A critical evaluation of knowledge transfer management in improving organisational effectiveness within MNCs

Abstract

This thesis would be trivial if it did not aim to assist organisations to continuously improve their activities and sustain long-term profitability in today’s competitive market. It reports the development of a knowledge transfer model within MNCs with the major focus on knowledge flow within international Lean and Six Sigma teams. The model highlights the inhibitory and facilitatory factors in knowledge transfer processes. To remain among the leaders in the market, firms must continuously strive for better performance. This often implies the best management practices such as continuous improvement processes. Lean and Six Sigma are two well-known approaches which are strategically important for businesses. The adoption and deployment of both Lean and Six Sigma, however, cannot be successful without a robust knowledge management structure, especially when deployed in an international dimension where subsidiaries and HQ constantly interact to maintain a high performance level. For many decades, efforts to develop knowledge management in multinationals have been important. Some of the well-know authors in this field are Davenport and Prusak, Szulanski, Minbaeva, Gupta and Govindarajan, and Holden. Although there have been many attempts to understand the phenomenon of knowledge management in multinationals, there are limited studies reported in the literature regarding knowledge transfer in international Lean and Six Sigma teams within MNCs in the broad triad of developed, underdeveloped and developing countries. Moreover, a number of knowledge transfer models have been proposed and described in many other research studies, but none is fully adaptable to the context of these international teams because of their lack of specificity to this particular field of practice. In fact, besides working within an international team, Lean and Six Sigma project leaders in MNCs are often seen as internal consultants, providing their services to two different categories of individuals: people with basic Lean and Six Sigma knowledge and those with no Lean and Six Sigma knowledge. Hence there is a need for a strong communication system to maintain good information flow and understanding in such international firms.This research thus investigated the existing phenomenon of knowledge transfer in Lean and Six Sigma teams within MNCs through a single case study carried out in four main regions Asia (Malaysia), Europe (France, Germany, the UK), Latin America (Argentina, Brazil) and the USA. It emphasised evaluating and comparing how (1) Lean and Six Sigma knowledge was developed, transferred and implemented in these different units, and (2) how the team members interacted together in order to successfully deploy Lean and Six Sigma projects internationally. This enabled the researcher to identify and understand the difficulties behind the success of knowledge transfer effectiveness in such teams. This study was conducted in three phases. In the preliminary phase, the literature review enabled the researcher to identify the gaps and establish the conceptual framework that helped the presentation of the phenomenon. Definitions of knowledge and knowledge management are put forward to highlight the characteristics of these concepts and to show how a good understanding of the complexity of ‘knowledge’ itself can improve knowledge absorption. An evaluation of the development of Lean and Six Sigma methodologies in MNCs was conducted. Secondly, the framework guided the researcher through interviews with Lean and Six Sigma experts and document analysis which resulted in a selection of frameworks. Finally, the resulting insights from the data analysis using expert knowledge, understanding, interpretation and experience enabled the refinement and validation of the proposed conceptual framework. A final model was then recommended to help Lean and Six Sigma project leaders and managers to effectively communicate and internalise, implement and innovate knowledge within their area of practice. This model contributes to knowledge in the area of international business, management practices and knowledge management within MNCs by incorporating new factors that affect knowledge transfer processes. To begin with, it suggests ensuring a balance between subsidiary autonomy and HQ–subsidiary networking for effective communication flow while investing more time in developing trust and understanding culture since cross-cultural differences appeared also to be seen as a positive asset for organisations, offering new opportunities for learning new ways of doing things and thus leading to innovation. Secondly, it proposes reinforcing the relationship base (common interest, individual commitment, trust, credibility and respect) in teams for better interaction, decision-making and change management. Thirdly, it emphasises training for knowledge development and internalisation, mentoring and coaching, and IT compatibility for ‘knowledge leveraging’. Knowledge transmission channels such as IT compatibility systems and mentoring and coaching enabled non-duplication of a piece of knowledge in the sense that it minimises the reinvention of knowledge that already exists elsewhere in the network. This thesis provides a constructive basis for further research within the field of both knowledge management and continuous improvement methodologies (Lean and Six Sigma) within MNCs and the researcher’s goal is to expand its analytical generalisation. Although DAS was specifically using Lean and Six Sigma as continuous improment methodologies, the company was the most appropriate case for this study as it has shown remarquable results in the deployment of continuous improvement methodologies (Lean Six Sigma). This success is mainly due to their capacity in improving organisational effectiveness by expanding knowledge transfer within their MNC through networking in international teams and geographically disperced units. Besides, they have a strong organisational culture which they try to align with other unit’s cultures. Other MNCs using continuous improvement teams can thus draw on this example to improve their organisational effectiveness.