Effectiveness of Knowledge Transfer in Multinational Companies: the case of two Selected Manufacturing Companies in Ethiopia

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Date

2020-05

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A.A.U

Abstract

Transferring knowledge from one subsidiary to another subsidiary increases the speed, efficiency, and quality of learning of an organization. Transferring and re-using information from previously learned source can help a company to reduce the cost of learning for a new target task (Chin, 2013). Inter-subsidiary relationship, the degree of involvement of the subsidiary in the company network and the internal competitiveness within and across units influences knowledge transfer. A subsidiary relationship is made of interactions formed with external partners; however, each unit is unique and is embedded in its own local context, and integrated in the MNC network (Lee & Wu, 2010). The study intended to investigate effectiveness of knowledge transfer in multinational companies. It was conducted in East Africa Bottling Share Company (EABC) and Beverage George Industry (BGI) companies which are Multinational Companies in Ethiopia. The researcher used descriptive research design and mixed research approach to investigate the study. Among 143 target population of the study (not including the physical labors of the companies), 4 managers and 103 workers were taken as a sample. Participants of the study were selected using judgmental and stratified sampling techniques (by using top mgt, middle level mgt and lower-level mgt as a strata) to select managers and employees of the two selected companies respectively. Both primary and secondary data was collected through data gathering instruments of survey questionnaires, semi-structured interview, direct observation and document analysis. Then, the data gathered in different sources was analyzed and interpreted in descriptive manner using SPSS. The finding revealed that an adoption and deployment of effective knowledge transfer is very essential; however, a company cannot be successful without a robust knowledge transfer especially when deployed in an international dimension where subsidiaries and Head Quarter constantly interacts each other. Even though, these Companies attempted to understand the phenomenon of effective knowledge transfer and a number of mechanisms have been proposed and described, none of them are fully adaptable to the context of these Companies. The companies faced lack of specificity to this particular field of practice. Hence, there is a need for a strong communication system to maintain good information flow to bring effective knowledge transfer to be competitive firms.

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Keywords

Knowledge Transfer, Knowledge, MNCs, Manufacturing Firms

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