KNOWLEDGE SHARING
ACROSS BORDERS:
CHOOSING THE RIGHT
MANAGER, ACCORDING
TO THE LOCALS
THIJS F. VAN DER WERFF
MASTER DISSERTATION
Knowledge sharing across borders: Choosing the right manager, according to the locals
Thijs F. van der Werff
Double Degree
“Advanced International Business and Marketing Management”
MSc. International Business and Management University of Groningen, Bartjan Pennink
S2392992
MSc. International Marketing Management
Newcastle University Business School, Jenny Rodriguez B3002711
Contact: thijs.vdw@live.nl Phone: +31 6 53 68 53 79
Amsterdam, December 2013
ABSTRACT
Managers from multiple types of organisations have acknowledged that knowledge management is essential to organisational success in today’s highly competitive environment. Especially in multinational organisations where knowledge needs to be shared across borders and cultures, effective knowledge sharing is a highly complex task. In order to overcome differences in culture and language between the parent firm and foreign subsidiaries, various multinational corporations have sent expatriates that have strong relations with the parent firm to manage foreign subsidiaries. However, where knowledge sharing depends on both knowledge access and communication, the relationship that managers keep with the local employees appears to be important with regard to accessing knowledge.
ACKNOWLEDGEMENT
First of all, I would like to thank all the respondents that have been willing to participate in my research by filling in the questionnaire. Without them, I would not have been able to run this research. In addition, I want to thank all my friends and acquaintances that have helped me spreading my questionnaire. Especially, I want to thank Ian Scott-Bell and Andrew Openshaw from Nigel Wright, for the distribution of my questionnaire amongst the company’s internal employees, and international contacts. This has led to a wide variety of countries, cultures and visions participating in my study. For that I am very grateful.
Additionally, I want to thank my supervisors Bartjan Pennink and Jenny Rodriguez for their detailed feedback and unconditional support throughout the whole process. Thank you for all the moments that you have welcomed me to discuss my dissertation and the accompanied issues, and sometimes even frustrations that came with writing this dissertation!
I want to thank my parents, Margot and Sietse, and my sister, Liz, for their support. They have kept me motivated to finish my dissertation in time, despite the rough times that we have been through last year. I would not have been able to do this without you. In addition, I want to thank Liz for critically reading my dissertation, and for helping me out with the figures and tables incorporated in this dissertation. I would have been lost without her graphic-superpowers!
In addition, I want to thank all my fellow-students with who I have gone through this Double Degree. Getting to know each other in Groningen, building friendships in Newcastle, and keeping it like that hopefully for a long time after finishing our degrees. This dissertation is the end of an intense period of our lives, but it is only the start of everything that is ahead of us.
At last, but definitely not least, I want to thank you as a reader of this dissertation for your interest in my work. Despite the SPSS-struggles, it has – really – been a pleasure working on this dissertation and I hope that you will take something from it. After all, contributing to the existing knowledge on this topic was my overall goal.
TABLE OF CONTENTS
ABSTRACT -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ 3 ACKNOWLEDGEMENT -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ 4 INTRODUCTION -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ 7 PROBLEM INDICATION -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ 8 CONTRIBUTION -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ 10 RESEARCH OUTLINE -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ 121. LITERATURE REVIEW: KNOWLEDGE MANAGEMENT AND HOW THIS IS AFFECTED BY
MANAGERS’ CULTURAL EMBEDDEDNESS AND SOCIAL CAPITAL -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ 13 1.1 KNOWLEDGE MANAGEMENT IN MNCS -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ 13 1.2 FOREIGN STAFFING PRACTICES TO SHARE KNOWLEDGE ACROSS BORDERS -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ 18
1.3 SOCIAL CAPITAL -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ 24
2. CONCEPTUAL FRAMEWORK: WHICH FACTORS DO INFLUENCE KNOWLEDGE SHARING
3. RESEARCH METHODOLOGY -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ 39
3.1 CONSTRUCT DEFINITIONS -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ 40
3.2 DATA COLLECTION PROCESS -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ 40
3.3 MEASUREMENT ASSESSMENT -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ 47
4. RESULTS: KNOWLEDGE SHARING BETWEEN MANAGERS AND LOCAL EMPLOYEES -‐-‐-‐-‐-‐-‐-‐ 50
4.1 SAMPLE CHARACTERISTICS -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ 50
4.2 ANALYSIS OF THE MODEL -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ 50
INTRODUCTION
Managers from multiple types of organisations have acknowledged that knowledge management within organisations is the key to organisational success in today’s highly competitive environment (Fos & Pedersen, 2002; Ipe, 2003; Michailova & Mustaffa, 2012). In addition, the increasing complexity and speed of changes in knowledge and information (Huysman & Wulf, 2005) has resulted in a growing body of literature covering knowledge management in the last decades. A critical point indicated in the existing literature is organisations’ capability to share knowledge within organisations in order to be successful. This leads to the question why some organisations stand out in intra-organisational knowledge sharing, whereas others do less well.
According to Hocking, Brown and Harzing (2007), two activities that are fundamental to knowledge sharing are access to knowledge and communication. Clearly, it is impossible to transfer knowledge from one business unit to another without these two activities. However, it is generally accepted that knowledge sharing within organisations can be difficult (Goh, 2002; Schlegelmilch & Chini, 2002; Li, 2005; Chow & Chan, 2008). Communication failures, conflicts, and power dynamics within organisations are only a few of the factors indicated that may lead to barriers in the knowledge-sharing process (Goh, 2002).
point out that most tools developed to enhance knowledge sharing within organisations do not become institutionalised into the corporate culture, which results in resistance to effectively use them. Thus, whilst information technology is a critical factor for knowledge sharing within MNCs, the role of social relationships between individuals and groups of individuals should not be forgotten (Huysman & Wulf, 2005). Social capital, as the binding factor between members of a network, results in, amongst others, more effective knowledge sharing, lower transaction costs and greater coherence of action (Widén-Wulff & Ginman, 2004).
One proposed way to foster intra-organisational knowledge sharing is to send out expatriates to manage MNCs’ foreign subsidiaries (Harzing, 2001a). Due to their intercultural experience (Argote & Ingram, 2000; Bonache & Brewster, 2001) and strong relations with the parent firm (Bartlett & Ghoshal, 1989), expatriate managers are considered to be successful at transferring knowledge across geographic borders. Their strong ties and shared language with the parent firm make them more effective in their communication with the parent firm (Hocking et al., 2007).
However, in order to effectively transfer knowledge from the subsidiary to the parent firm, knowledge first has to be accessed properly (Hocking et al., 2007). Therefore, the manager should be able to communicate effectively with the local employees working in the subsidiary. As the expatriate manager shares his cultural background and language with the parent firm, there may remain a cultural and linguistic gap between the expatriate manager and the local employees. As a consequence, the knowledge-sharing barrier is not eliminated by sending out expatriate managers, but is shifted downwards (Freely & Harzing, 2003). Instead of having a barrier between the parent firm and the foreign subsidiary, sending out expatriate managers results in moving the barrier between the expatriate manager and the local employees.
PROBLEM INDICATION
Ghoshal, 1989). However, where knowledge sharing is dependent on both knowledge access and communication (Hocking et al., 2007), the relationship that managers keep with the local employees appears to be important in regarding accessing knowledge. Social capital between individuals, influenced by the level of shared culture and language between them (Chiu, Hsu & Wang, 2006), is recognised as a critical factor in enhancing knowledge sharing (Hitt, Lee & Yucel, 2002; Widén-Wulff & Ginman, 2004; Huysman & Wulf, 2005). Individuals that have a high level of shared culture and language tend to have a higher level of social capital than individuals that do not share their culture. As such, it could be argued that local managers would share less knowledge with expatriate managers than they would do with host country national managers. However, what the effect is of the manager’s cultural embeddedness in the host country on the knowledge sharing process between individuals is an underdeveloped theme in the existing literature.
In addition, in researching how knowledge sharing could be improved, current studies have mainly focussed on the improvement of information technology (Voelpel, Dous & Davenport, 2005; Wang & Noe, 2010). However, neglecting the social environment and social capital between the organisation’s employees has resulted in biased findings (Huysman & Wulf, 2005).
Therefore, this study aims to evaluate how the MNC’s subsidiary manager embeddedness in the local culture influences intra-organisational knowledge sharing. Examined will be whether there is a difference in local employees’ knowledge sharing with host-country national mangers compared to local employees’ knowledge sharing with expatriate managers, due to cultural differences. As such, the research question for this dissertation is:
What is the difference in knowledge sharing between local employees working under a host country national manager versus local employees working under an expatriate manager?
over studies done in the past. However, a body of constantly recurring factors that are considered in different studies can be identified, and will be extensively discussed in this dissertation. The factors that are considered in this dissertation are:
1. Social interaction ties (Huysman & Wulf, 2005; Chiu et al., 2006; Chang & Chuang, 2011);
2. Interpersonal trust (Li, 2004; Chiu et al., 2006; Chow & Chan, 2008; Chang & Chuang, 2011);
3. Presence of an informal relationship (Chiu et al., 2006; Chow & Chan, 2008); 4. Identification with the manager (Widén-Wulf & Ginman, 2004; Chiu et al.,
2006; Chang & Chuang, 2011);
5. Shared language (Feely & Harzing, 2003; Chiu et al., 2006; Harzing & Feely, 2008; Chang & Chuang, 2011);
6. Shared vision (Li, 2004; Huysman & Wulf, 2005; Chiu et al., 2006; Chow & Chan, 2008).
In order to answer the research question, six hypotheses covering these six factors that affect the social capital between the subsidiary’s manager and the local employees were developed. These hypotheses, based on the existing literature, will be tested by an empirical quantitative study.
Before data were analysed, it was assumed that in foreign subsidiaries of MNCs local employees share more knowledge with host country national managers than expatriate managers, due to their shared culture and language. These cultural similarities build stronger social capital between the manager and the employees, which leads to knowledge sharing. If this assumption is proved to be right, sending expatriate managers to foreign subsidiaries might strengthen the relation with the parent firm, but will not automatically increase knowledge sharing between the subsidiary and the parent firm.
CONTRIBUTION
MNCs. Whereas current literature mainly focuses on how knowledge can be the fundament of competitive advantages in MNCs, and what the crucial role of information technology is in the knowledge sharing process, limited research has been done in order to explain how organisations can transfer this knowledge considering different cultures. In addition, there is limited research undertaken on how expatriate managers interact with local employees in foreign subsidiaries that are culturally different from the MNC’s home country.
RESEARCH OUTLINE
1.
LITERATURE REVIEW: KNOWLEDGE MANAGEMENT
AND HOW THIS IS AFFECTED BY MANAGERS’
CULTURAL EMBEDDEDNESS AND SOCIAL CAPITAL
This dissertation combines the literature from different areas of research. Therefore, an extensive review of the existing literature about the topics covered in this study is provided in this chapter. The first section evaluates the concept of knowledge sharing. Since knowledge sharing has been a subject of research for multiple decades, the amount of literature written about this topic is too large to discuss entirely. Therefore, only the key aspects that are relevant to this specific study will be touched upon. The second section evaluates the executive staffing practices in MNCs, considering the trade-off between sending an expatriate manager or attract a host country national for a management position in the MNC’s foreign subsidiary. The last part of this chapter discusses how social capital and how this is related to knowledge sharing between local employees and their manager.
1.1 KNOWLEDGE MANAGEMENT IN MNCs
Knowledge management in MNCs has received more and more attention over the past decades for different reasons. First of all, there is growing recognition amongst both managers and researchers that knowledge is a critical factor for organisational success (Maurer, Bartsch & Ebers, 2011) as it drives innovation and growth, and it is a source of competitive advantage (Argote & Ingram, 2000; Grant, 2002). Furthermore, knowledge sharing is positively related to reductions in costs, faster new product development processes (Lin et al., 2009), and higher sales and revenue growth due to new product development (Hansen, 2002; Mesmer-Magnus & DeChurch, 2009; Wang & Noe, 2010).
1.1.1 The multinational corporation
Based on the definition proposed by Ghoshal & Bartlett (1990), in this dissertation an MNC is defined as an organisation consisting of different geographically separated organisations that includes a headquarter and subsidiaries based in other countries than this headquarter. All these different subsidiaries of the MNC operate under the corporate identity of the headquarter (Inkpen & Tsang, 2005). Considering the critical importance of knowledge for the success of organisations, the very reason why MNCs exist is because of their capability to exploit and share knowledge more effectively between organisational units within the organisation than through external market mechanisms (Inkpen & Tsang, 2005).
As mentioned before, the way knowledge flows in MNCs has drastically changed in the last decades (Almeida & Phene, 2004). Where knowledge used to be created in the parent firm from where it would be diffused to the foreign subsidiaries, nowadays international subsidiaries contribute to creating knowledge for the MNC by accessing local knowledge (Björkman et al., 2004). This tendency is the consequence of MNCs’ capability to combine internal learning, learning from knowledge that is transferred from different business units, and external learning from local corporations with which the foreign subsidiaries have built relationships (Almeida, Song & Grant, 2002). Consequently, knowledge sharing is not anymore a simple linear sequence. It should be recognised that the knowledge accessed in local markets is a critical source for MNCs’ competitive advantage (Li, 2004).
1.1.2 Knowledge characteristics
form the basis for doing business and new idea generation. This definition is chosen as it gives a traced out specification of the concept, and is in line with the idea that knowledge is affected by personal beliefs. In addition, it underpins that the emphasis in this dissertation is on ‘know-how’ in a broad sense, rather than simply “operational information”.
Three types of knowledge can be identified, namely, human knowledge, social knowledge and structured knowledge (De Long & Fahey, 2000; Chua, Pan & Omega, 2008). First of all, human knowledge is an integral part of an individual’s expertise, as it consists of what an individual knows. Secondly, social knowledge exists in the relationships between individuals, and is therefore collective. These two types of knowledge are deeply rooted in the actions and commitment of the persons involved, which makes them generally difficult to transfer or share (Dawes et al., 2012). As a result of the personal nature of these types of knowledge, it is hard to store them in databases or information systems (Huysman & Wulf, 2005).
In contrast, the third type, structured knowledge, is explicit (Goh, 2002). It is the kind of knowledge that is not related to a specific person, but is incorporated in organisational tools and systems, and therefore more easily transferable (Dawes et al., 2012). Therefore, it can be stored in databases and corporate systems. Whilst all types of knowledge are equally important to share, the level of difficulty to really share the knowledge is different (Chua et al., 2008).
Most literature that covers the knowledge sharing process in MNCs has focussed on sharing explicit knowledge through information technology, not considering the valuable human and social knowledge that individuals or groups keep between them.
1.1.3 Knowledge sharing versus knowledge transfer
Knowledge transfer is about the movement of knowledge between different units, divisions, departments or organisations (Argos & Ingram, 2005; Wang & Noe, 2010). In essence, moving the complete network in which knowledge resides from one business unit to another can be a useful way of implementing knowledge at a certain group, department or division. In this case, knowledge is literally transferred from on place to another. However, besides the fact that this is extremely difficult to realise in practice (Argos & Ingram, 2000), it does not add to the organisation’s overall body of knowledge. Taking knowledge away from one business unit in order to implement it in another will, other things equal, not contribute to the overall level of knowledge in the organisation.
Where the focus in knowledge transfer is on the actual movement of knowledge, the focus in knowledge sharing is on the social relationship between individuals in order to transfer knowledge. As such, the interpersonal context in which knowledge is exchanged is considered. As this dissertation is concerned with the interpersonal factors enhancing the exchange of knowledge, this dissertation will focus on knowledge sharing, rather than on knowledge transfer.
Where some researchers see searching and accessing knowledge as freestanding processes separate from the knowledge sharing process (Hansen, 2002; Hansen, Mors & Løvås, 2005), others have specifically included these processes into the concept of knowledge sharing (Hocking et al., 2007). In addition, some researchers consider the adaption and integration of knowledge as a part of the knowledge sharing process (Szulanski, 2000). In this dissertation, knowledge sharing according to the definition of Harzing et al. (2007) will be used, where the process comprises accessing knowledge and communication.
1.1.4 Knowledge management initiatives
However, according to a study undertaken by Babcock (2004), Fortune 500 organisations have lost over $31.5 billion yearly due to failure of effective knowledge sharing, despite the investments in knowledge sharing initiatives. An important reason identified why knowledge management systems fail is that organisational and interpersonal factors affecting knowledge sharing are hardly considered whilst implementing these systems (Voelpel, Dous & Davenport, 2005; Wang & Noe, 2010).
1.1.5 Cross-cultural knowledge sharing issues
Different cultures and languages form important barriers to close relationships (Feely & Harzing, 2003). As different cultural groups tend to have different ways of working, and sharing and interpreting knowledge, cross-border collaboration can be problematic (Krishna, Sahay & Walsham, 2004). Several studies have identified differences in culture and language as critical factors in causing a barrier between parent firms and foreign subsidiaries (Harzing, Kôster & Magner, 2010), which has a negative effect on sharing knowledge (Swift, Balkin & Matusik, 2010; Dawes et al., 2012).
the MNC has a negative effect on intra-organisational knowledge sharing. According to Macharzina, Oesterle and Brodel (2001), the possibility that knowledge sharing across different cultures fails is substantial, unless organisational routines are adapted to the expectations of the receiver of knowledge. Consequently, in order to overcome the cultural barrier between the parent firm and their international subsidiaries, the expectations of both parties should be matched.
1.2 FOREIGN STAFFING PRACTICES TO SHARE KNOWLEDGE
ACROSS BORDERS
As managers play a fundamental role in determining the performance of international subsidiaries within MNCs, foreign staffing practices are major challenges to MNCs’ headquarters (Delios & Björkman, 2000). When deciding on the staffing of foreign subsidiaries’ management positions, MNCs have roughly two options for employment: to attract host-country nationals, or to send expatriates (Delios & Björkman, 2000). In this dissertation, expatriates will be defined as employees that – for professional reasons – are based in another country than from which they keep the nationality. According to Harzing (2001b), expatriate managers can be seen as ‘mini-headquarters’ in the international subsidiaries. This places them in a position where they can share their knowledge with the local employees, whilst at the same time they can foster the centralisation of decision-making and function as an effective control mechanism for headquarters to control and coordinate the operations in the foreign subsidiaries.
Figure 1–1: The number of expatriates in the world in the past decades. Source:
http://www.feedbacq.com/blog/wp-content/uploads/2013/05/04_World-Expat-Population_V5.jpg
That the number of expatriate managers has increased drastically in the last decades does not mean that it always is the most attractive option in foreign staffing practices. Both the benefits and drawbacks of both types of managers have been discussed extensively in the existing literature.
1.2.1 Motives for international transfer of managers
Going back in time, Edström and Galbraith (1977) undertook the first study to theoretically explain why international transfer of managers occurs. Practically every study covering the topic of expatriate management that has been done ever since has referred to this study, where three corporate reasons were identified why managers would be sent to other countries as expatriates.
The second reason for international transfers is management development (Edström & Galbraith, 1977). In this scenario, managers are transferred to foreign subsidiaries in order to gain international experience and to develop skills and techniques that might be useful for the parent firm or in future functions in other subsidiaries (Orlikowski, 2002).
The third reason is organisational development (Edström & Galbraith, 1977). Where the second reason aims to develop the manager in order to contribute to the MNC in the long run, with organisational development direct changes in the organisational structure are desired (Harzing, 2001a). In this scenario, expatriates managers are appointed to control the MNC’s foreign operations or to establish knowledge networks between the subsidiaries and the parent firm (Harzing 2001b). In this dissertation, the emphasis will be on the organisational development process.
Besides these three arguments, another plausible reason for MNCs to send out expatriate managers is to enhance the uniformity of the subsidiaries and parent firm. Positioning expatriates to manage all international subsidiaries might contribute to amplification of the MNC’s corporate identity throughout the world. What needs to be stressed here, however, is that regulations, contracts and directives could be deployed in order to maintain a uniform identity. As such, the uniformity-argument will not be further considered in this dissertation.
1.2.2 Expatriates versus host-country nationals
have host country nations in top management positions in the foreign subsidiaries (Harzing, 2001a).
On the other hand, the greater the cultural distance between the MNC’s home and host country, the harder it is for the parent firm to control the foreign subsidiary. As complexity increases, it becomes more difficult to control the directions, strategies and knowledge in the subsidiary (Paik & Sohn, 2004). Therefore, it can be argued that the higher the level of cultural distance, the more attractive it might seem to have expatriate managers in top management positions (Björkman & Delios, 2000). In addition, in comparison to host country nationals, expatriate managers are expected to be more familiar with the corporate values, vision and priorities, and are believed to have a stronger commitment to the MNC’s goals (Paik & Sohn, 2004). This commitment and better understanding of the corporate culture results in more effective communication (Scullion, 1994), and thus knowledge sharing.
Taken together, it appears that an important factor in making the decision which kind of manager is most effective depends on the direction of the flow of information. When local market information should be accessed and shared with the parent firm, host country national managers are perceived to be most effective. However, when strategic information and corporate values from the parent firm should be shared with the subsidiary, expatriates seem more effective.
employees, they might be more willing to share knowledge with a local manager than with an expatriate.
1.2.3 Challenging the cultural barrier
It is generally accepted that knowledge sharing between individuals or groups or individuals is affected by culture and language (Dayasindhu, 2002; Schlegelmilch & Chini, 2003; Hocking et al., 2007; Michailova & Mustaffa, 2012). Being familiar with the counterpart’s culture enables individuals to correctly interpret behaviour and non-verbal signals that will avoid intercultural conflicts (Paik & Sohn, 2004).
Many studies have indicated that sending expatriate managers to foreign subsidiaries is an important tool to deal with the cultural barrier between headquarters and subsidiaries (Feely & Harzing, 2003; Barner-Rasmussen & Björkman, 2005; Harzing et al., 2010). As such, Bonache and Cervińo (1997, p. 2) claim that expatriate managers function as “international glue” between the parent firm and foreign subsidiaries, stating that using expatriates in international subsidiaries are vital to anticipate on the – cultural – challenges that MNCs face.
However, research undertaken in the past decades has indicated that many MNCs have failed to pay sufficient attention to the non-technical skills that expatriate managers should posses to be effective in the local markets (Forster, 2000). Extensive knowledge of the local environment and being familiar with the local culture and language is just as, or maybe even more, important than technical skills (Forster, 2000; Harzing, 2001a). Paik and Sohn (2004) claim that when cultural difference between the parent firm and the subsidiaries increases, the cross-cultural issues are likely to increase as well. As such, by sending expatriate managers to countries that have a high level of cultural distance with the home country, expatriate managers may not be as effective as local managers, despite their technical management skills. Expatriate managers might even foster cultural conflict by being overcommitted to the parent firm’s culture (Paik & Sohn, 2004).
Taken together, sending expatriate managers to foreign subsidiaries is not unanimously recognised as an effective tool to eliminate the cultural barrier. In fact, the barrier is shifted downwards (Feely & Harzing, 2003). In the case that a host country national, that has a different cultural origin than the MNC’s home country, is managing the foreign subsidiary, the cultural barrier resides between the board at the parent firm and the host country national manager at the international subsidiary, as is displayed in Figure 1–2 on the left-hand-side. The right-hand-side of Figure 1–2 shows that in the case that an expatriate that is embedded in the culture of the MNC’s home country the cultural barrier is moved downwards, rather than eliminated. As such, eliminating the cultural barrier in order to foster knowledge sharing will only occur if the expatriate manager is able to adapt to the local culture, and is capable of managing the expectations of local employees (Harzing et al., 2010). This rather challenging, since expatriates need to anticipate to differences in cultural norms of social behaviour, attitudes towards authority and language (Krishna et al., 2004).
1.3 SOCIAL CAPITAL
Since knowledge is a rather extensive concept, it might be hard to measure the actual action of sharing of knowledge. One way that knowledge sharing in organisations can be measured is through the evaluation of alterations in the knowledge or performance of the receivers (Argote & Ingram, 2000; Maurer et al., 2011). Put differently, when the receiver of knowledge acts upon the knowledge received, thus showing changes in behaviour, one can assume that knowledge is shared. A critical point to his evaluation is that this method assumes that knowledge is not effectively shared when no changes in performance occur. However, as it is recognised that knowledge sharing is context specific and affected by the interpersonal relations between individuals (Lyles and Salk (1996; Voelpel et al., 2005; Wang & Noe, 2010), the social relation between individuals affects the extent to which individuals are motivated to share and implement knowledge. Therefore, social capital between individuals should be evaluated when considering knowledge sharing.
1.3.1 Social relations and willingness to share knowledge
The tendency to research knowledge sharing through information technology separately from social relations and cultural aspects has resulted in biased findings (Huysman & Wulf, 2005). It is the people that use it, rather than the technology itself, that enhances knowledge sharing. In order to effectively measure knowledge sharing, which on its own is hardly possible due to its abstractness, the willingness to share knowledge can be used as an effective proxy to measure knowledge sharing (Chiu et al., 2006; Chow & Chan, 2008). The validity of measuring willingness to share knowledge to draw conclusion about knowledge sharing is explained in more detail in paragraph 3.1.
knowledge between individuals or groups of individuals (Kwon, Heflin & Ruef, 2013). Since the factors that build social capital between individuals enhance willingness to share knowledge, these factors will be considered in this dissertation.
1.3.2 Social capital over time
The conceptualisation of social capital has changed over the past decades. Where Chang and Chuang (2011, p. 10) explain social capital as “the sum of the assets or resources embedded in the networks or relationships between individuals, communities, networks, or societies”, older studies undertaken by amongst others Nahapiet and Ghoshal (1998) and Inkpen and Tsang (2005) emphasise that whilst these assets and resources are embedded, they are as well accessible through, and created by, the network. What the majority of conceptualisations share, however, is the understanding that the stronger the relations between individuals within organisations are, the stronger the social capital within the organisation is. In addition, the stronger the social capital between individuals or groups of individuals, the more knowledge will be shared (Michailova & Mustaffa, 2012).
Just as the concept of social capital has changed over time, the factors that have been studied have changed as well. Where early studies mainly focussed on the presence of structural networks and relationships (Tsai & Ghoshal, 1998; Schmid & Schurig, 2003), later studies also include relational and cognitive factors to account for knowledge sharing (Inkpen & Tsang, 2005; Li, 2005; Buckley, Clegg & Tan, 2006), which resulted into a three-dimensional framework. The structural dimension is concerned with the network ties within organisations, the relation dimension covers the nature of the relationships between individuals, and the cognitive dimension considers shared codes between individuals (Huysman & Wulf, 2005).
knowledge is shared – which is related to the relational dimension, and an ability dimension – what knowledge is shared – which is related to the cognitive dimension. The factors considered to contribute to the building of these dimensions have not remained unchanged over time. Especially within the relational dimension, various factors perceived to affect knowledge sharing have been considered. Not all of them where perceived to be equally important, due to inconsistent findings. One factor considered in various studies is norm of reciprocity – the extent to which both parties involved in the knowledge sharing process mutually share knowledge and perceive this to be fair (Wang & Noe, 2010). Whereas Chiu et al. (2006) found that norm of reciprocity was positively related to knowledge sharing, Wasko and Faraj (2005) found the opposite. It is suggested that the differences in the outcomes of these studies were the result of differences between the personalities of respondents involved in the study (Wang & Noe, 2010).
Two other factors positively related to knowledge sharing are employee motivation and the leadership-role of the manager (Lin et al., 2009). When managers actively support knowledge sharing, the amount of knowledge is augmented. Similarly, when employees are motivated to share knowledge, knowledge sharing will increase. A prerequisite for both these stimulating factors is, however, that employees trust their manager (Lin et al., 2009; Wang & Noe, 2010). As such, trust is perceived to be extremely important in interpersonal relations when it comes to knowledge sharing. More factors considered in the literature are shared norms (Nahapiet & Ghoshal, 1998) and mutual respect (Putnam, 2000), which are both closely related to identification (Widén-Wulff & Ginman, 2004, Kankanhalli et al., 2005), and social system closure (Widén-Wulff & Ginman, 2004), which is closely related to the informal relationship (Hatala & Lutta, 2009; Yang & Maxwell, 2011).
1.3.3 Social capital defined
capital is defined as the combination of factors that bind and bond individuals in an organisation. In order to organise the factors that contribute to social capital, the original three-dimensional framework is used as the starting point. The three dimensions considered are the structural dimension, relational dimension, and
cognitive dimension (Chang & Chuang, 2011).
Based on an extensive literature study, six factors that influence social capital, divided over the three dimensions, were considered in this dissertation. These are the presence of social interaction ties, trust, informal relationships, identification, shared language and shared vision, and will be discussed in the next parts of this chapter.
1.3.4 Structural dimension
The structural dimension of the social capital theory is concerned with the structure of the relationships and the pattern of ties between the individuals in the organisation (Inkpen & Tsang, 2005; Maurer et al., 2011). It contains all connections, linkages or ties between individuals (Liu & Schaffer, 2005), considering who can be reached and how one can be reached (Chang & Chuang, 2011).
Social interaction ties – The presence of the social interaction ties between individuals
is critical to sharing knowledge within a network (Argos & Ingram, 2000; Schmid & Schurig, 2003), as there is no knowledge sharing without communication (Harzing et al., 2007). These network ties, or in other words, relationships, can be seen as the “channels for information and resources flow” (Chiu et al., 2006, p. 1876). Even though several studies found that weak ties between individuals or groups of individuals do not necessarily affect efficient knowledge exchange negatively when the knowledge is not complex (Hansen, 1999; Levin & Cross, 2004), strong interaction ties lead to effective sharing of tacit and complex knowledge (Levin & Cross, 2004; Wang & Noe, 2010; Yang & Maxwell, 2011).
In addition, strong relations between individuals result in more frequent knowledge sharing (Hansen, 2002), and sustain knowledge sharing over time (Chang and Chuang, 2011). Taken together, there is a significant positive effect of the presence of social interaction ties on the amount of knowledge shared between individuals.
1.3.5 Relational dimension
The relational dimension can be seen as an extension of the structural dimension. Where the structural dimension is concerned with whether a relationship between two or more individuals is present, the relational dimension considers the nature of this relation that fosters knowledge sharing (Chang & Chuang, 2011). According to Gupta and Govindarajan (2000), intra-organisational knowledge sharing is enhanced by the existence of close relationships between the organisational units. Several factors that might improve the relation between individuals have been evaluated over the past decades.
Trust – The factor within the relational dimension that probably received the most
attention in the existing literature is trust (Li, 2004; Chiu et al., 2006; Chow & Chan, 2008; Chang & Chuang, 2011). Following the generally cited definition of trust by Rousseau, Sitkin, Burt and Camerer (1998), in this study trust is defined as the willingness to position you vulnerable to the actions of another party. If this is the case, people are to have positive expectations about the goodwill and competence of the other party’s actions (Maurer et al., 2011). Moreover, trust is about the belief that the other party will not harm you or will take advantage of you in any possible way by misusing what has been trusted to them.
Informal relationship – This factor considers to what extent the relationship between
two actors is personal, or exclusively formal. Several studies have identified the importance of informal relations resulting from closeness and affection in stimulating knowledge sharing (Ring & Van de Ven, 1994; Hatala & Lutta, 2009; Yang & Maxwell, 2011). In addition, as informal relationships positively affect trust between individuals, informal relationships appear to be especially important when the conditions under which business operations occur are uncertain (Liu & Schaffer, 2005). International operations can be characterised as uncertain, because of the differences in culture.
Moreover, knowledge is shared more often between individuals that have a close informal relationship, and the quality of knowledge shared is of a higher level (Hocking et al., 2007). Next to that, stronger personal familiarity increases the openness of interaction between individuals, and enhances knowledge sharing (Gnyawali, Singal & Mu, 2009). Chow and Chan (2008) found that employees that have a good relationship with their manager tend to experience a higher level of social pressure to share knowledge with their manager, which might enhance knowledge sharing as well.
Identification – Yet another extensively studied factor that positively influences
knowledge sharing is identification with other persons. Identification is defined as the process whereby individuals see themselves as grouped with another individual or group of individuals (Chang & Chuang, 2011). Individuals tend to identify themselves with others that have similar beliefs, norms and behaviour (Yang & Maxwell, 2011). Important consequences of identification described in the existing literature are increased loyalty and increased motivation to build on and maintain the relationship with the other party (Nahapiet & Ghoshal, 1998). Furthermore, Chang and Chuang (2011) found that identification fosters the willingness to express and present ideas to others. Consequently, more knowledge is shared between individuals that identify themselves with the other person.
important when individuals have a choice with whom to share, and not to share knowledge. Whereas identification can be the consequence of having a sense of belonging to another person (Nahapiet & Ghoshal, 1998), more knowledge is shared between individuals that have similar needs and values (Chen & Wung, 2010).
Taken together, close informal relationships, build on trust and identification lead enhance complex knowledge sharing between business units. Especially in cross-border knowledge sharing close relationships are needed to properly share knowledge (Chang & Chuang, 2011).
1.3.6 Cognitive dimension
The cognitive dimension is a relatively new dimension added to the social capital theory and is not discussed in the mainstream literature on this topic. This dimension deals with the shared codes, interpretations, and representations of individuals or groups of individuals (Nahapiet & Ghoshal, 1998; Liao & Welsch, 2005). As such, it is concerned with the mental actions or processes that influence knowledge sharing, affected by the environment in which individuals are raised, live and work. Cognitive skills that enable access, communication and collaboration are requisite for knowledge sharing (Black & Mendenhall, 1990).
It is generally acknowledged that innovation is the consequence of combining different source of knowledge and experience (Huysman & Wulf, 2005). However, even though the combination of ideas from different angles is considered to foster the expansion of knowledge, smooth communication between individuals is a crucial condition for exchanging knowledge (Inkpen & Tsang, 2005). Cognitive social capital amongst individuals fosters the willingness to engage in knowledge sharing activities and improves the efficiency of communication (Liao & Welsch, 2005; Buckley et al., 2006). In addition, when two parties have a high level of cognitive social capital, cost of coordination and negotiation are decreased and communication effectiveness is improved (Gnywali et al., 2007).
Shared language – It might seem obvious that language plays a crucial role in
communication, and thus has a major impact on the social relations between individuals in a network (Feely & Harzing, 2003). Communication between individuals that have a different cultural background can be difficult, even when they speak the same language (Harzing, 2001). Language is the way to express ideas, discuss issues and exchange information, which are all important during the knowledge sharing process. When the individuals within a network share the same language, their ability to access each other’s knowledge is increased (Nahapiet & Ghoshal, 1998). In addition, shared language facilitates common understanding and establishes the way that individuals interact with each other (Chiu et al., 2006), which leads to more effective knowledge sharing (Harzing et al., 2011).
It should be recognised, that language goes beyond the idiom of individuals. In this study, shared language is interpreted in the widest sense of the word, including shared vocabulary, and the use of similar expressions, metaphors and jargon, which affect the meaning of the language used (Martins & Terblanche, 2003).
Shared vision – A shared vision represents the “collective goals and aspirations of the
members of an organisation” (Li, 2005, p. 82). Previous literature has acknowledged the positive impact of a shared vision on the cooperation and knowledge sharing within organisations (Tsai & Ghoshal, 1998; Almeida et al., 2002; Li, 2005; Lin et al., 2009). When individuals have a shared vision, they tend to have similar priorities (Dawes et al., 2012). In addition, their perception about how to communicate with each another is similar (Taylor & Wright, 2004), which stimulates mutual understanding, and sharing of ideas and knowledge (Inkpen & Tsang, 2005). Therefore it can be seen as a “bonding mechanism that helps different parts of a network to integrate” (Inkpen & Tsang, 2005, p. 157).
In addition, a shared vision enhances the shared understanding of what kind of knowledge is important. Consequently, the quality of knowledge that will be shared is of higher value to the MNC (Persson, 2006).
2.
CONCEPTUAL FRAMEWORK: WHICH FACTORS DO
INFLUENCE KNOWLEDGE SHARING BETWEEN LOCAL
EMPLOYEES AND THEIR MANAGER?
Where the literature review in the previous chapter functioned as the foundation for analysing the influence that the cultural embeddedness of managers in the subsidiaries of MNCs has on social capital, and in extension on knowledge sharing, in this chapter the conceptual framework for this specific study will be presented. The conceptual model that presents the constructs included in this research is provided in Figure 2–1. How this conceptual framework will be measured, and how data were collected will be discussed in chapter 3.
This model indicates the three constructs – manager’s embeddedness in the host country’s culture, social capital and knowledge sharing. Due to the comprehensiveness of the model, the impact of managers’ embeddedness on knowledge sharing is measured by researching the social capital between the managers and the local employees in the subsidiaries. As a consequence, there is a difference between the conceptual model, and the model that is actually researched.
2.1 CONCEPTUAL MODEL
The conceptual model is the larger picture presented in Figure 2–1. It presents the influence that the origin of managers has on knowledge sharing, moderated by the factors of social capital. As this study aims to consider sharing knowledge taking into account the social relationships between individuals and groups of individuals, measuring knowledge sharing according to the traditional methods – considering mainly information technology, personal capabilities and personal motivation independent from the social environment – is not applicable. Therefore, this study uses the positive relationship between social capital and knowledge sharing as indicated in the literature review as the starting point of this research. In the broader conceptual model, the independent variable is the manager’s embeddedness in the host country’s culture, and the dependent variable is knowledge sharing. This relationship is moderated by the six social capital variables.
2.2 RESEARCH MODEL
originates from a third country. Senior managers are the subject of this study, as they are in direct contact with both the foreign subsidiary’s employees as the top management at the MNC’s parent firm. In other words, they function as the link between these two entities.
2.3 STRUCTURAL DIMENSION
2.3.1 Social interaction ties
As mentioned before, the social network, built from social interaction ties between individuals, is a crucial requisite for knowledge sharing. The strength of these ties within organisations depends on the relationships between the employees. As relationships are affected by culture (Dayasindhu, 2002; Schlegelmilch & Chini, 2003), it can be argued that differences in the cultural background of local employees and their manager have an effect on the interaction ties between them. For example, culture affects to what extend the relations in organisations are hierarchical or rather flat (Adler & Kwon, 2002). When the manager and local employees are not on the same page about the optimal frequency and way of communication, this might lead to issues affecting knowledge sharing. Therefore, it is assumed that host country managers have a better understanding of the preferences of local employees related to the frequency and way of communication.
H1: Local employees have stronger social interaction ties with host country national managers than with expatriate managers.
2.4 RELATIONAL DIMENSION
2.4.1 Trust
a higher level of trust in host country national managers, which enhances knowledge sharing.
H2: Local employees have a higher level of trust in host country national managers than in expatriate managers.
2.4.2 Informal relation
As mentioned before, international communication can be characterised as uncertain, because of the differences in culture. Especially under uncertain circumstances, individuals relate to what is familiar, which is assumed to have an effect on the knowledge sharing process. Local employees are assumed to have a better informal relationship with a host country national manager due to cultural habits, norms and values, which will affect knowledge sharing. As norms and values derive from fundamental differences in cultural background, important differences can hardly be harmonised between individuals from different cultural backgrounds (Krishna et al., 2004).
H3: Local employees have a stronger informal relationship with host country nationals than with expatriate managers.
2.4.3 Identification
Identification can be the consequence of having a sense of belonging to a group of people (Nahapiet & Ghoshal, 1998). In addition, Argos and Ingram (2000) found that employees prefer to share knowledge with somebody that they identify themselves with. It is assumed that local employees in foreign subsidiaries have a stronger sense of belonging to a host country national than to an expatriate manager, due to their similar culture.
2.5 COGNITIVE DIMENSION
2.5.1 Shared language
It is assumed that local employees have a higher level of shared language with a host country national manager than with an expatriate manager, as they have the same native language and are more likely to be familiar with the same vocabulary, habits, gestures and tone of communication. In addition, since culture affects the way individuals interpret information (Krishna et al., 2004), shared culture between local employees and their manager is assumed to foster knowledge sharing.
H5: Local employees have a higher level of shared language with a locally attracted manager than with an expatriate manager.
2.5.2 Shared vision
According to Nahapiet and Ghoshal (1998), the willingness to share knowledge is largely dependent on mutual understanding amongst employees and their managers. Due to a shared culture and social relations, employees are assumed to establish a shared vision (Persson, 2006), which has a positive effect on knowledge sharing.
H6: Local employees have a higher level of shared vision with host country national managers than with expatriate managers.
2.6 CONTROL VARIABLES
This study has been controlled for several variables that were believed to have potential effect on the relationship between the embeddedness of the manager in the host country’s culture and the level of social capital that he or she has with the local employees in the subsidiaries.
capital than managers from other countries. The group of countries for which was controlled are the Netherlands, the UK, France and the Nordics.
3.
RESEARCH METHODOLOGY
The aim of this study is to evaluate how the embeddedness of the MNC’s subsidiary manager into the host country’s culture influences the intra-organisational knowledge sharing process. Based on the elaborated conceptual model with clear concepts and expected relations, questionnaires send to employees in the foreign subsidiaries of MNCs were used to collect data in order to test the hypotheses. How data were collected and measured will be discussed in this chapter.
As already established and validated research constructs were used in this study, quantitative study was preferred over a qualitative study. Three main reasons influenced this decision. First of all, quantitative research is a relatively quick method to obtain data from various different sources. Where only a limited number of case studies could be reviewed due to time constraints, a wider range of cases could be considered in quantitative study, which is less time consuming. Especially since the central theme of this study is the effect of the relationship between employees and their managers on knowledge sharing, which underlines the role that cultural differences play in knowledge sharing, it seemed inappropriate to consider only a limited number of cases in a limited area. By using questionnaires, respondents from all over the world, taking into account various different cultures, could be evaluated.
Secondly, the power of quantitative research to generalise the findings when a large number of randomly selected respondents participates in the research was considered very attractive. Where most of the earlier studies covering expatriate management in multinational organisations focussed on a limited number of countries (Harzing, 2001b), this study intended to make the results as generalisable as possible.
At last, quantitative research was preferred over qualitative because of the alleged higher credibility due to statistical significance.
3.1 CONSTRUCT DEFINITIONS
In developing measurement items to test the hypotheses, items that have been validated in prior studies were adopted, and modified to fit this specific study. The definitions of the constructs and the number of items related to existing literature are summarised in Table 3–1 on the next page.
With respect to the measurement of knowledge sharing in relation to social capital, a side mark has to be made. Since knowledge sharing is difficult to measure when social relations are to be taken into account – in contrast to studies that focus solely on the technological dimension of knowledge sharing – the ‘willingness to share knowledge’ was used as a proxy to measure knowledge sharing.
It is acknowledged that willingness to share knowledge and the very action of sharing knowledge is not completely the same. However, it is assumed that the difference between these two concepts is small, and that there will not be any difference for the relationship between the employees and an expatriate manager, or between the employees and a host country national manager. Therefore, measuring the willingness to share knowledge appears to be a legitimate proxy for knowledge sharing in this context. Furthermore, previously research has already successfully used willingness to share knowledge as a proxy (Chiu et al., 2006; Chow & Chan, 2008; Boom & Pennink, 2012), and willingness to share knowledge is highly related to the actual performance of knowledge sharing (Chow & Chan, 2008). It is perceived that the best way to measure employees’ willingness to share knowledge is by measuring the factors that influence their willingness, which are the factors that build social capital.
3.2 DATA COLLECTION PROCESS
3.2.1 Scales and measures
manager was an expatriate – where an expatriate was defined as an employee that for work reasons is based in another country than from which he or she keeps the nationality – and what their manager’s nationality is.
Construct Definition Items Reference
Manager’s
embeddedness in the host country’s culture
The degree to which the manager shares his/her culture with the local employees in the subsidiary
Not applicable Own definition
Social interaction ties The degree to which employees have a strong personal relationship with their manager
3 Chiu, Hsu & Wang, 2006
Trust The degree of
employees’ willingness to position themselves vulnerable to the actions of their manager
3 Chow & Chan, 2008
Informal relation The degree to which employees feel a close relation with their manager
3 Chow & Chan, 2008
Identification The degree to which employees identify themselves with their manager
4 Chiu, Hsu & Wang, 2006
Shared language The degree to which employees share language, both formal and informal
4 Chiu, Hsu & Wang, 2006
Shared vision The degree to which employees have collective goals with the manager
3 Chow & Chan, 2008
Table 3–1: Construct definitions
similarities in answers, the questions covering different constructs of knowledge sharing were randomly placed throughout the questionnaire and reversed questions were used. The questionnaire was accompanied by an information sheet, which will be discussed in the next paragraph and is provided in Appendix A.
3.2.2 Ethical considerations and risk assessment
Etiquettes and ethical consideration have been taken into account whilst developing and running the research. In order to communicate this with the research participants, an information sheet was attached to the questionnaire that the participants were asked to fill in. The information sheet contained, amongst others, information on the project and its purpose, in order to ensure that potential participants were capable of making an informed decision about their participation in the research. Additionally, potential participants were informed about the expected time that it would take to fill in the questionnaire, and that participation would be completely voluntarily and anonymously.
Contact details were provided in the information sheet in case the respondents had any further questions or doubts or in case respondents wanted to be informed about the results of the research. At the end of the questionnaire, participants were given the option to indicate whether they were interested in being informed about the findings of the study.
To be completely sure that all respondents were aware of their right to refuse participation, the first page of the questionnaire contained a checkbox with the statement “I am aware that this questionnaire is completely voluntary and anonymous and I approve that my answers will be used in this study”. By checking the box, participants indicated that they were aware that participation was on a voluntary basis, that the questionnaire was confidentially handled, and that they had given permission to use their response in the research.
All data were collected for a specified and lawful purpose and were processed fairly and lawfully in line with the data protection policies from the Newcastle University Business School. In addition, the European Union Data Protection Directive (1995), Human Rights Act (1998), Data Protection Act (1998), Freedom of Information Act (2000), Environment Regulations (2004) and Statistics & Registration Service Act (2007) were considered. The collected data have under no condition been made available or shared with third parties, and have been stored securely. Computerised data were stored on a password-protected laptop, whereas hardcopy data were stored in a key-controlled room, in line with policies from the Newcastle University Business School.
3.2.3 Pilot test
The preliminary questionnaire was sent to 20 people that worked in multinational organisations, or had over six months experience working in a multinational in the past. The aim of this pilot test was assure that the instructions and questions were stated in a clear way, in everyday language, understandable for all potential respondents of the final questionnaire. Respondents of the pilot test were explicitly asked how they interpreted the questions, in order to assure that they understood the questions correctly.
Of the 20 people considered in the pilot study, 13 participants provided feedback on the clarity and usefulness of the questions and statements. This feedback, together with the feedback from my supervisors, led to several adjustments in the questionnaire.
3.2.4 Target group
The questionnaire was targeted at employees working in the subsidiaries of MNCs, working directly under senior managers. Both employees working under expatriate and host-country national managers were considered. The employees working directly under senior managers were selected, as senior managers are assumed to be the key decision-makers and to have an important role in the knowledge sharing process between subsidiaries and the MNCs’ headquarter.
