An Empirical Study of the Role of Knowledge Characteristics and Tools on Knowledge Transfer in China-Based Multinationals

An Empirical Study of the Role of Knowledge Characteristics and Tools on Knowledge Transfer in China-Based Multinationals

Sajjad M. Jasimuddin (Department of Strategy, Kedge Business School, Marseille, France), Jun Li (Lvshunkou Economic Development Zone, Dalian, China) and Nick Perdikis (Aberystwyth University, Caradigion, UK)
Copyright: © 2019 |Pages: 31
DOI: 10.4018/JGIM.2019010109

Abstract

This article describes how technology—i.e. the infrastructure of tools, systems, platforms—enhances knowledge transfer. The effect of tools on the relationship between knowledge characteristics and knowledge transfer effectiveness is under-researched. This article attempts to address the interplay of knowledge characteristics and transfer tools within multinational corporations (MNCs). Based on the structural equation modelling, this research proposes and tests a basic model that captures knowledge characteristics and transfer tools at 125 Japanese subsidiaries operating in China. Drawing on the literature, this article argues that the role of knowledge characteristics and transfer tools need to be considered for effective knowledge transfer between MNCs and their subsidiaries. Knowledge characteristics and transfer tools play differing roles in knowledge transfer. This article also extends the existing studies by focusing on knowledge characteristics and transfer tool constructs simultaneously in a model to understand the notion of knowledge transfer effectiveness in the global business context.
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Introduction

Knowledge is recognised as a vital organisational resource that is at the heart of corporate success, be it a domestic or multinational (Kogut & Zander, 1992; Nonaka & Taekuchi, 1995). The successful transfer of knowledge within or among organizations is a strategic imperative (Li, 2008). Knowledge transfer in global environment, particularly in multinational corporations (MNCs) is a popular area of research (Lu, Leung, & Koch, 2006). Knowledge can be transferred across the companies involved in foreign investment; particularly it flows from MNC to its subsidiaries and affiliates (Schulz & Jobe, 2001). Since local Chinese firms often lack technical and managerial knowledge necessary for global competitiveness, they attempt to get access to this valuable resource, particularly from Western MNCs (Steensma & Lyles, 2000). Knowledge transfer is critical in developing and enhancing the competitive advantage of firms. Reflecting this view, Argote and Ingram (2000) contend that knowledge transfer is a basis for competitive advantage in firms. Since knowledge resides in different individuals, departments or divisions, in a competitive environment, successful transfer of knowledge within or among organizations help to integrate a firm’s knowledge pools. Knowledge that is transferred is the critical component of the value that a firm creates. Accordingly, knowledge transfer provides new opportunity for better performance of firms in competitive environment. This helps us to establishing how knowledge transfer contributes to the competitiveness of the firm.

Knowledge transfer is a dyadic exchange in which a source (MNC) transfers knowledge and a recipient (subsidiaries) learns and applies it (Ko et al., 2005; Slaughter. & Kirsch, 2006; Zhang & Jasimuddin, 2012). Drawing on the work of Grant (1993) and Hansen et al. (1999), the paper addresses knowledge transfer from the Japanese MNCs to their subsidiaries in China. There has been research on tacitness feature of knowledge (Polanyi, 1962; Dhaanaraj et al., 2004; Li, 2008; Cummings & Teng, 2003; Ambronisi & Bowman, 2001), According to the knowledge-based view of the firm, the degree of tacitness of knowledge has an influence on knowledge transfer. Several authors (e.g. Zander & Kogut, 1995; Li, 2008; Cummings & Teng, 2003; Dixon, 2000) argue the nature of knowledge affects the knowledge transfer by MNCs. Dixon (2000) suggests that one of the important factors that influence in intra-firm knowledge transfer is the nature of knowledge, especially where the knowledge has embeddedness and tacitness. This view is echoed by Cummings and Teng (2003) who contend that the knowledge context includes the transferred knowledge’s embeddedness and articulability. Several authors have incorporated knowledge characteristics, especially tacitness or codifiability of knowledge as control variables (e.g., Bjorkman et al., 2004; Hansen, 2002; Monteiro et al., 2008; Persson, 2006).

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