KNOWLEDGE TRANSFER METHODS IN STRATEGIC ALLIANCES
Knowledge Transfer Methods in Strategic Alliances
Achieving sustainable competitive advantage through knowledge transfer, culture, and trust in foreign parent and international joint venture (IJV) partnerships
International Business Research
KNOWLEDGE TRANSFER 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 knowledge transfer, organizational learning and, therefore, competitive advantage.
Keywords: culture, trust, job security, knowledge transfer,
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 as the partnerships themselves and no single solution will fit all situations.
One opportunity through which a growth-oriented company may increase their global footprint is through strategic alliance. International Joint Ventures (IJVs) have become one of the most common means of international expansion because they enable firms to compete in complex environments (Hajidimitriou, Sklavounos & Rotsios, 2012). A strategic alliance can offer access to new product lines and resources, expanded services, emerging markets, increased brand exposure, advanced expertise, and a broader knowledge base. Foreign parent companies who are entertaining the possibility of a long-term IJV partnership must consider both the dissimilarities and the potential synergies which exist between the foreign parent and that of the IJV when considering markets, organizational/industry structure, and firm resources. The strength of the partnership will lie in the level of collaboration of the IJV, which is in a position to offer unique or local knowledge to the foreign parent.
Firm resources may include such beneficial tools as: expertise, capabilities, KNOWLEDGE TRANSFER METHODS IN STRATEGIC ALLIANCES 3
organizational processes, information, and knowledge (explicit and implicit), which can be utilized by a firm in their organizational strategy (Barney, 1991) in ensuring a stronger position in the competitive global market. To maintain continued growth and competitive advantage over competitors, corporations must consistently seek strategic avenues through which to achieve, expand and explore new markets.
Some of the concerns a foreign parent may have when considering an international joint venture (IJV) may include: 1) obtaining a solid understanding of the complexities of the operation and the culture of the IJV; 2) ensuring that both partners possess a similar outlook on operational objectives; 3) ensuring that both partners have a shared corporate vision; and, 4) the possibilities of building and achieving a basis of understanding and trust. One key focus area between a foreign parent and an IJV is knowledge transfer, which is defined as “the process through which one unit (e.g., group, department, or division) is affected by the experience of another" (Argote & Ingram, 2000, p. 151). Focusing on the requirement of effective information transfer from parent to the IJV, there are a number of methods available; some have been effective and others have been prone to difficulty -- sometimes failure. While there has been a moderate focus on IJVs in Vietnam, most studies have focussed on the relationship between the parent and the IJV (Lai Xuan and Truong, 2005). To advance research into...
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