Stickiness and the adaptation of organizational practices in cross-border knowledge transfers
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Stickiness and the adaptation of organizational practices in cross-border knowledge transfers Robert Jensen1 and Gabriel Szulanski2 1
Department of Organizational Leadership and Strategy, Brigham Young University, Provo, USA; 2 Department of Strategy and Management, INSEAD, Singapore Correspondence: R Jensen, Marriott School, Brigham Young University, Department of Organizational Leadership and Strategy, 772 TNRB, Provo, UT 84602, USA. Tel: þ 1 801 565 0027; E-mail: [email protected]
Abstract The reuse of organizational practices in multiple locations is a fundamental way in which MNCs leverage knowledge to seek competitive advantage. Scholars approaching the issue of adaptation from both a market and an institutional perspective argue that, in order to achieve fit with the local environment, some degree of adaptation is advisable, and the need for adaptation increases as the institutional distance between source and recipient locations increases. However, arguments to date have examined the effect of adaptation primarily on a subsidiary’s long-term performance. A necessary precursor is to understand the effect of adaptation on the transfer process itself, as transfer difficulty, or stickiness, may preclude the reuse of an organizational practice in the first place. In this paper, we explore how the adaptation of organizational practices affects the stickiness of cross-border transfers. We use structural equation modeling to analyze data from 122 internal transfers of best practice. Contrary to expectation, we find that adaptation significantly increases, rather than decreases, the stickiness of cross-border knowledge transfer. Journal of International Business Studies (2004) 35, 508–523. doi:10.1057/palgrave.jibs.8400107 Keywords: stickiness; knowledge transfer; adaptation; institutional theory; multinational corporation
Received: 4 February 2003 Revised: 24 February 2004 Accepted: 7 June 2004 Online publication date: 9 September 2004
Introduction The effective deployment of products, technology, and knowledge in multiple locations has long been identified as a critical success factor of MNCs (Buckley and Casson, 1976; Hymer, 1976; Dunning, 1977; Kogut and Zander, 1993; Zaheer, 1995). Substantial attention has been devoted to prescribing adaptation as a necessary component in transfers of firm-specific assets (Prahalad and Doz, 1987; Bartlett and Ghoshal, 1989). For example, it is often argued that consumer products, advertising campaigns, or distribution policies are more likely to function effectively when they are modified to reflect local market dynamics. Existing normative advice focuses on isolating criteria that should guide such adaptation, with criteria including differences in culture (Lemak and Arunthanes, 1997), consumer preferences and needs (Cui and Liu, 2001), and labor practices (Rosenzweig and Nohria, 1994). More recently, a broader and more stylized perspective on adaptation has been developed by scholars of institutio
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