Knowledge Transfer from multinational corporations’ headquarters to their subsidiaries : The methods of transferring knowledge (Explicit & Tacit)

Sammanfattning: Background: Globalization, technological advancement and opportunity of capturing new markets have pushed business organizations to expand their business in the inter- national market. As a result, companies have established their subsidiaries in the host country and control their business from headquarters. Moreover, headquarters provide all the support such as training, strategies and knowledge to their subsidiary to perform better and help to build competitive advantage. The importance of knowledge transfer has increased in recent decades because knowledge is considered as an asset. Aim: The aim of the study is to analysis the method of knowledge transfer (explicit and tacit) from multinational companies headquarter to their subsidiaries. Methodology: In this paper, qualitative research approach has been followed with con- tent analysis technique. Primary data has been collected through interviews and Conve- nience sampling technique were used. Findings: Findings of the study shows that MNCs are using agency theory and knowl- edge base theory to transfer knowledge to their subsidiary. Most of the cases it has been observed that headquarters appeared as a knowledge creator whereas subsidiaries only utilize that knowledge. Moreover, manufacturing based companies transfer more explicit knowledge and service based companies transfer more tacit knowledge. Almost every MNCs use training, seminars, creating social groups and written instructions to transfer explicit and tacit knowledge to their subsidiaries. Study also found that there are some internal (hoarding behavior, non-invented here syndrome) and external factors (culture, language, location) which affect the knowledge transfer process of MNCs. Contribution of the study: This study will help managers around the world to under- stand the core concept of knowledge transfer, knowledge transfer method and factors affecting knowledge transfer. On the other hand, it will also help to design flawless channels to transfer knowledge. Scope of further studies: More interviews can be added including managers from the subsidiaries to get a more broader perspective. Also the studies can be done with com- paring different industries since knowledge is different depending on the industry. For example, the service Industry has more tacit knowledge than in the manufacturing indus- try.