Responding to increasingly competitive environments, it has become commonplace for multinationals to enter into cross-border partnerships, ventures and alliances to gain know-how, manage costs and grow revenue. The results from these activities however, have not always delivered on their promise. Part of the reason lies in the challenges of transferring knowledge compounded by an international setting. The degree of difficulty in knowledge transfer increases for multinational managers and their counterparts because cultural differences influence information processing, management styles and sense making. In addition, most knowledge transfer projects do not take the time to allow partners to develop the rapport and trust pivotal for project commitment and successful learning to occur. This chapter explores a failed knowledge transfer project between two distinct cultures and, using literature on cross-cultural knowledge transfer and communication theory as well as anecdotes from the actual process, offers a process for creating and engaging a more successful design.
TopIntroduction
Increasingly, sustainable competitive advantage is thought to be driven by knowledge, from employees (Drucker 1991) and other firm assets (Edvinsson and Sullivan 1996) that combine to create critical core competencies (Stewart 1997; Grant 1996; Quinn 1992). This train of thought is central to the notion that knowledge should drive the firm’s positioning in the marketplace. Organizations have thus made it a prerogative to try and harness the knowledge resident in their walls. Whether capturing knowledge or transferring it, academics (Barney, 1991; Grant 1996; Quinn 1992, Rothberg and Erickson, 2005), reporters (Stewart 1997) and practitioners (Davenport and Prusak, 1998; Sveiby, 1997, Saint-Onge,1996) have all acknowledged the importance of strategically managing knowledge to help create and sustain ever elusive forms of competitive advantage.
A second driver of sustainable advantage is globalization, where hypercompetitive markets challenge firms to quickly create products that are better (differentiated) and cheaper (cost leadership). This dynamic demands that firms extend their value chains across country boundaries to source high value supply, manufacturing capability, and know-how from wherever it exists on the globe. These extended networks of partners, enabled through information technologies and connectivity can become a key factor in achieving success (Erickson and Rothberg, 2002). Navigation requires not only the deliberate management and deployment of knowledge, but doing so in firms whose business models and boundaries are ever changing. (Anon, 2000).
Regardless of its intent, knowledge transfer is the dissemination of know-how between partners to achieve a business outcome. This managerial imperative is challenged by the nature of knowledge and the nature of people. When knowledge transfer moves across cultures, the hurdles become even higher, hence creating an environment where sharing and learning can take place is no small task.
Early studies took a managerial view seeking advantage through best practice and discovered knowledge transfer difficulty within firms across shifts (Epple et al. 1991), and facilities (Argote et al. 1990). Later studies offer a host of processes and tactics for engaging the organization’s knowledge community in sharing what they know and using what they have (Cohen and Prusak, 2004; Pfeffer and Sutton, 2003; Davenport and Prusak, 1998). Within their multinational structures, firms are currently trying to leverage the knowledge base inherent in their subsidiaries to improve their learning processes and innovative performance (Kotabe et al. 2007).
In the strategic view, studies focus on the role of knowledge sharing to create a market advantage. In an emerging industry, especially in the pre-commercial phase, innovation performance is improved when firms share knowledge, especially when they step outside the bounds of national innovative systems into global innovative systems (Spencer (2003). Such knowledge-sharing behaviour is thought to influence the institutional environment to favour a firm’s technology as the industry standard (Boisot, 1995), or by attracting the influence of researcher opinion, producers of complementary products, and new entrants into the firm’s technology path. If a firm perceives itself as the quicker innovator or superior learner in its industry, then it may even deliberately consider transferring knowledge outside of its walls to competitors (Zander, et al. 1995).