Knowledge Transfer

Knowledge transfer is information transmission from one point to another in a given context; from a source to a recipient and is seen as a dyadic exchange of knowledge between two sources.

The transmission process has to be aligned with the corporate's overall strategy. In most cases, the process of transfer of knowledge takes place intra-MNC. Organisations redesign control mechanisms to integrate and optimise performance after identifying the barriers, cultural or otherwise, to the transfer of knowledge.

Knowledge transfer has become a critical issue in multinational corporations. In their pursuit of success across different markets, MNCs need to concentrate not just on what they know, but also on `how' they gain that knowledge and transmit it through the organisation.

The question is: How to improve systems, tools and templates used for storing information. nt dimension to the transfer is the interface between human and knowledge storage systems. That is where the flow of data or knowledge becomes important. A strategic dimension to the whole process of transfer is the tools, systems and processes used, and how these are integrated effectively. Transfer takes place not only between individuals but also among entities (subsidiaries) of an MNC.

Researchers assign different labels to transfer activities — `knowledge diffusion,' `knowledge sharing,' `knowledge dissemination,' `transfer of capabilities,' `transfer of best practices' — all hereafter called `knowledge transfer'.

Knowledge sharing

Unlike other resources, knowledge does not diminish when it is shared; on the contrary it actually multiplies. At the organisational level, knowledge multiplies when it is acted or reacted upon. It bestows negative effects on firms if holders of knowledge protect it by not sharing it. This aspect of protection is labelled "sticky"; stickiness is either intrinsic to the knowledge itself or pertinent to the situation.

Strategic mandates

Often, subsidiaries of an MNC take on different strategic mandates depending on the unit's local environment, company's global strategy, and unique resources and capabilities. A subsidiary receives knowledge from the rest of the corporation and provides information as well. Subsidiaries could be local implementers, or specialised contributors, or follow world mandates. Specifically, headquarters gives a mandate to a subsidiary that it controls through formal and informal mechanisms.

The subsidiary is allowed sufficient freedom to define its own mandate, usually determined by the local environment. Activities for the last mandate above are integrated worldwide but managed by the subsidiaries. The subsidiary creates knowledge that can be used by other units with less centralisation and formalisation. The local unit serves as a partner of the headquarters in developing strategies. These units analyse threats and opportunities before developing appropriate responses. Local environment, if complex, accounts for a high value of knowledge stock particularly when network positions react to changes in the environment. The imposition of a company-centric culture may be a handicap for integrating with the local research, inhibiting creation of new knowledge.

The unit creates knowhow in all key functional areas. It could be strategically less important markets where access to critical information is not necessary. Operational execution capturing economies of scale and scope is crucial to an MNC's global strategy.

Integrators

Units therefore have to be managed differently to maximise global performance and to build a global network for appropriate knowledge flows. The MNC can be seen therefore, as a knowledge integrating institution. An MNC internalises knowledge by putting together resources, attributes, and activities in an internal market at a far more efficient rate than do markets. In the process an MNC is perceived to be a social community, a reservoir of productive knowledge and a fountainhead of competitive advantage. Just as knowledge stock has to be continuously updated, infrastructure also has to be developed, if, that is, the employees of MNC are capable of using it.