INTRA-ORGANIZATIONAL KNOWLEDGE SHARING IN MNCs DEPENDING ON THE DEGREE OF DECENTRALIZATION AND COMMUNITIES OF PRACTICE

Abstract

ABSTRACT This paper investigates the process of knowledge sharing between the different sites of a multinational company (MNC) and its influencing factors in 8 renowned MNCs in various industries all over the world. Following the research question 'How does the organizational structure influence knowledge sharing across the single sites of MNCs?', we focus on analyzing the organizational context of structure (the degree of decentralization of knowledge management and the existence of communities of practice) and its impact on the technical and personal knowledge flows and the intensity of cross-site knowledge sharing investigated with qualitative research methods. THEORETICAL BACKGROUND Empirical investigations of knowledge transfer within the multinational corporation and the factors that drive such transfer have been few (Gupta and Govindarajan, 2000; Phene et al., 2005). Our study aims at overcoming this limitation. The research is based on our recent global study on knowledge management and organizational learning in MNCs, supported by the Austrian Research Fund. The overall goal of the project was to provide a holistic picture of knowledge management in MNCs. Decentralization of Knowledge Management MNCs can be regarded as integral parts of a complex configuration of value-creating activities across national borders (Holtbriigge and Berg, 2004). Barlett and Ghoshal (1989) suggest the need for cross-border coordination between interdependent domestic and foreign operations can be handled by the transition to integrated transnational networks. These networks are characterized by a changing role of the headquarters away from hierarchical control of foreign subsidiaries to decentralized decision processes. According to Macharzina et al. (2001), non-hierarchical, network-oriented (so-called heterarchical) modes of international collaboration in MNCs have an organizational logic which is totally different from hierarchical, centre-oriented modes. However, the presence of heterarchy does not mean that hierarchical organization has disappeared in internal networks as hierarchy remains indispensable to reach certain decision quickly (van Wijk et al., 2003). As a matter of fact, organizations that decentralize decision-making may be more adaptive, more innovative, and are more capable to deal with complex environments than those organizations that maintain centralized decision-making and coordination (Macharzina et al., 2001). In network-oriented models of multinational organizations there is strong orientation towards the global acquisition and use of knowledge. Knowledge about the whole company should be embedded in all parts of the multinational system. According to Gupta and Govindarajan (1991), a high level of commitment to the entire organization and its global goal is absolutely necessary. To transfer knowledge, there must be both collective commitments of the partners on the one hand, as well as a certain amount of not only individual, but also organizational autonomy on the other hand. This autonomy is central to the idea of network-oriented modes of organizations. This form is supposed to be the most appropriate structure to cope with cultural differences and diversity issues. In the long run, knowledge sharing in MNCs can only work if managers of the organizations involved have similar assumptions on the partner relationship, its objectives, and performance (Inkpen, 1998 and 2000). The premise here is that the structure of the MNC can be understood as a differentiated network, where the network consists of linkages between the headquarters and the subsidiaries, of linkages between subsidiaries, and the subsidiaries' local linkages. This network is assumed to serve as glue that holds the vast geographically dispersed MNC together and through this network the different units can coordinate their activities, because the interpersonal ties make information exchange possible between interconnected units (Forsgren, 2004). …