MANAGEMENT

Knowledge Management

Abstract

Multinational corporations are increasingly dependent upon globally dispersed knowledge to compete in the global economy. In the traditional view, a strategic advantage for MNCs was their ability to replicate and transfer superior knowledge from headquarters to international subsidiaries. It is increasingly difficult for MNCs to realize a strategic advantage because much of the knowledge that MNCs need to compete in the global economy is highly tacit, context-specific, globally dispersed, and difficult to share. Little is understood about how MNCs can effectively harness globally dispersed knowledge. Knowledge sharing is important for international organizations to gain competitive advantage in the global market.

The paper contains three parts. Part 1 discusses about the introduction of knowledge management, importance of KM, resource based view, types of knowledge, social ties and knowledge transfer, cultural distance and obstacles to Knowledge Sharing. Part 2 consists of the technique adopted to implement the resource based approach and part 3 discusses the prerequisite for KM Implementation and the paper ends with the conclusion part.

Knowledge Management

Introduction

For multinational corporations (MNCs), there was a time when globalization meant “teaching the world from headquarters or from subsidiaries in advantaged locations or dominant clusters”. As globalization has increased, the knowledge necessary to compete in the global economy no longer resides in one location; rather, it is globally dispersed. The MNC's sustained competitive advantage (Barney, 1991, pp. 99-120) has become increasingly tied to its ability to share knowledge among its globally dispersed operations

The significance of this report is its emphasis MNCs to create a sustained competitive advantage through better understanding of the role that strong social ties play in cross border tacit knowledge sharing. The sharing of globally dispersed tacit knowledge in MNCs is impeded by cultural distance. Social networks with strong social ties are believed to be an effective means for sharing knowledge within the global context of a MNC. This study of knowledge sharing among process global organizations in a multinational corporation examined the extent to which strong social ties are effective at overcoming cultural distance to increase the sharing of knowledge. This understanding might help leaders in all MNCs to understand the role of strong social ties as a means for increasing tacit knowledge sharing.

The Importance of Knowledge in MNCs

Global competition has made cross-border knowledge transfer among business units increasingly important to the success of MNCs (Bhagat et al., 2002, pp. 204-221). In the traditional multinational paradigm, firms were viewed as benefiting from superior technology developed in the home country and replicated in other national markets through foreign direct investment. Multinational corporations have traditionally been projectors of knowledge created at home and transferred to foreign operations. The corporate home was seen as the source of all innovation, control, technical skills, and leadership talent. Consequently, MNCs failed to realize the potential of their globally dispersed sources of talent. That paradigm is being replaced by a view of the MNC as a network, where knowledge-building requires integrating contextually-specific knowledge from subsidiaries in different national cultures.

Resource-Based View of the Firm

The traditional view ...