Effects of knowledge sharing within and between business units in MNCs
The Journal of World Business recently published a study by FOCUS researcher Paul Gooderham conducted with Jarle Hildrum (Telenor), Torben Pedersen (Bocconi), Angels Dasi (University of Valencia) and Frank Elter (Telenor) that explores the organizational separation effect on knowledge sharing within and between business units in MNCs.
The authors summarise the main findings in the paper as follows:
Multinational companies (MNCs) comprise business units many of which are located abroad but some of which may be located in the parent country. Employing data from Telenor, we find evidence that the internal boundaries between business units have an impact on knowledge sharing. Unsurprisingly knowledge sharing between individuals within the same business unit is significantly more common than knowledge sharing between business units. However, what is novel is that we show that the factors that promote knowledge sharing within and between business units differ. Individuals’ intrinsic motivation, innovative values and job autonomy are relatively more important drivers for sharing knowledge within their own business units. Further, individuals’ extrinsic motivation, result-oriented values and corporate employee development are relatively more effective for sharing knowledge across business units.
Why are these findings important and what is new about them in terms of extant knowledge?
This study is the first to analyze knowledge sharing within MNCs at the individual level and between the two contexts: within and between business units. We add to previous research from the Organizational Behavior literature by comparing individuals’ behavior under conditions of contextual variability within the same firm. Additionally, our level of analysis -the individual- allows us to extend previous findings from the International Business field by showing that the organizational separation effect does not substitute but supplements previous research on the effect of distances on knowledge sharing.
What can managers learn from this study?
We provide managers with a better understanding of why individuals behave differently depending on the organizational context. We identify the degree of psychological safety individuals feel as a critical factor. Within the same business units, managers should avoid interventions that introduce an external sense of pressure. Instead, they should ensure that individuals’ have a sense of control by supporting job autonomy and promoting innovative values. However, for the promotion of knowledge sharing across business units there is a greater scope for managerial intervention that compensates for a reduced sense of control. Introducing external rewards, fostering result-oriented values and implementing corporate employee development programs helps managers enhance the psychological security necessary for knowledge sharing.