Unpacking the Flow : Knowledge Transfer in MNCs

Abstract: Multinational corporations (MNCs) are increasingly competing on their ability to utilise knowledge sourced from various parts of the world. In order to draw full advantage of a multinational presence, harnessing the potential of peripheral knowledge assets is a main strategic imperative. This thesis examines an activity that is central to MNCs use of such peripheral knowledge assets, namely the transfer of knowledge from one subunit to another. The knowledge transfer problem is approached in two ways: the extent to which subunits engage in knowledge transfer to other units in the organisation and the performance of knowledge transfer projects. The evidence provided in this thesis is derived from the analyses of quantitative data collected in two separate projects. A central argument concerns the importance of studying performance of knowledge transfer projects. Knowledge transfer is seen as distinct and purposeful projects. It is suggested that the performance of these transfer projects can be evaluated along the dimensions of transfer efficiency and transfer effectiveness. Results indicate that the extent to which subunits transfer knowledge to other MNC subunits is influenced by the presence of lateral integrative mechanisms as well as the presence of incentives to engage in knowledge transfer and subunit socialisation. Moreover, the operational structure of the subunit influences the extent of outbound knowledge transfer. The present evidence also suggests that subunit capabilities to knowledge transfer can be developed by accumulation of transfer experiences. However, even if subunits engage in knowledge transfer to an increasing degree, it is not self-evident that they become better at the task. In particular, these capabilities seem to be specific to source-recipient dyads, i.e. only experience from previous interactions in this dyad increase transfer performance. Evidence also suggests that authoritative pressure and centralised formal structures can lead to superficial collaboration in knowledge transfer. Finally, it is shown that despite the past years increasing interest in inter-firm networking as means to develop and access knowledge to innovative processes, such external interaction in subunits may compromise the possibilities to subsequently transfer the newly developed knowledge to be exploited in other parts of the MNC.