Technological Knowledge Transfer within Chaebols after the 1997-98 Crisis

Abstract

How do large complex organisations manage their knowledge flows to build long-term competitive advantage and short-term superior performance? In particular, how do such organisations balance the knowledge exchange among central units and the knowledge exchanges between the centre and the periphery so as to gain a better development of new knowledge and better short-term performance outcomes? This paper studies the technology knowledge management system of South Korean chaebols. Our analysis suggests that the knowledge management strategy of those groups has two major components. First is the strategy to exchange technological knowledge among headquarter units, which gives rise to a reservoir of amalgamated knowledge. Second is the strategy by the headquarters unit to transfer technological knowledge in the reservoir to its foreign subsidiaries. We believe that these networked patterns of knowledge lead to the creation of local competitive advantages for foreign subsidiaries. These in turn create the rent streams that enhance the global performance of chaebols in the post-Asian crisis period.