Abstract
Knowledge sharing is a systematic process for creating, acquiring, synthesizing, learning, sharing and using knowledge to achieve organizational goals. It is also a source of competitive advantage especially for multinational companies. The objective of this paper is to discuss the impact of subsidiary manager’s role in knowledge sharing, manager’s compensation system, and the level of cultural differences between home and host country on the level of knowledge sharing between the headquarters and subsidiaries of multinational companies. A study has been conducted at a subsidiary of a large manufacturing company in Malaysia. Data were collected via self-administered survey questionnaire. The respondents consist of 100 executives and managers of the company, and all the questionnaires distributed were filled and returned back for data analysis. Findings indicate that all three factors significantly influence the level of knowledge sharing with the manager’s compensation system has the strongest impact. MNC therefore should clearly define the manager’s role in knowledge sharing and provide attractive rewards and remunerations to encourage knowledge sharing. At the same time, cultural differences should not be considered as a barrier to knowledge sharing as this study indicates that it can be a driver for effective knowledge sharing between headquarters and subsidiaries.
Highlights
A multinational corporation’s (MNCs) competitive advantage these days increasingly depends on the control over intangible resources rather than tangible resources (Hall, 1992)
The objective of this study is to identify the impact of the abovementioned factors on the level of knowledge sharing between headquarters and subsidiaries of MNCs
According to the Pearson’s Correlation analysis, it was found that local subsidiary top management compensation system has a very important influence on MNC’s knowledge sharing level because it motivates the management of the subsidiary to put more efforts in organizing, transferring, and sharing the knowledge or information with the headquarter or other subsidiaries
Summary
A multinational corporation’s (MNCs) competitive advantage these days increasingly depends on the control over intangible resources rather than tangible resources (Hall, 1992). Saturated domestic markets have led firms to seek growth opportunities in foreign markets, in emerging economies with significant economic growth and market potential, such as in China, Brazil, Russia, Eastern Europe and East Asian countries Multinational corporations these days face head-to-head competition with global rivals in these high-potential foreign markets (Buckley & Casson, 1998). MNCs such as Exxon Mobil, BP, Royal Dutch Shell, and Chevron for example are all major players in the oil industry, and they compete intensely in multiple countries (Hansen & Nohria, 2004) These companies realised that their performance should depends on the increase in capital investments only, but they have to create some innovative ways to increase the profits especially through global learning. Sharing of new ideas between multiple subsidiaries in foreign markets and the headquarters may help MNCs develop a new strategy to compete in the global market
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