Journal of World Business 39 (2004) 168–182
An integrated model of knowledge transfer from
MNC parent to China subsidiary
Pien Wanga,*, Tony W. Tongb, Chun Peng Kohc
School of Business, National University of Singapore, 1 Business Link, Singapore 117592, Singapore b
Fisher College of Business, The Ohio State University, Newark, OH, USA c
International Enterprise Singapore, Singapore
Based on an empirical study of 62 firms, this paper develops a two-stage model describing knowledge transfer from MNCs to their China subsidiaries. In the first stage, the model proposes factors affecting the extent of knowledge contributed by an MNC to its China subsidiary. In the second stage, the model proposes factors affecting the extent of knowledge acquired by the China subsidiary from its MNC parent. Knowledge contributed by the parent to the subsidiary is affected by two groups of factors: parent’s capacity to transfer knowledge and parent’s willingness to transfer knowledge. Holding constant knowledge contributed by the parent, knowledge acquired by the subsidiary from its parent is determined by two groups of factors: subsidiary’s capacity to acquire knowledge and subsidiary’s intent to acquire knowledge. Implications for future research and management practitioners are discussed.
# 2003 Elsevier Inc. All rights reserved.
Keywords: Knowledge transfer; MNC parent; China subsidiary
Among all the resources of a firm, knowledge is the
most strategically important resource (Grant, 1996).
Knowledge provides the capacity for organizational
action and new knowledge provides the capacity for
organizational renewal (Inkpen, 1998). However, the
knowledge base of young subsidiaries established by
multinational corporations (MNCs) in transition
economies is weak (Lyles & Salk, 1996). Thus without
successful knowledge transfer from their MNC parents, it is difficult for these subsidiaries to build up knowledge base, improve capabilities, accelerate
Corresponding author. Tel: þ65-6874-6805.
E-mail addresses: email@example.com (P. Wang),
firstname.lastname@example.org (T.W. Tong),
email@example.com (C.P. Koh).
management localization, and survive intense competition to generate good returns for their parents. Successful knowledge transfer requires the transferors to be capable and willing to transfer knowledge on the one hand (e.g., Gupta & Govindarajan, 2000; Tsang,
2001), and the recipients to be capable and willing to
acquire knowledge on the other hand (e.g., Cohen &
Levinthal, 1990; Hamel, 1991; Lane, Salk, & Lyles,
2001). Despite the importance of knowledge transfer
for firms involved in foreign direct investment (FDI)
activities, there has been little systematic discussion of
this topic from the perspectives of both the knowledge
transferor (i.e., MNC parent) and the knowledge recipient (i.e., foreign subsidiary). Thus two fundamental issues remain under-explored: (1) factors influencing
the capacity and willingness of a parent to transfer
1090-9516/$ – see front matter # 2003 Elsevier Inc. All rights reserved. doi:10.1016/j.jwb.2003.08.009
P. Wang et al. / Journal of World Business 39 (2004) 168–182
knowledge to its foreign subsidiary; and (2) factors
affecting the capacity and intent of a foreign subsidiary
to acquire knowledge from its parent.
In this paper, we have attempted to answer these
two questions by conducting an empirical study on
foreign invested enterprises (FIEs) in China. China
adopted the Open Door policy in 1978 to attract
foreign capital and to acquire advanced foreign knowledge to improve its economy. Lured by China’s low cost labor and huge market potential, FDI inflows
reached a cumulative total of US$ 395 billion from
1979 to 2001, representing 20% of FDI in all developing countries (China Hand, 2002). However, despite China’s importance in the global FDI, and the large
amount of advanced foreign knowledge diffused into
the country, little...
Research Paper No. 1518 CROSS-BORDER KNOWLEDGETRANSFER AND PERFORMANCE IN EMERGING ECONOMIC REGIONS: THE CASE OF JAPANESE INTERNATIONAL JOINT VENTURES IN CHINA
TAKEHIKO ISOBE UNIVERSITY OF MARKETING AND DISTRIBUTIONSERVICES KOBE, JAPAN SHIGE MAKINO THE CHINESE UNIVERSITY OF HONG KONG DAVID B. MONTGOMERY
September 8, 1998
CROSS-BORDER KNOWLEDGETRANSFER AND PERFORMANCE IN EMERGING ECONOMIC REGIONS: THE CASE OF JAPANESE INTERNATIONAL JOINT VENTURES IN CHINA1
By TAKEHIKO ISOBE Associate Professor Department of Commerce University ofMarketing and Distribution Sciences 3-1 Gakuen Nishimachi, Nishi-ku, Kobe, Japan Phone: 81-78-794-3516 / Fax: 81-78-794-6149 Email: Takehiko_Isobe@red.umds.ac.jp
SHIGE MAKINO Assistant Professor Department ofManagement The Chinese University of Hong Kong Shatin, N.T., Hong Kong Phone: 852-2609-7636 / Fax: 852-2603-5104 makino @baf.msmail.cuhk.edu.hk
DAVID B. MONTGOMERY S.S. Kresge Professor ofMarketing Strategy Graduate School ofBusiness Stanford University Stanford, CA 94305-5015 Phone: 650-723-3029 I Fax: 650-725-9932 MontgomeryDavid@gsb.stanford.EDU
September 8, 1998
Please send all correspondences to Shige Makino.
CROSS-BORDER KNOWLEDGETRANSFER AND PERFORMANCE IN EMERGING ECONOMIC REGIONS: THE CASE OF JAPANESE INTERNATIONAL JOINT VENTURES IN CHINA
Abstract. As emerging...
...KNOWLEDGETRANSFER METHODS IN STRATEGIC ALLIANCES
KnowledgeTransfer Methods in Strategic Alliances
Achieving sustainable competitive advantage through knowledgetransfer, culture, and trust in
foreign parent and international joint venture (IJV) partnerships
International Business Research
KNOWLEDGETRANSFER METHODS IN STRATEGIC ALLIANCES 2
Abstract: Trust, cultural and relational embeddedness, along with
control synergies, comprise relational capital, representing an area
of considerable importance in an international joint venture (IJV)
relationship. The objective of this paper is to consider the various
ways through which foreign parents and IJV partners interact and
how certain components of their relationship impact knowledgetransfer, organizational learning and, therefore, competitive
Keywords: culture, trust, job security, knowledgetransfer,
international joint venture (IJV), competitive advantage.
We live in a global market environment, which has provided boundless opportunities for
organizational growth. These opportunities come with the benefit of access to new expanded
markets, but are often accompanied by a number of operational challenges for organizations.
The approaches to solving these challenges are often as unique...
The ability to transferknowledge across the organisation has become a key source of competitive advantage for firms striving to be leaders in the marketplace (Drucker, 1995). As companies expand internationally, sources and users of knowledge become increasingly dispersed. The transfer of knowledge is particularly challenging for multinational corporations (MNCs) where cultural and linguistic differences create barriers to communication and understanding (Yang, Mudambi, & Meyer, 2008). On the other hand, it has also been argued that language diversity broadens the access to diverse knowledge sources and serves as acknowledge transfer facilitator (Henderson, 2005).
However, Lee and Wu (2010) state that the access to knowledge sources per se does not necessarily correlate with a firm’s ability to use knowledge effectively and MNCs and their subsidiaries differ significantly in their ability to absorb and replicate external knowledge as well as in their capacity to transfer it in multiple directions and apply it in other (organisational and geographical) locations.
This process has been labelled ‘absorptive capacity’ and can be defined as a dynamic capability with four dimensions that progress chronologically: acquisition, assimilation transformation, and...
ß 2008 Elsevier Inc. All rights reserved.
ISSN 0090-2616/$ – see frontmatter
Knowledge Sharing Among High-Tech
MNCs in China and India:
Invisible Barriers, Best
Practices and Next Steps
MARY B. TEAGARDEN
The convergence of size, talent and ambition is
creating a dynamic playing field for knowledge creation and sharing in the Asia-Pacific
Region. The importance of China and India is
old news. Combined, the two countries
account for over 38% of the world’s population, and both have declared innovation to be
a strategic national priority. In 2006, China
announced plans to become an innovationoriented society by 2010 and a global leader in
science and technology by 2050. India proclaimed itself ‘‘The world’s knowledge hub of
the future’’ at a 2006 national research and
development exposition. The investment in
building the human infrastructure to realize
these aspirations is extraordinary according to
many popular sources—India graduates over
half a million scientists and engineers each
year. Even more are graduated each year in
China! Collectively, India and China graduate
about 12 times more scientists and engineers
each year than the United States. But aspirations and sheer talent are only part of the story.
Foreign Direct Investment (FDI) into
...role of tacit knowledge in innovation management
January 2004 Ragna Seidler-de Alwis Institute of Information Science University of Applied Sciences, Cologne Claudiusstr. 1 50678 Cologne, Germany Tel.: ++49 221 8275-3387 Mobile: ++49 175 1861855 Email: firstname.lastname@example.org Evi Hartmann A.T. Kearney Platz der Einheit 1 D – 60327 Frankfurt, Germany Tel: +49 69 9550 7550 Fax: +49 69 9550 7555 Mobile: +49 175 2659 514 Email: email@example.com Hans Georg Gemünden Institute of Technology and Innovation Management Technical University of Berlin Hardenbergstr. 4 – 5, HAD 29, 10623 Berlin Tel: +49 30 314 26088 Fax: +49 30 314 26089 Email: firstname.lastname@example.org RAGNA SEIDLER- DE ALWIS, Professor at the Institute of Information Science at the University of Applied Sciences in Cologne, Germany. EVI HARTMANN, PhD, Consultant at A.T. Kearney, Frankfurt, Germany. HANS GEORG GEMÜNDEN, Professor, Chair of the Institute of Technology and Innovation Management at the Technical University of Berlin, Germany.
Competitive Paper submitted to the 20 Annual IMP Conference in Copenhagen, 2th - 4th September 2004
Abstract Innovation management includes the management of processes to strive for novel assignments through the combination and integration of different knowledge components. Besides, next to explicit knowledge, tacit knowledge has a crucial influence on the success of innovation processes in...
FROM COMMON TO UNCOMMON KNOWLEDGE:
FOUNDATIONS OF FIRM-SPECIFIC USE OF KNOWLEDGE AS
Georgia State University
DENNIS A. GIOIA
The Pennsylvania State University
Although the knowledge-based view of strategy has significantly advanced understanding of the foundations of competitive advantage, less is known about how knowledge becomes a strategic resource. In this study, we develop an inductive, process
model of the relationships among (1) top managers’ beliefs about knowledge as a
resource (termed executive knowledge schemes), (2) the ways that executives search
or scan for knowledge, and (3) how they use that knowledge in practice to transform
common knowledge into distinctive, uncommon knowledge as a way of achieving
competitive advantage. In the course of generating the grounded model, we also
uncovered a new concept, scanning proactiveness, and identified two distinct forms of
knowledge use in practice: knowledge adaptation and knowledge augmentation.
One of the most venerable observations about
knowledge is Francis Bacon’s dictum that “knowledge is power.” Management scholars have now
firmly established the role of knowledge as one of
the key competitive resources of modern times
...Ericzon D. Quinain August 28, 2013
BSHRM 302 Mrs. Angelita Libardo
“ Keeping Up With The Expectation Of My Parents “
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...When it comes to the most serious problem hindering Chinese modernization efforts today, our group considers the Knotty Political System in china as the most serious problem. To be specific, Rampant Corruption and Rule by law in political system are the focus of our presentation.
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