Knowledge transfer in product development: an analysis of Brazilian subsidiaries of multinational corporations.
| Autor | Schreiber, Dusan |
| Cargo | Report |
Introduction
Research on the knowledge transfer process in multinational companies is not a recent endeavor. The first studies on the subject date back to the 1960s, originally based on theoretical research on knowledge transfer and its coordination methods, from creation to sharing. Research on the subject has grown exponentially, extending the focus of the studies and revealing variables that influence the knowledge management process and the search for the factors that determine the effectiveness of knowledge transfer (Spender, 1996; Zander & Kogut, 1995).
Some factors have been pointed out as being more important than others in this process, including absorptive capacity, knowledge explicitness, subsidiary roles, and personnel exchange. These factors influence the design of knowledge-sharing patterns, and define the strategies adopted by multinational companies to lead their worldwide knowledge transfer processes.
Early studies of the knowledge transfer process focused on transmission and sharing from headquarters to subsidiaries. This approach was justified by the importance of corporate headquarters to the internationalization process; since they held power and, in the majority of cases, had superior knowledge, technology and management processes, the goal was to replicate their model in the companies' subsidiaries. As subsidiaries have developed or acquired their own capabilities based on prior experience and knowledge, increasing their importance and power within the corporation, their participation in product and technology development has grown.
Few studies have focused on the search for variables associated with the knowledge transfer process in multinational corporations, combined with the characteristics, dimensions and origins of knowledge. It is assumed, from the contributions of Tsoukas (1996), Spender and Grant (1996), Grant (1996) and Simonin (2004), that many variables influence knowledge transfer, depending on the characteristics, dimension and origin of the knowledge, thus influencing the form of acquisition, absorption, registration and sharing of the knowledge. Based on a review of the literature on knowledge transfer, the objective of this paper is to identify the factors associated with the knowledge transfer process in the R&D departments of multinational companies, built on the characteristics of R&D knowledge, primarily in terms of project development. In order to further develop the subject, the paper analyzes a multiple case study of Brazilian subsidiaries of multinational corporations in the machinery and equipment sector. These cases provided an example of knowledge transfer between Brazilian subsidiaries and American and German headquarters, as well as between Brazilian and other subsidiaries.
Departing from the current literature, the cases studied herein reveal the dynamic nature of knowledge transfer design, depending on the set of technical and relational competences provided by the subsidiary to headquarter.
Knowledge Transfer and Absorptive Capacity
To properly understand the subject of this study, we first provide an overview of the concepts and features associated with knowledge, its transfer, and the corporate capacity to absorb knowledge.
Knowledge definition and classification
In the knowledge transfer process, the main function of management is to establish the necessary coordination for knowledge integration (Grant, 1996). The definition of knowledge used in this article is based on the concept suggested by Davenport and Prusak (1998, p. 6): "a fluid mixture of condensed experience, values, contextual information embedded not only in documents or repositories, but also in routines, processes, practices and organizational rules".
Knowledge is usually classified as either explicit or tacit. Explicit knowledge can be codified and easily communicated, and represents the entire set of knowledge that can be wholly articulated. As it is highly codified, explicit knowledge can be transmitted in a systematic manner and through formal language. Explicit knowledge is readily amenable to be processed by computer systems and stored in databases (Nonaka & Takeuchi, 1997).
Tacit knowledge is defined by Polanyi (1983) as non-verbalized, non-articulated, intuitive knowledge. It is also highly contextual and specific, and has a personal quality that hampers its formalization and articulation (Dhanaraj, Lyles, Steensma, & Tihanyi, 2004; Foss & Pedersen, 2004; Nonaka & Takeuchi, 1997; Spender, 1996). According to Martin and Salomon (2003), the greater the degree of knowledge tacitness, the more difficult its transfer.
Knowledge transfer
According to Faems, Janssens and Looy (2007), knowledge transfer flows from one individual (the knowledge holder) to another individual (who acquires it), and depends on the individuals' abilities and willingness to transfer it. It is worth noting that, to Davenport and Prusak (1998), in the case of knowledge transfer between business units of a single corporation, the knowledge does not need to be new to the company, but only to the receiving unit.
Besides transmission, knowledge transfer involves acquisition as well. Huber (1991) defines knowledge acquisition as the process through which knowledge is obtained, the assimilation of knowledge being conditioned by variables such as absorptive capacity, motivation of the recipient, and incentives for the transmitter. Mere availability of knowledge does not entail transfer. The key element in knowledge transfer is not the source of the original knowledge, but the recipient's perception of the utility and applicability of this knowledge in its operations. According to Garavelli, Gorgoglione and Scozzi (2002), the transfer process does not depend solely on the cognitive characteristics of the user that is the focus of the interpretation, but also on the way it is offered to the user, represented by the codification used to characterize that specific knowledge.
Acquired knowledge can be tacit, explicit, or a combination of both. According to Brown and Duguid (1991) and Tsoukas (1996), knowledge acquisition can also be the result of individual participation and interaction with tasks, routines, technologies, resources and people, within a specific context. Regardless of how individuals assimilate knowledge, the responsibility for providing a favorable context so that they will acquire it and apply it to their work rests with the organization.
Simonin (2004) suggested that the ambiguity of knowledge plays a critical role as a mediator between explanatory variables (tacitness, prior and later experience, complexity, cultural and organizational distance) and the result of the transfer process.
There are several barriers to knowledge transfer. Szulanski (1996) points to the lack of absorptive capacity, causal ambiguity, and relationship difficulties. Davenport and Prusak (1998) note other difficulties, namely: lack of trust; differences in culture, vocabulary and, theoretical landmarks; lack of a time and place for meetings; limited view of productive work; status and reward benefits for knowledge owners; a lack of absorptive capacity on the part of the recipient; belief that knowledge is the exclusive prerogative of certain groups; and lack of tolerance for errors or the need for assistance.
Absorptive capacity
A key aspect of knowledge transfer is absorptive capacity. To Cohen and Levinthal (1990), absorptive capacity is associated with the ability to explore external knowledge, transform it into innovation, and apply it towards business objectives. According to the authors, absorption is facilitated by proximity in knowledge base between transmitter and recipient, but does not depend solely on the individual capacity of its members; it is more than the sum of these capacities.
According to Zahra and George (2002), absorptive capacity has two aspects: potential capacity and actual capacity. The former includes knowledge acquisition and assimilation, whereas the latter includes the transformation of knowledge and its actual use. Forcadell and Guadamillas (2002) stress how absorptive capacity requires similar levels of technical development for both transmitter and recipient, thus ensuring the quality of assimilation of the intervening knowledge. The quality of the process is tied to the specificity of the knowledge, the degree of formalization and the results obtained.
Henard and McFadyen (2006) argue that two complementary dimensions of accumulated knowledge and absorptive capacity--depth and range--are especially important for R&D activities. The depth of accumulated knowledge is indicative of prior investment to acquire relevant knowledge. Range, in turn, concerns the application of accumulated knowledge. The existence of R&D knowledge optimizes the development and creation of new knowledge and new products.
Through a quantitative structural equation modeling study, Murovec and Prodan (2009) sought to ascertain which factors influence absorptive capacity in multinational corporations. Their results validated an absorptive capacity model built on two dimensions: (a) demand-pull and (b) science-push. The evidence confirmed the hypothesis that internal R&D activities have a favorable effect on absorptive capacity in both dimensions and that external R&D use is unrelated to the development of absorptive capacity in organizations. Furthermore, the study confirmed that absorptive capacity is based more on demand than on scientific progress.
Several elements improve absorptive capacity. They include: similarity between knowledge processing systems, organizational structures, experience solving similar problems (Lane & Lubatkin, 1998), trust, organizational processes, ability to apply knowledge (Lane, Salk, & Lyles, 2001), learning capacity, goals agreed upon by partners, training (Lyles & Salk, 1996), and long-term cooperation (Bjorkman, Barner-Rasmussen, & Li, 2004; Daghfous, 2004).
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