Impact of institutional elements on ease of international knowledge transfer

Abstract

Based on a study of knowledge transfer from a multinational corporation head office to subsidiary, this study examines the ease of cross border knowledge transfer to developed, developing and least developed countries impacted by varying institutional contexts. Institutions are clustered based on Scott’s institutional theory (1995), into normative, cognitive and regulative pillars that frame the mental models and approaches of actors in these institutional contexts. The study proposes that the institutional sectors of education systems, embeddedness of foreign firms, and authority systems impact ease of knowledge transfer from a MNC head office to its subsidiaries in developed, developing and LDCs. Therefore this study makes an important contribution to the literature on cross border knowledge transfer in that it suggests that the external institutional contexts contribute to effective knowledge transfer. The research provides management with an indication of the institutional elements that impact ease of transfer of knowledge, and the extent of interventions that can be optimised, to reduce the time; cost and effort associated with knowledge transfer initiatives that will ultimately increase their efficiency. The research aims to provide useful insights for practitioners wanting to minimise the barriers to knowledge transfer and optimise employee knowledge transfer initiatives. The overall outcome of the study is that as the socio-economic development increases, the ease of knowledge transfer increases. The study, hence contributes to the international business literature by identifying how inter-organisational knowledge transfer can be improved across borders. Copyright