The Tacit Knowledge Problem in Multinational Corporations: Japanese and US Offshore Knowledge Incubators

Lam, Alice (2008): The Tacit Knowledge Problem in Multinational Corporations: Japanese and US Offshore Knowledge Incubators.

Abstract

This paper examines the ‘cognitive’ and ‘societal’ aspects of the tacit knowledge transfer problem in MNCs. Based on a comparative analysis of the overseas R&D labs of US and Japanese MNCs in the UK, it examines how home-based models of learning influence MNCs’ transnational social spaces for learning and their capabilities to address the tacit knowing problem. It illustrates how the US professional ‘networks of practice’ (NoP) and the Japanese organizational ‘communities of practice’ (CoP) approaches to transnational learning unfold in practice. It also examines how divergence between home and host country institutions governing knowledge production inhibits cross-societal tacit knowing.

• Item Type: MPRA Paper
• Language: English
• Keywords: comparative thinking; tacit knowledge; knowledge transfer in MNCs; innovation and R&D; organizational learning; communities of practice
• Subjects: F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms ; International Business; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O32 - Management of Technological Innovation and R&D

References

Amin, A. and Roberts, J. (2008) ‘Knowing in action: beyond communities of practice’, Research Policy, 36(2); 352-369.

Aoki, M. (1988) Information, Incentives and Bargaining in the Japanese economy. Cambridge: Cambridge University Press.

Barlett, C.A. and S. Ghoshal, S. (1990) Managing innovation in the transnational corporations. In C. Barlett, Y. Doz & G. Hedlund (Eds.), Managing the global firm: 215-255. London: Routledge.

Bartlett, C.A. & Ghoshal, S. (1998) Managing across borders: the transnational solution. Boston, Mass: Harvard Business School Press.

Burt, R. (1992) Structural Holes: The Social Structure of Competition. Cambridge, MA: Harvard University Press.

Asakawa, K. (2001) ‘Organizational tension in international R&D management: the case of Japanese firms’, Research Policy, 30: 735-757.

Belderbos, R. (2003) Entry mode, organizational learning, and R&D in foreign affiliates: evidence from Japanese firms. Strategic Management Journal, 24(3): 235-259.

Birkinshaw, J. (1997) ‘Entrepreneurship in multinational corporations: the characteristics of subsidiary initiatives’, Strategic Management Journal, 18, 3: 207-29.

Brown, J.S. & Duguid, P. (1991) ‘Organizational learning and communities-of-practice: toward a unified view of working, learning and innovation. Organization Science. 2(1): 41-57.

Brown, J.S. and Duguid, P. (2000) The Social Life of Information. Boston: Harvard Business School Press.

Brown, J.S. & Duguid, P. (2001) ‘Knowledge and organization: a social-practice perspective’, Organization Science, 12(2 ): 198-213.

Cantwell, J.A. (1995) ‘The globalisation of technology: what remains of the product cycle model?’, Cambridge Journal of Economics, 19: 155-74.

Cantwell, J.A. and Zhang, Y. (2006) ‘Why is R&D internationalization in Japanese firms so low? A path-dependent explanation’, Asian Business and Management. 5 (2): 249-269.

Chikudate, N. (1999) 'Generating reflexivity from partnership formation: a phenomenological reasoning on the partnership between a Japanese pharmaceutical corporation and western laboratories', The Journal of Applied Behavioral Science, 35,3: 287-305.

Cohen, S.S. and Fields, G. (1999) ‘Social capital and capital gains in silicon valley.’ California Management Review, 41, 2: 108-130.

Cohen, W.M. and Levinthal, D.A. (1990) ‘Absorptive capacity: a new perspective of learning and innovation’, Administrative Science Quarterly, 35: 128-152.

Coleman, J.S. (1988) ‘Social capital in the creation of human capital’, American Journal of Sociology, 94: S95-S120.

Coleman, S. (1999) Japanese Science: From the Inside. Routledge: London and New York.

Collins, H.M. (1982) ‘Tacit knowledge and scientific networks’, in Barnes, B. and Edge, D. (eds) Science in Context: Readings in the Sociology of Science. Milton Keynes: Open University Press, pp.44-64.

Collins, H.M. (2001) ‘Tacit knowledge, trust and the Q of saphhire’, Social Studies of Science, 31,1: 71-85.

Cramton, C. D. (2001) ‘The mutual knowledge problem and its consequences for dispersed collaboration’, Organization Science, 12,3 : 346-371.

Dore, R.P. (1973) British factory, Japanese factory; the origins of national diversity in industrial relations. Berkeley: University of California Press.

Doremus, P.N., Keller, W., Pauley,L. and Reich, S. (1998) The Myth of the Global Corporation. Princeton, New Jersey: Princeton University Press.

Duguid, P. (2005) ‘The art of knowing: social and tacit dimensions of knowledge and the limits of the community of practice’, The Information Society, 21: 109-118.

Durkheim, E. (1964) The Rules of Sociological Method. New York: Free Press.

Eisenhardt, K.M. (1989) ‘Building theories from case study research’, The Academy of Management Review, 14,4: 532-550.

Fleck, L. (1979) Genesis and Development of a Scientific Fact. Chicago: The University of Chicago Press.

Florida, R. (1997) ‘The globalization of R&D: results of a survey of foreign-Affiliated R&D laboratories in the USA’, Research Policy 26: 85-103.

Frost, T.S. (2001) ‘The geographic sources of foreign subsidiaries' innovations’, Strategic Management Journal, 22, 101-123.

Frost, T.S. and Zhou, C. (2000) ‘The geography of foreign R&D within a host country’, International Studies of Management and Organization, 30,2:10-43.

Frost, T.S., Birkinshaw, J.M. and Ensign, P.S. (2002) ‘ Centres of excellence in multinational corporations’, Strategic Management Journal, 23: 997-1018.

Gassman, O. and von Zedwitz, M. (1999) ‘New concepts and trends in international R&D organization’, Research Policy, 28: 231-250.

Gertler, M.S. (2003) ‘Tacit knowledge and the economic geography of context, or the undefinable tacitness of being (there)’, Journal of Economic Geography, 3: 75-99.

Gerybadze, A. and Reger, G. (1999) ‘Globalization of R&D: recent changes in the management of innovation in transnational corporations’, Research Policy, 28: 251-274.

Granovetter, M.S. (1973) The strength of weak ties. American Journal of Sociology, 78: 1360-1380.

Granstrand, O. (1999) ‘Internationalization of corporate R&D: a study of Japanese and Swedish corporations’, Research Policy, 28: 275-302.

Gupta A.K. and Govindarajan, V. (2000) ‘Knowledge flows within multinational corporations’, Strategic Management Journal, 21: 473-496.

Hamel, G. (1991) ‘Competition for competence and inter-partner learning within international strategic alliances’, Strategic Management Journal, 12: 83-103.

Hage, J. and Hollingsworth, J.R. (2000) ‘A strategy for the analysis of idea innovation networks and institutions’, Organization Studies, 21 (5): 971-1004.

Hall, P.A. & Soskice, D.W. (2001) Varieties of capitalism: the institutional foundations of comparative advantage. Oxford: Oxford University Press.

Hansen, M.T. (1999) ‘The search-transfer problem: the role of weak ties in sharing knowledge across organization subunit’, Administrative Science Quarterly, 44: 82-111.

Hane, G. (1999) ‘Comparing University-Industry Linkages in the United States and Japan’, in Branscomb, L.M., Kodama, F. and Florida, R. (eds.) University-Industry Linkages in Japan and the United States, Cambridge and London: the MIT Press, pp. 20-61.

Hollingsworth, J.R. (2000) ‘Doing institutional analysis: implications for the study of innovations’, Review of International Political Economy, 7,4: 595-644.

Hollingsworth, J.R. (2002) ‘Tacit knowledge, innovation and economic geography’, Urban Studies, 39, 5-6: 871-84.

Kaounidess, L.C. (1999) 'Science, technology, and global competitive advantage: the strategic implications of emerging technologies for corporations and nations'. International Studies of Management and Organization, 29: 1, 53-79.

Kitschelt, H. (1991) ‘Industrial governance structures, innovation strategies, and the case of Japan: sectoral or cross-national comparative analysis’, International Organization, 45,4: 454-493.

Kneller, R. (2003) ‘Autarkic drug discovery in Japanese pharmaceutical companies: insights into national differences in industrial innovation’, Research Policy, 32: 1805-1827.

Kogut, B. and Zander, U. (1993) ‘Knowledge of the firm and the evolutionary theory of the multinational corporation’, Journal of International Business Studies, 24, 4: 625-646.

Kogut, B. and Zander, U. (1995) ‘Knowledge, market failure and the multinational enterprise: A Reply’, Journal of International Business Studies, 26,2: 417-426.

Kotabe, M., D. Dunlap-Hinkler, R. Parente, & H.A. Mishra. (2007). Determinants of cross-national knowledge transfer and its effect on firm innovation. Journal of International Business Studies, 38(2): 259-282.

Kuemmerle, W. (1997) ‘Building effective R&D capabilities abroad’. Harvard Business Review March-April: 61-70.

Kuemmerle, W. (1999a) ‘Foreign direct investment in industrial research in the pharmaceutical and electronics industries: results from a survey of multinational firms’, Research Policy, 28: 179-193.

Kuemmerle, W. (1999b) ‘The drivers of foreign direct investment into research and development: an empirical investigation’, Journal of International Business Studies, 30, 1: 1-25.

Lam, A. (1997) ‘Embedded firms, embedded knowledge: problems of collaboration and knowledge transfer in global cooperative ventures’, Organization Studies, 18, 6: 973-996.

Lam, A. (2000) ‘Tacit Knowledge, Organizational Learning and Societal Institutions: An Integrated Framework’, Organizational Studies, 21, 3: 487-513.

Lam, A. (2002) 'Alternative societal models of learning and innovation in the knowledge economy', International Social Science Journal, 171: 67-82.

Lam, A. and Lundvall, B-A. (2006) ‘The learning organization and national systems of competence building and innovation’. In E. Lorenz, E. and B-A. Lundvall (eds) How Europe’s Economy Learn, Cambridge: Cambridge University Press. Lehrer, M. and Asakawa, K. (2003) ‘Managing intersecting R&D social communities: a comparative study of European ‘knowledge incubators’ in Japanese and American firms’, Organization Studies. 24,5: 771-792.

Lindkvist, L. (2005) ‘Knowledge communities and knowledge collectivities: A typology of knowledge work in groups. Journal of Management Studies, 42(6): 1189-1210.

March, J.G. (1991) 'Exploration and exploitation in organizational learning'. Organization Science, 2:71-87.

Martin, X and Salomon, R. (2003) ‘Knowledge transfer capacity and its implications for the theory of multinational corporation’, Journal of International Business Studies, 34,4: 356-374.

Mendez, A. (2003) ‘The coordination of globalized R&D activities through project teams organization: an exploratory empirical study’, Journal of World Business, 38: 96-109.

Methé, D.T. (1995). ‘Basic research in Japanese electronic companies: an attempt at establishing new organizational routines’, in Liker, J.K., Ettlie, J.E. and Campbell, J.C. (eds.) Engineered in Japan: Japanese technology-management practices. New York: Oxford University Press, pp. 17-39.

Methé, D.T. and Penner-Hahn, J.D. (1999) ‘Globalization of pharmaceutical research and development in Japanese Companies: organizational learning and the parent-subsidiary relationship’, in S.L.Beechler and A. Bird (eds.) Japanese Multinationals Abroad: Individual and Organizational Learning, New York: Oxford University Press, pp. 191-210.

Meyer-Krahmer, F. and Reger, G. (1999) ‘New perspectives on the innovation strategies of multinational enterprises: lessons for technology policy in Europe’, Research Policy, 28: 751-776.

Miller, K.D., Meng, Z. & Calantone, R.J. (2006) ‘Adding interpersonal learning and tacit knowledge to march's exploration-exploitation model’, Academy of Management Journal, 49(4): 709-722.

Morgan, G. (2001) 'The multinationals firm: organizing across institutional and national divides', in G. Morgan, P.H. Kristensen and R.Whitley (eds.) The multinational firm: organizing across institutional and national divides, Oxford: Oxford University Press, pp.1-24.

Mowery, D.C. and Rosenerg, N. (1993) ‘The U.S. National Innovation System’, in R.R. Nelson (ed.). National Innovation Systems: A Comparative Analysis. Oxford: Oxford University Press.

Murray, F. (2004) ‘The role of academic inventors in entrepreneurial firms: sharing the laboratory life’, Research Policy 33: 643-659.

Nakayama, S. and Low, M.F. (1997) 'The research function of universities in Japan'. Higher Education, 34, 245-258.

Nelson, R. R. (1993). National Innovation Systems: A Comparative Analysis. Oxford: Oxford University Press.

Nonaka, I. And Takeuchi, H. (1995) The Knowledge Creating Company. Oxford: Oxford University Press.

Odagiri, H. and Goto, A. (1996) Technology and Industrial Development in Japan, Oxford: Clarendon Press.

Orlikowski, W. J. (2002) ‘Knowing in practice: enacting a collective capability in distributed organization’, Organization Science, 13, 3: 249-273.

Pauly, L.W. and Reich, S. (1997) ‘National structures and multinational corporate behaviour: enduring differences in the age of globalization’, International Organization, 51, 1: 1-30.

Pearce, R. and Papanastassiou, M (1999) ‘Overseas R&D and the strategic evolution of MNCs: evidence from laboratories in the UK’, Research Policy, 28: 23-41.

Polanyi, M. (1958) Personal Knowledge: Towards a Post-Critical Philosophy. London: Routledge and Keegan Paul.

Polanyi, M. (1966) The Tacit Dimension. New York: Doubleday.

Reger, G. (1999) ‘How R&D is coordinated in Japanese and European multinationals’, R&D Management, 29,1: 71-85.

Reagans, R. and McEvily, B. (2003) ‘Network structure and knowledge transfer: the effects of cohesion and range’, Administrative Science Quarterly, 48: 240-267.

Reber, A.S. (1993) Implicit Learning and Tacit Knowledge: An Essay on Cognitive Unconscious. New York: Oxford University Press.

Roehl, T., Mitchell, W. and Slattery, R.J. (1995) ‘The growth of R&D investment and organizational changes by Japanese pharmaceutical firms, 1975-1993’, in J.K.Liker, J.E. Ettie and J.C. Campbell (eds.) Engineered in Japan. New York: Oxford University Press, pp.40-69.

Ronstadt, R.C. (1978) ‘International R&D: the establishment and evolution of research and development abroad by seven US multinationals’, Journal of International Business Studies, 9: 7-24.

Rowley, T., Behrens, D. and Krackardt, D. (2000) ‘Redundant governance structures: an analysis of structural and relational embeddedness in steel and semiconductor industries’, Strategic Management Journal, 21: 369-386.

Saxenian, A. (1996) Beyond boundaries: open labour markets and learning in the Silicon Valley. In M.B. Arthur and D.M. Rousseau (Eds.), The boundaryless career: a new employment principle for a new organizational era: 23-39. New York: Oxford University Press.

Schutz, A. (1953) ‘Common sense and scientific interpretation of human action’, Philosophy and Phenomenological Research, September: 1-37.

Shapin, S (1995) ‘Here and everywhere: sociology of scientific knowledge’, American Review of Sociology, 21: 289-321.

Simonin, B.L. (1999) ‘Ambiguity and the process of knowledge transfer in strategic alliances’, Strategic Management Journal, 20 (7): 595-623.

Sole, D. and Edmondson, A. (2002) ‘Situated knowledge and learning in dispersed teams’, British Journal of Management, 13: S17-34.

Szulanski, G. (1996) Exploring internal stickness: Impediments to the transfer of best practice within the firm. Strategic Management Journal, 17: 27-43.

Teece, D. J. (1977) ‘Technology transfer by multinational corporations: the resource cost of transferring technological know-how’, Economic Journal, 87: 242-261.

Turner, L., Ray, D. and Hayward, T. (1997) The British research of Japanese companies, London: Japan/Anglo-Japanese Economic Institute.

Uzzi, B. (1997) ‘Social structure and competition in interfirm networks: the paradox of embeddedness’, Administrative Science Quarterly: 42, 35-67.

Spencer, J.W. (2001) ‘How relevant is university-based scientific research to private high-technology firms? A United States-Japan comparison’, Academy of Management Journal, 44(2): 432-441.

Szulanski, G. (1996) Exploring internal stickness: Impediments to the transfer of best practice within the firm. Strategic Management Journal, 17: pg. 27.

Vygotsky, L.S. (1978) Mind in society : the development of higher psychological processes. Cambridge: Harvard University Press.

Wenger, E. (1998) Communities of Practice: Learning, Meaning, and Identity. Cambridge: Cambridge University Press.

Wenger, E. (2000) 'Communities of practice and social learning systems', Organization, 7 (2): 225-246.

Westney, D.E. (1993) ‘Country patterns in R&D organization: the United states and Japan’, in B. Kogut (ed.) Country Competitiveness and the Organizing of Work. New York: Oxford University Press, pp.36-53.

Westney, D.E. (1999) ‘Changing perspectives on the organization of Japanese multinational companies’, in S.L. Beechler and A. Bird (eds.) Japanese Multinationals Abroad: Individual and Organizational Learning. New York: Oxford University Press, pp. 11-29.

Whitley, R. (2001) 'How and why are international firms different? The consequences of cross-border managerial coordination for firm characteristics and behaviour', in G. Morgan, P.H. Kristensen and R. Whitley (eds.) The Multinational Firm: Organizing Across Institutional and National Divides, Oxford: Oxford University Press, pp. 27-68.

Whitley, R. (1999) Divergent Capitalism. Oxford: Oxford University Press.

Whitley, R. (2000) ‘The institutional structuring of innovation strategies: business systems, firm types and patterns of technical change in different market economies’, Organization Studies, 21,5: 855-86.

Whitley, R. (2002) Developing innovative competences: the role of institutional frameworks. Industrial and Corporate Change, 11(3): 497-528.

Zanfei, A. (2000). 'Transnational firms and the changing organization of innovation activities', Cambridge Journal of Economics, 24: 515-542.

Zucker, Lynne G., Michael R. Darby and Jeff S. Armstrong (2002) ‘Commercializing Knowledge: University Science, Knowledge Capture, and Firm Performance in Biotechnology’, Management Science, 48,1: 138-153.