Knowledge Attributes

The model 4 in Fig. 13 proposes to look at the three different variables which deal with the knowledge characteristics of the transferred knowledge which could impact reverse knowledge flow. For MNEs from emerging markets like India, the nature of the knowledge that the subsidiaries possess is perhaps one of the most vital aspects of RKT. This is because they are attempting to close the knowledge gap that exists between them and their global competitors via RKT. With respect to the persuasion needed by the Indian MNE to pursue RKT, the knowledge relevance plays an important role and so does the complexity and tacitness of the knowledge (as they perceive it).

Figure 13: Conceptual Model 4

Most studies on knowledge transferability and learning deals mostly with firm- specific variables with very few empirical studies focus on the dimensions of

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knowledge (Simonin, 1999a). Analysing the impact of organisational mechanisms on knowledge flows would not be complete without considering some of the crucial characteristics of the knowledge involved in the transfer (Bjorkman et al., 2004). Knowledge ambiguity is one of the main factors that hamper knowledge transfer and this ambiguity could be attributed to tacitness, asset specificity, complexity, experience, partner proactiveness, cultural and organisational distance (Simonin, 1999a).

The more codified the knowledge, the more will be the knowledge transferred (Schulz, 2003). The knowledge transfer process experiences more challenges when it comes to tacit knowledge as it is difficult to codify and teach. Tacitness has also been referred to as “know-how” (Kogut and Zander, 1992), uncodified knowledge (Hu, 1995), implicit knowledge (Spender, 1994) and skills (Nelson and Winter, 1982). Tacit knowledge may require richer communication mechanisms and more personal interactions to enable knowledge transfer (Dhanaraj et al., 2004). Tacit knowledge has more ambiguity associated with it when compared to explicit knowledge and hence inhibits knowledge transfer (Simonin, 2004). Tacitness can cause ambiguity related to the knowledge (Ambrosini and Bowman, 2001). Complexity on the other hand deals with the comprehension of the knowledge and is also associated with a wider span of knowledge (Grant, 1996b). Hence, the associated knowledge could prove to be more complex especially when it spans across multiple domains of knowledge and expertise. It then becomes difficult to familiarise with all of the various involved components (Simonin, 1999b) so as to get the complete picture. Hence this proves to be a hindrance to knowledge flows (Simonin, 1999b; Pak and Park, 2004).

Based on the above aspects of knowledge, the “Stickiness” of knowledge or the difficulty to transfer knowledge could be very well attributed to the inherent complexity and tacitness of the knowledge. Although the influence of these knowledge aspects on primary knowledge transfers have been studied (Simonin, 1999a; Pak and Park, 2004), the effect on reverse knowledge flow still needs to be looked into. Considering the stickiness of knowledge and its influence on reverse knowledge transfers in the context of Indian MNEs, when the parent units evaluate the knowledge held by their overseas subsidiaries, they are likely to find it difficult

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to comprehend. Also, the reverse transfers may be based on the parent unit’s prerogative and hence these aspects of knowledge as perceived by them plays an important role in the process. The more difficult the transferability of the knowledge (with respect to complexity and tacitness) from a parent perspective there is likely to be more reluctance associated with attempting the same. This could also mean a costly and time consuming transfer process which may in turn diminish the chances of materialising these transfers. Hence the study proposes;

Hypothesis 11 (H11). Reverse knowledge flow from overseas subsidiary to the

Indian parent will be negatively related to the complexity of the knowledge transferred.

Hypothesis 12 (H12). Reverse knowledge flow from overseas subsidiary to the

Indian parent will be negatively related to the tacitness of the knowledge transferred.

The value of subsidiary’s knowledge stock is a source of attractiveness for other units including the parent (Gupta and Govindarajan, 2000). This attractiveness is also linked to the relevance and non-duplicative nature of the knowledge and is a necessary condition for knowledge flow to occur. This is also in accordance with the concept of absorptive capacity which depends to a large extent on the similarity of existing stock of knowledge (Szulanski, 1996) to the transferred knowledge. Knowledge relevance is specifically more crucial to reverse knowledge transfers as the parent has to be interested in the knowledge residing within the subsidiary which is based on the potential benefit that they foresee (Yang et al., 2008; McGuinness et al., 2013). This trend could be seen in the empirical investigations where knowledge relevance was found to be more important in reverse knowledge flows when compared to knowledge flows (Yang et al., 2008).

This would mean that for this study, the Indian MNE would see more potential in knowledge held by their subsidiary which has some form of connectedness to the knowledge that they already possess. “The relevance of new knowledge can be discovered by exposing it to prior knowledge” (Schulz, 2001, p. 664) and is very closely linked to the potential implications of this new knowledge. Relevance theory (Sperber and Wilson, 1986) also states that the new knowledge is found to be

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relevant when new inferences or interpretations (Yang et al., 2008) are explored. This means that it would make it easier for Indian MNEs to see the potential benefits for this knowledge and get their attention as well if they can interpret this new knowledge and relate it with their own to form their own inferences. The motivation to engage in the transfer would be more once they realise the potential. Hence the relevance of the knowledge as perceived by the parent unit is bound to positively influence the reverse knowledge flow. This leads to the following hypothesis.

Hypothesis 13 (H13). Reverse knowledge flow from overseas subsidiary to the

Indian parent will be positively related to the relevance of the knowledge transferred.

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