Knowledge Transfer in Multinational Corporations

effective knowledge transfer will not come about automatically but requires appropriate and concerted managerial action. This is especially tme in multina tional organizations created though mergers and acquisitions. In such organiza tions, individual subunits are not only subjected to the isomorphic pulls of their respective local environments (Westney 1993) but are often characterized also by different organizational cultures, administrative heritage and work practices. As a long stream of research on mergers and acquisition testifies, achieving syner gies through knowledge sharing in such circumstances is associated with formid able obstac1es. The theoretical basis of much current literature on knowledge and knowledge transfer can be traced from Nelson and Winter's (1982) seminal work, over Win ter's (1987) conjecture regarding the trade-offs between tacitness and codifica tion of knowledge to a celebrated series of artic1es by Kogut and Zander (1992, 1993, 1996). It conceptualizes the multinational firm as a social community that specializes in the creation and transfer of knowledge. 'Higher order organiza tional routines' and the 'identifications' of their employees place firms in the privileged position to be able to intemally transfer knowledge, especially in its more 'tacit' varieties, more rapidly and cheaply than this can be accomplished through third-party licensing or through involuntary imitation. In this approach, the existence of firms is explained without invocation of 'opportunism' or other transaction cost considerations - a fact that has no doubt contributed to its wide spread appeal.