Management of Knowledge Transfer Service and Improvement in Multinational Companies: Enhancing Competitive Advantage through Effective Knowledge Transfer in Multinational Companies

Abstract

The effective dissemination throughout the MNC organization of valuable knowledge acquired by its local affiliates is seen as an important source of competitive advantage. Knowledge differs in characteristics and so do the available transfer mechanism. Focusing on internationalization knowledge this large-scale empirical study explores the incidence and the performance implications of fit between knowledge characteristics and transfer mechanisms as used by MNCs. It is found that a substantial proportion of the observed MNC knowledge transfer transactions may be classified as ‘misfits’ and to some extent do these ‘misfits’ result in impaired performance of the MNC. As such, it is essential that the MNC employs the mechanism of transfer that suits the specific knowledge characteristics. The use of unsuitable transfer mechanisms may cause loss of knowledge in the process of transmission or may involve unnecessarily high communication costs – both with potentially negative effects on the performance of the MNC. Knowledge is ascribed a key role when explaining the existence and the growth of multinational companies (MNCs).