The level of interplay required between expatriates and locals in a MNC's subsidiary to effectively transfer knowledge in order to gain strategic competitive advantage

Abstract

Understanding the interplay between expatriates and locals and how that has an effect on knowledge transfer within a Multinational Corporations (MNC) is key to increasing strategic competitive advantage (SCA). The literature has shown that various factors such as effective knowledge transfer, knowledge stock, and subsidiary autonomy, amongst others, are factors which increase subsidiary performance. Although the literature proves how important the expatriate and local is to the transfer of knowledge, there is little about understanding the workings of this relationship. This study explores this relationship and seeks to establish insights into the interplay between expatriates and locals and to understand how this expedites knowledge transfer from a parent organisation to a subsidiary, which ultimately increases strategic competitive advantage. Qualitative exploratory methods were used to gain insight into the interplay between expatriates and locals within different MNC subsidiaries. Twelve semi-structured depth interviews were conducted with separate respondents from separate subsidiaries of MNC's. The interviewees were of management level and had a good understanding of their company and the topic being researched. While trust was a factor that came out as one of the major findings, which was congruent with the literature, there were other new insights which emerged. The key findings of this study were that cultural understanding, openness to people and change, and working towards a common purpose or goal are key factors in the moderating role of knowledge characteristics between these two actors. Creating an open collaborative learning environment where knowledge can be shared with one another and face-toface, constant communication where new insights gained in understanding how to expedite knowledge transfer.