The impact of distance on knowledge transfer effectiveness in multinational corporations

This paper aims to shed light on the interplay of knowledge transfer mechanisms and distance within the MNC. While it is largely undisputed that cross-boarder knowledge flows contribute to the firm's success, our knowledge on the effects of specific transfer mechanisms is scarce. We examine the impact of different dimensions of distance to test the applicability of personal coordination mechanisms (PCM) and technology-based coordination mechanisms (TCM) in situations of differentiation and dispersion. Data on 324 knowledge transfer relationships of MNC units was used to test our hypotheses. While TCM function relatively context-free, we find that PCM are moderated by distance. Our results support moderating effects of geographic, cultural and linguistic distance, which are vital to our understanding of knowledge transfer effectiveness in MNCs.

[1]  Thomas J. Allen,et al.  Managing the flow of technology: technology transfer and the dissemination of technological informat , 1977 .

[2]  Paul Almeida,et al.  Are Firms Superior to Alliances and Markets? An Empirical Test of Cross-Border Knowledge Building , 2002, Organ. Sci..

[3]  Morten T. Hansen,et al.  When using knowledge can hurt performance: the value of organizational capabilities in a management consulting company , 2005 .

[4]  Gabriel Szulanski.  Exploring internal stickiness: Impediments to the transfer of best practice within the firm , 1996 .

[5]  Brent R. Moulton.  Random group effects and the precision of regression estimates , 1986 .

[6]  R. Grant.  Toward a Knowledge-Based Theory of the Firm,” Strategic Management Journal (17), pp. , 1996 .

[7]  Keith D. Brouthers,et al.  Explaining the National Cultural Distance Paradox , 2001 .

[8]  Martin Schulz,et al.  Codification and tacitness as knowledge management strategies: an empirical exploration , 2001 .

[9]  Merritt Ruhlen,et al.  Worldwide Analysis of Genetic and Linguistic Relationships of Human Populations , 2012, Human biology.

[10]  Anil K. Gupta,et al.  Knowledge Flows and the Structure of Control Within Multinational Corporations , 1991 .

[11]  Tina C. Chini.  Effective Knowledge Transfer in Multinational Corporations , 2004 .

[12]  Daniel H. Kim.  The Link between individual and organizational learning , 1997 .

[13]  Bernard L. Simonin.  Transfer of Marketing Know-How in International Strategic Alliances: An Empirical Investigation of the Role and Antecedents of Knowledge Ambiguity , 1999 .

[14]  Frances Cairncross.  The death of distance : how the communications revolution will change our lives , 1997 .

[15]  G. Altmann.  Science and Linguistics , 1993 .

[16]  Lilach Nachum,et al.  The persistence of distance? The impact of technology on MNE motivations for foreign investment , 2005 .

[17]  Richard L. Daft,et al.  Organizational information requirements, media richness and structural design , 1986 .

[18]  Jean-Claude Usunier,et al.  International and Cross-Cultural Management Research , 1998 .

[19]  Moshe Farjoun,et al.  The independent and joint effects of the skill and physical bases of relatedness in diversification , 1998 .

[20]  J. Johanson,et al.  The Internationalization Process of the Firm—A Model of Knowledge Development and Increasing Foreign Market Commitments , 1977 .

[21]  Rajiv Sabherwal,et al.  Organizational Knowledge Management: A Contingency Perspective , 2001, J. Manag. Inf. Syst..

[22]  Deirdre Boden,et al.  NowHere: Space, Time, and Modernity , 1995 .

[23]  Ulf R. Andersson,et al.  Balancing subsidiary influence in the federative MNC: a business network view , 2007 .

[24]  B. Kogut,et al.  Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology , 1992 .

[25]  J. H. Dyer,et al.  Creating and managing a high‐performance knowledge‐sharing network: the Toyota case , 2000 .

[26]  Morten T. Hansen,et al.  Knowledge Networks: Explaining Effective Knowledge Sharing in Multiunit Companies , 2002 .

[27]  Bradley L. Kirkman,et al.  A quarter century of Culture's Consequences: a review of empirical research incorporating Hofstede's cultural values framework , 2006 .

[28]  G. Hedlund.  A model of knowledge management and the N‐form corporation , 2007 .

[29]  T. Kostova.  Transnational Transfer of Strategic Organizational Practices: A Contextual Perspective , 1999 .

[30]  Martin Schulz,et al.  Pathways of Relevance: Exploring Inflows of Knowledge into Subunits of Multinational Corporations , 2003, Organ. Sci..

[31]  Albert H. Segars,et al.  Knowledge Management: An Organizational Capabilities Perspective , 2001, J. Manag. Inf. Syst..

[32]  X. Martin,et al.  Knowledge transfer capacity and its implications for the theory of the multinational corporation , 2003 .

[33]  S. Shane,et al.  Cultural Differences in Innovation Championing Strategies , 1995 .

[34]  N. Adler.  International Dimensions of Organizational Behavior , 1986 .

[35]  T. Pedersen,et al.  MNC knowledge transfer, subsidiary absorptive capacity, and HRM , 2003 .

[36]  M. Boisot.  Information space : a framework for learning in organizations, institutions and culture , 2013 .

[37]  Harbir Singh,et al.  The Effect of National Culture on the Choice of Entry Mode , 1988 .

[38]  P. M. Podsakoff,et al.  Self-Reports in Organizational Research: Problems and Prospects , 1986 .

[39]  Bodo B. Schlegelmilch,et al.  Learning from foreign subsidiaries: An empirical investigation of headquarters' benefits from reverse knowledge transfers , 2006 .

[40]  A. Giddens.  The consequences of modernity , 1990 .

[41]  Denice Welch,et al.  Adopting a common corporate language: IHRM implications , 1999 .

[42]  Srilata Zaheer.  Overcoming the Liability of Foreignness , 1995 .

[43]  Robert J. Jensen,et al.  Presumptive Adaptation and the Effectiveness of Knowledge Transfer , 2006 .

[44]  Scott Shane,et al.  National Cultural Distance and Cross-Border Acquisition Performance , 1998 .

[45]  Barbara F. Grimes.  Ethnologue Languages of the World , 1988 .

[46]  H. Triandis,et al.  Cultural Variations in the Cross-Border Transfer of Organizational Knowledge: An Integrative Framework , 2002 .

[47]  Morten T. Hansen,et al.  How do multinational companies leverage technological competencies? Moving from single to interdependent explanations , 2004 .

[48]  Gabriel Szulanski,et al.  Stickiness and the adaptation of organizational practices in cross-border knowledge transfers , 2004 .

[49]  Matthew S. Kraatz,et al.  Modeling the dynamics of strategic fit: a normative approach to strategic change , 2000 .

[50]  David A. Griffith,et al.  The effect of cultural distance on entry mode choice, international diversification, and MNE performance: a meta-analysis , 2005 .

[51]  Mary Yoko Brannen,et al.  When Mickey Loses Face: Recontextualization, Semantic Fit, and the Semiotics of Foreignness , 2004 .

[52]  B. Kogut,et al.  Knowledge of the firm and the evolutionary theory of the multinational corporation , 1993 .

[53]  R. Vernon.  International investment and international trade in the product cycle , 1966 .

[54]  Anil K. Gupta,et al.  Business Unit Strategy, Managerial Characteristics, and Business Unit Effectiveness at Strategy Implementation , 1984 .

[55]  P. Williamson,et al.  Related diversification, core competences and corporate performance , 2007 .

[56]  Morten T. Hansen,et al.  The Search-Transfer Problem: The Role of Weak Ties in Sharing Knowledge across Organization Subunits , 1999 .

[57]  Anil K. Gupta,et al.  Knowledge spillovers and the assignment of R&D responsibilities to foreign subsidiaries , 2004 .

[58]  Joel West,et al.  A Linguistic-based Measure of Cultural Distance and Its Relationship , 2004 .

[59]  Lilach Nachum.  International Business in a World of Increasing Returns , 2002 .

[60]  M. Lehrer,et al.  Managing local knowledge assets globally: The role of regional innovation relays , 2003 .

[61]  O. Shenkar,et al.  Cultural distance revisited: Towards a more rigorous conceptualization and measurement of cultural differences , 2001 .

[62]  J. Thompson.  The Media and Modernity: A Social Theory of the Media , 1995 .

[63]  H. Triandis.  Culture and Social Behavior , 2019, Cross-Cultural Explorations.

[64]  Ben L. Kedia,et al.  Cultural Constraints on Transfer of Technology Across Nations: Implications for Research in International and Comparative Management , 1988 .

[65]  I. Nonaka,et al.  How Japanese Companies Create the Dynamics of Innovation , 1995 .

[66]  M. Tushman,et al.  Resource recombinations in the firm: knowledge structures and the potential for schumpeterian innovation , 1998 .

[67]  Robert Nobel,et al.  Organizational Characteristics and Reverse Technology Transfer1 , 2001 .

[68]  Refik Culpan.  The Differentiated Network: Organizing Multinational Corporations for Value Creation , 1997 .

[69]  S. Ghoshal,et al.  Organization Theory and the Multinational Corporation. , 1993 .

[70]  P. Lawrence,et al.  Organization and Environment: Managing Differentiation and Integration , 1967 .

[71]  Michael G. Harvey,et al.  Executive Insights: An Intercultural Communication Model for Use in Global Interorganizational Networks , 2001 .

[72]  Xavier Martin,et al.  Tacitness, Learning, and International Expansion: A Study of Foreign Direct Investment in a Knowledge-Intensive Industry , 2003, Organ. Sci..

[73]  Julian Birkinshaw,et al.  Knowledge Flows Within Multinational Corporations: Explaining Subsidiary Isolation and Its Performance Implications , 2008, Organ. Sci..

[74]  Simcha Ronen,et al.  Comparative and multinational management , 1986 .

[75]  P. Almeida,et al.  Subsidiaries and knowledge creation: the influence of the MNC and host country on innovation , 2004 .

[76]  W. Rogers.  Regression standard errors in clustered samples , 1994 .

[77]  Denice Welch,et al.  In the shadow: the impact of language on structure, power and communication in the multinational , 1999 .

[78]  N. Venkatraman,et al.  Contingency Perspectives of Organizational Strategy: A Critical Review of the Empirical Research , 1985 .

[79]  John Roberts,et al.  Repairing Managerial Knowledge-Ability Over Distance , 2003 .

[80]  Morten T. Hansen,et al.  What's your strategy for managing knowledge? , 1999, Harvard business review.

[81]  P. A. Losty,et al.  A Behavioural Theory of the Firm , 1965 .

[82]  Wenpin Tsai.  Knowledge Transfer in Intraorganizational Networks: Effects of Network Position and Absorptive Capacity on Business Unit Innovation and Performance , 2001 .

[83]  Anil K. Gupta,et al.  Knowledge flows within multinational corporations , 2000 .

[84]  M. Gordon,et al.  PUBLICATION RECORDS AND TENURE DECISIONS IN THE FIELD OF STRATEGIC MANAGEMENT , 1996 .