Do Parent Units Benefit from Reverse Knowledge Transfer?
| Author | Kamel Mellahi,Smitha R. Nair,Kishore Gopalakrishna Pillai,Mehmet Demirbag |
| Date | 01 July 2018 |
| DOI | http://doi.org/10.1111/1467-8551.12234 |
| Published date | 01 July 2018 |
British Journal of Management, Vol. 29, 428–444 (2018)
DOI: 10.1111/1467-8551.12234
Do Parent Units Benefit from Reverse
Knowledge Transfer?
Smitha R. Nair, Mehmet Demirbag,1Kamel Mellahi2
and Kishore Gopalakrishna Pillai
Norwich Business School, University of East Anglia, Norwich Research Park,Norwich, Norfolk NR4 7TJ,
UK, 1Essex Business School, University of Essex, Southend Campus, Elmer Approach, Southend-on-Sea SS1
1LW, UK, and 2Warwick Business School, University of Warwick, Coventry CV4 7AL, UK
Corresponding author email: mdemirc@essex.ac.uk
Emerging market multinationals resort to knowledge acquisitions from their over-
seas subsidiaries to springboard and realize their global ambitions. Drawing from the
knowledge-based view and social capital perspective, this study explores the eects of
organizational collaboration and tacitness on multiple dimensions of reverse knowledge
transfer (RKT). Data were collected through a survey, from senior and middle levelman-
agers of parent Indian multinationals, pertaining to RKT fromtheir overseas subsidiaries.
The hypotheses are analysed using partial least squares modelling. The results demon-
strate positive eects between the extent and benefits of RKT. Collaboration was found
to have a positive influence on both dimensions of RKT. Tacitness also has a positiveim-
pact on the benefits from RKT.The implications of the findings and the limitations of the
study are discussed along with suggestions for future research.
Introduction
Knowledge transfers, especially involving cross-
border interactions of multinational enterprise
(MNE) units, have attracted considerable atten-
tion from international business and management
scholars. By and large these studies (Li, 2005;
Minbaeva, 2005; Minbaeva et al., 2003; Tran,
Mahnke and Ambos, 2010) are focused on the
parent units transferring their knowledge to their
acquired overseas subsidiaries (conventional or
primary knowledge transfers), so that they areable
to perform their envisaged role within the MNE
network (Ambos, Ambos and Schlegelmilch,
2006). This is not surprising because these over-
seas acquisitions were conventionally performed
by the very well-equipped and competent western
MNEs from the developed economies (DMNEs)
and, more often than not, their subsidiaries lagged
behind their advanced parent units whenit came to
strategic resourcesand state-of-the-art capabilities.
However, as these subsidiaries learn and develop
their capabilities, parent units start recognizing
their subsidiaries and subsequently tap into the
subsidiary knowledge (Denrell, Arvidsson and
Zander, 2004) to leverage their resources, which
has fuelled the interest in reverse knowledge
transfers (RKTs).
Unlike the DMNEs, the acquisitions of emerg-
ing market MNEs (EMNEs), especially in the
developed markets, are driven by knowledge
seeking motives to a large extent (Bangara,
Freeman and Schroder, 2012; Buckley et al.,
2016a; Jormanainen and Koveshnikov, 2012; Ke-
dia, Ganey and Clampit, 2012; Luo and Tung,
2007; Mathews,2006; Thite et al., 2015; Wilkinson,
Wood and Demirbag, 2014). As latecomers, these
acquisitions are vital for them to rapidly catch up
with their global competitors (springboard). This
is because, as latecomers, they are also likely to
lag behind their more advanced competitors in the
developed markets in terms of strategic resources
and capabilities (Khan and Nicholson, 2014). The
strategic asset seeking behaviour of EMNEs (via
© 2017 British Academy of Management. Published by John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4
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Benefits from Reverse Knowledge Transfer 429
overseas acquisitions) helps them attain the much
needed competitive edge in international markets.
EMNEs have more overseas subsidiaries that
engage in RKT compared to DMNEs (Giuliani
et al., 2014). The DMNEs, on the other hand,
have more passive subsidiaries engaging primarily
with conventional knowledge transfers (KTs).
This body of evidence lends further support to
the argument that EMNEs attempt knowledge
acquisition via RKT and hence it is crucial that
we further understand the knowledge pursuits of
EMNEs and the benefits they accrue from the
same. Hence,this study seeks to explore RKT in an
emerging marketcontext, more specifically dealing
with Indian MNEs and their overseas subsidiaries.
Prior studies on RKT (Ambos, Ambos and
Schlegelmilch, 2006; Hakanson and Nobel,
2001; Mudambi, Piscitello and Rabbiosi, 2014;
Najafi-Tavani, Giroud and Sinkovics, 2012;
Pereira, Munjal and Nandakumar, 2016; Rabbiosi,
2011; Rabbiosi and Santangelo, 2013; Yang,
Mudambi and Meyer, 2008) have dealt largely
with DMNEs focusing on the eects of organi-
zational mechanisms or firm level factors. Some
of these studies have also highlighted the signifi-
cance of focusing on the benefits or utilization of
RKT (Ambos, Ambos and Schlegelmilch, 2006;
Yang, Mudambi and Meyer, 2008) rather than on
the extent of RKT, which was the conventional
approach followed by most scholars. This is based
on the premise that not all KT that occurs is likely
to benefit the recipient unit (Ambos, Ambos and
Schlegelmilch, 2006), which is the parent unit in
the case of RKT. However, there is a dearth of
studies that investigate the potential links between
the extent of RKT and the benefits that parent
units derive from it. It is vital to understand the
extent to which the parent units actually benefit
from RKT, since these transfers are costly and in-
volve significant investments in terms of resources
and time. The first contribution of this study is
that it analyses the potential links between the two
dimensions of RKT, namely the extent of RKT
and the benefits that parent units derive from the
same, indicating the eectivenessof such transfers.
Knowledge attributes like ambiguity, com-
plexity, stickiness and tacitness have always been
considered as inhibitors to KT (Simonin, 1999;
Szulanski, 1996; Szulanski, Cappetta and Jensen,
2004; Zander and Kogut, 1995). Studies on RKT
have seldom investigated the eects of knowl-
edge attributes on RKT, except for the eects of
relevance of knowledge (Yang, Mudambi and
Meyer,2008). The tacitness of knowledge (Polanyi,
1962) is crucial and is central to the discussions
pertaining to the knowledge-based view (KBV)
of the firm (Grant, 1996a). Tacit knowledge has
been viewed as a vital source of competitive
advantage for firms simply because it is embed-
ded deep within individuals and organizations
(Nelson and Winter, 1982; Reed and DeFillippi,
1990), thus making it more inimitable, valuable
and beneficial (Barney, 1991; Grant, 1996a), but
dicult to transfer (Grant, 1996a; Park, Vertinsky
and Becerra, 2015). In this context, it is vital to
understand the eects of tacitness on both the
extent of RKT and the benefits derived from RKT
to reveal dierential eects if any. The second
contribution of this study is that it investigates the
eects of tacitness on the two dimensions of RKT
(extent and benefits).
The KBV of the firm also discusses the need to
observe tacit knowledge through its application
in order to better comprehend it (Grant, 1996a;
Kogut and Zander, 1992). It is also vital for
individuals to have shared understanding and ex-
periences while sharing tacit knowledge (Nonaka
and Takeuchi, 1995). Inter-organizational col-
laboration facilitates such personal interactions
and the creation of shared mental models, which
are essential to transferring tacit knowledge
(Dhanaraj et al., 2004; Nonaka, 1991). In ad-
dition, the social capital perspective (Nahapiet
and Ghoshal, 1998; Tsai and Ghoshal, 1998)
stresses the significance of aspects like shared
vision, trust, mutual respect, collaboration and
commitment, which facilitate KT (Li, 2005;
Muthusamy and White, 2005; Yamao, de Cieri
and Hutchings, 2009). However, there is a dearth
of empirical studies that explore the joint eects of
inter-organizational collaboration and tacitness
on RKT. Additionally, the influence of collab-
oration on the two dimensions of RKT (extent
and benefits) still remains overlooked. Hence the
final contribution of this study is that it explores
the inter-linkages between tacitness, collaboration
and the two dimensions of RKT in a joint model.
Theoretical background
Reverse knowledge transfer
The KT literature has a fair share of studies
devoted to conventional KT, i.e. the flow of
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