Determinants of a successful cross-border knowledge transfer in franchise networks

Abstract

PurposePrevious research on service multinational corporations (SMNCs) has mainly focused on the entry mode decisions in foreign markets. The purpose of this paper is to examine the cross-border knowledge transfer in franchisee networks in Pakistan.Design/methodology/approachThe qualitative semi-structure interviews approach is used to study the cross-border knowledge transfer from a franchisor to two local franchisee networks in Pakistan.FindingsThe results show that both explicit and tacit knowledge are transferred in cross-border franchise networks. The transfer of the knowledge from a franchisor to a franchisee is facilitated through the use of a variety of transfer mechanisms – both hard and soft transfer mechanisms, that is, video conferencing, emails, phone calls, seminars, meetings, documents and franchisor agents’ visits. The knowledge sharing in cross-border franchise networks in Pakistan shows numerous similarities with that occurring in manufacturing industries. The prior experience of the franchisee and the regional and local franchisors’ agents – their role as knowledge transfer agents (intermediaries) – facilitate the acquisition and assimilation of knowledge from the franchisor to a franchisee in the developing economies.Practical implicationsThe paper discusses relevant implications for managers of franchisor and franchisee networks by focusing on the need to engage with both explicit and tacit knowledge transfer. The experience of the franchisee is important for the acquisition and assimilation of knowledge.Originality/valueThis paper is the first in the context of cross-border knowledge transfer from a franchisor to a franchisee in the Pakistani context. The author highlights the important role of prior experience of the franchisee and the regional and local agents of the franchisor in the transfer of cross-border knowledge transfer under the franchising arrangements.