chapter also discusses the knowledge development of the Kristiansand refinery in light of Robert Pearce's concept of ‘creative subsidiaries’, that is, affiliates that actively try to shape their destiny and develop their line of business (see Chapter 1). He has focused on subsidiaries and technological evolution. One common feature of the creative subsidiaries is that they tap local sources of knowledge.