The study has analyzed the innovation process in MNCs as knowledge creation and integration betweensubsidiaries and headquarters. It has proposed the framework of global innovation perspective to explain theglobal innovation process by emphasizing the importance of subsidiaries. Global innovation perspective installs subsidiaries as knowledge generating units through disruptive innovations in host markets which can later betransferred to other host and home markets through open innovation. It has discussed the case of HarmanInternational Industries to trace the roots of the international innovation strategy of the company in three pillarsof global innovation perspective. It has been concluded that the role of subsidiaries as knowledge generatingunit is elevated in the current scenario due to potential of emerging markets to serve as laboratories andemergence of geographically dispersed technology clusters away from MNCs headquarters.