Chapter II. KNOWLEDGE TRANSFER ISSUES
2. Transfer of knowledge in creation of value in new organization
The New Comprehensive Encyclopaedia gives two concepts of knowledge transfer:
economic and psychological. For the research undertaken in the presented paper they only fit to a limited extent. Under the economic approach, two other variants are distinguished: international transfer and transfer of income. The transfer of knowledge is not mentioned by the source. International transfer, which also occurs
in mergers and acquisitions, is defined as transfer of money, gold, capital from one country to another63. While the term „capital” also includes intellectual capital, the definition would be relevant to the transfer in question here. On the other hand, the psychological definition of transfer is more complicated – the influence that the ability acquired earlier exerts on acquiring other skill. This corresponds in some extent to one of the forms of knowledge conversion, namely the combination of knowledge. Nevertheless, these partial similarities to the actual course of the transfer cannot be the reason to recognise encyclopaedic definitions as helpful in multilateral knowledge transfer. In general, researchers avoid explicit definition of the concept of transfer, perhaps because of its obviousness, which discusses displacement, transfer, etc. Therefore, many authors consider that it is appropriate to define the concept of transfer by its function.
B. Mierzejewska believes that „various variations present in the literature on the subject matter of knowledge transfer (and thus combination of knowledge, knowledge sharing, knowledge transfer, learning, etc.) can be broadly defined as transfer”64. It would appear that the differences between the definition of knowledge and knowledge transfer would practically involve the creation of knowledge that does not fall within the definition of transfer.
It is slightly differently presented by J. Kang, M. Rhee and K.H. Kang, who also define transfer through its functions, but also include the creation of knowledge to it65. Then knowledge and transfer would be conceptually coherent. A. Ring and H.
Öfverström66 believe that the different terms for knowledge transfer used in literature come down to epistemological differences, i.e. using different terminology. The point is that such concepts as: combination of knowledge, its combination and creation or
„teaching” describes practically the same thing. They further argue that the views expressed in this case, expressed e.g. by C. Bartlett and S. Ghoshal67, I. Nonaka and H. Takeuchi68, G. Hedlund69, Kogut and U. Zander70, show discrepancies only in
63 Nowa Encyklopedia Powszechna…, op. cit., v. 6, p. 433.
64 B. Mierzejewska, Transfer wiedzy…, op. cit., p. 2.
65 J. Kang, M. Rhee, K.H. Kang, Revisiting…, op. cit., p. 25.
66 A. Ring, H. Öfverström, Contextualised View of Knowledge Transfer in Mergers and Acquisitions, Göteborg University, Göteborg 2000, p. 54.
67 C. Bartlett, S. Ghoshal, Re-conceptualizing Bartlett and Ghoshal’s Classification of National Subsidiary Roles in the Multinational Enterprise, “Journal of Management Studies”, March 2011, p. 254.
68 I. Nonaka, H. Takeuchi (eds.), The Knowledge…, op. cit., p. 31.
69 G. Hedlund, A model of knowledge management and the N-form corporation, „Strategic Management Journal” 1994, No. 15, p. 73–90.
70 B. Kogut, U. Zander, Knowledge…, op. cit., p. 76.
literature, as the transfer is considered from different points of view. This only shows some confusion in terminology in this matter. Therefore, it should be assumed that the above mentioned scientists treat the terms knowledge and knowledge transfer as identical, they differ only in different approach to the topic. By agreeing with this approach, it is doubtful whether acquisition of knowledge through acquisitions or mergers, which today is a typical case of knowledge transfer between companies, corresponds to the actual creation of knowledge. This approach may be justified when we deal with a situation where the acquired knowledge is expanded (combined) through combination with another element of knowledge. However, in specific cases, the purpose of its acquisition is simply to gain access to licenses, innovations, etc.
without its immediate further improvement by combining with other elements of knowledge. In this case it is difficult to talk about creating knowledge.
Using the known knowledge conversion scheme shown by J. Nonaka and H.
Takeuchi71, it is worth to trace the transfer of knowledge from the point of view of its transfer under merger of enterprises, as shown in Figure 4.
Figure 4. Creating knowledge through different manners of conversion
Adaptation Externalization
Internalisation Connection
Tacit knowledge Explicit knowledge
Tacit knowledge
Explicit knowledge
Source: I. Nonaka, H. Takeuchi (eds.), Knowledge Creating Company, Oxford University, New York 1995, p. 78.
As it can be seen from analysis of the above-presented knowledge conversion model, knowledge transfer can be done only through sales or the same thing, and in practice is absolutely prevailing, by consolidation companies with automatic knowledge transfer72. Virtually its direct use can only affect insights (in the original internalized knowledge) and then merging it and re-internalizing.
A similar approach is demonstrated by G. Probst73 and others, who among the knowledge management place gaining knowledge on the first place. They consider acquiring knowledge through acquisition of companies as a kind of process in
71 I. Nonaka, H. Takeuchi (eds.), The Knowledge…, op. cit., p. 62.
72 Automatism occurs here only as a right to use the acquired knowledge. Its actual use depends on the speed of passing through subsequent integration stages, as will be seen in the next subsection of Chapter II.
73 G. Probst, S. Raub, K. Romhardt, Zarządzanie wiedzą…, op. cit., p. 31.
knowledge management. Likewise, L. Barton74, who represents the view that import of knowledge from the environment, is an important means for acquiring key skills.
Enterprises are faced with an increasing amount of knowledge that needs to be mastered, and the basis for the operation and development of organizations under such conditions is knowledge75. Considering the knowledge conversion contained in Table 7, it is concluded that it is taking part inside an enterprise or companies merged into a new organization within merger or acquisition. In the latter case, the transfer inevitably extends over time and goes through several separate stages, primarily due to cultural differences and other causes of organizational nature. The details of this problem – postponing knowledge acquisition – will be discussed in the next step of the paper. At this point it must be emphasized that the conversion of knowledge within an organization is more effective than by merger of companies, at least in the first stage, in particular with regard to tacit knowledge. This is indicated by the findings of B. Kogut and U. Zander, who say that „it must be stated that by technology transfer one can expect it to be less profitable than within a company”76. Of course, this does not mean that a well-calculated purchase of a company is unprofitable in this respect, but that transitional steps are needed to achieve the full effect. Knowledge transfer requires several essential conditions. One should first of all pay attention to the potential difference between the consolidated organizations.
It makes no sense to merge enterprises to obtain new knowledge, if differences in its level are not relevant. In the opposite case, i.e. when the enterprises differ in terms of knowledge resources, the need for transfer increase. The following knowledge flows can be distinguished:
• the acquiring entity obtains the knowledge that was the main or at least one of the main reasons for merger (often occurring within the framework of another official reason for acquisition);
• the acquiring entity receives additional knowledge (not planned);
• the acquired within the acquisition satisfies its problems with the surplus in knowledge potential by the acquired entity.
The above statements on the existence of bilateral flow of knowledge have been confirmed by Swedish researchers77, i.e. H. Bresman, J. Briskinshaw and R. Nobel. However, they assume that during the first stage an increased flow of
74 L. Barton, Źródła wiedzy, Harward School Business, Boston 1995, p. 39.
75 M. Dzwigoł-Barosz, Niwelowanie luki kompetencji menedżerów w procesie przekształcenia przedsiębiorstwa w organizację inteligentną, Politechnika Śląska, Gliwice 2013, p. 51.
76 B. Kogut, U. Zander, Knowledge…, op. cit., p. 98.
77 H. Bresman, J. Briskinshaw, R. Nobel, Knowledge transfer in Innovation Acquisition,
“Journal of Informational Business Studies” 1999, No. 30(3).
knowledge from the acquiring entity to the acquired one occurs. This is in line with the assumption that in many cases acquisition of a company aims to acquire a particular technology, innovation, etc. Regardless of the quantifiable flows there are non-transferable (neutral) knowledge resources, generally identical or very similar in both companies. Figure 5 illustrates a situation in which the primary motive for merger is to gain knowledge by taking over an enterprise or when it is hidden under other official motives.
Figure 5. Creating knowledge through different manners of conversion
Knowledge being main motive for acquisition
Additional knowledge, unplanned earlier
to take over ,
Knowledge useful to the acquired Need for knowledge
Knowledge acquired in addition
Knowledge neutral for the acquired
Knowledge neutral for acquiring
The need for knowledge by the acquired
Source: own study.
One of the elements of this model, built on the basis of research of companies’
similarity in terms of potential, is the analysis of the knowledge flow. The principle of the procedure is as follows: the more the companies differ in the potential of knowledge, the more likely they are suitable for consolidation. Of course, the potential difference is not the only condition, but it is a necessary condition. It does not make sense to consolidate companies with the same or very similar knowledge.
It follows that a diagnosis of knowledge identification should be performed before merger. For this purpose a kind of „knowledge map” may be used that identifies the situation in this regard. This is not a knowledge map in the sense of training aid described by A. Polak78. In this case, knowledge identification can be used in the enterprise selected to be taken over and possibly also by the initiator of
78 A. Polak, Nauczanie…, op. cit., p. 10–13.
the acquisition in order to obtain the size of the knowledge potential difference. An example map of this knowledge is shown in Figure 6.
Figure 6. A theoretical map of knowledge that is owned and desired in a new (consolidated) enterprise
SKILLS EXPERIENCE RELATIONS STANDARDS ANALYSES REPORTS PROGRAMS DOCUMENTS
INTERNAL RULES AND MANUALS PATENTS, IDEAS AND INNOVATIONS
Legend:
Colour marked rectangles from the left = acquired knowledge Colour marked rectangles from the right = own knowledge White rectangles = potential (missing) knowledge Source: own study.
One must remember that these are fictitious quantities and only a thorough analysis of the actual data on both sides of the transaction can provide a more accurate response, obtained with the application of the method described.
It should be added that in fact maps of knowledge are generally of a different nature and if they are created, than rather for the purpose of training at universities.
They have different construction then, and another manner of collecting information is used.
The above-described division and structure of knowledge by elements, components and categories, and the knowledge map constructed on their basis, will be useful in analysing the stages of knowledge transfer.
Figure 7. A theoretical map of knowledge that is owned and desired in a new (consolidated) enterprise
0 5 10
Potential knowledge Own knowledge Acquired knowledge Documents
Patanet, ideas and innovations Programs Protocols Standards
Relations Experience Skills
Internal rules and manuals
Analyses
Source: A. Polak, Nauczanie organizacji przedsiębiorstw za pomocą mapy wiedzy, „Przegląd Organizacji”
2012, No. 3, p. 10–13.