Proceedings of I-KNOW ’04 Graz, Austria, June 30 - July 2, 2004 Cross-Border Knowledge Transfer in International Strategic Alliances: From Cultural Variations to Asymmetric Learning Process Rossella Canestrino (Doctoral Student in Business Administration, Parthenope University, Naples Rossella.firstname.lastname@example.org)Abstract: The explosive growth of international strategic alliances as firm’s way to entermarkets, as well as a mode to acquire new knowledge has affected the complexity of academicresearch about international cooperation and knowledge transfer process. Transferringknowledge among organizations involves a wide range of features. According to this statement,empirical evidences fade out both the need to test the validity of the existing theoreticalframework on knowledge sharing process and to better understand the impact of differentvariables on international knowledge transfer. Starting from the role that the typology ofcontext and the tendency to individualism vs collectivism have in affecting the stability ofinternational strategic alliances [Calvelli, 1998], the aim of this paper1 is to show, through somecase studies, to what extent the effectiveness of cross-border knowledge transfer can beinfluenced by: the role of cultural dimensions, the type of international collaboration(complementary/synergic) as well as the strategic objectives of the relationship. Somehypothesis and suggestions for further research will be formulated on learning capabilities ofpartners involved in an international strategic alliance.Key Words: Knowledge transfer, international alliances, cultural settings.Category: A.01 Cross National Alliances and Inter-firm Knowledge Transfer:Theoretical BackgroundThe expansion of markets, both domestically and internationally, intensifiesenvironmental turbulence, impelling firms to enhance flexibility [Volderba, 1996] andto improve their level of knowledge exploration [March, 1995]. In this context knowledge has became one of the most strategically-significantresource [Grant, 1996] and there is increasing recognition that the competitive1 This paper is the result of the first stage of a wider-ranging research project addressed tocollect data, in order to apply the right quantitative method for valuating the impact of culturaldimensions and the typology of the alliance on the cross-border knowledge transfer. The datawill be collected through questionnaires to be send to a sample [to be selected] ofinternationalised firms involved in international alliances.
Canestrino R.: Cross-Border Knowledge Transfer ... 185advantage of firms depends on their ability to create, transfer, utilize and protectknowledge asset [Teece, 2000]2. Since very few firms are able to develop a wide range of knowledge internally,firm accessibility to a broader knowledge-base through external learning has attractedthe attention of both practionists and scholars in strategic management which haveanalysed knowledge transfer process both from an intra-organizational and inter-organizational point of view. Over the past decades strategic alliances have became not only one of the mostsuccessfully internationalisation modes used by firms [Inkpen, 2003], but also themost used organizational form for absorbing and creating new knowledge [Cohen andLevinthal, 1990; Van Wijk, Van Den Bosh; Volderba, 1999]. The explosive growth of international strategic alliances as firm’s way to entermarkets as well as a mode to acquire new knowledge has affected the complexity ofacademic research about international cooperation and knowledge sharing process,because of the existing link between international knowledge transfer, strategicalliances form and partners cross-cultural variations. There is a significant body of theoretical research and empirical studies withregarding to the issue of alliances and learning. This stream of research addressessome of the important questions associate with the conditions under which knowledgetransfer process among partners is fostered. Cohen and Levintal , for example, introduce the concept of absorptivecapacity to label the ability of the firm to evaluate, assimilate and use outsideknowledge for commercial ends. They introduce the absorptive capacity construct as “The firm’s ability toidentify, assimilate and exploit knowledge from the environment” [1989, p. 569-570].In another paper the authors [1990, p.128] considering the level of prior relatedknowledge as the determinant of firm’s absorptive capacity, stated “...the ability toevaluate and utilize outside knowledge is largely function of the level of prior relatedknowledge”. Starting form this assumption some authors have analysed various organizationaldeterminants of absorptive capacity may be distinguished. Van Wijk, Van Den Bosh;Volderba , building on the earlier contributions of Lane and Lubatkin ,propose two organizational determinants of absorptive capacity in addition to thelevel of prior related knowledge: organization form and combinative capabilities.Combinative capabilities are the firm capabilities to integrate, synthesize and apply2 Recent literature on the role of firm-specific knowledge in competitive strategy shows severaltheoretical perspective: starting from the perception of the firm as a bundle of resources whichconsist of human and material asset introduced by Penrose , the following resource-based view of the firm [Barney, 1991] focuses on knowledge as key competitive asset,identifying it as the basis of firm growth [Grant, Baden Fuller, 1995].The related competence-based theory of the firm underlies the relevance of firm capabilities todevelop and mix different resources in order to create and sustain competitive advantage[Hamel, Prahalad, 1990; Teece and Pisano, 1994]. The analysis of organizational capabilityoffers, then, insight into the so-called knowledge-base view of the firm according to which thefirst role of the firm is that of integrating knowledge resident in individuals in goods andservices [Grant, 1996; Nonaka, 1994].
186 Canestrino R.: Cross-Border Knowledge Transfer ...current and new acquired knowledge which, together with different organizationalforms, are likely to influence the scale and scope of knowledge absorption differently[Van den Bosh, Volderba and De Boer, 1999]. Cohen and Levinthal traditional definition of firm absorptive capacity seems tofind support also in Inkpen’s works  which analyses the importance of relatedknowledge in the learning opportunities created by international alliances,emphasizing the role of the following features: • The existence of a prior and familiar knowledge • The existence of a previous collaborative experience among partners In this sense the prior possession of relevant knowledge and skills is not onlywhat gives rise to creativity, permitting the assimilation and exploitations of newknowledge [Cohen and Levithal, 1990], but also a key issue to consider for thesuccess of cooperation. Many publications [Cohen and Levinthal 1990; Lane and Lubatkin, 1998] suggestthat absorptive capacity is an important moderating factor for assimilating newknowledge and the concept has been used, even if indirectly, by different authors bothin the context of inter-organizational learning networks [Lane and Lubatkin, 1998;Inkpen, 1998; Mowery, Oxley, Silverman, 1996; Bhagat, Kedia, Harveston, Triandis,2002] and in the field of internal networks research [Van Wijk, Van Den Bosh;Volderba, 1999]. Other authors have analysed knowledge transfer process referring to the type ofknowledge involved, tacit versus explicit; simple versus complex and independentversus systemic [Kogut, Zander, 1992; Nonaka, Takeuchi, 1995] or to the nature ofbusiness activities and firm’s reward system [Lei, Slocum, Pitts, 1997], but we stillknown relatively little about the impact of national cultural dimensions together withthe nature of cooperation on learning process in international alliances. Transferring knowledge among organizations is a difficult and oftenmisunderstood process. It involves a wide range of different features so that theresearches advance on the topic of knowledge transfer and international learningprocess have to consider all the features can influence the effectiveness of cross-border transfer of organizational knowledge as well as the way they interact. For the considerations introduced, one of the aims of this paper is to understand,through the analysis of some case studies, to what extent the effectiveness of cross-border knowledge transfer can be influenced by the following features: • The role of cultural dimensions • The type of international collaboration (synergic/complementary)2 The Role of Cultural Dimensions: The Impact of the CulturalContexts Typology and Individualism vs Collectivism on PartnersCo-operation AttitudeIn the beginning of the ‘80s many researchers in organizational theory developed acultural approach to the firm trying to better understand the dynamics at work in theorganisations. For many times the impact of “external” or national culture on firms behaviourshas been underestimated, since some authors [Adler, 1986; Ivanier, 1992] sustain that
Canestrino R.: Cross-Border Knowledge Transfer ... 187national culture is only rarely present in the firms or that it is often overpowered bythe “internal” or organizational culture. This concept is based on the idea thatorganizational culture moderates the impact of national one, assuming that“employees working for the same organization, even if they are from differentcountries, are more similar than different” [Adler, 1986, p. 46]. On the contrary, Hofstede  supports the idea of a predominant role ofnational culture on the organizational one. Without suggesting the prevalence of national or organizational culture, bothempirical and theoretical researches focus on the interaction between internal andexternal cultural values in explaining firms’ dynamics. According to this point ofview, therefore, the concept of culture, even if difficult to define in the practice, iswidely accepted as an important element able to affect both the organizationsbehaviour and the inter-firm relationships. National culture and partners’ cultural characteristics have, consequently, asignificant impact on the knowledge transfer process within and among theorganizations3. In this sense, the role of culture on the capability to use and transfer knowledgehas been studied both at a macro-economic and micro-economic level: from a macro-economic point of view, for example, Almeida, Grant and Phene  considernational culture and cross-cultural differences among partners as an important aspectof inter-firm knowledge transfer, while from a micro-economic point of view, DeLong and Fahey  recognize organizational culture- practices, norms and values-as a major barrier to leverage intellectual asset, to create and share knowledge4. When cultures cross, a cultural shock can occur, often accompanied by negativeeffects on work climate in international join venture [Calvelli, 1998]. The larger is the cultural distance between the partners engaged in aninternational strategic alliance, more evident are the effects of the cultural shock whenit occurs. An important premise for international joint venture survival is, therefore,partner’s capacity to overcome cultural distance in order to create a positive climatefor discussion and knowledge share [Day, Dosa, Joergensen, 1995]. During the 1980s many U.S. electronic and automotive firms, like GeneralMotors or General Electric, formed a wide range of alliances with the emergingcompetitors from the Far East, only to find that these relationships revealedincompatible partners attitudes and difficult of working together. Within the cross-national studies, some researchers have empirically inquired,through the analysis of several case studies, the different firms’ approaches tointernational networking. In the authors’ view, an interpretation of cross-cultural3 According to the research conducted by Baghat et al.  knowledge transfer ininternational alliances is more effective when transacting organizations are located in nationalcontexts that do not differ significantly on cultural dimensions, so that cultural compatibilityamong the partners can be considered one of the main factor, even if not the only one, affectingthe international alliances stability and their effectiveness.4 De Long and Fahey  idendify four ways in which culture influences knowledgemanagement: shaping the assumption about what knoweldge is; defining the relationshipbetween individual and organizational knowledge; creating a context of social interaction aswell as shaping the process by which new knowledge in created and diffused in theorganizations.
188 Canestrino R.: Cross-Border Knowledge Transfer ...impact on international networking stems from the combination of two dimensions:the cultural contexts typology and the group belonging feeling. The first dimension refers to the three typologies of cultural environments thatcharacterize organizations identified by Cox and Blake : monolithic,pluricultural and multicultural contexts.Each context reflects both the dominant values within the organization, upon which itdepends the degree of interaction among different cultures, and the atmospherederiving from the interaction itself [Calvelli, 1998].On the basis of the above dimensions Cox and Blake  identify firms’ innerorganizational environment in a continuum from the monolithic cultural context to themulticultural one. Monolithic context is characterized by a strong homogeneity within itself and bya low propensity to accept different cultural models. The cognitive process linked to this type of organization lead to thecategorization according to which the diversities are not accepted and, without anyattempts of understanding them, are often negatively evaluated. Very often thecategorization comes from self-identity and self-categorization theories according towhich people are accepted, or not, more on the basis of physical characteristics, likethe race, the skin colour and the spoken language, than on the cultural values andbelieves. The implicit assumption of the mentioned theories is that diversityacceptation lead to lower self identity, thus causing a deep psychological stress. In the opposite position in the cultural scale there is the multicultural contextcharacterized by an effective dialogue among different cultures and by the absence ofdiscrimination and prejudices. Within this context both pluralism of ideas anddifferent managerial behaviours are fostered; the cognitive process is addressed to theinterpretation of cultural diversities to deep understand their characteristics and inorder to identify homogeneity among them as well as their potential integrationelements. Between the two described typologies there are the pluricultural contexts wherethe lack of the assimilation mechanism of diversities can generate some culturalconflicts, even if it exists a sort of diversity acceptation attitude. The interculturalconflicts may be generated by the absence of cognitive assimilations process ofdiversities or by the presence of cultural minorities which are not able to interact withthe cultural dominant groups. Starting from the underlined theoretical background, the dimensions used by Coxand Blake  to analyse the organizational cultural environments have beenextended by Calvelli  to the external dimension of firms, in order to interpretthe relations among organizations coming from different national contexts. Thetypologies of national cultural contexts have been, therefore, identified according tothe cognitive process adopted by the dominant culture in a given area, on one hand,and to the level of interaction among different cultural groups within the same area,on the other hand. From an inter-organizational perspective, monolithic contexts represent anobstacle to inter-firms relationships, because of actors’ resistance to cooperate withpartners coming from different cultural contexts. Without considering the possibility of cultural changes time by time, which are,however, occurring in many geographical areas thanks to the globalisation of markets
Canestrino R.: Cross-Border Knowledge Transfer ... 189and firms, some examples of monolithic contexts are given by the Euro-Mediterranean area: one case is that of the internal areas of Turkey, where the smallfirms coming from Anatolia have strong traditions and religious beliefs, and are notopen to cooperation; another one may reasonably be that of the internal areas ofMaghreb and Arabian countries. At same way, also in the pluricultural contexts the lack of an effectiveassimilation mechanism of diversities could lead to intercultural conflicts and todifficult of cooperation. Examples of pluricultural contexts may be the East-Europeancountries; the ex-Yugoslavia or Algeria and all those countries where the lack of aneffective interaction mechanism among people could lead to some conflicts betweenthe cultural minorities and the dominant group. Only in multicultural contexts cooperation is simpler and more spontaneous andthe background for cooperative relationships really exists. The cultural context typology is, however, only one of the two dimensions usedto explain firms’ propensity to cooperation. Another very important feature in the affecting firm’s openness towardsinternational networking is the group belonging feeling - namely individualism vscollectivism – [Hofstede, 1980; Hampden- Turner and Trompenaars, 2000]. Individualism as opposed to collectivism describes the relationship between theindividual and collectivity that prevail in a given society [Hofstede, 1980; Hampden-Turner and Trompenaars, 2000]. The dimension clarifies, in other words, the extent towhich culture encourages personal initiative and achievement, the importance ofprivate life and personal separation, in contrast with a sense of community orcollective characterized by a social framework. Individualism describes the tendencies to orient actions towards independence,competition and one-self interests. Collectivistic perceive themselves asinterdependent members of a group, so they tend to act cooperatively in their groupinterest [Hofstede, 1980, 1991; Triandis, 1993]. If we look at the existing diversities among countries, the dimension ofindividualism vs collectivism plays, also, an important role in favouring or blockingthe learning process deriving from co-operations [Calvelli, 1998]. The differences between collectivistic and individualistic cultures have somedirect implications particularly regarding cooperation and competition among firms: ageneral statement would be that more individualistic is a culture, less cooperative isbehaviour. As consequence individualism would obstacle alliances betweeninternational partners, while collectivism would relate positively to cooperationpropensity of the firms. Some empirical investigations, however, confirm that individualism does notrepresent a barrier to international cooperation: according to this point of view,individualism does not preclude relationships with others; rather it affects how theseinteractions are conduced. The collectivistic orientation motivates people to work fortheir group’ interests, while individualists, by definition, work together only if theymay reach advantages for themselves [Triandis, 1993, Tiessen, 1997]. Considering the impact of the defined cultural dimensions, the differencesbetween collectivism and individualism concern more the level of stability anddifficult of managing alliances than the relationship start-up.
190 Canestrino R.: Cross-Border Knowledge Transfer ... In this sense individualism does not seem to be an obstacle both in multiculturaland pluricultural contexts, where it lead to easy to start, but instable or opportunisticcooperation. As figure n.1 shows, only in monolithic context the presence of individualismlead to forced relationships among partners, while both in pluricultural andmulticultural contexts it does no more obstacle the cooperation starting process, butits stability, so that resulting alliances very often degenerate into opportunisticrelationships which early end when one of the partner leaves the collaboration afterhaving gained its goals- namely costs and risks reductions, market barriersovercoming and acquisition of new competences. Contexts Typolgy Multicultural Instable alliances Stable alliances Contexts (Easy to start) (Difficult to start) Pluricultural Opportunistic Contexts Relationships Monolitic Forced Locking to Contexts Relationships Relationships Individualism Collectivism Group Belonging Source: Calvelli, 1998 Figure n.1: “Firms’ Openness to International Networking” On the contrary the collectivism in multicultural context, often, lead to difficult tostart, but stable5 cooperation, based on trust and long-term relationships. The presenceof collectivism makes more difficult to establish alliances among the partners5 The stability is here intended as a concept of dynamic stability able to sustain the armony andthe balance between the international partners also in occasion of deep enviromental changes[Yan, 1998].
Canestrino R.: Cross-Border Knowledge Transfer ... 191especially if they come from different cultures as it is reflected by the problemsencountered to start collaborative arrangements with Japanese firms. Both Confucian and Scintoistic religion influence Japanese people and firms,where up-down, bottom-up and cross relations prevail and where the interaction andtrust-based relationships among the actors are the norm. As a consequence, it is no easy to enter into Japanese Keiretzu because ofcollectivism often conduct to the firms’ external closing even if, they are located inmulticultural contexts. In spite of this, after having gained the access to the alliance,the presence of collectivism favours long-term relationship founded on trust amongpartners [Calvelli, 1998; Calvelli and Cannavale, 2002].3 From cultural variations to the knowledge transfer process: anintegrative frameworkFrom a learning perspective individualism and collectivism seem to play an importantrole in affecting the knowledge transfer in the international inter-firm cooperationbecause of their impact on the stability of the alliances themselves, as well as on thepartners’ cooperation attitude. When an international strategic alliance is created, firms’ boundaries becomepermeable and a learning process may occur. Depending on the different cultural openness to the international networking [seefig.1], we consider the different cross-boundary knowledge transfer processes thatmay be achieved within an international alliance with respect to its stability orinstability and to the level of the existing opportunism of partners. Without suggesting that in the instable international alliances there is noknowledge transfer, we underline that the presence of an opportunistic behaviourfavours an asymmetric knowledge transfer from one partner to another which oftenlead to the unilateral advantages for the “stronger”6 firm that leaves the relationshipafter having gained its goals - namely after having acquired the knowledge it needs. The impact of opportunism on the knowledge transfer process: the asymmetry of knowledge transfer Kentucky Fried Chicken (KFC)- one of the most known fast food chains in the world- started in the early 1930s by Kernel Sanders in the Southern USA as a small franchise operation. When KFC first went into the Japanese market in the early 1970s, the company chose to form a joint venture with a large scale poultry producer with an excess capacity. This 50/50 joint venture would have favoured both the partners, as KFC was able to ensure a stable and high quality supplies to its operations, and the local corporation was able to increase efficiencies in production by selling its excess supply. No longer the6 In our perspective the “stronger” partner is those actor which has the mayor absorptivecapacity according to the Cohen and Levithal definition. He is, in other words, the partner whohas the a previous knowledge asset more related, or similar, to the new knowlegde to beacquired.
192 Canestrino R.: Cross-Border Knowledge Transfer ... alliance was abandoned by KFC, after it has knowing the exiting rules and regulations imposed by the Japanese government on foreign direct investment. In 1995 Crysler announced that it was widening down its 25-year alliance with Mitsubishi Motors. One of Chrysler’ objectives in the relationships was the access to a source of market knowledge for the sale of small cars in Japan. When it acquired the knowledge it need, the reason for the relationship with Mitsubishi was no longer present. The English Caterpillar entered an international alliance, in the late 1980s with the Korean Daewoo to built forklift and light construction. Caterpillar is the worlds leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. The company is a technology leader in construction, transportation, mining, forestry, energy, logistics, electronics, financing and electric power generation. Caterpillar believed it could work with Daewoo to gain access to emerging Far East market and to use Korea as low-cost sourcing platform machinery components. Daewoo, however, viewed Caterpillar as a provider for critical technology for component manufacturing. Eventually, Caterpillar withdrew from the alliance when it realised the difficult of managing a relationship with cultural distant partners. Pfizer is an American pharmaceutical firm which actually employs over 4,600 people in Japan, including 14 physicians and a large number of both technical and managerial professionals. Pfizer entry in Japanese market started in 1955 with the creation of Pfizer- Taito, a 50-50 joint venture with the Japanese Taito Sugar Co. In 1967 Pfizer established a domestic manufacturing capability and in 1983, after having developed own knowledge assets about Japanese market, it bought out Taito to become wholly owned subsidiary of Pfizer Inc. In 1985 it established a major research centre in Nagoya. Source: Database “Il sole 24 ore”. The case study on Caterpillar-Daewoo alliance is outlined in Lei, Slocum, Pitts  In the proposed empirical evidences the opportunistic behaviour seems to have avery important role in affecting the knowledge transfer process. Even if theinternational strategic alliances occur in a multicultural context, the presence ofindividualism, typical of the American firms, turns into an opportunistic behaviour,thus determining the premature end of the cooperation. In this situation one partneradvantages of the acquired knowledge both from the alliance experience and, incertain conditions, from the other partner’ skills7. Suzuki-GM alliance: the CAMI Project CAMI is a joint-venture manufacturing company between Suzuki Motors and General Motors, based in Ingersoll, Canada, with two complete production manufacturing lines. The purpose of the alliance was to allow Suzuki to expand into the American and European markets, and for GM to learn Japanese manufacturing methods - typically technological knowledge transfer.7 According to Tsang  a partner involved in a strategic alliance may learn from the otherpartner’s skills or from the alliance experience as well.
Canestrino R.: Cross-Border Knowledge Transfer ... 193 The “technology” itself being transferred was the whole production line with its multi- skilled team-work approach for each work unit of the plant from the stamping shop to assembly. It also dealt with general principles of the lean manufacturing like the small lot production, the production levelling, the total quality management, and the various factors that enable just in time and lean production. In order to grant the knowledge transfer between the organizations, a consulting society became responsible of an intensive 6-month training of selected 200 Suzuki managers and plant supervisors: training involved language, intercultural, and training skills. Most of the selected plant supervisors were in their forties and fifties, and although highly skilled in their jobs at Suzuki, had no high school or higher education and hence suffered from a complete lack of confidence in their ability to train “foreigners”. Most of them had never been outside Japan and were extremely reticent about being transferred to Canada for two years, indeed about the whole project. Apart from basic language training and because of the initially very negative attitude of partners, the main obstacles were the necessity to develop confidence among the members and to create a positive trust-based climate in order to overcome cultural differences and to establish the conditions for a mutual knowledge transfer. Overall, the whole project was highly successful, and was a major organisational learning experience for all involved. The 200 Suzuki advisors (all of whom had to be replaced temporarily back in their home plant during the project) were originally scheduled to return to Japan after two years at the Canadian plant. The transfer and actual production went so smoothly, however, that most were able to return within one year. Moreover, Suzuki had gained the confidence, knowledge and know-how in such technology transfers; indeed many of the supervisors did not return to their previous jobs, but instead became part of a new technology transfer team who were subsequently involved in Suzuki’s Hungary plant project and later their China and North Korea plant projects. Some were even seconded to other Japanese automotive companies involved in similar international technology transfers. General Motors also gained a lot from the project in terms of key Japanese manufacturing techniques. Contrary to the NUMMI experience with Toyota, since the CAMI project was a total technology transfer to Canadian managers and operators involving the whole plant system, the depth of knowledge gained by GM was quite profound. Indeed it later gradually formed the basis of a change in approach at GM in general. The core Canadian managers at CAMI (who themselves had been carefully selected and seconded to CAMI for their competence, youth and being open-minded to new manufacturing approaches) were sent after two years to GM’s newly acquired Eastern European operations to transfer the whole Japanese manufacturing approach to the plants there. After having applied Japanese manufacturing techniques successfully to GM’s peripheral plants, the team was later recalled home and became instrumental in implementing the learned approach to GM’s core plants. Indeed it formed one of the bases of the overall change that has cascaded throughout GM in the last ten years. Source: Database GM-Suzuki CAMI project On the contrary, the presence of collectivism, favouring long-term and trust-basedrelationships, plays an important role in supporting the interactions between the actorsin order to foster the knowledge transfer mutually to both the parties. The impact of individualism vs collectivism on inter-firms cooperative stability,however, is not the only interesting point to analyse in order to better understand the
194 Canestrino R.: Cross-Border Knowledge Transfer ...international knowledge transfer process: another important issue is to consider theinfluence of the considered cultural dimensions on the type of knowledge may betransferred between the partners of an international strategic alliance. It is not the aim of this paper to deeply analyse the different types of knowledgeproposed by the existing literature on the topic. As a consequence, we consider onlythe distinction between tacit vs explicit knowledge which more concern to howcodified or embedded knowledge is. Particularly Kogut and Zander define explicit knowledge as “Knowledge whichcan be transmitted without ant loss of integrity once the syntactical rules fordeciphering it are known...on the other hand knowledge that is tacit is complex anddifficult to codify” [Kogut, Zander, 1992, p.28]. The nature of knowledge, tacit vs explicit, has a deep impact on its transferprocess, so that many authors [Kogut, Zander, 1992; Nonaka , Takeuchi, 1995;Spender, 1996] sustain that the explicit knowledge can be codified in formal rules,tools and processes, so that it is easily transferred, while the tacit knowledge is oftenembedded in the individuals’ cognitive processes and it is more difficult tocommunicate and transfer than the explicit one: the transfer of tacit knowledgerequires richer context and more than just codification [Daft, Lengel, 1986]. Depending on the distinction mentioned by the literature, a transfer knowledgeprocess may refer to the transfer of tacit knowledge, to the transfer of explicitknowledge or to both of them. Since individualism and collectivism influence theway people think, interpret and make use of knowledge, it seems reasonably tosuppose a moderating effect of the above cultural dimensions on the type ofknowledge may be transferred in a cross-border strategic alliance. According to the research conducted by Baghat et al. , organizationslocated in individualistic cultures are better able to transfer and absorb more explicitknowledge than the tacit one. In contrast, organizations located in collectivisticcultures are better able to transfer and absorb knowledge that is more tacit. Thetransfer of tacit knowledge is typical of those collectivistic cultures, like the Japaneseone, where people usually learn one from each other, according to a sort of“collectively tuning” [Guadri, Vicari, 1994]. Putting together the effect of individualism on the stability of an internationalalliance in multicultural and pluricultual context and the type of knowledge thatindividualistic organizations are more able to transfer and absorb, it is coherent tosupport the idea that in the opportunistic alliances, firms are able to transfer andabsorb only explicit knowledge. As the proposed empirical evidences also confirm, inthis case an asymmetrical knowledge transfer takes place in favour of the strongerpartner of the cooperation who leaves the alliances after having gained the explicitknowledge it needs, like market knowledge, norms and rules. At same time when a cross-border alliance is established among collectivisticorganization, the stability of inter-firms relationships, as well as the deep interactionsbetween the partners favours the transfer of tacit knowledge. Starting from the assumption that learning through cross-border alliances is adifficult and frustrating process, the analysis of only cultural dimensions, however, isnot sufficient to explain both the complexity of international knowledge transferprocess and partners’ learning capabilities: we have to consider also the type ofalliance engaged by actors in order to answer to the following questions:
Canestrino R.: Cross-Border Knowledge Transfer ... 195 • which type of learning develops within the collaboration (symmetrical or asymmetrical) • what type of knowledge is object of transfer • in which case partners’ learning capability is coherent with the concept of absorptive capacity. According to the aim of this paper, the following section shows a taxonomy ofthe mayor typologies of collaborations.4 Collaborative Arrangements of International StrategiesFirms’ collaborations can have a variety of organizational arrangements, such as jointventures, licensing agreements, distributions and supply agreements, R&Dpartnerships and technical exchange. Calvelli  proposes a taxonomy ofcollaborative arrangements on the basis of the following dimensions: the nature ofcooperation (trade and non trade) and the complexity of arrangement. Strategic alliances: Strategic alliances: Complexity increasing -marketing -technological -sales -productive -post sale services -R&D Countertrade Licensing and patents Trade Non-TradeSource: Calvelli, 1998 Figure n. 2: “Typologies of firms’ collaborations” From a learning perspective each form of agreement implies a certain knowledgetransfer among partners, even if not at same way. Depending on this consideration thetaxonomy offers us a starting point to better understand what type of knowledge isobject of sharing among the partners as well as the learning process derived from theinteraction between the type of chosen partnership and cultural dimension abovedescribed. A great number of authors recognise that collectivistic firms are able toimprove a synergic growing of contextual knowledge thanks to manager openness tolearning process. This is true in the multicultural contexts where the tendency tocollectivism seems to favour the long-term relationships, thus creating a good basisfor cooperation stability and more complex learning process.
196 Canestrino R.: Cross-Border Knowledge Transfer ... As empirical evidences show, however, it is not possible to generalise withoutconsidering also the existing type of cooperation, as well as partners’ previousknowledge asset. On this topic, the resource-based perspective suggests us adistinction of alliances on the base of the existing similarities among the knowledgeassets of the firms involved in the relationships. According to the resource-basedview, we define as complementary cooperation those alliances established betweenpartners with different knowledge asset, that means that one partner has, for example,market or distribution knowledge asset and the other one has productive knowledge.At same we define as synergic cooperation those relationships established betweenactors with similar knowledge asset and competences. Both of them, of course, maybe trade or non trade, and, particularly in the case of complementary cooperation, theeffective knowledge transfer between the parties seems to be moderated by theprevious knowledge asset of the organizations involved. Figure n.3 shows the knowledge transfer alternatives which may occur in aninternational cooperation depending both on the typology of the alliance engaged bythe partners - synergic or complementary – and on the stability (or instability) of therelation itself. The definition of the stability and instability areas is based on the roleplayed by the cultural dimension, individualism vs collectivism in affecting theopenness toward the international networking in multicultural contexts [see fig. n. 1]. Typology of Instability Alliance Area Stability Alliance Area Alliance Synergic Bilateral/ Mutual KT Bilateral/ Mutual KT (Esplicit Knowledge) (Tacit Knowledge) A BComplementary Unilateral/Asymmetric KT Unilateral/Asymmetric KT (Esplicit Knowledge) (Tacit Knowledge) Opportunistic alliance C DSource: Our elaboration Multicultural ContextFigure n.3: “Cross-Border Knowledge Transfer as function of cultural variations and the typology of the alliance”88 Because of the complexity of the cross-border knowledge transfer, we consider only theextreme and opposite conditions in the partners’ absorptive capacity, that means that partnershave an initial very different knowledge asset (ex.: productive knowledge vs market
Canestrino R.: Cross-Border Knowledge Transfer ... 197 When an international complementary trade alliance occurs between two partners,A and B, for example, in a multicultural and collectivistic context, the learningprocess depends on parents own previous knowledge asset. If partner A is a productive firm, while partner B is a distribution firm, the tradealliance allows A to acquire knowledge from B about the host countries, but partnersB does not likely acquire productive knowledge from A. It results an unilateral orasymmetric learning process where only one partner acquires new and significantlydifferent knowledge. From a learning point of view, the resulting situation, showed bythe quadrant (D), is similar to that of the instable alliances, even if both partners sharecommon collectivistic values. It seems, therefore, that only the conclusion of a synergic alliance between A andB may conduct to very different learning opportunities. In this case both trade andnon-trade arrangements may lead to a mutual knowledge transfer between the partnersthanks to the “group feeling” and long-term relationships that result from theinfluence of collectivism in a multicultural context [see quadrant (A)]. Looking at the instability area, quadrant (C) shows the learning situation whichoccurs in the case of complementary and instable alliances: the existence of actors’different knowledge asset is the assumption for an unilateral knowledge transfer infavour of the stronger partner, which could leave the cooperative arrangement afterhaving reach his learning object, since the presence of individualism may shift thecooperation to an opportunistic alliance. From a learning perspective the presence of synergic alliances, even if in theinstability area [see quadrant (A)], could lead to the same results we have in thestability area, thanks to the homogeneity of the partners’ knowledge asset which allowthem to develop synergy and to overcome their cultural differences. In such conditions the transfer of implicit knowledge is favoured too, as it isshowed by the above Suzuky-GM synergic alliance, as well as by the success of thecross-border alliance between the Japanese Sharp and the American Intel. Sharp was founded in 1912 by Tokuji Hayakawa and it is nowadays the worldleader in the production of fluid crystal and in the applied digital technology. In 1992Sharp started a strategic alliance with the American Intel, specialised in theproduction of semiconductor, in order to gain the access to the emerging technologiesin manufacturing techniques in flash memories. The alliance allows Sharp and Intel tojoint for developing the next-generation of flash memory chips, able to holdinformation memories also in the case of black-out. Sharp’s relationship with Intel has been very closed as both companies had asimilar knowledge asset base and tried to learn one to each other, so that also tacitknowledge could be spread within the alliance. The observations above lead us to the identification of an evolution pattern in thetypology of knowledge may be transferred within a cross-national alliance, as it isshowed by the arrows in fig. n. 3. In the case of complementary alliances the unilateral knowledge transfer betweenthe partners could lead to the transfer of only explicit knowledge, even if in theknowledge). According to this assumption the “stronger” actor is the partener with the mayorabsorptive capacity.
198 Canestrino R.: Cross-Border Knowledge Transfer ...presence of collectivism, thus resulting an hypothetical movement from quadrant (D)to quadrant (C). This is the case of the above example of partners with very different knowledgeasset, such as market knowledge and productive knowledge, where they no longerdevelop the synergic approach necessary for transferring tacit knowledge. Knowledge transfer process in the synergic international alliances: how overcome cultural differences General Motors Corporation and Toyota Motor Corporation formed NUMMI as an experiment. NUMMI was formed in 1984 and it is still operating. For Toyota, the joint venture was an opportunity to test its ability to use its production methods in an American setting. For GM, it provided a way to learn how to build cars more efficiently using Toyotas “lean” production system. Since GM also wanted to manufacture a small, high-quality car, Toyota seemed like the perfect partner. GM initially unevaluated the learning opportunity given by the alliance, so, in order to create a successful climate to knowledge transfer, the American partner had to shift its behaviour and its managerial philosophies. Former GM workers were invited to apply for jobs and told of the need for employees willing to contribute to an atmosphere of trust and cooperation. Potential production employees went through a three-day assessment that included production simulations, individual and group discussions, and written tests and interviews. Once hired, team members attended a four-day orientation covering the team concept, production system, quality principles, attendance policies, safety policies, labour management philosophies and the competitive condition of the auto industry. About 450 group leaders and team leaders travelled to Toyotas Takaoka plant in Japan for three weeks of classroom and on-the-job training. This training is now conducted almost exclusively at the NUMMI plant in a two to four week program referred to as “Foundations in Training” or FIT. Classes include an introduction to the Toyota production system, team building, union-management relations and safety. These are followed by on-the-job training with team members working side-by-side with experienced trainers. The first NUMMI team, approximately 700 team members, built the Chevrolet Nova in December of 1984. Automotive writers compared its quality to similar cars being produced in Japan. From a learning perspective, the knowledge transfer process is often defined as slow and painful, since Toyota Knowledge system was deeply embedded (tacit) in the Toyota history and culture and it was difficult for GM to change its attitude and behaviours. By its side, Toyota needed to learn only how to transfer an existing manufacturing process in North America, so that the knowledge Toyota needed was more explicit than that GM one. In any case, the synergic approach developed in the alliance allow each partner to overcome cultural differences and to reach own strategic object. Source: Database “Il sole 24 ore” With respect to empirical evidence from Anglo-Japanese international alliances,Tidd and Izumimoto  underline that more recently the main strategic object ofJapanese firms is to enter European Union to establish there a manufacturing base.The complementary structure of the alliances between British and Japanese firms donot produce a harmonious relationship as the authors research also revealed a range of
Canestrino R.: Cross-Border Knowledge Transfer ... 199fundamental disagreements between the British and the Japanese management. Anexample is given by the end of the Anglo-Japanese jv Temko-UK. In the mid-1990s Temko, a Japanese car component manufacturer acquired theBritish firm with which has been established a strategic alliance some years before.The acquisition had followed a joint venture agreement to manufacture carboncanister with the British firm, which was formed with the aim to gain capacity tosupply the European market [Saka, Kubo, 2000], so that the knowledge transfer hadas object those information, rules and competitive mechanism of European market,codified and easy to absorb. Among the synergic inter-firms cooperation another evolution pattern thatempirical evidences have shown is that from the quadrant (A) to the quadrant (B).Because of the synergic approach of the involved partners they often develop, time bytime, closer relationships which lead to more stability of the alliance itself. It results along-term cooperation, thus permitting to overcome cultural differences. The firms’learning process is fostered too and the mutual understanding often allows thereciprocal transfer of knowledge and the absorption of both explicit and tacitknowledge.5 Conclusion and suggestionsIn a global arena cross-border transfer of knowledge is important to achieve firm’scompetitive advantages. Organizations are involved in knowledge transfer process byengaging international joint venture and strategic alliances. Because of internationaldimension of cooperation the effective knowledge transfer between partners seems tobe moderated not only by their relative absorptive capacity, but also by their culturalpatterns and by the nature, complementary and symmetric of the alliance itself.Starting from the idea that collectivism and individualism affect the stability of aninternational alliance in the multicultural contexts, as well as on the typology ofknowledge may be transferred (tacit vs explicit), the paper attempts to propose anintegrative framework by considering also the role played by the type of the chosencooperative arrangement on the knowledge transfer process among the partnersinvolved in a cross-national cooperation. According to empirical evidences complementary alliances lead to anasymmetric knowledge transfer, while synergic alliances foster a mutual learningprocess among the partners. Two evolutionary patterns have been singled out: the firstmoves from complementary stable alliances to instable ones, while the second movesfrom synergic instable alliances to stable ones. These patterns seem to reflect achanging attitude in cultural behaviour of organizations which suggests for furtherresearches, in order to better understand to what extent cultural differences obstacleinter-firm knowledge transfer, as well as to what extent the managing of cooperativearrangements may lead to overcome cultural diversities. This paper is the result of the first stage of a wider-ranging research projectaddressed to collect data, in order to apply the right quantitative method for valuatingthe impact of cultural dimensions and the type of alliance on the cross-borderknowledge transfer. According to the above considerations further researches have also consider theinfluences of individualism vs collectivism upon the cooperative arrangements that
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